DLF to Reinvest in Delhi Real Estate After Aman Resorts Divestment
DLF, India's largest real estate company, is planning a significant reinvestment in the Delhi real estate market. This strategic move follows the recent sale of the company's stake in the luxury Aman Hotel chain, a transaction aimed at reducing debt and sharpening the organization's focus on its core real estate business.
The sale of Aman Resorts shares signifies DLF's renewed commitment to Delhi's real estate landscape. (pic. of DLF Bella Greens Bangalore): Delhi Real Estate can expect more like this.
By divesting its interests in the Aman Luxury hotel brand, DLF aims to address its existing debt burden and free up capital for new ventures. The company intends to launch a series of new projects in the Delhi real estate market within the next three to four months. This reinvestment strategy marks a return to DLF's core strengths after a period of diversification into other sectors.
New Delhi Projects Expected Within Four Months
DLF's Senior Executive Director, Sriram Khattar, confirmed that the company is poised to initiate these Delhi real estate projects within the coming four months. The recent sale of DLF's stake in Silverlink Resorts Ltd, the holding company for Aman Resorts, is a crucial component of this strategic shift. Aman Resorts, known for its exclusive properties such as Amanwana, gained international recognition after being visited by the late Princess Diana. The resort is located near the Tambora Volcano in the Sumbawa Province of Indonesia.
Under the guidance of Chairman Kushal Pal Singh, DLF intends to refocus on its core real estate operations. The company's previous forays into diverse sectors, including hotels, wind farms, and potential export processing zones, did not yield the expected results. This prompted a reassessment of the company's expansion strategy and a renewed emphasis on real estate development.
The sale of the Aman shares is projected to reduce DLF's total debt by approximately 26%. This deleveraging effort is expected to enhance the company's attractiveness to investors and facilitate progress on the planned Delhi real estate projects.
“The firm will again be concentrating on real estate assets,” Mr. Khattar said during an interview. He further explained that DLF will seek opportunities to capitalize on favorable market conditions in the real estate sector, including lower interest rates and improved investor confidence.
Rise in DLF Shares Follows Announcement
Following the announcement of DLF's strategic shift, the company experienced a positive response in the stock market. While DLF's shares are currently trading approximately 57% below their initial public offering (IPO) price – making it the third worst-performing stock in the current market – they have shown a recent upward trend. The market value of DLF shares has increased by 0.3%, reaching Rs. 225.9. This followed DLF raising 91.9 Billion Rupees from its initial share sale at 525 Rupees per share in 2007. DLF also intends to generate an additional Rs. 9 billion through the sale of its wind farms.