India's largest realty giant DLF Ltd will invest about Rs 3,500 crore this year to complete construction of almost all of its existing housing projects, a senior company official said.
DLF has 18.5 million square feet area under construction in various housing projects, and it is targeting to complete about 15-16 million sq ft by end of this year and create finished stocks amid slow sales in the residential segment.
"We have already constructed nearly 11 million sq ft in the first three quarters of this fiscal. Now, we are targeting to complete almost all of our projects this year," DLF's Group Chief Financial Officer (CFO) Ashok Tyagi told PTI.
Out of 18-19 million sq ft area to be constructed in the residential portfolio, he said only 2-3 million sq ft would be left for the next year.
"We will be investing Rs 3,250-3,500 crore on construction during this calendar year," he said, adding that the company continues to focus on execution of existing projects and also to create finished un-launched inventory.
DLF has residential projects in Delhi, Gurgaon, Hyderabad, Kochi and Panchkula among others.
The company has recently started developing two new office projects in Gurgaon and Chennai, totalling 4 million sq ft of leasable area, after it exhausted all commercial stocks.
On housing sales, he said the residential market would continue to remain sluggish for the next few quarters. "We will have an operating shortfall of about Rs 750-850 crore a quarter due to weak sales and collection," he added.
According to an investor presentation, DLF's sales bookings declined by 62 per cent to Rs 760 crore in the first nine months of the current 2016-17 fiscal from Rs 2,015 crore in the corresponding period of the previous financial year.
The company's gross sales bookings were higher at Rs 1,550 crore during April-December of this fiscal, but cancellation/upgradation worth Rs 790 crore dragged net sales.
DLF had last week reported 46 per cent fall in profit at Rs 98 crore and 30 per cent dip in net sales to Rs 2,058 crore in the quarter ended December as compared with the year ago period. The finance cost rose to Rs 758.64 crore from Rs 670.6 crore during the period under review.
DLF's net debt increased to Rs 24,397 crore during the third quarter of the current fiscal from Rs 23,140 crore as on September 30, and borrowing is expected to rise further. The company has a total land bank of 264 million sq ft.