Q4 20/21

Jun 12, 2021

Cash generation of INR382 crores during the full year. Demand in the residential business exhibited a strong comeback in the fiscal. New sales booking for the fiscal stood at INR 3,085 crores, reflecting a year on year growth of 24%. We witnessed growth across geographies and product segments. We launched the initial phases of independent floors in DLF City and New Gurgaon, which received encouraging response from the market and witnessed healthy absorption, indicating demand for quality products in established locations. New sales booking from launch of the new product was INR908 crores during the fiscal. We continue to bring further phases of this product across the Gerdau market. We have worked hard on getting our cost structures in place and happy to share that we have successfully managed to reduce our cost or cash overheads from INR775 crores to INR458 crores during the current fiscal, a reduction of 40% plus. We are confident that we will be able to sustain these levels going forward. On the finance cost side, we were able to bring down our interest cost to approximately 8.4% and exit March, which is a reduction of 143 basis points on a full year basis, which resulted in cash savings of 50 crores during the fiscal. And this translates to an annualized savings of approximately INR 75 crores to INR80 crores. We also saw a consistent ramp up in our collections And consequently, our net debt stood at INR4,885 crores, a reduction of INR380 crores during the year. We remain committed to bringing down debt levels in the medium term. We continue to work on our ESG journey And as a significant achievement during the fiscal, DLF Limited was the only real estate company to be included in the Dow Jones Index. We joined the rank of just 11 companies from India. We are hopeful that we will make further strides in our sustainability initiatives. We are infused with the recovery witnessed in the residential market and expect this growth cycle to continue in the long run. Given the strong outlook for the residential segment, continue to embark on this upcycle and remain committed to scale up our new product offerings across segments and geographies including Delhi, Gurgaon and South. We plan to launch projects adding up to approximately 8,000,000 square feet During the fiscal, our Q1 launches have got TILSS continues to exhibit growth and hiring activity is expected to rise. Hence, we continue to maintain a positive outlook for the rental business in the long term. We strongly believe and remain confident that our strong balance sheet, quality assets and new product pipeline will enable us to withstand any short term dislocations caused by the pandemic. We are ready and poised comfortably to ride the growth wave once normalcy returns to the market. I'll end here. Now open the floor for Q and A session. Thank you. Thank you very much, sir. Ladies and gentlemen, we will now begin the question and answer year. Your question will be read out and answered by the management. You may also ask an interactive Question. Please click on the View Questions tab, enter the credentials and click on Q and A tab on the left While we wait for participants to join on the audio for Asking with your questions, we'll take our first text question, which is from the line of Adhadev Chattopadhyay from ICICI Securities. The question is, what was the total office area which expired in FY 'twenty one and how much of that was released? What are the scheduled expiries for office portfolio in FY 'twenty two? Okay. I am Sriram Khater. I'll take that question. The expiry in the 33,000,000 Portfolio was IN the was IN the was INR1,500,000 and between 75% 80% of it was released. In FY 'twenty two, the expiry is roughly the same. It's about 1,600,000. And we expect the renewals to be between 75% 85%. Thank you. We'll take our next text question, which is from the line of Vasudev Ganatra from Edelweiss. His question is, what is the gross new sales value for Q4 FY 'twenty one? Yes, For the full financial year, it's new products are contributing to INR 908 crores. And for quarter 4, it is INR464 crores. Total sales for Q4? Total sales for POAR is INR1058 crores. Our next next question is from the line of Murtaza Arcevala from Kotak Securities. His question is, Can you provide breakup of pending construction cost for the extent development portfolio as well as the launch of new developments? Thank you. I think we've provided Some details on that, right? So I'll just Yes, so the total payables for the the total payables we've shared is INR 1242 crores and of which construction payables are almost close to INR 700 crores, CapEx is INR331 And the new development is INR230 crores. That's broadly the breakup of this INR 1242 crores which we've shared in our presentation. But given that 1Q is obviously going to be pretty much a washout, You think we can still maintain this 3.5 or maybe an annualized velocity of about 4,000 crores For fiscal 'twenty two, so that's the second one. And third is, Tagrissohn, basically on this net debt slide, It seems to me that on Slide 28, you will pretty much I mean, in 2 or 3 years, as this inventory rolls down, You should pretty much be 0 debt, I mean, given that you have this cash surplus. So should one assume that you will basically reinvest a lot in your new projects To effectively grow the business or I mean to effectively, will that debt come down to only 2,500,000 or 3,000 or will you go down to 0? That is basically the question I'm getting at. Thank you. Okay. So let me Sourav, hi. Let me take the first question on Your question of so called rising vacancies and whether INR 4,500 crores rental, We are on track for