Ladies and gentlemen, good day and welcome to DLF Limited Q2 FY 2023 earnings conference call. We have with us on the call Mr. Ashok Kumar Tyagi, CEO, DLF Limited. Mr. Vivek Anand, Group CFO. Mr. Sriram Khattar, MD, Rental Business. Mr. Aakash Ohri, Chief Business Officer and Group Executive Director. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Please note that this conference is being recorded. I now hand the conference over to Mr. Vivek Anand. Thank you, and over to you, sir.
Thank you. A very good morning, and welcome to DLF Limited Quarter 2 Financial Year 2023 earnings webcast. I know it's a Saturday morning, so thanks for joining us early on a Saturday. I would like to start by wishing you and your families a very happy Deepavali. Moving on to the results, we continue to perform consistently across all parameters in line with the guidance. I will now first talk about the financial highlights for Quarter 2 Financial Year 2023, which is DLF Limited consolidated results. Consolidated revenue stood at INR 1,360 crores. Gross margin improved to 60%, driven by superior product mix. EBITDA stood at INR 495 crores, with margin improving this quarter to 36%. Net profit at INR 487 crores, reflecting year-on-year increase of 28%.
This was primarily due to higher JV profit and significant reduction in the finance costs. Housing demand continued to remain buoyant during the period. The luxury segment continues to witness sustained demand with a clear shift towards larger homes. We continue to experience further consolidation across the industry in the backdrop of changing consumer preference towards quality offerings from large and credible players. The interest rate hike was on expected lines. We continue to closely monitor these developments, however have not experienced any material impact on housing demand so far. We remain confident that our product offerings will remain the preferred choice for customers and will continue to perform well. Our residential business delivered a steady performance and clock new sales booking of INR 2,052 crores, reflecting a year-on-year growth of 36%.
Cumulative new sales bookings for first half financial year 2023 stands at INR 4,092 crores, in line with our guidance. We believe that our well-thought-out strategy of bringing low-rise developments across multiple geographies augurs well in the current market. We launched three new products across multiple price segments and geographies during the previous quarter. The Grove in DLF 5 Gurugram, The Valley Gardens in Panchkula, Garden City Enclave Independent Floor in Sector 93, New Gurugram. All these new launches witnessed encouraging response from the markets, delivering cumulative sales of INR 1,315 crores during the quarter. The Camellias, our super luxury offerings, has consistently proven to be the preferred choice. Sustained momentum of demand for this product led to incremental sales bookings of INR 473 crores during the quarter.
We remain optimistic about the inherent demand in housing, given the changing aspirations of consumers for high-quality, efficient design products being offered across established ecosystems, and continue to work to offer new products across segments and geographies. Surplus cash generation during the quarter stood at INR 409 crores before net outflow of INR 292 crores on account of increased dividend payout. Deleveraging remains a focus area and consequently our net debt stood at INR 2,142 crores at the end of the quarter. I now move to the financial highlights for Quarter Two Financial Year 2023, DLF Cyber City Developers Limited consolidated results. The office portfolio is exhibiting steady recovery with improvement in occupancies. The buoyancy in the retail business continues.
Rental income grew 20% year-on-year, driven by a strong growth in retail revenue, which grew 54%, and office business, which grew 14% during the period. Consolidated revenue of INR 1,369 crores, reflecting a 22% year-on-year growth. EBITDA stood at INR 1,046 crores, year-on-year growth of 21%. Net profit at INR 355 crores, reflecting year-on-year growth of 54%. We continue to witness a steady upstick in occupiers' attendance , currently at 67% across the portfolio, along with gradual recovery in our leasing momentum. Office occupancy levels have moved up to 89% during the quarter, up by 1 percentage point. The first phase, 1.7 million sq ft of our next generation workplace, DLF Downtown Gurugram, has commenced operations and has now started contributing to the rental portfolio.
Its unmatched location and our ability to offer an integrated, safe and sustainable ecosystem has once again scripted a success story. The office area for this asset was completely pre-leased even before commencement of operations. We continue to have a positive outlook towards the office business and hence continue to judiciously put our CapEx to fuel growth in this business.
