Commercial property , also called commercial real estate , investment property or income property , is real estate (buildings or land) intended to generate a profit , either from capital gains or rental income. Commercial property includes office buildings , medical centers, hotels , malls , retail stores, multifamily housing buildings, farm land , warehouses , and garages. In many U.S. states , residential property containing more than a certain number of units qualifies as commercial property for borrowing and tax purposes.
44-552: DLF Limited (formerly Delhi Land & Finance ) is an Indian commercial real estate development company. It was founded by Chaudhary Raghvendra Singh in 1946, and it is based in New Delhi , India. DLF has developed residential colonies in Delhi such as Model Town , Rajouri Garden , Krishna Nagar , South Extension , Greater Kailash , Kailash Colony , and Hauz Khas . DLF builds residential , office, and retail properties. With
88-492: A stock swap . In April 2019, its newly constituted board informed investors that the company had 302 entities through which it currently operates. IL&FS has 256 group companies as of 2018, including subsidiaries, joint venture companies and associate entities. Though on the surface, the company appears to have 23 direct subsidiaries, 141 indirect subsidiaries (including special purpose vehicles for different projects), 6 joint ventures and 4 associate companies, each of them
132-399: A Letter of Intent although it is common. A PSA is a legal agreement between the seller and a single interested buyer which establishes the terms, conditions and timeline of the sale between the buyer and seller. A PSA may be a highly negotiated document with customized terms or may be a standardized contract similar to those used in residential transactions. Once a PSA is executed, the buyer
176-465: A commercial building may combine functions , such as offices on levels 2–10, with retail on floor 1. When space allocated to multiple functions is significant, these buildings can be called multi-use. Local authorities commonly maintain strict regulations on commercial zoning , and have the authority to designate any zoned area as such; a business must be located in a commercial area or area zoned at least partially for commerce. Commercial real estate
220-647: A deal closes, post-closing processes may begin, including notifying tenants of an ownership change, transferring vendor relationships, and handing over relevant information to the asset management team. IL%26FS Infrastructure Leasing & Financial Services Limited ( IL&FS ) is an Indian state-funded infrastructure development and finance company. It was created by public sector banks and insurance companies. It operates through more than 250 subsidiaries including IL&FS Investment managers, IL&FS financial services and IL&FS Transportation networks India Limited (ITNL). Its projects include some of
264-573: A newly formed Twenty20 cricket league. DLF paid close to ₹ 2 billion (US$ 24 million) for the five-year sponsorship deal. The deal ended in the 2012 version of the season, wherein it was taken over by Pepsi . Haryana Urban Development Authority (HUDA) and DLF, in a 50:50 joint venture, have completed work on a 16-lane, 10.5 km road network in Gurgaon. This stretch from NH8 Toll Plaza to Sector 55/56 in Gurgaon with six underpasses, one flyover and freeways has improved traffic management in
308-547: A pattern that continues to this day. Currently, its institutional shareholders include Life Insurance Corporation of India (LIC), ORIX and Abu Dhabi Investment Authority , with small shareholdings by a few Indian banks. State Bank of India (SBI) was a share holder till 2017, after which it sold its stake in the company. A few foreign investors including Greenspring associates remain investors in its subsidiary companies, especially IL&FS transportation and IL&FS infrastructure services. In 2012, A2Z Group acquired
352-426: A set of criteria set out by the buyer. Types of buyers may include an owner-user, private investor, acquisitions , capital investment, or private equity firms . The buyer or its agents will perform an initial assessment of the physical property, location and potential profitability (if for investment) or adequacy of property for its intended use (if for owner-user). If it is determined the prospective investment meets
396-518: A turnover of ₹ 31.2098 billion (US$ 370 million) and profit after taxes of ₹ 15.1548 billion (US$ 180 million). As of 31 March 2012, the company had 1,380 square feet of leased retail space across the country. In 2013-14, it leased out 3 million sq ft of office space in India. DLF's first residential project was Krishna Nagar in East Delhi , which was completed in 1949. Subsequently,
