Needs to realise roughly Rs 3,000 crore to keep to debt decrease target for current financial year.

India’s largest developer by market capitalization, DLF Ltd, is banking on at least two to three big ticket sales in early 2012, to stay to its debt reduction target for the current financial year. The developer needs to realise Rs 3,000 crore to Rs 3,500 crore from noncore asset sales, to attain its 2011-12 goals.

Although the company is still far from the divestment figure it had set, Rajeev Talwar, executive director sounded sure about making it on time. He told Business Standard the developer was expecting a couple of big ticket sales before the current financial year closes.

Besides the much talked Aman-Resorts deal, DLF is looking at a transaction to offload stake in its Pune IT Special Economic Zone (SEZ), sometime early next calendar year, Talwar said. Another deal to sell stake in the Noida IT-SEZ is also in the offing. According to analysts, these three deals could fetch DLF Rs 3,300 crore.

“The Aman hotel sale is only at arm’s-length, but would not conclude this calendar-year. Early next year looks more likely,” said Talwar. The stake sale in Aman will exclude the Delhi hotel (earlier named Lodhi). Analysts said the Aman Resorts sale could be a projected Rs 2,000 crore deal. The Pune-SEZ deal could be worth Rs 900 crore and the stake sale in Noida SEZ could fetch the company between Rs 400 crore and Rs 450 crore.

The company may seem at selling the un-built land of DLF Hotels and Hospitality Ltd (DHHL), again as part of its noncore divestment strategy. “We will try to get the maximum valuation of the sale,” he said.

Earlier this week, DLF acquired an additional 26 per cent stake in its joint venture DLF Hotel Holdings Ltd (DHHL), from Aro Participation Ltd and Splendid Property Company, affiliates of Hilton International, for Rs 120 crore. The joint venture has one Hilton hotel, in Delhi.

Another divestment DLF has initiated is in Galaxy-Mercantile, a JV between DLF Home Developers Ltd and Infrastructure Development Finance Company. Four days ago, DLF announced signing an agreement to divest its entire stake in Galaxy-Mercantile. Galaxy will buy the entire DLF stake in the project for Rs 450 crore over the next 12 to 18 months. DLF has already received the first share of Rs 200 crore from this deal. The balance payment has been linked to various leasing milestones.

As for the SEZ-projects in Pune and Noida, DLF holds 70 per cent in both. The Pune SEZ is a joint venture with Ackruti City. According to Talwar, the company is in talks with Indian and foreign companies to sell its stake in the Pune SEZ. The industry buzz is that international private equity Major Blackstone will buy into DLF’s Pune SEZ. The Noida SEZ asset is a JV with another real estate company, 3C.

In the case of Aman hotels, DLF has got the final-bids from four or five companies. Khazanah, Malaysian government’s wealth fund, is being seen as the most possible buyer. Other prominent bidders include Kingdom Holdings, the company which owns the Four Seasons Hotel, and a Chinese hospitality group, it is learnt.

DLF’s net debt stood at Rs 22,519 crore as the half end of September. It aims to bring down debt to Rs 19,000 crore to Rs 19,500 crore by the end of this financial year, and to Rs 10,000 crore by 2013, through sale of noncore assets.

New home sales rose a bit in October, but the level of demand is historically very weak because of high-unemployment in the U.S. and competition from cheaper existing homes.

Sales increased by 1.3% to a seasonally adjusted annual-rate of 307,000 from a downwardly revised speed of 303,000 in September, the Commerce Department said.

Economists surveyed by Dow Jones Newswires had estimate sales would slip by 0.3% to an annual-rate of 312,000.

The average price in October for a new home was $212,300, higher than the level of $204,200 a year earlier and as yet down from the month earlier.

Uncertainty in the direction of home prices can give would-be buyers second thoughts, with some of them waiting for a better deal. Owners who want to sell, on the other hand, tend to take their property off the market until prices steady a trend that adds to inventory in the future and depresses-prices further.

New homes are, generally, more expensive than previously owned property. People have been particularly attracted to foreclosed homes because of the low-price tags.

New-home sales amount to about a quarter of their peak before the bubble began deflating around five years ago. Sales are way below healthy levels, considered to be an annual rate of around 750,000.

Year over year, new-home-sales were 8.9% above the October 2010 level.

Because many people have much of their net worth tied up in their homes, the bursting of the price bubble made consumers feel less wealthy and discouraged spending. The economy slouches from late 2007 to mid 2009. It has been trying to retrieve strongly but unemployment stays high.

For the housing sector to recover, the economy needs to create more jobs and housing prices must steady. But economists think prices will keep falling because the foreclosure-pipeline is long. Falling prices pull more homes “underwater,” which mean the owners owe more on their mortgages than the property is worth. That leads to more foreclosures and lower prices.