that for 'twenty four, 'twenty five. I just want to share some data on the vacancy. As of March 31st, our vacancy is around 12% in the entire portfolio of And also with the same focus on Camellia's where year on year if you see for the past So I can safely say 3 to 4 years. There has been a consistent deliberate on sales with an increased value Per unit sales as well as the both gross and net numbers. So that Also, and that being said, even this quarter the start has been pretty good for all the rest of the inventory and we are Online with in line with whatever the guidance that we provided. So both this year Part A as well as I'm sorry, as the rest of the business And with the familiar and super luxury, we will be able to meet those numbers. Okay. So Akash, just one follow-up Have you taken any price hike in any project at all? Yes, Sohrab. I'll be happy to announce to you that when you ask that Not only here, just last quarter when we launched the flows, let me tell you just one zone of that flows in one of the geographies. And in just about 3 launches in about 6 weeks, we took the paisa by INR 1500 per square foot. In the other zone, Which launched in say about 2 weeks from that time, we took the price up by INR 2,500 to INR 4,000. So not only to your question in every business of ours across the residual inventory I'm saying which At one point, I saw in 2018 with respect, I'd say you guys thought it was all junk, but we have now been able to not only Sell well and also create value in terms of increase in our net gains and all that. So everything has gone up. Plus, let me tell you in familiar as alone, if you see our you will see there's a price increase in almost every phase of the independent Clores that our clients have launched, every page is priced slightly higher than the previous, and the market so far has been accepting that. In fact, one of the very interesting things that brokers and Bhagav will tell you that ever since from December, we brought our independent flows in the market, The price of the plots has jumped by anywhere from 30% to 40% in the secondary market in that sense. Also happy to tell you that Alameda, which is a new group down, is now retaining at about over a lakh rupees a square yard And not one sales sort of almost I'd say about over 20 sales. So I think these we are demonstrating enough strength on ground, We're not talking about it right now, but I think the numbers will show. Thank you very much. Our next question is a text question, which is from the line of Puneet Ghuladi from HSBC. The question is what drove increase in finance and construction costs in Q4? And is this run rate a new norm? Your notes to account talk about some acquisition of some entities. Can you talk about what do these relate to? And what is the balance construction CapEx for DCCDL? Thank you. So, on the acquisition of the entities, Puneet, basically, You may recall that we had a class of entities with whom we had entered into development agreements over the course of the last decade. So even though the development rights of those entities was completely with DLF, but the nominal title of those entities was still with those And across the last 12 months, we have in different phases been acquiring those entities to ensure that we have a 100% title on those lands. So I'm very happy to mention that with the entities that we acquired in this quarter, Now almost 100% of those Gurgaon and rest of India land that were earlier with us through a development right or joint development agreement have now been fully acquired by us. And so I mean from a title standpoint, from a future growth standpoint, I mean now we are sort of, This is in a far more secure position than what we were say a year back. So that is as far as those acquisitions of those land owning about 35 watt Land owning companies are concerned? Yes. Now on the CapEx for This is the Chennai CapEx you talked about. I think that the number is close to INR150 crores or INR 155 crores to be precise. On the finance cost, Full year basis, Puneet, the number has dropped by almost 40%, but your question is more on quarter 4, which is the exit cost for quarter 4 is INR 191 crores, which compared to quarter 3 is down from INR 198. And if I compare year on year basis, it is down by 19%. So the cost is on a declining trend. That's 1, right? So if you're asking me, is this something we are able to sustain on a full year basis, the answer is yes. In fact, if you really look at our cost for this quarter, we are confident of bringing our cost down by another 20 basis points even this quarter. So we are not only confident of meeting this number but beating this number. Thank you, sir. Our next text question is from the line of Milan Mehta from HSBC. The question is, when is our GIC JV project scheduled for launch? Any specific Debt reduction target for FY 'twenty two. Thank you. On the GIC JV residential project, that is going through some approval issues in Delhi. I mean just to sort of put it in perspective, this is the biggest single project from an approval standpoint that Delhi has seen since Capital Green's launch About a decade back. So even there approval, currencies are sort of being tested, if I will, and the lockdown date hit. But we are optimistic to be launching it hopefully in Q3 of this year with all the approvals in place. So that is as far as that is concerned. The second thing, Nilan, on the net debt, as Vivek mentioned earlier, we are clearly focusing on reduction of net debt. But as a principle, except for the sales guidance, we do not offer an explicit guidance on the net debt number for fiscal 'twenty two. But clearly, the trajectory should continue on a