We have initiated development of an additional office block in DLF Downtown, Gurugram. The development of DLF Downtown Chennai remains on track. The retail business continues to exhibit healthy growth. Footfalls and consumption trends exhibited strong momentum. Sales growth has been better compared to pre-COVID levels, and we expect similar trend in the near future given the sustained demand and the upcoming festival season. We remain comfortably poised to deliver our business goals, which is well supported by sustained housing demand, quality offerings, and a healthy balance sheet. This completes the results update. Thank you very much. We can now open the floor for Q&A.
Thank you very much. We will now begin the question and answer session. To ask a question, please click on the Raise Hand icon available on the toolbar, or you may click on Q&A icon to raise your hand or type your question. The operator will announce your name when it's your turn to ask a question. Please accept the prompt on your screen and unmute your microphone while proceeding with your question. We will wait for a moment while the question queue assembles. The first question is from the line of Kunal Lakhan from CLSA. Please go ahead.
Hi. Good morning, sir. My first question is on slide 15. Since we have launched about 4.5 million sq ft in first half and the second half, we seem to be launching about 3.1 million sq ft, second half which usually is the stronger quarter, stronger period seasonally. How should we look at this? Like, would we look at up-fronting some launches from 2023 or beyond period to 2022's second half? Or, you know, how should we look at this? If you can give some commentary on the sales trajectory also in the second half.
As far as the H2 is concerned, I think what we are doing is we're going to be maintaining our guidance as to what we had mentioned to you all. Because what happens in a situation like this is that what you are seeing right now is already being pre-planned to execute and deliver. Therefore the entire machinery then goes into putting that whole launch together. We have good visibility and pipelines and launches for Q3 as well as Q4. Q3, you will see a launch, another launch in Panchkula. Q4, we are preparing for the big high-rise launch, the 63 , which we will talk to you after this quarter.
As far as the trajectory is concerned, I think we are maintaining the strike rate as we had suggested or promised. Over and above that, for us to pre-pone launches of the next year, I don't see maybe a reason right now in the most immediate future. We've got things lined up for should we require things to happen before we have the I'd say infrastructure to support it and the firepower to kind of execute that. As of now, I think we are working to our plan and we'd like to maintain that. Thanks.
Just a related question on that, Aakash. You're on the Phase 5, right? We launched The Grove, and we sold it out in a fortnight. How should we look at the subsequent phases coming through in Phase 5? What could be the timeline for, say, The Crest Phase 2 or something on similar lines?
Yeah. DLF 5, as we call it, for this year, I think we are done with DLF 5's launches. We will next year, obviously, in one of the quarters, we will announce the Crest 2 that you are referring to. But at this point of time, I think, if you see the spread and how we've been working is across geographies. You know, right now the focus is going to be Panchkula, and then it'll move to the golf course extension area. Coming back to DLF 5, we will announce it, hopefully after Q2.
Yeah.
Next year. We will give that guidance before the year starts. You'll have it much before.
Kunal, you know, just to supplement what Aakash said, it's before launching a major high-rise like be it on the Golf Course Extension Road or on the Golf Course Road, we need three or four quarters of intensive preparation, not only in terms of approvals, but also in terms of awarding of contracts, finalization of BOQs, beginning of at least the subsoil construction work and all of those things. We have been on the Golf Course Extension project for the last two or three quarters, and I think now we hopefully executed enough to have a launch in the next quarter. Similarly, hopefully you should see a Phase 5 high-rise launch sometime in the later half of next year if all goes well.
Sure, sure. My second question was on the collection side. Last four quarters we have been clocking INR 2,000 crore+ of sales consistently. And you know, considering like, you know, the new launches that we have done have a much shorter monetization period or construction period of 18-24 months, right? Somewhere like your collection run rate has to catch up with the sales run rate. When do you think that will happen, you know, when we can reach 2,000 crores of collection run rate?
May I answer it or you wanna answer it?
Please.
Most of the collections, as we had even planned within the system are being done as per plan. If you pull out the four quarters collection date also, you will see it's at par with what the planning was earlier. With regard to collections at par with sales, this only happens with the construction schedules, and that you call for money based on that. If you've seen, you know, this is a little bit of a, I'd say a dangerous call to do because, you know, you need to give the customers a little bit of a breathing space before they actually get into the habit of paying. We are the most aggressive in our calling.
