Cygnus Real Estate Aug09

8/6/2019 Cygnus Real Estate Aug09

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Cygnus Business Consulting & Research Pvt. Ltd. 2009 1

Industry Monitor

Real Estate

Vol.908

CONTENTS

INDUSTRY AT A GLANCE ....................................................................................................2

KEY DEVELOPMENTS ..........................................................................................................3

MARKETING .......................................................................................................................3

OPERATIONS ......................................................................................................................4

INVESTMENTS....................................................................................................................5

INDUSTRY STATISTICS .........................................................................................................7

PRODUCT FOCUS ...................................................................................................................8ECO HOUSING....................................................................................................................8

Overview............................................................................................................................8Indian Scenario ...................................................................................................................8Budget Issues ......................................................................................................................9New projects.......................................................................................................................9Outlook..............................................................................................................................9

COMPANY SCAN...................................................................................................................10DLF Group ..........................................................................................................................10

Products & Services ..........................................................................................................10

Business Strategies ............................................................................................................10Key Ratios.........................................................................................................................10Performance Analysis........................................................................................................11Cost Structure Analysis .....................................................................................................11Stock Performance ............................................................................................................12Outlook............................................................................................................................12

UPCOMING EVENTS ...........................................................................................................13


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Industry Monitor Real Estate August 2009


INDUSTRY AT A GLANCE

MARKETING

High-End Homes Frozen Out of Budding Housing Rebound - USA Hansteen launches US$300m UK industrial property fund - London Work resumes at Queue Point real estate development in Dubailand - Kuwait Dubai Real Estate Down 50% from Peak Real estate, infrastructure loans show strong growth - India RBI issues revised draft norms on commercial real estate exposures - India Risesun Real Estate acquires land for RMB538.61m - China

OPERATIONS

Washington Real Estate Investment Trust sells Rockville property - USA ProLogis cuts back Nashville operations - USA Big real estate write down potential overhangs GE - USA Hammerson names new CEO as UK property market thaws - London

INVESTMENTS

Lone Star Said to Secure Pledges for US$20 billion Property Funds - USA Tesco Hungary reportedly in 63m store sale/lease-back deal - UK Bundesbank had big investment in Hypo Real-report - Berlin Overseas property investors in Central London doubled in last 12 months - London 2.2km roadwork complete for Emirates Lake Tower real estate project - UAE National Projects & Construction expands real estate project - Dubai AXA Real Estate to invest in China property - China IREO to pump in US$500m in India


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KEY DEVELOPMENTS

MARKETING

AmericasUSA: High-End Homes Frozen Out of Budding Housing ReboundHousing is fast dividing into two markets: sales of low- and moderately-priced homes are pickingup and values have stopped falling in some parts of the nation. But on the upper end, salesremain mired in a deep slump and price declines are expected to accelerate. Signs of the divideare visible across the country, including in suburban Chicago. In middle-class Schaumburg, Ill.,

which had a median income of US$65000 in 2007, sales were up 41% in June from the depressedlevel of a year earlier and bidding wars have broken out on some properties.

EuropeLondon: Hansteen launches US$300m UK industrial property fund

Property investment firm, Hansteen has set up a US$301m fund to buy UK industrial properties,as it expects attractive deals to emerge following a sharp market downturn. The Hansteen UKIndustrial Property Unit Trust has raised 90 million pounds in equity, comprising 30 millionfrom Hansteen and the rest from institutional investors. The 180 million pound fund will include50% gearing. The fund is aiming to acquire industrial properties valued at 15 million pounds orless, or property portfolios worth under 30 million pounds, and is targeting annual returns, afterfees and expenses, of 12 to 15%.

Middle east/AfricaKuwait: Work resumes at Queue Point real estate development in Dubailand

Al Mazaya Holding, Kuwaiti Shareholding Company working in the field of real estate

development, has announced that that the work on all buildings at Queue Point in Dubailand hasresumed with delivery was set for 2010. Queue Point real estate project is located at Al Liwan inDubailand, Dubai. It is 40 to 60% complete and 95% of the units had already been sold.Buildings in Queue Point will be between 5 and 15 storeys, and will be interspersed with gardens,green spaces and waterfalls.

Dubai: Dubai Real Estate Down 50% from PeakHome values in Dubai have fallen by about half from their peak late last year in the wake of theglobal real-estate slowdown. Property prices in the emirate, which had been driven sharply higherin past years as foreign investors snapped up real estate, have been sliding since the third quarterof 2008. Property prices in Dubai were rising sharply as recently as the first half of last year. But

since the third quarter of 2008, as the impact of the global crisis has drawn in on the emirate,real-estate agents have reported softening prices and a dearth of buyers, especially those buyinginvestment properties which had earlier helped drive steep price increases.

