DLF Cyber City Developers Ltd (DCCDL), the rental arm of DLF Limited, has seen a ratings upgrade with CRISIL rating it as AAA (Stable), from AA+ (stable).

In its rating rationale, CRISIL stated, that the upgrade reflects expectation of sustenance of the strong business risk profile, backed by high occupancy levels and scale of the operational portfolio (40.4 million square feet), along with structural year-on-year improvement in the financial risk profile which is expected to continue over the medium term.

According to Sriram Khattar, Vice Chairman & Managing Director of DCCDL, the company has maintained that its assets have met global benchmarks suitable for its tenant partners. 

“It also strengthens our resolve to meet, if not exceed, our commitments to governance and financial prudence, along with delivering the highest quality of sustainable buildings and services,” he said. 

DCCDL operates one of the largest commercial real estate portfolios in the country. 

Its office portfolio comprises of 36-odd msf with occupancy of 93 per cent spread across Gurugram, Chennai, Hyderabad and Chandigarh. It also operates a retail portfolio of approximately 4.3 msf which has 95 per cent occupancy spread across NCR, Chennai and Chandigarh. 

It is adding another 12 msf of office space and 2 msf of retail space in the near term, DLF said in a statement.

Earlier, consultancy firm Jefferies had said, DLF’s lease portfolio has a 29 msf pipeline till FY30, over 44 msf of operational annuity portfolio (DCCDL + DLF). 

“A capex of ₹20,000 crore is envisaged, of which majority – around ₹12,000 crore is in DCCDL. This should double the annuity run-rate to ₹10,000 crore,” it said in a report. 

Strong demand is seen for rental assets across board and new openings from FY26 should demonstrate high rentals in key markets, it added. 

Jefferies said, the target for rental biz is to achieve zero net debt – which stood at ₹16,700 crore at Dec 2024 – by FY30 at the group level.

The firm in its downside risks had maintained, weaker-than-anticipated real estate sales, 5 per cent higher vacancy rates, and a 10 per cent bigger loss in rental values is possible in a downturn. 

Kotak Institutional Equities, in its report maintained, DLF reported ₹5,600 crore of annuity revenues (DCCDL + DLF) in 9MFY25, including ₹4,200 crore of rentals (largely at DCCDL). 

Management expects the rentals to grow to ₹10,000 crore by FY30, with the asset base growing to 73 msf. 

DCCDL’s portfolio has demonstrated strong leasing trends with occupancy for the portfolio standing at 93 per cent partly dragged down by SEZ occupancy, while the non-SEZ office and retail portfolio enjoyed occupancy of 97 per cent and 98 per cent respectively, it said in a report. 

“We further highlight that 8 msf of under-construction projects is nearing completion, which are 95 per cent pre-leased,” it added.