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DLF’s rental arm to buy out Hines from One Horizon Centre
Photo Credit: VCCircle

DLF Cyber City Developers Limited (DCCDL), the rental arm of real estate developer DLF Group, has entered into an agreement to buy out US development and investment firm Hines’ stake in One Horizon Center, the company said in a statement on Friday.

The commercial property One Horizon is located at DLF 5, Gurugram and has a leasable area of 8,13,000 square feet (sq ft) with some retail elements.

DLF owns 48.2% stake in Fairleaf Real Estate Private Limited, the entity developing One Horizon Centre, while Hines owns the rest.

DLF is paying roughly Rs 780 crore ($106 million) for the stake purchase.

The deal is likely to be concluded by the next quarter, the statement said.

“We believe that this acquisition will be highly value-accretive for us and will add approximately Rs 150-160 crore of rental revenues annually. Post completion of this acquisition, the DCCDL platform will have approximately 34 million sq ft of operational rental portfolio,” said Sriram Khattar, managing director, rental business, DLF.

DLF and Hines had entered into the joint venture to develop One Horizon back in 2008. Recently, the duo got into another joint venture to develop a commercial project in Gurugram on a land parcel of 11.76 acres.

DLF, which has developed an area of approximately 331 million sq feet so far and has an annuity portfolio of over 35 million sq ft, is looking at various avenues for raising capital.

Early this year, it raised Rs 1,000 crore ($130 million) by issuing non-convertible debentures (NCDs).

DLF has a partnership with Singapore’s GIC for its rental platform DCCDL. In 2017, the promoters of DLF sold a part of their stake in the rental arm to Singapore sovereign wealth fund GIC for $1.3 billion to reduce debt.

The rental arm of the company registered a revenue of Rs 1,040 crore for the three months ended September, a quarter-on-quarter growth of 12%. Its net profit was Rs 171 crore for the September quarter.

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