If you've seen our payment schedules compared to anybody else in the country, we take a substantial part, almost 25% and above, most immediately in the first quarter alone. I think that is the rate that we'd want to. I don't think collecting money more than that right now kind of unnerves the investor and the customer because everybody's doing their financial planning. The banks kind of disburse monies based on, you know, how they want it. We've kept that, the collection. I know I've, Vivek, you know, say that, but I don't think I would like to keep the collection pace more than what it is today. Also because you need to give that comfort factor to the investor, you know?
Yeah.
I think that's the pace that we've been doing. Let Vivek answer.
Yeah. Good morning. Good morning, Kunal. On the sales rate of 2,000, when do you think our collections will catch up? First message I want to give is that 2,000 crores of sales includes the One Midtown sales, right? When we look at the collections, we look at the collections which are without One Midtown. That's separate. Therefore the two are not comparable. Let me also answer how our collections are picking up and how I see the collections in the second half. The first half collections have grown by 15% over the same period last year. Clearly there is a pickup in collections, point number one. Second half, we expect the collections to significantly move up, right? That's as per our plan.
The projects which have been launched are getting closer to their construction phase end, right? We will be raising demands this quarter and next quarter, and hopefully that should get collected within 30-60 days. We will see collections improving and moving up significantly in second half versus the first half.
Will it be?
Thank you.
I don't see that, right? Yes, there will be a significant upside in the collections.
That's very helpful. Thank you so much. Wish you all a very happy Diwali in case I don't get a follow-up question. Thank you so much.
Thank you.
Thank you.
Thank you. The next question is from the line of Saurabh Kumar from JPMorgan. Please go ahead.
Thank you. Am I audible?
Yeah. Good morning, Saurabh. Morning, Saurabh.
Sir, a few questions. First is, you know, on your opening comments you mentioned that mortgage rates are not having an impact, but maybe that was for last quarter. We've already seen the rates go to 8.5, and with the risk that this goes to 9.5, would you still be confident that demand will not be impacted if rates move to the 9.5% handle? And also ex of Camellias, how many, how much of your customers would end up taking mortgages, if you can, if you would have a ballpark idea?
As far as the mortgages are concerned, Saurabh, I've seen a trend that people are getting into or, you know, diluting their mutual fund or other investments to kind of route their monies back into the new sales. I've seen this trend over one year, Saurabh. I've been monitoring this closely. Also because I work very closely with the banks with our launches. I've seen a certain amount. Let's say if I can give you an example of one of the recent launches. The bank mortgages or the call for that was just about maybe 15% so far, you know, compared to what these guys have in hand or whatever. To answer your first question, it's an opportunity cost.
At that point of time, if you actually see what these people are going to be investing in, I'd like to answer it in a different way what I'm reading over the last two quarters, and I don't think we can completely negate the interest issue. What I'm seeing is that we are the preferred investment category right now. When I say we, I'm talking about DLF. I'm not talking about the industry right now. I am seeing that happen where people are consciously breaking or moving their other monies towards us. Whether that in the near future is going to impact, I don't think.
Again, I don't wanna speculate, but what I'm seeing a trend where, you know, it's like a Ghar Waapsi for a lot of people coming back to the DLF way of, you know, investing and everything because of the commitments that we've done over the last, I think two, three years. We've demonstrated that we've finished projects. We've given people back money should they need it. You know, a DLF investment is almost like a liquid fund today. So even if people were wanting to exit, we never kind of held back. We continued to move on. We demonstrated a lot of strength. So the bank rates have been going up, if you see over the last two quarters also.
I think the customers are, right now, thankfully, very focused on investing with us, and they are looking forward to this. The second thing that I'm also doing is I'm stepping up on the NRI plan. If you've seen our NRI investments are between 12% to, say about 14% odd , where it has a potential to double. Therefore, you will see an aggressive outreach starting November, where we've just had two very successful outreaches in Dubai, and Singapore. I see that particular thing also changing because December onwards, December to February, there are a lot of NRIs who come and visit the country.
I feel that that is something that we would like to go pitch in advance and then wait for them to make investments or come and do that. It's not only a Camellia-centric story, but I am seeing this across the board. I feel that the customers today prefer to be with us rather than investing in other asset classes. I'm seeing this very clearly, Saurabh.
