DLF signs on StanC in 1 of 2020's largest deals in commercial real estate

DLF signs on StanC in 1 of 2020’s largest deals in commercial real estate

New Delhi: DLF has signed one of 2020’s largest commercial real estate deals, and it’s with Standard Chartered as an anchor tenant in one of its upcoming projects in Chennai. This agreement assumes significance as Standard Chartered is committing to rent a sprawling space of 7.7 lakh square feet in the midst of the coronavirus pandemic when most global corporations are talking about Work From Home remaining as the norm even in the post-Covid world. This will be the largest global campus of Standard Chartered GBS, a wholly-owned subsidiary of Standard Chartered.

So did StanC get a good bargain and a rent lower than the market value?

“No. not at all. Standard Chartered started the process of selecting a developer two years ago. There was not much negotiation in the rent, nothing more than the usual that takes place,” said Sriram Khattar, Managing Director, DLF Rental Business.

StanC is taking this space in DLF Downtown, a mixed-use development project located in the heart of Old Mahabalipuram Road at Taramani in Chennai, which is the IT sectors’ central business district and home to 100 plus MNCs and large Indian corporations. This entire project of DLF is likely to entail a Rs 5,000 crore investment, and is running six months behind schedule due to the lockdown and labour shortage.

DLF, one of India’s largest developers of office space, seems to be confident the WFH trend will not last forever or have a big impact on the Grade-A builder community.

“WFH will eventually reduce the need for new office space by 15-18% as organisations may not call everyone to the office and there will also be social distancing norms being followed,” said Khattar.

He also dismissed theories of DLF having to renegotiate rentals as companies battle the pain of Covid-19, the lockdown and rework their office space requirements. “Our tenants have not asked for rental discounts. Some did ask for rental deferments. From all our tenants, 4-5% have been adversely impacted and had to shut down..they are primarily into co-working and hospitality. Our rental collection is in excess of 95%,” Khattar said.

DLF says it has used this time to forge deeper connections with both its tenants and lenders. “Our treasury book at Rs 19,000 cr, and we took a decision to not defer interest and also service our loans on time and by the due date. This has been received well by the lenders,” he said.