DLF to Expand Retail Footprint, Plans New Shopping Mall in Gurugram

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DLF to Expand Retail Footprint, Plans New Shopping Mall in Gurugram
Credit: © Reuters.

Realty giant DLF (NS: DLF ) is set to commence construction of a new 25 lakh square feet shopping mall in Gurugram this quarter, as per the company's Vice Chairman and MD (Rental Business), Sriram Khattar. The move comes in response to a surge in demand for quality real estate space from retailers. The construction cost for the new mall is estimated to be around Rs 1,700 crore.

DLF's current retail footprint encompasses around 42 lakh square feet across nine properties, mainly within Delhi-NCR. Approximately 3.4 lakh square feet of the retail portfolio is managed directly by DLF Ltd., while the remainder falls under DLF Cyber City Developers Ltd (DCCDL), a joint venture between DLF and Singapore's sovereign wealth fund GIC.

Khattar, who recently assumed his new role, noted that the retail sector has rebounded significantly following the COVID-19 pandemic, with a surge in footfalls and sales at shopping malls. He adds that the company is also constructing a premium mall in Goa spanning around 6 lakh square feet.

In an effort to cater to local residents' needs, DLF is developing high-street shopping centers near its housing projects. Construction of these centers is already underway at DLF-phase 5, Gurugram, and Moti Nagar, Delhi.

During an investors' presentation for Q1 of fiscal year 2023-24, DLF projected a "significant increase in retail presence" with its portfolio expected to double over the next 4-5 years. This aligns with InvestingPro Tips, which highlight DLF's strong returns over the past five years and its position as a prominent player in the Real Estate Management & Development industry.

In terms of financial performance, DCCDL reported consolidated revenue of Rs 1,412 crore during the April-June quarter, marking a year-on-year growth of 12%. Consolidated profit for the same period was Rs 391 crore, reflecting a year-on-year increase of 21%.

DLF's retail business generated revenue of Rs 187 crore in Q1 of this fiscal year. At the group level, DLF recorded a 12% increase in consolidated net profit to Rs 527 crore in the first quarter of this fiscal year, up from Rs 469.57 crore in the same period last year. The total income for the quarter marginally increased to Rs 1,521.71 crore from Rs 1,516.28 crore in the corresponding period of the previous year.

According to InvestingPro data, DLF's market capitalization stands at $15984.96M USD, with a P/E ratio of 63.49. Despite a decline in revenue growth of -5.7% LTM2024.Q1, DLF has managed to maintain a gross profit margin of 56.84%. The company's dividend yield is at 0.75%, indicating a consistent return to shareholders, which is in line with the InvestingPro Tip that DLF has maintained dividend payments for 17 consecutive years.

DLF Group, which primarily focuses on the development and sale of residential properties and the development and leasing of commercial and retail properties, has developed more than 158 real estate projects and an area exceeding 340 million square feet. With an annuity portfolio of over 42 million square feet, DLF Group possesses land banks to develop 215 million square feet across residential and commercial segments. For more insights like these, consider subscribing to InvestingPro.

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