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Delhi-based DLF group plans to re-enter the Mumbai property market with a project in Andheri West, after focusing on the National Capital Region. DLF is likely to launch the first phase of this project before June 2024.
The project is a Slum Rehabilitation Authority (SRA) project and is being developed as a joint venture in partnership with the Trident Group. The first phase of the project consists of 1 million square feet of development.
DLF will pump in around Rs 400 crore as equity to develop the entire project having a potential saleable area of 30 - 35 lakh sq. ft. DLF will hold a 51% stake in the special purpose vehicle (SPV) for developing the project, while Trident holds the remaining 49%. Under the partnership, DLF will manage the construction, sales and financial closure of this project.
DLF Home Developers Ltd's (DHDL) is developing the project through its wholly-owned arm, Pegeen Builders & Developers. While Trident is developing the project through its wholly owned subsidiary Sahyog Homes Ltd (SHL). DLF in a regulatory filing in July 2023 had said that DLF’s Pegeen Builders & Developers will allot 9,800 equity shares of Rs 10 each at par to Trident’s Sahyog Homes Ltd (SHL).
Ashok Kumar Tyagi, managing director, DLF Ltd, said that the first phase of the project is of 30-odd stories, of which around 27-28 stories are already ready. DLF is thus on track for a potential launch before June 2024.
The Andheri project will be the pilot project for DLF in the Mumbai market, and a future strategy will be based on the success of this project. This explains DLF choosing Andheri West for its first project. Andheri West is one of the most sought-after micro-markets for high-net-worth individuals, celebrities and business owners. Apart from that, Andheri West has recently witnessed new launches from category A developers like Adani, Transcon, Sheth and Oberoi Realty too is likely to launch soon.
The DLF group had created a sensation in 2005 when it purchased 17 acres of prime mill land in Lower Parel at a National Textile Corporation auction for ?704 crore – the highest bid then. DLF group had planned to construct a business hotel, a mall and a multiplex, but it changed its plan to setting up an IT park later. However, after the 2008 economic crisis, it changed plans to make a residential project, but eventually in 2012 it sold the land to Lodha Developers for Rs 2,700 crore due to its debt crisis.
DLF’s re-entry now, into the Mumbai property market, is in the backdrop of big, listed developers diversifying into multiple geographies. Bengaluru-based Prestige Projects Pvt Ltd has rapidly expanded its Mumbai portfolio in the last two years picking up prime land parcels in Mahalaxmi, Marine Lines, Worli, Pali Hill, Bandra, Bandra Kurla Complex and Mulund. While Mumbai-based Godrej and Oberoi Realty had ventured into Delhi-NCR with new luxury projects earlier.
DLF has reported strong financials this year with a consolidated net profit of Rs 629 crore in the second quarter of this fiscal, up 29% year on year (YoY). Total income from operations rose to Rs 1,476 crore in July-September of 2023-24 from Rs 1,360 crore in the year-ago period. The company's sales bookings touched Rs 2,228 crore in Q2 with gross margins at 57%. It also said that it achieved net cash-positive status during the quarter. In a regulatory filing on October 31, DLF had said it was targeting sale bookings of about Rs 13,000 crore during this fiscal on the back of strong demand and will launch several new projects by March 2024.
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