Asia-PacificIndia: Real estate, infrastructure loans show strong growthLoans to the real estate sector, or loans to the commercial housing sector, grew by a strong 52%year-on-year, albeit on a much lower base. Between 28 February and 22 May, housing loansincreased by Rs31.38 billion, while bank loans to real estate companies went up by Rs37.34billion. In short, loans to real estate companies were more than loans for individual housing.

After a rise in bad loans in the credit card business; banks have started to cut back on lending to

this segment.


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India: RBI issues revised draft norms on commercial real estate exposuresThe Reserve Bank of India (RBI) has come out with revised draft guidelines on commercial realestate (CRE) exposures. The revision comes in the wake of doubts raised in certain quarters ontreatment of specified exposures. The new draft is also necessitated by the need to align with the

rules with Basel-II framework. The Basel-II framework has clearly spelt out the definition ofincome-producing real estate (IPRE) in para 226 of its framework. According to the Basel-IIframework, IPRE has a strong positive correlation between the prospects for repayment of theexposure and the prospects for recovery in the event of default, with both depending primarilyon the cash flows generated by a property.

China: Risesun Real Estate acquires land for RMB 538.61mRisesun Real Estate Development Co. Ltd., which mainly deals with businesses in HebeiProvince, Jiangsu Province, Anhui Province and Shandong Province, announced that it has wona bid for a piece of residential land for RMB538.61m in Wucang District, Handan, HebeiProvince, sources reported. The parcel, which covers a land area of 203,718 square meters, will

have landscaped areas covering more than 35% of the development. The floor area ratio will notexceed 3 and the building coverage rate will not exceed 20%.

OPERATIONS

AmericasUSA: Washington Real Estate Investment Trust sells Rockville property

The Rockville-based real estate investment trust bought the 35,000-square-foot office property at11810 in 1993 for US$1.4m. The identity of the latest buyer of the two-story building, which wasbuilt in 1969, was not immediately available. The Rockville-based real estate investment trust saidit achieved a net book gain of US$1.0m on the sale and a 13% unlevered internal rate of returnduring the 16-year ownership period. Late last month WRIT said it gained US$4.2m on the sale

of an Elkridge, Md. industrial park.

ProLogis cuts back Nashville operationsProLogis is shrinking its Nashville office, which will now be managed out of the real estatecompany's Memphis office. Through a combination of asset sales and fund contributions, acommon equity offering, repurchases of debt at a discount and reductions in businessexpenditures, ProLogis has cut its direct debt by US$2.9 billion. ProLogis is a real estateinvestment trust, with some 475 million square feet of space in North America, Europe and

Asia.

ANALYSIS - Big real estate write down potential overhangs GEThe potential for multibillion-dollar write downs in General Electric Company's US$84 billionreal estate portfolio is emerging as one of the key questions about the future of its GE Capitalunit. Deepening concerns about global liquidity -- given a prolonged U.S. recession, tight creditaround the world and the rapidly declining value of U.S. commercial real estate -- have led GEinvestors to question the company's method of valuing its real estate holdings, an issue some sayspeaks to an overall lack of transparency at GE. "What GE is doing is not recognizing anyimpairment of any significance on this stuff," said Jack De Gan, chief investment officer withHarbor Advisory Corp, which owns GE shares. "(GE is) hoping they can ride through thisrecession using held-to-maturity type accounting on everything, not mark it down, and wait forthe market to recover under it so they don't have to charge earnings." The financing needed toroll over a lot of the commercial debt coming due in the next few years is not available. Much ofthe company's commercial real estate equity is not worth what GE paid for itespecially assets


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bought near the market peak in 2006 and 2007. De Gan said GE should recognise thedeterioration in commercial real estate markets and mark down its US$84 billion portfolio by 2to 5%.

EuropeLondon: Hammerson names new CEO as UK property market thaws

Anglo-French property investor, Hammerson cited stabilising UK prices for slowing a decline innet asset value and unveiled a new CEO to coincide with an imminent new dawn in Britain's

withered property market. The FTSE 100-listed company has appointed UK Managing Director,David Atkins to replace Chief Executive, John Richards, who is retiring after 30 years' service inthe month of September.

INVESTMENTS

AmericasUSA: Lone Star Said to Secure Pledges for US$20bn Property FundsLone Star Funds founder, John Grayken is securing pledges toward his goal of raising US$20billion to invest in distressed commercial real estate and securities. Lone Star is doubling the sizeof its funds as the deepening crisis in commercial real estate increases opportunities to buy atdiscounts. Falling rents and occupancies will accelerate defaults and delinquencies in mortgagessold as bonds.