downward spiral. Thank you. Shall we proceed to our next question, sir? Thank you. Our next question is from the line of Abhinav Sinha from Jefferies. Mr. Sinha, I would firstly like to congratulate Mr. Tyagi on his elevation to CEO. There have been other Board and management changes as well, including induction of 2 family members on Board. Can you please detail the thought process behind these changes a bit, such as any realignment of responsibilities? His second question is on residential business. Can you provide some granularity on new launches in the Value Homes segment, Premium and Luxury Housing. And third question is on lease business. Has there been any reduction in office rentals in key markets such as Cyber City and Chennai? Okay. So, thank you, Abhilam. From an induction of the 2 daughters of Rajiv Singh, Chairman, on to the Board. Frankly, I think both Savitri and Anushka are now in their mid-30s. And I think it was generally felt that from a promoter family guidance and ownership standpoint, this was the appropriate time for them to Come on board in a non executive capacity right now and start observing the operations of the company In part closer detail, if you will. And hopefully, it gives them the right experience to go forward As things progress. So that is really as far as the debt is concerned. As far as the appointment of the 2 CEOs is concerned, As you know, we had 2 CEOs who retired last year, Mr. Mohit Ghujal and Mr. Rajiv Talwar. So even from a statutory standpoint, There were vacancies that existed. And hence, 2 of the whole time directors were rededicated as the CEO. Okay? The next question was on the sales. So the next year, we are looking at total launch plan of 8,000,000 square feet and the details we had shared in the analyst deck, but I'll just briefly summarize it for your benefit. Of this 8,000,000, The independent floors we talked about based on the success we had in the last 6 months of last fiscal, We'll be continuing with that close to 1,800,000 launches, right? That will be in Gurgaon market. We're looking at launching 1,000,000 plus of commercial in DLF V, New Gurgaon and Delhi market. And then value homes of close to 3,000,000, we are planning in Gurgaon, Tri City and Chennai. Right, I'll hand it over to Akash to build on this. Yes. So basically what we are also seeing is that consistently there has been a demand in all segments. And If you saw our performance last year and also previous one, right, whether it's the super luxury segment or the value homes or And now the new product that we launched are closed. I think what I'm seeing in the market is people Because of our lack of new launches, I think that space that was created was taken over by others. And I think it's an overwhelming response that I can respond to What do those comparisons? This further goes to demonstrate that today real estate of course being an asset class that is being preferred. But I think if you compare it with any other developments for other real estate companies, it's a very interesting fact you will see our collections Are even doing, I'd say, almost at par with the sales where people are have the confidence today To actually break their mutual funds, you wouldn't like that but and now actually divert this money to real estate assets, Which I'm seeing and earlier I thought it was an aberration in our last call, but now I am seeing this as an endorsement of what we've been doing all along. I think that is a message that I'd like to give you all. On the question of the rental rates in Cyber City Gurgaon and in Chennai, Two facts. 1, there is no increase that is happening. And 2, The rental rationalization is happening at the periphery, but that is happening for a short period of time. And there is always a risk reward ratio which we weigh in terms of trying to keep a place vacant or rent it out at Marginally rationalized costs for the next 3, 4 years, but have the rental ticking in. There has not been any dramatic reduction in rates. Thank you, sir. Our next question is a follow-up from the line of Nilan Mehta from HSBC. He would like to note that does the sale guidance Stand if GIC JV project gets delayed. Yes, Dheelan. The sales guidance of INR 1,000 crores a Quarter is well cushioned even in the extremely unlikely event of the GIC daily getting delayed. Thank you. We'll take our next text question, which is from the line of Nikunj Mehtha from HSBC Asset Management. The question for Mr. Mehta is, how do you see traction in Camellia's in terms of sales velocity and pricing post Completion of Clubhouse. Thank you. Thanks, Elon. So If I can just quickly go back to the last, say, couple of years or 3 years or fraction of camellias, it's Consistently performed at a certain level and there's a price increase. So if you've seen there's almost been a 35% increase from Say what we started off say it is about 3.5 years. But going forward, the clubhouse unfortunately because of The 2nd wave, everything had to be deferred. But that is something that people are yet to see and believe that a product like this can exist. In India, I'm benchmarking this with anything else that is ever built in the world. I don't think there's anything that can come even close to Camellia and the clubhouse in the whole world, it is put to shame a lot of 5 star hotels and we are also making sure that the services Levels of the familiars are backing this up to the head. So there is nothing left to chance. To answer that question, Yes. We are already seeing in fact, let me answer this in a way that everybody understands. So We started the rental program that you all asked about asked us in the last call. Happy to now Announced to you