26,100 acres for DLF's SEZs

India's biggest realty firm, DLF is betting on special economic zones (SEZs). The zones will cover an area of 26,100 acres and the company expects to take control of the land in the next two years.

DLF, which is floating a public issue of Rs 9,625 crore, has big plans for its newer businesses such as SEZs, hospitality, infrastructure and multiplexes.

The SEZ plan consists of a 20,000 acre multi-product SEZ in Gurgaon and a 3,000 acre multi-product SEZ at Ambala, among other smaller infotech zones.

"We will be leasing out the infrastructure in all our SEZs. By the next two years, we will acquire all the land. The IT SEZs will be completed by 2009 and the big multi-product zones will be ready in 5-7 years," a top DLF executive said.

However, the official maintained that the volatile SEZ policies could impact future projections. The company has already acquired land for the IT SEZs and is in the process of finalizing land for the multi-product SEZs.

"SEZs are long-term infrastructure projects and the norms related to processing and non-processing areas could have a significant impact on future revenues as well as project sizes," the official said.

The company has already entered into JVs for infrastructure with Laing O'Rourke, multiplex cinemas with DT Cinemas and hotel business with Hilton. It is also shaping up plans for airport management, financial services, asset management, leisure entertainment and wind energy and could tie up with foreign partners.

Analysts say most of the third-party SEZ developers will lease out the infrastructure created in these zones as they continue to remain bullish on the real estate sector and expect the prices to move northwards in the years to come.

"They (SEZ developers) are likely to lease out and avoid selling the core infrastructure. They could also look for JVs and outside investments in these projects, as this would bring down the project costs," Shailesh Kanani, an analyst with Angel Broking said.