EuropeUK: Tesco Hungary reportedly in 63m store sale/lease-back dealUK supermarket chain Tesco is selling its real estate in Hungary and renting it back as part of aglobal strategy to reduce the number of properties it owns, improving liquidity. Tesco is sellingreal estate in Europe and the US to American investment company WP Carey and Company,

who will sign 15- to 20-year leases for the properties with Tesco.

Berlin: Bundesbank had big investment in Hypo Real-reportGermany's Bundesbank had some 2.3 billion euros invested in Hypo Real Estate at a time whenthe central bank urged the government to rescue the stricken real estate lender, a newspaperreported. Business daily Handelsblatt said the Bundesbank sum included 5 million euros thecentral bank had invested in HRE for Germany's financial markets watchdog BaFin. It cited aconfidential Bundesbank report as evidence for the investments. The paper argued that thisplaced the two bodies in a 'serious conflict of interest' during a decisive phase in the rescue ofHRE at the end of September last year.

London: Overseas property investors in Central London doubled in last 12 monthsThe number of foreign property investors from Africa, Asia, Australia, China, and the MiddleEast buying prime real estate in central London worth 1m or more has doubled in the last year.

The number of overseas property investors has jumped from 35% in the second quarter of 2008to 43% in the second quarter of this year. There has been a doubling of overseas demand fromforeign property investors from Africa, Asia, Australia, China, the Middle East and central Asiancountries like Kazakhstan, Azerbaijan and Uzbekistan.


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Middle EastUAE: 2.2km roadwork complete for Emirates Lake Tower real estate project in AzmanCHAPAL, UAE's leading real estate developer, has completed the 2.2km road works to facilitatethe construction works on its 21 million sq ft BUA master developmentEmirates Lake

Towers. Being set besides the Emirates Road in Ajman, this development features 51 high-risetowers designed for residential, retail and commercial purposes has now opened an escrowaccount up to latest regulations by Ajman Real Estate Regulatory Establishment.

Dubai: National Projects & Construction expands real estate projectNational Projects & Construction (NPC), one of the leading Abu Dhabi-based real estate andconstruction conglomerates, has moved into its new headquarters in Musaffah as part of itscorporate expansion plans on the back of robust growth in business.As a part of its strategy forgrowth and expansion, NPC also entered into strategic knowledge and expertise sharingpartnerships with a number of international companies that are leaders in handling mega-projects.

Asia-PacificChina:Ping An Trust to invest in China propertyChina Ping An Trust & Investment Co Ltd, a subsidiary of the country's second-largest insurer,Ping an Insurance (Group), has inked a memorandum of understanding with AXA Real EstateInvestment Managers to jointly develop high-end residential projects in China. AXA, the largestreal estate fund manager in Europe and the fourth-largest in the world, said that the partnershipcould provide an opportunity to launch a dedicated Chinese real estate fund.India: IREO to pump in US$500m in IndiaIREO, a leading global investment fund dedicated to the Indian real estate sector, has announcedits foray into real estate development with a portfolio of 13 projects located in prime locationsaround the country, and plans to pump in US$500m in various infrastructure projects over aperiod of seven years.IREO has already commenced construction and leasing of a 5-million sqft IT SEZ and the sale and construction on 3 million sq ft of housing, and is poised to launch anumber of projects that will entail development of more than 8 million sq ft of housing in thecoming 12 months. Currently IREO has 13 projects under various stages of development andimplementation in the NCR, Haryana, Punjab, Tamil Nadu and Maharashtra.


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INDUSTRY STATISTICS

Major Lease Transactions during AMJ 2009 in Major Cities

CITY Tenant Building, LocationApprox.

Size(sq.ft.)

Etisalat Vatika Business Park, Gurgaon 72,000

ZTE Technologies Vatika Business Park, Gurgaon 10,000

Infosys Telecom Time Tower, Gurgaon 6,000

Pearson Education Knowledge Boulevard, Noida 25,000

Tata Teleservices A-37, Sector 60, Noida 2,40,000

NationalCapitalRegion(NCR)

State Bank of India World Trade Tower 1,600

BASF Vibgyor Towers, Bandra Kurla 24,000

British Counsel One India Bulls, Lower Parel 16,000

Mumbai

Schering Plough Platina, Bandra Kurla Complex 43,000 Amicorp RMZ Titanium, Airport Road 20,000

