DLF, India's largest real estate developer, is in discussions with Bharti Realty to acquire phases of Aerocity in Delhi, totaling 17 million square feet. The project includes 5 million square feet of retail space and is anticipated to generate INR 5,000 crore in annual rental income. Bharti Realty initially developed the project, and later, Brookfield acquired a majority stake. DLF aims to strengthen its rental portfolio through this acquisition. The development involves creating an SPV, which DLF Cyber City Developers will manage. Bharti Realty has already initiated development expansion, investing over INR 6,595 crore. This expansion aims to enlarge a commercial district with new assets, expanding the existing Worldmark properties.
DLF, India's foremost real estate developer, is currently engaged in discussions with Bharti Realty to procure the under-construction phases of Aerocity in Delhi, encompassing a total development potential of 17 million square feet, according to informed sources. Approximately 5 million square feet of the overall portfolio will be designated for retail purposes, with the completed project expected to yield an annual rental income of INR 5,000 crore. Although Bharti initially spearheaded the development of the first phase of Aerocity, Brookfield Asset Management of Canada later acquired a controlling stake of 51% in Rostrum Realty, a real estate joint venture.
GMR holds the lease for the entire area until 2066, and despite DLF's participation in the initial bid, it was ultimately awarded to Bharti. However, DLF has recently initiated the process to acquire the asset to further bolster its rental portfolio. It is anticipated that the company will establish a special purpose vehicle (SPV) as part of the deal structure, with DLF Cyber City Developers (DCCDL), the rental arm of DLF, likely to manage the asset, given its extensive operation of close to 40 million square feet nationwide.
Bharti Realty has already begun the development of approximately 6.5 million square feet, with an investment exceeding INR 6,595 crore, to transform Aerocity into a global business hub, including approximately 3 million square feet of retail space. Subsequent phases will witness the development of an additional 10 million square feet, with approximately 2 million square feet designated for retail. In the initial phase, Bharti Realty successfully completed Worldmark 1, 2, and 3, covering approximately 1.5 million square feet. This part is now under the ownership of Rostrum Realty, a joint venture between Brookfield and Bharti Enterprises. The entire project is part of a larger integrated development spanning approximately 60 acres.
Each office tower will incorporate a retail component alongside a separate mall, with ample parking space for over 10,000 vehicles. The company aims to commence possession starting at the end of 2024. The expansion will incorporate fresh assets named Worldmark-4, Worldmark-5, Worldmark-6, and Worldmark-7, collectively forming a commercial district offering approximately 3.5 million square feet of leasable area. This new area will nearly triple the size of the existing Worldmark assets.
In conclusion, DLF's potential acquisition of Aerocity's under-construction phases reflects its strategic vision to expand its footprint in the real estate market. With plans to strengthen its rental portfolio and capitalize on the commercial potential of the project, DLF aims to leverage its expertise and resources to drive growth and profitability. As discussions with Bharti Realty progress, the collaboration holds promise for both companies to unlock value and contribute to the development of Delhi's urban landscape.
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