Got it. Thank you, sir. The second one is, you know, Vivek, on the pricing. Your pricing across projects, we have seen much better than, you know, what we would have estimated at the point of launch. Your Grove is INR 22,000. Camellias is now INR 45,000. Even your Panchkula is at INR 8,400. Should we expect that now the stable state margins at DLF may be one and a half years out, move to a 40% range too from 35% odd? Or do you think a large part of these gains get reinvested back?
You're referring to EBITDA or you're referring to gross margins?
EBITDA.
EBITDA. See, EBITDA this year also I talked about, Saurabh, that we will be somewhere close to the range of 35%-36%. Going forward next year, I think we'll surely maintain that percentage and we will surely build on that.
On incremental sales, will it be fair to assume that the margins are higher than 35%?
I think it's a mix, Saurabh. Yes, we'll have to really look at it as a bucket, right, of new launches, right? In some products, yes, the margins are high, some are low. On an average, right, we are really making sure that we maintain our margins.
The second point, Saurabh, which will also drive the EBITDA is that, you know, to scale up our business, there's been an upfront investment in costs and in the overheads.
Yeah.
Which, you know, for an INR 8,000 crore annualized sales level has a certain EBITDA drag. Hopefully at a sales level which is higher in the following years and the cost there is broadly remaining the same. That should also add a couple of percentage points to the EBITDA margin because that just gets diluted. We've just added costs in anticipation of scaling up, and scaling up is happening now.
Yeah. Yeah.
Okay. Got it.
Also just to add, like, we'll be once these new launches, which we did in second half of financial year 2021, once we start issuing possession letters for them.
Yeah.
Right? Our revenue lines actually grow, right? That will also help you generate a better margin.
Got it. Sir, last question is on DCCDL. This quarter-on-quarter growth we are seeing, that's a contribution of the new DLF Downtown block. Will that be fair or is there any organic element to it as well? Secondly, the DLF Downtown difference versus Cyber Park, there's a 25% differential in rents. What would you attribute it to? Because the building quality will be similar. Is this just market definition we have seen in Gurgaon or, I mean, is there anything else to read into that?
Yeah. Hi, Saurabh. Your first question on organic versus growth from new assets. Organic growth is definitely there. In retail, you've seen a major bounce back compared to the same quarter last year and even compared to the first quarter of the current fiscal. In offices, we are now seeing the rentals getting steady to a marginal growth in the new rentals that we are doing. Therefore, the growth that you see is a combination of organic growth and inorganic growth coming from the new projects, basically Downtown. On Downtown, the rental increases are there because the time of completion of two and three Downtown compared to Cyber Park, there's a gap of three years. If you just take a normal annual growth, you have about a 15% growth.
Two, very clearly post-COVID, the large multinationals are showing the following two or three trends. One trend is that they are definitely moving to more quality assets, especially in IT parks, which give them an opportunity for further expansion and growth over the years. Two, there is no more their requirement of a grade A property. They are definitely looking at a grade A++ property. Three, the emphasis is much more on sustainability, wellness, the social infrastructure, et cetera, which we have been emphasizing in our office developments for the last five to seven years. These have held us in good state. Therefore, Downtown, which is now fully leased, has rentals which are about 23%-25% higher than Cyber Park.
I understand.
In terms of sort of your question of in terms of office growth of 14% year-on-year, Downtown's contribution is almost 4% out of 14%. Then we have new leases contributing 5%, right? Contractual escalations around 5%. That's broadly the breakup of 14%.
Yeah. Okay. Thank you. Thank you, sir. This is very helpful, and Happy Diwali to all of you.
Happy Diwali.
One more thing. Camellias is almost touching INR 60,000, huh? Not INR 45,000.
That's a good Diwali gift for all your investors and
Yeah, and to you, and to you. Thanks. Happy Diwali.
Thank you. The next question is from the line of Sameer Baisiwara from Morgan Stanley. Please go ahead.
Yeah. Hi. Thanks. Good morning, everyone. The first question is on DCCDL. We have got INR 19,000+ crores of debt. How do you see the interest rate impact over the next 12-15 months?
This was a question which we answered in the last analyst call also. It is very difficult to accurately forecast where these interest rates will go. There is the market buzz is that there will be an increase of 35-50 basis points between now and March. If you take a little conservative estimate, the impact at a PAT level will be between INR 50-80 crores for the full year.