Samsung Bagmane Tech Park, C.V Raman Nagar 66,000

Next Links CBD (Prestige Al Kareem) 20,000

Sony Vrindavan Tech Village, ORR 30,000

Lifetree Convergence Bagmane Tech Park, C.V Raman Nagar 33,000

ARM Salarpuria Touchstone, ORR 18,000

LSI Logic Salarpuria Infinity, Bannerghetta 9,500

TCS Prestige Libra, Mission Road 8,500

Banglore

Serco Prestige Libra, Mission Road 35,000

Scientific Publishing Gulecha Towers, T Nagar 25,000

CMRL Apex Towers, R A Puram 10,000Datacom RMZ Millennia, Perungudi, OMR 40,000

Swan Chennai Tech Park, Ambattur 48,000

SBI KRM Plaza, Chetpet 10,000

Athena Health RMZ Millennia, Perungudi, OMR 30,000

Ericsson Tamarai Tech Park, Guindy 30,000

Macmillan Ratha, Perungudi, OMR 25,000

Dupont Elnet, Taramani, OMR 12,000

Aircel Spencer Plaza, Anna Salai 30,000

Chennai

Unitech Wireless Samson Tech Park, Egmore 10,000

ICT Mindspace, Hitec City 16,000

Tieto Enator India Mindspace, Hitec City 52,000HCL JST, Kondapur 12,500

Hyderabad

Perot Systems JST, Kondapur 25,000

Mc Nelly Bharat RMZ Ecospace, New Town 1,50,000

Tech Mahindra DLF IT Park-I, New Town 22,500

Kolkatta

mJunction Godrej Waterside, Sector-V 18,000Source: CBRE, Cygnus Research


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PRODUCT FOCUS

ECO HOUSING

OverviewIn the marketplace for housing, we are often limited choices that are aimed at aconsumer prototype as imagined by a typical developer or marketing team. Thedesigner and developer of most multifamily residential communities are faced

with the often daunting task of predicting who will ultimately live there andwhat their preferences will be. Direct involvement of future residents in the design and decision makingprocess takes away the guess work and allows for creation of a tailored residential environment. TheEnvironmental Designed Group (EDG) is dedicated to utilising "green" technologies and to the creationof sustainable residential environments. This is going to be a new concept in Indian real estate market.

The Eco Houses consist

The houses are equipped with key features, both technological and common sense - for example,designed in south facing terraces to maximise solar heat gain, that utilise renewable, and conservable,energy. A small-scale combined heat and power plant on site, powered by wood off-cuts, provides mostof the energy to the estate. All buildings have a thick insulation jacket, made from recycled materials. Theproject has a legally-binding green transport plan, incorporating a car pool system for residents, greatpublic transport links, and is linked in to a cycling network. For these, and many more social andenvironmental initiatives and technologies, Bed ZED has won many national and international awards forsustainability, design, innovation and more. It is an inspiring achievement on a local and social level.

Indian ScenarioThis is a new concept in India which is a Natural Choice to Reduce Green House Gas Emission in thecountry. In India, demand of housing particularly in residential sector is growing-up. The policy makers inIndia have planned to provide shelter to every shelterless people by providing disaster-resistant housing inurban and rural areas. Stress has been given on 'affordable and durable houses' and adoption of 'cost-effective, environment-friendly housing. The cost-effective and eco-friendly technologies do not meanlow-grade construction with inferior quality materials or compromise with the safety of the buildings andcomfort of the inhabitants. Rather the technologies follow the relevant building codes and can alsoimprove the comfort level of the users if designed properly.

Changing Housing Scenario in India - from Kutcha to PuccaCommon people in India always prefer masonry wall and R.C.C. roof for a building of permanent nature.In the National Urban Housing and Habitat Policy 2007 of Government of India, current housingshortage in Urban Areas has been estimated as 26.53 million units. Whereas the Working group on RuralHousing for the 11th Five Year Plan - Ministry of Rural Development estimated Housing shortage inRural Areas as 47.43 million units. If the trend of conversion into "pucca" houses from "semi-pucca" /"kutcha" continues it is expected that by 2012, about 81% permanent houses in urban areas and about50% of permanent houses in rural areas will be constructed to fulfil the declaration of "Housing for All"by the Government of India under the National Housing and Habitat Policy 1998.

Companies providing services for those who are going for Eco HousingIdentifying the buyers - To sell them a houseEco - To manage the development entity and project developmentLenders - To borrow money for the initial predevelopment and other soft development costs

Architects and Engineers - To design the projectA Commercial Bank- To finance the constructionA General Contractor - To build the projectThe Cohousing Community - For spending the unspent construction contingency


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The trend of conversion from temporary to permanent or semi-permanent structures is likely to continuein view of economic upliftment of common people and different government schemes on providingdurable shelters to people of economically weaker section and lower income group. It has been stated inthe Government Policies that about 99% of the housing shortage pertains to Economically Weaker

Sections and Lower Income Group sectors. To provide minimum basic housing need it may beconsidered that about 45.2 million housing units with a minimum area of 25 square metre as per thestandards of Indira Awaas Yojna scheme will be required, which means a total of 1130 million squaremetre of built-up space needs to be constructed by 2012.