that just 2 days back in the smallest apartment size, it was 7,400 square feet, Got leased and that was not our apartment, it was our investors apartment got leased at RMB725000 a square foot. 7,25,000 lakhs for apartment and plus the maintenance. So what that actually means is today we are at at the Kamelyas we are at about 37,500 net of We are doing say about INR 33000. This can easily has the potential of going up by if you even Capitalized that rental, that's about INR40,000. So Amit, first, yes, Even in this quarter, we have as I mentioned to you, we have increased the receivables have gone up because Our discount patterns have come down by almost half. But I assure you going forward the potential What I just mentioned per square foot is reasonably high. And the velocity of the sales Velocity of the sales as you see in results have continued to be there. In fact, in the pandemic, after this whole thing left and people kind of got a breather, within that there were about almost 3 to 4 Zoom calls. And then of course as soon as it ended there were about 5 to 8 site visits which were done in the 1st 3 days of The lockdown ending. So I am seeing traction. I am seeing demand. We've worked very hard over the last couple of years to create that. The messaging is all over the world. And I think if you ask me with regard to how many people are right now interested, I can safely tell you there are upwards of about almost 50, 50 people that we're having a conversation with who are on the In the A category which I call the hot category. So I think we will make sure that to your point we will make sure that Not only the price goes up but also the value does. Thanks. Thank you very much. We'll take our next question, which is an audio question from the line of Kunal Lakhan from CLSA. Please go ahead. So we have about unreleased area of about 3,300,000 feet in our under construction portfolio. And of which, almost 2,500,000 square feet is in Chennai alone. So my question is with the kind of slowdown that we are seeing in new leasing in the midterm, The 1,500,000 are already pre leased to the extent of 500,000 square feet and These will be ready by Q3 to early Q4 of FY 'twenty two. We believe by the time they come up, we are making all efforts to see that they are predominantly pre leased. Sure. Just let me ask this differently. So in case in a hypothetical situation if we don't end up Pre leasing or if there is no execution of the option value, where would that 4,300 or 4,400 crores rentals stand in At the end of FY 'twenty four? Yes. So let me explain that. I think let me first correct it. The question which Sohrab had asked, I had answered that FY 'twenty two, the exit rental The March exit rental will be such that FY 'twenty three will be INR 37, INR 3800 crores. And please appreciate that in addition to the existing rentals that we have, Cyberpark, which is $2,500,000 will be at its full potential by the end of this year in terms of the Tenants having to start paying their rentals, it's already reached about 70% of its full potential. The Block 12 in Chennai will also give the full rentals. So and then we will have the benefit of One Horizon Center acquisition for the entire 12 months. So given that we will reach 3700, 3750 for FY 'twenty 2 And based on the exit rate, we will move on also aided by the fact that retail, which we have a normal potential of 700,000 to 750,000. In the current year, we are projecting about 375 crores to 400 crores, And this will become this will have its full potential in the coming year. So I think we are fairly in line to achieve what I mentioned earlier. And Kvaerat, with respect to your question on the REIT, so I think what we will be hopefully is that we should be REIT ready in about 4 quarters from now. We have more or less frozen the restructuring decisions that we need to take. And I think now it's a question of implementing them through the various Modalities that are required. Now when the REIT actually gets listed is frankly a decision Between the 2 shareholders, DLF and DIC, and the state of the markets at that time, frankly. So that I would rather defer to how things are Four quarters from now. But we clearly are targeting that we should be completely REIT ready by that time from a spec standpoint. Sure. Thank you so much. That's very helpful. My second question is on you mentioned earlier in your comments that we may surpass INR 4,000 crores of sales. Considering we are looking at an upcycle in housing and the strength of our brand and balance sheet, Do you think we can return to a sales run rate of INR7000 to INR8000 crores annually, which we used to clock, say, prior to 2012? Yes, we can. I mean, I don't think there is a doubt that we can't. But, the issue is also frankly that And in all fairness, we don't want to necessarily be on a treadmill where we're generating 10% to 15% EBITDA And generating a INR10,000 or INR8,000 crores of sales per annum. That has never been our goal. That will never be our goal. So I think we have what we would rather be focused on is a certain EBITDA and a certain margin run rate And hence, creating products which not only sell well but also are EBITDA, accretive and generative. But clearly, with the kind of launches that Akash As planned, with the complete potential of the GIC joint venture, which is about almost 9,000,000 square feet across the next 4 to 6 years? I mean, I see no reason why this 4,000 odd crores a year should not keep on growing As long as the overall macro situation remains constant. In our fairness, we have detested from giving attractive growth path Right now, but we believe that once we have a few quarters of consistently 4 digit sales