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DLF raises 2,400 cr from SBI to refinance debt, expand

  • The fund raising is one of the largest lease rental discounting (LRD) deals in recent times
  • The size of the loan demonstrates the company’s diverse tenant profile and its ability to generate long long-term cash flows from its real estate asset portfolio, DLF said

Bengaluru: India’s largest real estate firm DLF Ltd’s rental arm DLF Cyber City Developers Ltd (DCCDL) has raised 2,400 crore from State Bank of India (SBI) in one of the largest lease rental discounting (LRD) deals in recent times.

In the current scenario where bank disbursements to real estate developers have been sparse, DLF’s debt transaction, at an interest rate of 7.35% for a tenure of 15 years with a structured repayment schedule, is significant. This also enables the company to reduce cost of its debt.

DLF has raised the funding through the LRD route against two rental assets of 2.4 million sq ft in CyberCity, Gurugram.

The size of the loan demonstrates the company’s diverse tenant profile and its ability to generate long long-term cash flows from its real estate asset portfolio, DLF said.

Vivek Anand, DLF's group chief financial officer said, “The funding represents a resonant endorsement of DLF’s commercial portfolio. Despite the present uncertainty, we remain committed to reducing our borrowing cost while creating long term value for our stakeholders. Majority of the loan will be used to refinance existing debt, and the balance will be used to fund future expansion of the company."

DCCDL has refinanced around 1,950 crore of debt while the remaining 450 crore the rest will be used for future expansion.

DCCDL currently has total debt of around 19,500 crore.

DCCDL, which is a joint venture between DLF and Singapore sovereign fund GIC Pte Ltd, has 33 million sq ft of office and retail assets. DLF holds 66.66 per cent stake in DCCDL while GIC has the rest. The rental arm currently generates an annual rental income of 3,500 crore.

DLF Group has an operational rental asset portfolio of 35 million sq ft in the country with over 1600 tenants, 60% of which are Fortune 500 companies.

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