Budget IssuesIn the Union Budget 2009-2010, the honourable Finance Minister has rightly emphasised on low-costhousing and boosted up the rural housing sector by allocating Rs88 billion for Indira Awas Yojna, whichis 63% higher than the previous allocation. The minister has also created a Rs20 billion Rural HousingFund under the National Housing Bank. The budget also has allocated Rs39.73 billion for housing andprovisions for basic amenities for the urban poor. The sum also includes provisions for a new scheme"Rajiv Awas Yojana (RAY)". At the same time under the National Action Plan on Climate Change,

"Sustainable Habitat" is also a key issue, where stress has been given on energy efficiency in buildings.

New projects Tata Housing Development Company will build 1300 low-cost homes at Boisar, 100km from

Mumbai. The houses will be priced between US$8,258 and US$14,187. Atlas Group, which has carved out a niche of itself in the jewellery and healthcare industries across

Gulf countries, is diversifying into real estate sector and plans to invest US$201.51 in Kerala in thenext two to three years.

Mexican global multiplex operator, Cinepolis plans to invest US$357.7m in India for its filmexhibition business over the next seven years. It will open 500 movie screens.

The Avinash Bhosale Group (ABIL) is planning to invest US$126.25m for setting up three five-starhotels in Pune, Nagpur and Mumbai over the next three years.

OutlookThe Indian real estate sector plays a significant role in the country's economy. The real estate sector issecond only to agriculture in terms of employment generation and contributes heavily towards the grossdomestic product (GDP). Almost 5% of the country's GDP is contributed by the housing sector. In thenext five years, this contribution to the GDP is expected to rise to 6%. According to industry players,housing accounts for 4.5% of gross domestic product (GDP) with urban housing accounting for 3.13%.Nowadays, this sector is doing well as the government is giving good support to this sector by allocatingmore funds, and encouraging for some kind of technical innovation products.


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COMPANY SCAN

DLF Group

DLF Group is Indias one of the most famous and successful builders group.DLF Group is India's largest real estate company in terms of revenues, earningsmarket capitalisation and developable area. DLF has registered its presence across32 cities across the country. The primary business of the group is residentialcommercial and retail properties. It has a unique business model with earningsarising from development and rentals.

Products & ServicesSome of the major construction projects undertaken by the company areresidential commercial and retail properties. DLF has recently ventured into theinfrastructure SEZ and hotel businesses too.

Business Strategies Increase land reserves in strategic locations Expand core business verticals nationally Diversify into SEZ development Undertake infrastructure development with

Laing ORourke

Diversify into hotel development Enhance execution capabilitiesKey Ratios

Company Performance2008-09 2007-08

Net Sales 28279.00 55328.44Operating Profit 27325.20 35912.55OPM (%) 96.62 64.90NPM (%) 54.73 46.53Depreciation 1138.80 256.85Interest 8098.60 4476.47PAT 15477.70 25744.01Source: BSE India; Cygnus Research

Key Ratios2007-08 2006-07 2005-06 2004-05 2003-04

Debt-Equity Ratio 1.27 7.54 3.54 1.70 0.97Long Term Debt-Equity Ratio 0.70 6.46 3.18 1.59 0.88Current Ratio 1.93 1.91 1.55 1.36 1.31OPM (%) 64.91 87.11 50.58 29.54 12.50NPM (%) 46.53 36.02 23.10 15.00 7.36ROCE (%) 26.34 17.65 21.13 13.71 9.70RONW (%) 43.19 62.93 44.21 19.29 11.79Source: Company; Cygnus Research

Performance Analysis of DLF India

Quarterly Performance Financial Year Performance AMJ08 AMJ09 Var (%) 2008-09 2007-08 Var (%)

Sales 12786.10 4179.70 -67.31 28279.00 55328.44 95.65Other Income 2152.50 1478.60 -31.31 10113.90 5256.16 -48.03PBIDT 10286.60 3558.3 -65.41 27325.20 35912.55 31.43Interest 1816.80 2067.30 13.79 8098.60 4476.47 -44.73PBDT 8469.80 1491.00 -82.40 19226.60 31436.08 63.50Depreciation 285.00 307.40 7.86 1138.80 256.85 -77.45PBT 8184.80 1183.60 -85.54 18087.80 31179.22 72.38

Tax 1174.90 179.60 -84.71 2610.10 5435.22 108.24PAT 7009.90 1004.00 -85.68 15477.70 25744.01 66.33Source: Company; Cygnus Research

Major Projects

Houses Retail Offices Commercials


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Net Sales

20000

40000

60000

2007-08 2008-09

Rsm

Source: Company Annual Report; Cygnus Research

Performance AnalysisDuring 2007-08, the Company recorded a healthygrowth as compared to 2008-09. Net sales of thecompany reached Rs55328.44m in 2007-08 as

compared to 28279.00 in 2008-09. Thecompanys sales increased as it got major ordersin housing and commercial projects during theyear 2007-08. For AMJ08 the sales reachedRs12786.10m, and Rs4179.70m in AMJ09. Thecompanys revenues dipped due to flaggingdemand as well as lower realisations contributedto the poor showing.

