The recent rally seen in the stocks are bringing back some optimism to real estate developers. DLF Assets, the property fund of DLF Ltd, India’s largest real estate developer, plans not just to revive but also to enlarge an initial public offer of its property trust in Singapore, Reuters reports. The company plans to update the IPO papers in Singapore by month-end or next month.
DLF Assets Pvt. Ltd. or DAPL is independent of DLF Ltd. It was set up for bidding along with other companies in potential assets sale by DLF. Earlier this year, DLF had shelved a planned $1.5 billion IPO for its real estate investment trust, scheduled for the first quarter of 2008, becasue of market volatility.
In the interim, DLF has raised $450 million (Rs 1,831.5 crore) from Symphony Capital, a London based investment firm. Further, seeing DAPL’s inability to raise funds through an IPO, the parent company DLF has also reversed the sale of Rs 1,500 crore worth of office assets to the group company DLF Assets, thereby reporting a reduction of Rs 800 crore in the PBT for the quarter ended March ‘07.
DLF Assets forms an important part of DLF as the sale of commercial assets to DLF Assets contributed Rs. 2,207 crore to DLF’s revenue and Rs. 1,564 to its profit before tax in 2006-07 making up around 55 per cent of DLF Ltd’s revenues and 61 per cent of its pre tax profit.
“The main reason for the increase in sales revenue of DLF Ltd. was the sale by us of certain commercial properties to DAPL,” DLF had said in its IPO prospectus.

Renewed interest among investors
Poor market conditions had prompted rivals Unitech and Indiabulls Real Estates to also postpone their planned Singapore REIT IPOs in March. However, Indiabulls real estate has decided to list its property trust in Singapore and will go ahead with a $300 million IPO in Singapore.
Also, Emaar MGF, a joint venture between Dubai-based Emaar Properties and Delhi-based MGF, which had to withdraw its Rs 7,000-crore IPO, may also revisit its IPO plans, according to a report.
So after six and a half months of steep fall in real estate stock prices, the realty sector seems to be looking at the capital market again for raising capital.

Posted on 05/13/08, 8:24 AM
in: Capital Markets, Real Estate
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