DLF, the country’s largest real estate developer, plans to enter housing development projects in the overseas markets to overcome a slump in the domestic property market, a television channel reported today, citing Chairman K P Singh.
The property developer may build houses in Singapore and Malaysia, which have a large Indian population, the television channel reported, citing sources it did not identify.
Meanwhile, DLF will use cost-effective resources and work at higher levels of efficiency to beat the slump, Singh said in the company’s annual general report of 2007-08.
“The financial year 2008-09 will be a challenging year for the company. The global liquidity and credit crises and inflationary pressures within the domestic economy would impact the business scenario,’’ said Singh on the country’s current property market situation.
The company’s comments on the sector come at a time when most of the property developers are reeling under a cash crunch because of a drastic fall in property sales, a hike in lending rates, a crash in property stocks, curbs on lending to developers, among others.
Singh said to surmount such adversities, the company would have to perform at higher levels of efficiency by garnering more cost-effective resources and working harder to sustain and enhance growth rates and increase the business.
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Property sales have fallen more than 35 per cent this year in many cities and regions such as the National Capital Region (NCR) and Mumbai, mainly due to a rise in home loan rates and unaffordable realty prices, thereby limiting execution capabilities of developers. Reflecting this downturn, property stocks have fallen up to 50 per cent from their peak in January this year, eroding the wealth of investors and promoters.
DLF recently announced a buyback of its shares at Rs 600 apiece to instill confidence among the company’s investors. The company plans to buy a maximum of 22 million equity shares or 11 per cent of the 202 million shares held by the public.
After the buyback, the promoters’ shareholding in the company will go up to 89.4 per cent from 88.2 per cent now. The company’s stock has fallen by nearly 60 per cent from its peak at Rs 1,225 in January this year.
The DLF stock closed at Rs 495 on Monday on the BSE.