DLF merges arm with holding co of DLF Assets

DLF Ltd., the country’s largest property developer, is indirectly acquiring DLF Assets Ltd. (DAL), a promoter owned entity. Now the deal opens the possibility of DAL going ahead with a real estate investment trust (REIT) listing in Singapore that has been pending for over two years now. The fund raised there would be used to retire debt of DAL. As per the deal, the commercial rental business of DLF - DLF Cyber City Developers Ltd. - is being merged with Caraf Builders & Constructions Pvt. Ltd., the promoters’ holding company of DAL. DLF will own around 60% of the merged entity that would in turn own the assets of DAL. The proposed transaction will bring all commercial assets of DLF under one company giving the parent listed firm a revenue stream of around Rs25bn annually and help it hedge against the uncertainties of the property market. Caraf has four rent yielding properties with leased area of over 3 million sq ft besides 96% economic interest in DAL which, in turn, has four SEZ properties with leased area of over 6 million sq ft. DLF Cyber City has commercial buildings with leased area of close to 7 million sq ft besides two malls in Gurgaon and Delhi.