DLF Ltd. anticipates a strong increase in rental income for FY26, driven by new projects reaching completion. The company expects its rental earnings to rise from INR 300 crore in FY25 to INR 800 crore, while its joint venture DLF Cyber City Developers Ltd (DCCDL) with GIC projects an increase from INR 5,000 crore to INR 5,800 crore. Key assets, including three malls and Atrium Place, are set to begin generating revenue. With recent positive financial performance and accelerated capital investment, DLF aims to expand its rental portfolio, strengthening its position in India's commercial real estate market for sustained growth.
DLF Ltd., a prominent name in Indian real estate, has set its sights on a substantial increase in rental income for the financial year 2026 (FY26). This anticipated growth stems from the completion of several key projects in DLF's rental portfolio, many of which are expected to begin generating revenue within the coming quarters. DLF's rental assets are largely held under DLF Cyber City Developers Ltd (DCCDL), a joint venture established with GIC, Singapore's sovereign wealth fund.
The company estimates that its rental income for the current fiscal year, which ends in March 2025, will be over INR 300 crore. This income is likely to increase drastically to INR 800 crore over the following fiscal year. DCCDL's rental earnings, on the other hand, are expected to increase from INR 5,000 crore in FY25 to INR 5,800 crore in FY26, demonstrating the quality and depth of its rental asset portfolio.
During DLF's second-quarter investor call, Sriram Khattar, managing director of the DLF Rental Business, outlined these projections. He noted that the company's exit rental income for FY25 would be approximately INR 5,000 crore for DCCDL, with an additional INR 300 crore directly from DLF's properties. Looking ahead to FY26, Khattar predicted that DCCDL's rental income would increase to about INR 5,800 crore, while DLF would see a notable rise, posting approximately INR 1,000 crore. This figure includes revenue from Atrium Place in Gurgaon, a joint venture with Hines. After accounting for the joint venture partner's share, DLF's total rental income for FY26 is expected to stand at around INR 800 crore.
Khattar stated the reasons for the anticipated growth, citing the readiness of new assets in DLF's rental portfolio. "The increase in rental income in the coming fiscal year can be attributed to new assets reaching income-generating stages," he explained, citing the construction of three large malls and the Atrium Place. These assets, which are expected to be operational by FY26, will add significantly to DLF's income-generating properties.
The company's recent quarterly results indicate the excellent growth in its rental division. DCCDL recorded consolidated sales of INR 1,653 crore for the quarter ending September 30, a 13% rise over the same period last year. Meanwhile, consolidated earnings increased by 25% to INR 521 crore, confirming DCCDL's excellent financial position and development potential.
The company has taken note of these developments and, as a result, has increased its capital expenditure (capex) commitments to support the expansion of its rental portfolio. DLF claimed in a statement that "our rental industry is experiencing a healthy upturn and is growing steadily. Encouraged by these positive developments, we have increased our capital commitments to support the growth of our rental portfolio." This emphasis on extending and improving the rental portfolio is consistent with DLF's overall strategy to capitalise on rising demand for commercial property.
DLF's joint venture, DCCDL, is expected to generate strong rental revenue growth, while new expansions under DLF's own assets will improve overall earnings. The emphasis on speeding expenditures and completing new projects underscores the company's proactive approach to capitalizing on the growing potential of India's commercial real estate market. This strategy is especially opportune, since India's urbanization and economic growth continue to fuel demand for high-end commercial premises.
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