DLF has bought out developer Ireo’s outstanding loan and aims to develop a housing project with 7.5 million sq ft saleable area
New Delhi: DLF Ltd, the country’s largest real estate developer, has acquired a 29-acre land parcel in Gurugram’s Golf Course Extension for ₹825 crore, in the first big land transaction this year. The company plans to develop a housing project on this land, offering 7.5 million sq ft of saleable area.
A key part of this transaction involved DLF settling Ireo’s outstanding loan of ₹825 crore. This move will lead to the lenders exiting, incurring a significant loss on the loan. DLF, in its earnings call on Thursday, said it is currently finalizing the terms to acquire the land from Ireo.
Separately in a regulatory filing, DLF said it has signed an agreement with Standard Chartered Bank, Singapore Branch, DB International (Asia) Ltd, Singapore, and Deutsche Investments India Pvt Ltd for purchase of privately placed, listed, secured, non-convertible, redeemable bonds with a face value of ₹600 crore, which Ireo had defaulted on, including accrued interest.
“The company, directly or through its affiliates, intends to acquire overall rights and interest in land parcel admeasuring 29 acres having estimated development potential of up to 7.5 million sq ft, after following due process of law. Out of the identified land, about 25 acres forms part of the mortgaged land,” DLF said in the filing.
Furthermore, DLF has agreed with the bondholder to purchase these bonds for ₹825 crore and will subsequently assume the bondholder’s rights. In addition to this, DLF, through direct or affiliate involvement, will acquire rights and interests in the remaining land portion via separate binding agreements with the bond issuer.
Last November, Mumbai-based Oberoi Realty Ltd entered the National Capital Region (NCR) property market by acquiring 14.81 acres of land from Ireo Residences Company Pvt Ltd and others, in Sector 58 of Gurugram for ₹597 crore.
The residential sector has seen a flurry of land acquisitions post pandemic, reaching a peak in 2023. Anarock Property Consultants reports at least 97 land deals, covering 2,707 acres nationwide, with about 72% intended for residential development. This is an increase from 82 deals over 2,508 acres in 2022.
DLF reported a 27% year-on-year rise in net profit to ₹655.71 crore for the December ended quarter, attributed to higher income and lower expenses. Total income for the quarter increased to ₹1,643.51 crore from ₹1,559.66 crore a year ago.
Additionally, DLF’s board approved the sale of its office building, DLF Centre, to its subsidiary DLF Cyber City Developers Ltd (DCCDL) for ₹825 crore.
