DLF Ltd., India’s biggest developer, may start selling residential apartments at its first project in Mumbai by December, said Saurabh Chawla, executive director for finance.
The New Delhi-based company plans to develop 4 million square feet (371,612 square meters) of homes on former textile mill land in Lower Parel in central Mumbai, and may start offering the apartments this year, Chawla said.
“We are waiting for all our approvals and will launch the project only when we receive all the sanctions,” Chawla said in an interview in New Delhi yesterday. “It should happen sometime by the end of the third quarter” of this financial year ending March 31.
Lower Parel has emerged as an office district after defunct textile mill land was sold for commercial development. High-end residential projects such as Lodha Developers Ltd.’s World One, which claims to be India’s tallest residential tower, are being built in the area.
DLF may earn as much as $2 billion from the project by selling apartments for more than 20,000 rupees ($431) a square foot, CLSA Asia-Pacific Markets estimated in a note to clients dated Aug. 25.
The rush of developers to the area signals there may be an oversupply, analysts Suhas Harinarayanan, Suman Memani and Arun Aggarwal at Religare Capital Markets Ltd., said in a June note.
“Lower Parel is likely to see a supply of over 10 million square feet in the next 3 to 4 years, making it an over-supply zone ” the analysts said.
DLF, whose main developments are in Gurgaon near New Delhi, expects to reduce its net debt levels by 40 billion rupees to 145 billion rupees in the year ending March 31, Chawla said. DLF will earn annuity and rental income of about 18 billion rupees in the period, he said.
The developer also is seeking to sell a stake in the luxury Aman Resorts chain to a strategic partner and expects to complete the transaction this financial year, Chawla said.
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