DLF says office market revival needs economic growth of 7%

NEW DELHI: DLF Ltd, India’s biggest developer, expects demand for offices to revive after growth in Asia’s third-largest economy accelerates to at least 7%, Executive Director Rajeev Talwar said.

Gurgaon, India-based DLF has slowed construction of 27 million sq ft of office and retail space, the company said in its annual report in July. More than 70% of new projects will be in the residential sector, with offices accounting for 16 percent, according to the report.

DLF’s profit declined for a fifth straight quarter after demand for property slumped as India’s US$1.2 trillion (RM4.12) economy expands at an estimated 6% in the year ending March 31, the slowest pace in seven years. Growth may accelerate to 8% in the following year, India’s Planning Commission forecast on Nov 4.

“We have to sustain growth between 7% to 9% a year before we see the commercial sector really coming up in demand,” Talwar said in an interview with Bloomberg-UTV. Until then, “supply is going to hold on and retail will only come up much, much later after that.”

DLF, the second-worst performer on the Bombay Stock Exchange Realty index this year, has gained 29%, lagging behind the 65% growth in the benchmark Sensitive Index. – Bloomberg LP
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