DLF defers key projects; retrenches staff
DLF has acceded to the slump in market demand and deferred several residential, hotel and commercial projects, while retrenching a few members of its staff.
Its chairman K P Singh said on the sidelines of the India Economic Summit, the real estate sector needs to see a boost in housing demand through a reduction in interest on home loans to around 7%, which otherwise may result in job losses.
Especially in Mumbai, the company has delayed its projects, including development of a mill property at Lower Parel and a hotel project. According to sources, the retail-cum-entertainment centre at Mumbai Mills property, which marked DLF’s entry into the financial capital three years ago, has been delayed by two years. The project, announced in June 2005 and slated to be completed in December 2009, is still at the excavation stage.
It is understood that other developers like Unitech and Parsvnath Developers have also retrenched staff recently.
Developers have been facing liquidity crunch for over a year now. One of the reasons for this is the high risk weightage for bank loans to real estate and the ban on them from borrowing funds overseas.
However, the government has asked developers to slash prices of their projects to boost demand in the sector. Singh said the lack of demand has already led to lower prices.