in per quarter behind us, We can lay out hopefully a faster growth path as well. Just a related question on that. So do you think beyond the launch pipeline that you've highlighted, There is potential to bring in lot of plotted developments across our portfolio? No. So most of the projects developments, actually, what we are doing in the last since October, November and will continue to for the next 2 years Yes. To convert them into flows and monetize them that way, which JV is a more lucrative way. But I mean, Like 12 this year, except for the GSE JV, we are not planning the launch of any of the high rises in Gurgaon. I mean, at some stage, those will stage a comeback and those will stage a significant comeback. And that's when the sales growth should start gathering momentum even further. Maybe except for 1 off plotted launch, there may not be too many plotted launches per day. Am I right, Akash? Sure. Thank you so much. And sorry, go ahead. No, I was saying that Plotted, as you know, Has had its own traction and acceptability. But to immediately convert that into Close or create value, I think that has been lapped up much faster. So, Clotet as far as the land is concerned, well, Has its own pluses and that will remain. But I think today the demand and Both from the point of view of condominium living and yet living independently with a certain amount of So this is Zhong Min. I think both postings are running as far as those demands are running concurrently today. And so Today, the customer wants a ready to move in opportunity rather than get into a mode of construction. I think that's what Mr. Aftahi is saying. We will monetize it through that process. Thanks again and congratulations Ashok Jay on your Elevation to the CEO. Thank you and wish you all the best. Thank you. We'll take our next question, which is a text Question from Sameer Baixiwala from Morgan Stanley. Firstly, he would like to congratulate and give his best wishes to Mr. Tyagi. His questions are, first question is, what are your thoughts about golf course extension Micro market. Is there a business rationale for you to build presence there? His second question is on Commercial leasing, the question is when do you expect new leasing markets to open up at pre COVID levels? When do you expect completion of downtown Gurgaon and Chennai? And any plans on Phase II downtown Gurgaon? The third question is, you would like to know your updated thoughts on Tulsivari and Chanakya Puri. And the 4th question is how much time do you give yourself to sell down Camellia's inventory? Thank you. So would you like to know about Gulf Coast Extension Road from a residential development point of view or from the commercial development point of view? Maybe, sir, you can come to the Yes. So, okay. So I'll leave the leading questions to Shiram. But on the two questions pertaining to the resi market. So the Gounkoy extension road, frankly, especially ever since the entire cyber threat to Gounkoy's road and the underpasses got constructed, It's actually become a pretty attractive micro market. And the players there are doing well. We have one extremely From site of 25 vehicles there, which is on our radar and at some stage will come in the launch pipeline. But clearly, Bocko Extension Road has emerged as a good micro market in that piece Of course, the entire geography. Your question on Tulkiwari stroke, Janakya Puri. So Tulsiwadi, the slum rehab activities are going on. They were slightly impacted in the last few months because of the Mumbai lockdown. So like there is 1 tower which is now ready. Obviously, the entire rehab process will commence once the lockdown gets completely lifted. We expect, and I don't fully understand the nuance of the Mumbai pool policy. But what I'm told is that the first phase of the sale building This should be at least technically available for launch in the next about 9 odd months. Now the exact timing of launch and all of those things will obviously have to be discussed between the 3 shareholders And decided, as you know, we are only about 35.5% shareholders in that JV. But clearly, we do believe that now The hard the grunt work, a significant chunk of that is behind us. And hopefully, the sale pipeline should commence In the next 12 or 9 to 12 months process. Charikampuri, I think clearly, we are we continue to work On the planning and all of those things, as we had mentioned last time, we are still hopeful if we can get some additional Approvals to be able to increase the development potential of that of their entire township. And that may still be maybe 1 to 2 years away from actually completing the planning process really. Most of the legal issues with respect to that land have all gone away, including its eligibility for developing residential and all of those things. Now it's only a question of how much development potential are we able to eventually get out of that part? On the two questions on the rental side, the first one was When do we expect the leasing to get to pre COVID levels? To answer that, the pre COVID levels of office leasing We're between 6,000,000 to 7,000,000 square feet in terms of gross leasing per annum. I believe that if this vaccination program Continues and a substantial portion of the population is vaccinated by this year end. FY 'twenty three should be near around that level. If not the full 100%, at least 90% of that level, which is FY 'twenty three. In terms of completion of Downtown Gurgaon and Downtown Chennai, Downtown Gurgaon will be The first phase of 1,500,000 will be completed late Q3, early Q4 of FY 'twenty two. And Downtown Chennai is in the first phase 2 phases. The first phase will be completed by The