DLF Cyber City Developers Ltd (DCCDL), the rental arm of India’s largest real estate firm DLF Ltd, on Sunday said it has raised ?2,400 crore from State Bank of India (SBI), in one of the largest lease rental discounting (LRD) deals in recent times.
The debt transaction, at an interest rate of 7.35% for 15 years with a structured repayment schedule, enables DLF to reduce the cost of its debt, at a time banks are wary of financing real estate developers.
DLF has raised the funding through the LRD route against two rental assets totalling 2.4 million sq. ft in CyberCity, Gurugram.
The size of the loan demonstrates the company’s diverse tenant profile and its ability to generate long-term cash flows from its real estate asset portfolio, DLF said.
Vivek Anand, DLF’s group chief financial officer, said, “The funding represents a resonant endorsement of DLF’s commercial portfolio. Despite the present uncertainty, we remain committed to reducing our borrowing cost while creating long-term value for our stakeholders.”
“The majority of the loan will be used to refinance existing debt, and the balance will be used to fund future expansion of the company,” he added.
DCCDL has refinanced around ?1,950 crore of debt, while the remaining ?450 crore will be used for expansion. It currently has a total debt of around ?19,500 crore.
DCCDL is a joint venture between DLF and Singapore sovereign fund GIC Pte Ltd.
News Source:- Livemint