With builders pessimistic, the no of new-homes listed for sale at the end of October was 162,000, which is historically low. That supply would take 6.3 months to reduce at the current sales speed and is around a healthy-level. The supply in September was 6.4 months.

The Commerce statement said October new home sales were mixed. New home Sales rose 14.9% in the West and 22.2% in the Midwest. Sales were flat in the Northeast and fell 9.5% in the South.

Washington is getting ready to sell off state assets to increase painfully required revenue, a yard sale of sorts favored by both Democrats and Republicans.

Items up for tender contain an island, an airstrip, vehicles, roads, buildings, land even the airwaves used to broadcast television, the New York Times reports.

Some properties might require some tender loving concern, but with a little love and some strong chemicals a house once belonging to the Animal Disease Center can become a loving home.

Republicans like privatization because it shrinks the government.

Democrats wish it for raise income painlessly.

“This is something that we can have two-way contract on,” says Representative Jeff Denham, R-Cal.

Close to $20 billion could come from vacant airwaves, and $4 billion from disembarrassing government entities of belongingness they don’t necessitate and help narrow deficits.

A congressional super committee is musing ways to shave $1.2 trillion off U.S. deficits over 10 years.

President Barack Obama, at the same time, is calling for $1.5 trillion in new incomes that accompanies his $447 billion jobs creation plan, which trusts heavily on slashing payroll taxes.

An unemployment rate stays high, and some say the country wants to get used to high joblessness, which won’t come down much for another two years.

“Growth stays sluggish and deficient to cut down the unemployment rate,” Ryan Sweet, an economist at Moody’s Analytics, says in a message to clients, the Associated Press reports.

CEOs at big companies are more unenthusiastic than they were just three months ago, according to a survey by the Business Roundtable, a trade group.

About one third of the CEOs say they plan to take on or improve spending in the next six months, down from half in June, the survey finds, the AP adds.

Real Estate Company Sobha Developers today tell it will invest Rs 250 crore to develop its property in Chennai.

Sobha Developers

“We will be launching in new areas. We will be launching in Chennai, whereas the property will be spread over 1 millionsq ft. The investment cost for this is Rs 250 crore,” Sobha Developers Managing Director J C Sharma told the media on the sidelines of the Real Estate Investment Forum and Business Spaces 2011.

On the company’s income, he said, “We are expecting Rs 1,500 crore values of new space sales (in the current fiscal) from Rs 1,100 crore last year.”

The firm registered a net profit of Rs 182 crore in FY’11, a raise of 32.85%from Rs 137 crore posted in the year ago period of time.

Sobha sold 2.78 million square feet in FY’11 as against 2.08 million square feet in the year since period of time.

The Bangalore based company said its whole debt stood at Rs 1,300 crore and it will repay close to 35% of the same this year. “Our total debt is Rs 1,300 crore. In FY’ 12, we have to repay Rs 450 crore.”

The debt to equity ratio of the company is 0.65:1, the greatest it has ever had, Sharma said.

Asked how the company will finance the debt repayment, Sharma said all the needed requirements were made to fulfill its obligations.

DLF vault on land auction buzz

DLF surged 8.23% to Rs. 216.90 on BSE on information that the company has sold 10.8 acres in Gurgaon as part of its efforts to reduce the debt burden.

In the meantime, the BSE Sensex was temporarily up 472.80 points, or 2.95%, to 16,523.90.

On BSE, 17.36 lakh shares were traded the counter as against average volume of 12.43 lakh shares above the past one quarter.

The stock hit a high of Rs. 218.45 and a low of Rs. 205 so far throughout the day. The stock hit a 52-week high of Rs. 397.35 on 4 October 2010. The stock strike a 52-week low of Rs. 173.40 on 17 August 2011.

The large-cap stock had outperformed the market above the past one month till 26 September 2011, gaining 13.96% compared with the Sensex’s return of 1.28%. The scrip had also outperformed the market in past one quarter, going down 7.44% as against 12% decline in the Sensex.

The country’s biggest real estate solid in terms of market capitalization has equity capital of Rs. 339.60 crore. Face value per share is Rs. 2.

DLF has allegedly sold 10.8 acres in Gurgaon to a Dubai-based Indian investor for Rs. 280 crore.

The company is also in talks with other investors to sell another 20 acres in Gurgaon, which is projected to fetch around Rs. 400 crore.

DLF’s debt stood at Rs. 21524 crore as on 30 June 2011. The company plans to decrease this by Rs. 7000 crore this fiscal, reports added.

On an amalgamated basis, DLF’s net profit fell 12.8% to Rs. 358.36 crore on 20.6% raise in net sales to Rs. 2445.82 crore in Q1 June 2011 over Q1 June 2010.