middle to Q3 of next calendar year and that the block that we are building of 1,000,000 square feet, which is already pre leased, Will be completed within 12 months after that. Our next question is an audio video question from Puneet Gulati from HSBC. Mr. Gulati, may we request you to please accept the prompt on your screen to proceed with your question? Yes. Hi, thank you so much. And this is a follow-up question. Just on the same interest cost and the construction cost, so if you notice, In Q3, your finance cost was INR 128 crores, which went up to INR 211 crores. Similarly, construction cost Q3 was INR 2.32 crores, went up INR 394 crores. So that's what I really want to understand. In Q4, what really led to this increase in the construction cost and finance cost? I think you'll have to repeat the question, please, right, for my understanding? Yes. Sorry. So in the cash flow statement, there is a finance cost which has gone up to 2.11 crores from 128 crores in Q3. And similarly on the construction cost, It is INR 3.94 crores versus INR 2.32 crores in Q3. So what is driving this increase in both these costs? So finance costs, clearly, I think that's to do with the NCD interest what we've paid. So as you know, the NCD interest gets paid in the month of March. So while we do it every quarter, but the payment happens annually. So that's almost close to INR 90 crores, right? That got paid during the quarter. So that's answering the first question. 2nd question is on your construction cash phasing. So, dollars 207, dollars 230, that's largely linked with the construction activity. As the construction activity has increased, if the payments are actually linked to that. So it's nothing but a large part of the payments, almost close to INR 400 crores got paid because of The increase in the construction activity during quarter 4. In fact, I'll say second half of last year, while it picked up in December quarter, But a large part of the outflow happened in March 1. So is INR 3.94 crores kind of quarterly run rate is what one should assume going forward as well? No, no. I had given the guidance. It's around INR 1200 crores. So you can take 100 of INR 75 crores to INR 300 crores. Okay. Understood. Understood. Yes. Okay. Understood. And similarly, there is an other income increase for DCCDL. What does that relate to? So the other income increase in TCCDL is primarily due to the Accounting standards which allow which requires us to do the fair market valuation of the asset acquired. We have acquired 1 Horizon Center completely in February. And since the earlier acquisition of About 50% bought at a rate lower than what we acquired the second 50% at. The difference between the was acquired and has come as other income? That's primarily the other income. Yes. Got it. Understood. And for the balanced construction cost for Chennai, you said INR 150 crores is the balanced construction cost for Downtown Chennai. What would be the balance for downtown Kuttel? Yes. Let me share the figures with you. The first two towers of 2,000,000, The total cost is about INR 800 crores. We have incurred about INR 200 crores to INR 275 crores and the balance INR 500 crores will be spent. On the 3rd tower, which is pre leased, we have not spent much At the moment, I think in terms of mainly the architectural fees, etcetera, but that which will be constructed over the next 24 to 30 months. The cost of that is about another INR 400 to INR 450 crores. Okay. And for Downtown Gurgaon? Downtown Gurgaon, we the first 1,500,000, Out of 600, we spent about INR 350, INR 375 crores and the balance INR 200 odd crores will be spent INR 225 crores will be spent in the next one year. Typically, what happens is that even after The building is up and running because of retention and other clearances. The payment for that project Okay. And the carry forward is roughly 10% to 15% of the total project cost. So whilst I mean, if you take CyberPark as an example, while the total project cost was in the ballpark of INR 13.50 crores to INR 14 100 crores. We still have about INR 100 crores, INR 150 crores of retention money and other monies to be released to the contractors for Cyberpunk. Understood. But the Physical structure is almost complete. The physical structure is complete. The MEP and facade work is ongoing. It got a little slowed down because of the second wave. But I think we are well in line to get our occupancy certificate by End of this calendar year, early next year. Understood. And for the balance, 1,500,000 second phase Downtown Burgaon, how much would you need to spend? 1,500,000 in Downtown Gurgaon? Yes. Yes. So that I think We can go with a ballpark figure of about INR 4,500 a square foot on INR 1,500,000, so that's another INR 600 crores That we need to spend on that. Inclusive of all approval costs? Yes, I think yes. It's inclusive of approval costs and architectural fees, etcetera. Understood. My last question is on the Board composition. So now you have 2 additional members On the family side joining, replacing the earlier CEOs. And in your notes, you also mentioned 2 independent directors Resigning. So is the balance between independent and non independent still the same or do you have to recruit More independent directors now? So we had 9 independent directors, of which 2, Doctor. Kapoor and Mr. Meimani, retired. Doctor. Kapoor was about 90, Mr. Hemani was about 82, and they have both retired. Their tenure ended on March 31. And obviously, because of the age And the fact that they accept those two terms under the new company tax and were not eligible for reappointment, they retired. So the number of independent directors is now 7. And the number of non independent