DLF speeds up mall build-outs as footfalls rise

DLF Ltd, the largest real estate developer in the country, is seeing upside in its mall and retail business after a lull of more than 18 months.

Better-than-expected footfalls at its malls are prompting the developer to ramp up construction of the new ones.
With improved outlook, the developer is seeking to take the number of operational malls in the national capital region to 12 during the fiscal from the present 7.

It has given guidance of earning a rental income of about Rs 1,600 crore during the fiscal 2011 from the commercial and malls business from Rs 500-600 crore recorded in the last
fiscal.

The developer recently launched one Star mall in Gurgaon and 3 malls in Delhi in Mayur Vihar, Shalimar Bagh and Saket. It already has a luxury mall, Emporio, apart from 2 more in Delhi, 4 malls in Gurgaon and one mall in Chandigarh.

“As the economy has progressed in the past few quarters we are experiencing better rental rates, footfalls and retailers. We believe this trend will continue to get stronger as the year progresses…mall rentals across micro markets are likely to remain stable in the medium term,” a DLF spokesperson told DNA.

DLF leased about 1 million sq ft of commercial space in the first quarter and is maintaining 3-4 million sq ft lease guidance for the fiscal.

The developer, which saw increased traction in mall occupancy in the last quarter with enquiries increasing, was able to lease 0.05 million sq ft of mall space in the first quarter.

Last year, the developer was involved in a major face-off with the retailers at DLF Place Saket and DLF Place Vasant Kunj in New Delhi as they shut shop due to poor business and footfalls, forcing the developer to slash pre-committed rent agreements.

The low level of interest among retailers coupled with recessionary trends forced the developer to put its mall plans on the back burner.

Meanwhile, the developer was able to get Rs 290 crore from divesting its non-core assets in the first quarter.

DLF has maintained that sale of non-core assets would contribute up to Rs 2,500 crore for the next 15-18 months.