Indias largest real estate developer DLF intends to spend 15% of its revenue on an ongoing basis to purchase additional land. DLF has carved out a land replenishment fund, wherein 15% of the sale value of its real estate development is credited.
DLF CFO Ramesh Sanka says the companys land replenishment fund will not be a fund in a conventional sense. As a matter of discipline, we will credit 15% of the sales towards land purchases on an ongoing basis, so that we have at any point of time enough cash for a good opportunity. He says DLF is not desperate for new land purchases, but should be ready to bid for attractive projects, as and when they come up. Incidentally, the company claims it has enough land bank to last for ten years.
DLF increased its land bank from 574 million sqft to 751 million sqft in 2007-08. The company fully owns 92% of its current land bank while, the rest is held in joint ventures with others. According to the company, 85% of its land resource is located in top seven cities. DLF is putting in place a geographical information system to keep track of its huge land bank. The new system is intended to keep track of acquired lands as well as prospective lands for acquisition.
More : economictimes.indiatimes.com
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