After an attractive stock market buyback, DLF, India's biggest real estate company plans another buyback and this time it is not for shares but in its profitable commercial property business.
DLF's commercial complex business has decided to buyback property from its investors but only if it has another buyer.
This isn't DLF's entry into the realty broking business but a sincere effort to hold on to its loyal investors.
Sources say DLF does not aim to profit from this buy back but wants to meet its huge investment for DLF Commercial Complexes by stimulating investor demand.
Sources say DLF Commercial Complex (DCCL) eyes Rs 8000 crore revenue for FY ’09. Last year revenues were only Rs 3000 crore. DCCL is DLF's most profitable business and 60 per cent of buyers are investors.
“The industry, I think in total terms, is facing a certain amount of fall-off in sales primarily because of investors sitting on the fence at the moment. But DLF has been doing well and our market share has increased,” said Ajay Khanna, MD, DLF Commercial Complexes.
Experts say that in such a scenario focussing on sale could be a good bet.
“It is not only about bailing out investors. If I find a distressed asset with a good rental capability, I might also buy it out,” said Ajit Krishnan, Partner, E&Y.
It might be too early to judge the impact of this move but DLF is the market leader and such a step could inspire other developers, rework their strategy to help trapped investors exit. DLF also says that apart from commercials it could look at a similar model for its residential properties.