The companys operating profit before interestand depreciation, amounted to Rs27325.20m asagainst Rs35912.55m in 2008. Net profit after

providing for interest depreciation and taxamounted to Rs25744.01m as against Rs15477.70m during the previous year. For AMJ09 the companysnet profit reached Rs1004.00m as against Rs7009.90m in 2007-08. The companys profitability declinedfor the quarter due to an increase in constructionexpenses though a fall in raw material expensesyear-on-year (YoY) has come as a surprise.

Common Size Comparison as percentage of netsales

When we compare DLF with its peers Ackruti CityLtd and Anant Raj Industries Ltd, we that the latterneeds to improve its cost efficiency, particularly for

consumption of raw materials. The company alsoneeds to reduce its staff costs as compared to itspeers. The company is the leading real estatedeveloper in India.

Cost Structure AnalysisConsumption of raw material as percent ofoperating income, declined in 2008-09 ascompared to 2007-08. Consumption of rawmaterial constitutes about 28% to 30% of theoperating income. The staff costs alsoincreased when we compare on a YoY basis;

estimated at around 3-4% of operating income.When all the expenses are compared, Interestconstitutes the largest cost factor followed byraw material consumption. Other expensesaccount for about 8-9% of the operatingincome. The company plans to improve itsprofitability by reducing its operational expenses through reducing dependence on manual work andincreasing productivity by adopting latest technologies and mechanisation of key activities.

Common Size Comparison for 2008-09 (Rs m)

DLFAckrutiCity Ltd.

Anant Raj

Other Income 35.76 6.82 14.88

Raw Material 27.52 38.37 1.16

Staff Costs 3.80 2.34 1.79

Interest 28.64 24.65 0.11

Depreciation 4.03 0.92 2.08PBT 63.96 91.24 105.78

Tax 9.23 6.77 17.05

PAT 54.73 59.82 88.41

Source: BSE India; Cygnus research

Cost Structure as Percentage of Operating Income 2008-09 2007-08Raw Material 28.48 59.79Staff Expenses 3.94 0.00Purchases 0.00 0.00

Administrative Expenses 0.00 0.00Depreciation 4.17 0.72Interest 29.64 12.46

Tax Charges 9.55 15.13Other Expenses 8.08 4.89Source: Company; Cygnus Research


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Relative Market C ap

Performance

20

40

60

80

100

120

Jul-08

Aug-08

Sep-08

Oct-08

Nov-08

Dec-08

Jan-09

Feb-09

Mar-09

Apr-09

May-09

Jun-09

DLF

BSE Sensex

BSE R eal Estate

Share Holding Pattern

Public

5%

Insti-

tutions

17%

Pro-

moters

78%

Source: BSE India C nus Research

Stock Performance

From June 2008 to May 2009, the BSE Sensex has seen a rise of 8.64% from the base of 13461.60 basispoints to 14625.25 basis points. Growth in the economy and formation of stable government createdpositive sentiments in the market and it aided the cause of the bulls. The highest price over the period

was Rs509.30 and the lowest value of the share of the company was Rs151.70.

OutlookDLF, Indias largest property firm, plans to launch 16 million sq ft of residential space in the current fiscaleven as the company continues to have a cautious outlook. DLF has been able to reduce its debt by overRs20 billion and has received Rs20 billion from DAL, another group company in the June quarterindicating that the companys cash situation may be fast improving. DLF which has 483 million squarefeet of residential projects will launch a few thousand flats on the outskirts of New Delhi and villas plotsand group housing societies in the southern city of Kochi Goa state and Panchkula in Haryana. It has alsoacquired land for the development of malls and commercial complexes in Hyderabad and Pune.

With Indian economy being on the recovery side, Real estate market is expected to pose a huge demandfor the major builders in India. The company will be able to increase the revenues and PAT which werebadly affected in the year 2008 due to the liquidity crunch in the market.


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UPCOMING EVENTS

1. Event Property AsiaDate Aug 01-03, 2009

Venue Karachi Expo Centre, Karachi, Sindh

Highlights

Property Asia is definitely poised to become Asia's biggest property and realestate show in Pakistan which would gather prospective investors, policymakers, landowners, developers, financers, real estate agents and buyers fromall over the globe under one roof.

