InvestorQ : Why is DLF hiving off some of its prime property in Goa?
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Why is DLF hiving off some of its prime property in Goa?

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5 months ago
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India’s largest real estate player, DLF Ltd, plans to sell a piece of land in Goa for a consideration of around Rs.250 crore. This is part of the company’s long term strategy to gradually divest non-core assets and raise funds to pare debt. The company has plans to become zero debt by the end of the current year.

The company representatives have confirmed that the land parcel was among the last of the pieces in the list of non-core assets that DLF held. The buyer identity was not disclosed by DLF. It may be recollected that DLF had purchased that piece of land more than 10 years ago to develop a hotel project. That is not all as far as Goa is concerned.

DLF has three land parcels in Goa, which were acquired in the late 2000s to be developed into parallel residential, retail and hotel projects. In the past few years, the projects have run into rough weather and have faced issues such as procuring environment clearances, getting land ownership and title clearances etc.

As a conscious decision at a corporate level, DLF has gradually sold most of its hospitality and hotel ventures as well as other non-core businesses with a view to reduce the debt pile. The company will now focus only on its core commercial office and residential development business. In the meanwhile, DLF has systematically exited several property markets to focus on Gurugram and few other cities like Chennai.

DLF has already sold Aman Resorts for $358 million and has also divested its stake in Adone Hotels and Hospitality to a Kolkata-based consortium for Rs.567 crore in June 2012. As of the Dec-20 quarter, DLF debt stood at Rs.5100 crore after paring down slightly in the previous quarter. As a matter of strategy, especially post the real estate registration rules, DLF has decided to only sell residential properties after they are constructed.

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