directors, including the executive directors, With the inclusion of these 2 new board members, this is also 7 now. So we are now at 7 and 7, which is what is the mandate for Baba Thank you. Next question is from Saurabh Kumar from JPMorgan. Please go ahead. Mr. Saurabh Kumar, I would request you to please accept the prompt and unmute your microphone to proceed with your question. Hi. Am I audible? Yes, you are. Please go ahead. Okay. The first question is on this Heinz JV I mean, the Heinz JV, Is there any pre leasing you have done, Cutter, sir, there? Or that's just Haines' responsibility and you are pretty much done on that? No. So the Haines JV, Saurabh, as you know, is twothree DLF and onethree HIVE. And The master planning is just about finishing. And because the master planning is finishing, The excavation work, etcetera, has started, but the physical construction will take another few months. We have yet not started marketing it. But the leasing responsibility as a DLF or Heinz or At the moment, it's combined. I think we have a very deep relationship with Heinz for the last And we plan to lease in a manner that we are able to leverage on each other's strengths. I think Heinz connects in the U. S. From where a number of multinationals come to set up their back offices and kept us in an extremely high order. And DLF and our leasing teams are very strong in the local markets. So we plan to create a synergy between these two to create the best leasing that we can do for that project. Understood. 2nd is, sir, on this REIT structure, I just want to understand what DAREF's corporate structure will evolve to. It Seems that the REIT will be a subset of DCCDL, right? And it will probably like would you put office and retail both in this? And what do you think about the development pipeline? So I mean you have a 6,733 and then DC serial spawns like A single REIT? Or is it 2 REITs? If you can give some clarity on how your eventual corporate structure evolves around with this REIT. Sohrab, I'm delighted that you are finally getting interested in the REIT sector. I'm not sure, but since you've decided to go ahead with it. But to be fair, I mean, whatever little we have, I mean, sort of drawn this straw man with the tax and everything, Actually, the REIT most probably will come above Cyber City. So the REIT will be owned by the 2 shareholders in the Re listing and then cybersecurity and its and other entities will fall below the REIT. That may be the most efficient mechanism from an income extraction standpoint. And this will just be office business, sir? Or No. That, again, sir, is something that we'll obviously work with the banker. So There are only 2 decisions to be taken. 1 is the office and retail or only office. And B is how do we ensure that the development pipeline Is that a commercially acceptable level of whatever somewhere in the mid teens and does not grow beyond that? So does that need a Certainly structuring. Those are the 2 pieces that Shiram, Vivek Hai, Shiram's CFO, Naveen, all of us are sort of working with the tax consultants and the GIC folks. Okay. And the third thing, sir, on this parent company cash flow, so your two projects, the GIC, the JV, Horizon Center is a JV, right? So after, as Vivek said, INR 12 100 crores construction outflow, you're pretty much done on the existing projects. So I was just wondering because your I mean, this Delhi sales will probably not reflect either in your P and L or in your cash flow statement. So should we expect that from here on after this INR 1200 crores, like you just have inventory and maybe just INR 800,000 crores of CapEx because From what it looks like Look, the sales responsibility for the GIC JV is ours. So you would still see that sales number Appearing in the presale, but you're right. For C and L in an income recognition standpoint, that will follow a more complex method of revenue share And other income heads so there are certain income heads identified as per the JV agreement by which DLF gets the income And there's certain comment by which JV gets the impact. So that will be driven by whole streams in that sense, like any JV with a sovereign fund. But this responsibility will completely rest with Akash and his team? No, no. I was asking most from a cash flow perspective. So We don't see either that. Then we don't talk about those. So you're like, the sales cash flow from the JV. And when the JV We paid out those grant fees and revenue share fees and all the other fees to both the shareholders. That's how the cash flow will start. We will start expecting. Okay. So after this INR 1200 crores, whatever you have to spend, basically it's all new projects, right? Thank you. The next question is a text question from the line of Saurabh Taparia from UBS. His question is, when do you expect to generate operating cash on the DLF levels as even with INR 1,000 crores of quarterly average sales and reduced OpEx, one offs like tax refunds, etcetera, Are helping generate positive cash? So I think First of all, I think this last financial year itself, I think we've been we've generated almost INR382 crores of cash. But yes, you're right. Technically speaking, yes, the income tax refunds actually aided that generation. No doubt about that. But I think as I already said, our collections, which are improving quarter on quarter, our cost base which has been set And payables, which I talked about, INR1200 crores, including all commitments for our inventory, right? And as new products we start launching and they start generating cash, we are confident that this year we will be able to sustain, if not improve the performance on the cash front. I think this quarter may be a