As a part of their new business model, DLF group has planned to sell their apartments only after they will get occupancy certificate of the project. The new business model came into effect in order to remove any uncertainty regarding costs and delivery timelines. According to a senior official, because of many project delays lakhs of home buyers are stuck and are facing problems.
Giving more information of the new biz model, DLF’s group CFO Saurabh Chawla said, “The Company would sell only completed products from now onwards. Customers are now averse to taking a risk and they prefer to buy ready-to-move-in apartments.”
He further said that DLF will apply for occupancy certificates once the structure of the building is complete along with other infrastructure. The additional cost on increased working capital requirement would be marginal.
Presently, DLF has already completed projects worth about Rs 13,500 crore and they will sell them in next 5-6 years. Along with that, DLF has also started constructing housing projects in central Delhi in partnership with Singapore based investment firm GIC.
“Incidentally, both RERA and Ind AS 115 (new accounting standard) support evolution of this business model. DLF would sell residential products to retail customers also.” Chawla added.
These commercial properties would be sold either to retail customers (B2C) or to DLF Cyber City Developers Ltd (DCCDL) — JV firm with global investment firm GIC — as investment properties (B2B).
Last week, DLF also reported a 56 percent increase in its consolidated net profit at Rs 172.77 crore for the first quarter of this fiscal. Its net profit stood at Rs 110.70 crore in the year-ago period.