Sameerji, basically, and in fact, I'll ask Vivek to then elaborate on this. Broadly of, you know, the repo has gone up by 1.9 percentage points in the last, whatever, 6 months. Broadly, what the team has been able to do, led by Vivek and the finance team in Cyber City, is to restrict the impact on Cyber City to about half of it. Vivek, you may want to-
This 190 basis points increase in repo in the last five months on a gross debt of INR 20,000 crores theoretically translates to an impact of close to INR 400 crores at a PBT level. This year, what we've been able to do is to restrict the impact to a little more than INR 100 crores at a PBT level. There are series of steps what we've really taken in terms of renegotiation, refinancing, which has really helped us.
Yeah, sure, sir. The question is, how much of this is fixed versus variable? Therefore, you know, how, you know, can we say that, you know, the rate, you know, the impact can be 100-150 basis points in fiscal 2024, based on your internal workings. My fear here is that whatever the rental growth that may come, say INR 300-400 crore, a lot of that gets digested by this increase in interest cost.
Yes. Yeah, yeah. The fixed interest portfolio in this 1,900 crores is about 15%-16%. However, now we are starting to work with the banks which give us lease rental discounting, which by their very nature are much more long term, to try and see if we can fix the interest rates for the first 2 years or 2 and a half years, and then they go back to floating. The treasury teams are working on this. Next year's impact at a PAT level could be about 100 to about 150 crores, depending upon how we exit this year. Yes, it will have an adverse impact to the PAT compared to the earlier interest regime.
I think this is something which we have to take in our stride as we go ahead. We've had two very, very good years of interest rates going down, and probably we'll see interest rates at a little elevated level till FY 2024 before they start sort of tapering off again in FY 2025, 2026.
Okay. That's very clear. Just to be sure, you said 15-16% is fixed. 85% is floating at the moment.
Yes. You know, I would just like to add one thing here. When we talk of fixed, we generally have to approach the capital markets for that, whereas the variable of floating rate is available from the banking system. The banking system is much, much more flushed with funds than the capital markets for fixed-rate instruments. Therefore, the banks which have healthy balance sheets now are very competitive in the rates they offer. Therefore, in my personal view, just to compare a fixed versus floating to take a call will be difficult because of the liquidity conditions in the banking and in the capital markets.
Okay, sir. Very clear. Sir, quick, two more questions from my side. One is on the residential side. So that's clearly the demand momentum has been good, but this is a cyclical industry. What are the one or two key risk factors that you see that can, you know, moderate, this demand?
With regard to the present demand.
I am seeing a lot of business coming in from actual users, and that has completely changed the dynamics. I can tell you today. I am not seeing at this point in time. I mean, I'm seeing investors, but I'm seeing them in lesser proportions. What I feel is that right now, over the next year at least, I'm seeing a lot of pent-up demand, but pent-up in a way that people had been deferring. Now people have come down to. Earlier, they were living in homes that were rented or even otherwise not to their liking. I'm right now seeing a trend where people are actually spending a lot of time.
I'm saying this because, if you see our launches, there were times where, during launches, people won't even come to sites. Their brokers and intermediaries would run around, fill out forms, get everything done, and we are done. I am seeing this change because whether it is a Midtown, whether it is a floor in Phase 1 to 4, whether it is DLF 5 Grove, whether it is even the new Gurgaon launch that we just did, Garden City Enclave, whether it was The Valley Gardens in Panchkula. I am seeing today that people are not only visiting once, but spending a lot of time contemplating, deciding, looking at the orientation and so on and so forth.
Yes, I understand it's cyclical, but you know, we've just come back after 10 years. Yeah, at least give us some more time.
Mm-hmm.
You know, the resi business, if you've seen over the last three years, there has been quite a robust demand. This is not the frivolous demand that used to be earlier. This is not something that can be passed around is what my personal experience has been over this last, I'd say even six quarters, if I can say it to you. Earlier, I thought it was just maybe a Camellias story. As I traveled, I saw Chennai, which was an average ticket size of maybe starting at just about INR 40 lakhs. Or you know, every customer today, whether a mid-level or a high-level customer, is spending a lot of time making sure that they are buying something that they like. You know, they can't be pushed around anymore.
It's not that you got the second floor, so I can shove it down. What I'm seeing right now is, I can safely say that I am seeing a genuine demand right now. That cyclical nature right now is not something that I'd like to. I'll keep it in the back of my head right now since you mentioned it, but I mean, right now, it doesn't bother me.