bit challenged, but we are still trying our best. On a full year basis, we certainly are committed to improving our performance compared to the last financial year. Thank you. We'll move on to our next question, which is from the line of Manish Oswal from Nirmalbank Securities Private Limited. Firstly, congratulations to team DLF on good set of numbers. His question is, what would be the 2nd wave impact On retail portfolio in terms of rent waiver or vacancy levels? And when do you see DCCDL to pre COVID Occupancy level, which is 95%. On DLF resi DevCo business, how is current sales inquiry and Converting sales trend. Your views recently approved Model Tenant Act and overall housing rental market development in your key markets? Thank you. So let me take the questions on the retail business and what we plan to do and when do we Look at occupancy levels to pre COVID levels. See, on retail, let me take you back last year where DLF Retail leadership position in the industry and decided to support the retailers by charging no rental during the period where the malls and the shops of the retailers were shut down. Whilst we have not taken a final decision on this, We expect that the program this year will be on similar lines. However, unlike last year where the Come back to the malls was slow. We believe that this time because of the vaccination program And because of the various precautions that we have taken, we believe that the retailers We'll have a better year compared to last year with the footfalls coming back. So how the whole program pans out, I cannot say. But I can only say is that I believe that we should support the retailers this year also by not charging renters during the period that the malls were shut. On the when will we reach our occupancy of pre COVID levels, I would tend to think FY 'twenty three, we will be somewhere near the occupancy of the pre COVID levels. And what was your third question? Sales and burn in transport. So with regard to the sales inquiry, Let me give you something that happened in April, immediately after the lockdown. So I'll give you an example of Kasali Where there was some residue in inventory that was lying with us which we were planning to bring out in any case in Q2. And then of course lots of second page of Rosolie. But the inquiries and this whole option of having a second home, Which is an extension of your first hold. I think that became a reality and in 3 days flat, We sold about we sold that entire 90% of the inventory in 3 days. So not only inquiries to your point, but also People are immediately wanting to make those commitments and putting the money down. What is that? So that was one area. We saw similar traction in Tri City which is Panchkula and Bulakkur, we saw in Indore, we saw in the floors as I was telling you. Just as we have started to open. I was making that point about super luxury. I'm happy to let you know that As we stand today, we are already in the numbers, as I said, almost coming close to the double digit in Superlaugury sales in just this quarter. So I am seeing an increase in residential Investments, residential demand, I'm seeing that happen for two reasons. I'm seeing a very clear trend Of people wanting to upgrade or increase the size of their homes that is I saw that the first time I Participated in one of these webinars in June, I had made that comment where at that point in time it wasn't substantiated. But as we saw in quarters going forward, it's that's what it is. So I see A big demand in residential apartments and residential I see a big demand in that business. I also see People now very clearly looking at 2nd homes as not an option anymore but as something which has become A necessity. So that is something which is good where an extension and a second home is now becoming a priority for people. That It's very clear. The trends are clear and so are the sales closures. So hopefully All those points are taken care of. You talked about the model tenancy that I feel is more or less we've been conforming to most of that Even previously, so if you look at deposits of 2 months versus 6 months in commercial, I think for us we've been following that. But I think it will only add to I think some of these residential agreements that have recently happened, Maybe there is an uptick I see there. So I think there also we will see some kind of increase and confidence that the market will have. This is only all these measures I'm seeing are only going to increase the demand for the residential sector. Ladies and gentlemen, that was our last question for today. I now hand over the conference to Mr. Tyagi for closing remarks. Over to you, sir. Thank you. So thank you all for joining us on Saturday afternoon. This seems to be our preferred time for inviting you anyway. And all of us are emerging from a pretty tough COVID situation. And I hope all of you and your families are safe and continue to be safe. I think, clearly, the residential sales is gathering traction. And the commercial leasing business also after I mean, on account of the COVID, I'm sure it has a extremely strong road map to growth. So we believe that we are now geared up well for leveraging the opportunity offered by both of these businesses. And hopefully, we'll continue to stay engaged with all of you. Later part of the year, hopefully, as travel becomes more prevalent and the residual COVID issues die down, Would love to host all of you in Gurgaon games and show with not only the new Camellia's Club, but also the completed Cyber Park, The advanced completion stage of downtown and whatever else is happening. So clearly look forward to continue the engagement. Thank you. Thank you. Thank you.