Contact Details

E- Commerce Gateway Pakistan Private Limited. 18, C. P Berar Society, OffAmir Khusro Road, Karachi, PakistanTel: +(92)-(21)-4536321; Fax: +(92)-(21)-4536330;E-mail: [email protected]

2. Event International Property ExpoDate Aug 01-03, 2009

Venue Pragati Maidan, New Delhi

Highlights

Coming from the house of country's leading trade show organizers with anumber of successful shows in their basket, International Property Expo willfocus on residential and commercial property, investment and real estatemarket. The show has a commendable track record with the previous showsproving to be an instant hit. It has made a mark for itself in the industry andis highly appreciated for being well-organised and extensively publicised.

Contact DetailsMedia Expositions & Events. 112-A Sant Nagar, G. F., East of Kailash,New Delhi, India. Tel: +(91)-(11)-26236933; Fax: +(91)-(11)-41620861Email: [email protected]; Web: www.themediaexpo.com

3. Event Tourism Investment & Real Estate DevelopmentDate Aug 11-14, 2009

Venue Four Seasons Hotel Damascus, Damascus, Dimashq

Highlights

This event is considered the biggest conference which aims in presenting thereal estate market and tourism in Syria to be invested through demonstratingthe new projects and attracting the best companies which has a leading role inthe constructional, real property and tourism property in many Arabic andForeign Countries.

Contact DetailsAl haitham Exhibitions & Conferences. Abdul Hak Building, 1st,Damascus, Syria. Tel: +(963)-(11)-3346366; Fax: +(963)-(11)-33500889E-mail: [email protected]

4. Event IMOBILIS - Exhibition of Real Estate OffersDate Sep 03-06, 2009

Venue TBA, Cluj-Napoca, Cluj, Romania

Highlights

It is designed to provide an efficient solution so as to ensure the meeting ofdemand and offer from the real estate field. Therefore, IMOBILIS representsa professional frame to present the best offers of real estate agencies and themain real estate developers, moreover to present the latest tendencies in thefield, as well as the residential projects, either already existing or in process ofcompletion.

Contact DetailsAbplus Events. 2, Ungheni Street, Lasi, RomaniaTel: +(40)-(232)-278811; Fax: +(40)-(232)-217791


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5. Event Properties Ahead- Real Estate ExpoDate Sep 19-20, 2009

Venue Pragati Maidan, New Delhi, India

Highlights

This unique exhibition is being organised aimed at offering the complete

solution for any type of property, finance, interior or exterior requirement atsame platform. The highlight of this expo is from buying a property, gettingthe finance for the same, finding good architects, interior designer to beautifythe home, inspiring landscaping ideas and outdoor features, homeimprovement products and services & consultancy on vastu & Feng shui.

Contact DetailsEcube Entertainment Pvt. Ltd. 706, 7th Floor, Devika Tower, ChanderNagar, Ghaziabad, India. Tel: +(91)-(120)-4566566Email: [email protected]; Web: www.ecubeservices.biz

6. Event International Fair of Investments Real EstateDate Sep 30-02 Oct

Venue Lviv Palace of Arts, Lviv, Ukraine

Highlights

International fair of investments real estate on - movable and immovable

property of cities and towns, municipal management and activity, acquisitionand sale of individual houses and other real estate and investments.

Contact DetailsGal Expo. 30, Vynnychenka, Lviv, Ukraine

Tel: +(380)-(322)-970627; Fax: +(380)-(322)-971756E-mail: [email protected]; Web: www.galexpo.lviv.ua

7. Event City Real Estate InvestmentDate Oct 10-03, 2009

Venue Lithuanian Exhibition and Convention Centre, Vilnius, Apskritis, Lithuania

HighlightsCity Real Estate Investment is an exhibition on movable and immovableproperty of cities and towns, municipal management and activity, acquisitionand sale of individual houses and other real estate and investments.

Contact DetailsLitexpo. Laisves Avenue, 5, Vilnius, Lithuania

Tel: +(370)-(5)-2451800; Fax: +(370)-(5)-2454511E-mail: [email protected]; Web: www.litexpo.lt

8. Event Industryscape 2009Date Oct 18-20, 2009

Venue Abu Dhabi National Exhibition Centre, P.O. Box 5546, Abu Dhabi

Highlights

Organised by IIR Middle East at Abu Dhabi National Exhibition Centre,Abu Dhabi, United Arab Emirates, Industryscape 2009 is known as one ofthe biggest exhibition for real estate industrial sector. It is 3 days event whichopens up new gateways for both national and international real estatemarketplace. The event welcomes real estate agents, builders, brokers,contractors etc. from throughout the world.