If I were to add to Sameer to your question, I will say possibly one of the things which we're keeping very close is the interest rates. I think Kunal asked this question earlier. That was something we all are at this point in time watching it very closely. But if I really look at last three launches we had in the previous quarter, right? These launches were in three different geographies at three different-
Price points.
Price points across different segments of our customers. I think we've got a very good response. Sometimes it's difficult to really predict what is working, what is not working. If you really see, we are sitting on a repo rate. In fact, the repo rate has now touched 6.9% faster than what all the banks had projected sometime in April and May. Despite that, we are seeing that the demand stays as strong as it was before. Therefore, yes, while interest could be one big watch out, but I also feel that all the other fundamental demand drivers continue to play well at this point in time.
I've got it, sir. Thank you very much. With your permission, one final quick question. Your intent to generate free cash flow every quarter, whether small or big, I mean, that intent remains, right?
Yes, absolutely. That intent remains. Yes.
Okay. Great. Thank you, sir.
Thank you. The next question is a text question. Okay, we have lost the question from Mr. Mohit. We'll move on to the next question, which is from the line of Pritesh Sheth from Motilal Oswal. Please go ahead.
Hi, am I audible?
Yes, sir, you are.
Yeah.
Please go ahead.
Yeah, hi. Thanks for taking my question. Firstly, just one. Are we all set to launch the last tower in One Midtown this quarter or it's next quarter?
No. It's scheduled for Q1, but we may prepone it to Q4 because right now, as Mr. Tyagi is also saying, a lot of preparation goes towards making the, I mean, working for a new launch, which is a big launch, as you know, which is in Gurgaon, the high-rise we were talking about. The collections and the process there in Midtown is, thankfully, quite stable right now. Right now what we are going to be doing is because there will be a price increase also with this. Just to give you a quick background of what's happening in our adjacent property, the Capital Greens, which abuts the Midtown, we've almost in Phase 3 reached a realization.
Not we, but our investors, our customers have already almost reached INR 30,000/sq ft realization. Whereas we right now are selling Midtown, the third tower C was sold at about INR 23,500. I feel there is a tremendous amount of opportunity here for everybody to invest there. Whether we want to get in now and realize it or we want to stick to the Q1 plan is something that we'll decide in Q4. At this point in time, I think, again, as I said, we'd like to work to that plan because we've seen this. Every time we rush into something, obviously there's something gets left out.
If we can just maintain this strike rate and work to our plan, I think because you know the entire machinery starts to work pre-launch, pre-approval. First the concept, this and that. It's just the gestation period for that. Within the company, everybody has to align themselves for that particular launch. I think the concentration will be here. Should push come to shove and we need to do something there, we will. We are ready for a Q4. We are ready for a Q1. Thanks.
Sure. Just a follow-up on residential. I think for next quarter, since The Grove is fully sold out, we already have probably INR 1,500 crore of visibility for next quarter, right? I mean, I guess that project was around INR 1,800 crore and we have booked INR 300 crore from that project in this quarter in Q2. Given that we have a strong visibility and there are two big launches that are coming, one next quarter on Panchkula and in Q4, there would be high-rise. Shouldn't I mean, aren't you more confident that we can do more than INR 8,000 crore of sales and, given the visibility we have, we need to upgrade our guidance? Or, you'll still remain cautious given the environment and stick to that INR 8,000?
We'll remain cautious given the environment. We don't know how everything is going to pan out. You've seen what the U.K. is going through and everything else. I say again, we are right now at this point in time. I'd rather we all be cautious because I think that's the plan we all kind of discussed and set ourselves to do. Yes, if there is opportunity to grab more, you have my assurance that we will leave no stone unturned to do that. At this point in time, I think I'd say the external environments right now. There are too many variables going on. If we just keep our head down and continue to at least work to our plan, that is what I feel we would like to do. Mr. Tyagi.
Can add something if he wants.
No. I think we internally definitely feel confident that we can hopefully beat the 8,000 guidance. Given all the externalities, including the interest rate, I think right now from external standpoint, we'd like to continue with the guidance of 8,000 that we have given, with hopefully an upside risk to it.
Sure. Thanks. One last. In terms of high-rise, we already have one in plan and The Crest two would be next year. What all are the other high-rises that are already included in our launch pipeline that we have slated? I guess there's one more in Chennai, if I'm not wrong.
Yeah.
Any other, let's say, new Gurgaon that you already have?
Yes, there is Chennai coming. We're all excited about it. That's going to be the first luxury development in Chennai, right in the heart of the city, which will be along the lines of the Crest Plus. Yes, Chennai, you know, we are, you know, happy to go back there with this particular product. There will be something in Gurugram. Right now, if you've seen, even the portfolios are pretty balanced with low-rise and high-rise. I think that's what you will see from us going forward because there is thankfully a market for low-rise and there is a market for condominiums. Which when we started off, we want.
I mean, there was skepticism all around, but I think if you've seen the results and the acceptance, I think there is now it's reasonably established that there are both these markets can work concurrently. I think that's what we'll do.
Sure. Very helpful. That would be next year, right?
Yeah, yeah. Next year.
Okay. Okay. Thanks. Happy Diwali to you all.
Happy Diwali.
Thank you. The next question is a text question from Abhishek Lodhia from YES Securities. The question is: If I heard rightly from Vivek, sir, that collection of INR 1252 crore doesn't include numbers from Midtown, then what is the collection run rate at Midtown and for this quarter? Thanks, and Happy Diwali to DLF family.
Yes, Abhishek, you heard me correct. The numbers what we report are DLF numbers, and we don't include the JV numbers when we report the collection numbers. As of September, we've collected close to INR 400 crore in the JV, and this quarter our plan is to collect INR 450 crore. As the construction commences and as we are raising demand, we will be having a good upside on collections this quarter.
Thank you. The next question is again a text question from Nimit Gala from Ace Landstone Investments, and the question is: Hi, team. Any update on REIT timelines or is there a change in plan, maybe due to high interest rate regime and rise in cap rates? I see no mention in the investor presentation.
I mean, so there's no change in the plan or the direction, and I think both GIC and we are reasonably committed to the entire thing. You are right, given the high interest rate scenario currently going on and the overall uncertainty, you know, frankly, I mean, this obviously is not the best time for a new REIT, especially a REIT potentially of our size, to come into the market. We are sort of readying all our firepower to it. Hopefully, you know, as the markets sort of temper and both the shareholders decide, we will bring it to the market. Yes, not in the immediate short term.
Happy to-
I'll take the liberty of adding one more point to what Ashok mentioned. See, unlike the raise in the capital markets, our raise is not because we need the money.
Yes.
In our planning, we have been reasonably self-sufficient last 2-3 years and plan to be so in the next 2-3 odd years, where our business cash flows are adequate to service our debt and still give healthy dividends to the shareholders. The raise is only to bring the portfolio in the capital markets. If I may be a little immodest, it's going to be the biggest portfolio, and therefore we have to do it carefully and ensure that the investors get the best bang for the buck. While, as Ashok mentioned, our preparation is going on in full steam, it is not that we are under any pressure to do it soon.
Thank you. Ladies and gentlemen, this was the last question for today. I now hand the conference over to Mr. Ashok Tyagi for closing comments.
Thank you. Once again, you know, I apologize for getting all of you out on a Saturday morning. I think this has been a good quarter, and clearly, I think we are hopefully getting onto a consistent, you know, good cycle across the industry, across all the three segments of the industry, which is residential, offices and retail. You know, hopefully, you know, to the point of specificity, you know, I think we are hopefully still at the early stages of an upcycle and, in the offices business actually emerging from a significant downcycle of the pandemic. You know, hopefully we still have a few quarters of potentially good external cycles. As you have seen, the organized players are the ones gaining share in both the residential and the commercial spaces, and we see that trend to continue, you know.
We continue to stay focused on generating free cash flows in both residential and commercial segments, you know, and obviously deploying them, you know, in the residential segment on deleveraging, in the commercial segment on CapExing. I think hopefully our strategy which, you know, over the last few quarters was still sort of bits and pieces, is now coming together and delivering on a consistent basis. Hopefully we'll continue being on this journey for the future as well. Thank you once again.
Thank you, and a very happy Diwali to all of you.
Yes, Happy Diwali.
Thank you. Happy Diwali.
Thank you.
Thank you. On behalf of DLF Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.