Contact Details IIR Middle East, PO Box 21743, Dubai, United Arab EmiratesTel: +(971)-(4)-3352437; Fax: +(971)-(4)-3352438 Web: www.iirme.com9. Event Real Estate Investment World Middle East 2009

Date Nov 01-03, 2009Venue Shangri-La Hotel Dubai , Dubai, United Arab Emirates

Highlights

Real Estate Investment World Middle East is the region's leading real estateinvestment exhibition which discusses various aspects of capital managementin the thriving Middle Eastern property market. Real Estate Investment

World Middle East 2009 will be an unrivalled and unique platform which willaddress the opportunities in Middle East real estate and will provide theexhibitors, new contacts and great exposure.

Contact DetailsTerrapinn Pte Limited. 12, Prince Edward Road, 03-01 Podium A, Bestway,

Singapore, Singapore. Tel:+(65)-(65)-62228550; Fax:+(65)-(65)-62263264


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10. Event Belgrade Real Expo (BelRE)Date Nov 05-07, 2009

Venue Belgrade Fair Grounds, Belgrade, Serbia And Montenegro

Highlights

Belgrade Real Expo (BelRE) is the property and investment fair, gathering

domestic and foreign investors, key experts, property owners, projectmanagers, consultants, credit line supporters, real estate agencies, as well asthe end users.

Contact DetailsBelgrade Fair. Bulevar Vojvode Misica 14, Belgrade, Serbia

Tel:+(381)-(11)-2655701; Fax:+(381)-(11)-265536411. Event Moscow International Property Show

Date Nov 13-14, 2009Venue T-Modul Exhibition Hall, Moscow, Russia

Highlights

The Moscow International Property Show is specially designed to operate in aworkshop environment and not as an exhibition. Many sensible Russians arenot eager to advertise their wealth and would not be comfortable visiting a'public' exhibition, however, a real estate show in a professional exhibition

centre atmosphere is most suitable.

Contact DetailsaiGroup. Luzshnetskaya nab. 2/4 Bld.10, Office, Moscow, Russia

Tel:+(7)-(495)-5409695; Fax:+(7)-(495)-540519012. Event Property Management Exposition & Conference (PM Expo)

Date Dec 02-04, 2009Venue Metro Toronto Convention Centre, 255 Front Street West , Toronto, Canada

HighlightsIt is Canada's largest property management exposition and conference. TheShow will bring together key decision-makers in the real estate and propertymanagement sectors from the largest companies in the market today.

Contact DetailsMerchandise Mart Properties, Inc. Suite 470, The Merchandise, Chicago,USA. Tel:+(1)-()-1-800-677-6278; Fax:+(1)-(312)-5277980

13. Event ACRES Middle EastDate Dec 07-10, 2009

Venue Expo Centre Sharjah, Sharjah, United Arab Emirates

Highlights

ACRES Middle East is the UAE's leading international investment and realestate exhibition. The exploding property market in the UAE continues toprovide some of the world's most fantastic profits for both local andinternational investors. In particular, real estate prices continue to rise inSharjah, Abu Dhabi and Dubai with each new development announcedselling out at record speed.

Contact DetailsExpo Centre Sharjah. Opposite Al Taawun Mall, Al Khan Area, Sharjah,United Arab Emirates. Tel:+(971)-(6)-5770000; Fax:+(971)-(6)-5770111

14. Event Real Estate & Housing Exhibition(ESTATEX)

Date Dec 14-17, 2009Venue Dhahran International Exhibition Centre, Dammam, Saudi Arabia

Highlights

It is a distinguish and unique event attracting all kinds of real estate,consulting, investment companies aiming to launch their new projects andservices for different groups of visitors. Moreover, this event is the best placeto discover and esteem the Gulf Real Estate market, projects and find newopportunities and marketing ideas.

Contact DetailsDhahran International Exhibition Co. Post Box No. 7519, Ad-Dammam,Saudi Arabia. Tel:+(966)-(3)-8592358; Fax:+(966)-(3)-8590203


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15. Event International Exhibition of InvestmentDate Jan 06-09, 2010

Venue Isfahan International Exhibition Centre, Esfahan, Iran

Highlights

It is a premiere event for penetrating into the Real State agents sector, held at

Isfahan International Exhibition Centre, Isfahan, Itan & Organising byExpoKish. It is counted as one of the most awaited specialise exhibitions inIran. It will offer better opportunities for exploring the respective sector and

will therefore help in exploring latest trends and technology of the sector.

Contact DetailsExpoKish. Flat # 25-5th Floor # 60, Tehran, Iran.

Tel:+(98)-(21)-77529214; Fax:+(98)-(21)-77657133

Documents

Cygnus Real Estate Aug09