440-595: A ₹1,000 crore short-term loan taken from SIDBI , resulting in SIDBI asking one of its officers to resign. Subsequently, Bloomberg Quint, Business standard and Economic times reported that one of the IL&;FS group of companies called IL&FS Financial Services Limited had defaulted on its commercial paper payments. This led to news of a possible audit by the Reserve bank of India . IL&FS Financial Services Ltd., one of
484-429: Is commonly divided into five categories: Of these, only the first five are classified as being commercial buildings . Residential income property may also signify multifamily apartments. The basic elements of an investment are cash inflows, outflows, timing of cash flows, and risk. The ability to analyze these elements is key in providing services to investors in commercial real estate. Cash inflows and outflows are
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#1732798324223528-431: Is commonly required to submit an escrow deposit, which may be refundable under certain conditions, to a title company office or held by a brokerage in escrow. The transaction moves to the due diligence phase, where the buyer makes a more detailed assessment of the property. Purchase and sale agreements will generally include clauses which require the seller to disclose certain information for buyer's review to determine if
572-464: Is dependent on market conditions, current tenants, and the likelihood that they will renew their leases year-over-year. It is important to be able to predict the probability that the cash inflows and outflows will be in the amounts predicted, what is the probability that the timing of them will be as predicted, and what the probability is that there may be unexpected cash flows, and in what amounts they might occur. The total value of commercial property in
616-708: Is further subdivided into additional legal entities, with much cross ownership as well as ownership by investment vehicles of various governments. While some of its subsidiaries (such as IL&FS Transport) ran into high losses in 2018 and found it difficult to repay their loans, others (such as IL&FS investment managers) posted profits of ₹72.5 crore in 2018, a 33% profit after tax. Some of them are listed below- IL&FS has several projects in different sectors including Transportation, Area Development, e-Governance, Health Initiatives, Cluster Development, Finance, Power, Ports, Water and Waste Water, Urban Infrastructure, Environment, Education, and Tourism. In 2009, it became
660-574: Is headed by Rajiv Singh, who is the current chairman of the DLF Group. According to the Forbes listing of richest billionaires in 2023, Kushal Pal Singh, Chairman Emeritus, is the 19th richest man in India with a net worth of US$ 8.8 billion. The company's $ US$ 2 billion IPO in July 2007 was India's biggest IPO in history. In its first quarter results for the period ending 30 June 2007, the company reported
704-646: Is the first tunnel in India with a fully integrated tunnel system and is expected to reduce the distance between Jammu and Srinagar by 30.11 km (18.7 mi), reducing the travel time by two hours. IL&FS also has large investments in its own subsidiaries, as well as in the equity market. In September 2018, these amounted to nearly ₹10,000 crores. As of March 2018, the largest shareholders of IL&FS Investment services were as follows From July to September 2018, two out of IL&FS's 256 subsidiaries reported having trouble paying back loans and inter corporate deposits to other banks and lenders, resulting in
748-620: The Central Bank of India , Housing Development Finance Corporation (HDFC) and Unit Trust of India (UTI), to provide finance and loans for major infrastructure projects. Gradually, as the organisation needed better financing, it additionally opened itself to two large international players, namely Mitsubishi (through Orix corporation Japan) and the Abu Dhabi Investment authority . Subsequently, Life Insurance Corporation India , Orix and ADIA became its largest shareholders,
792-528: The RBI requesting its major share holders to rescue it. In July 2018, Hindu Businessline reported that the road arm of IL&FS was having difficulty making payments due on its bonds. In the same month, Business Standard reported that its founder Ravi Parthasarathy would be leaving the firm for medical reasons, after having headed the firm for 30 years. In early September 2018, Moneylife India reported that one of IL&FS's subsidiaries had been unable to repay
836-519: The BSE, IL&FS investment services (IVC) clarified that the news items did not relate to it, as these were two completely different legal entities. A similar letter was published by IL&FS Transportation. On 1 Oct 2018, the Government of India took steps to take control of the company and arrest the spread of the contagion to the financial markets. A new board was constituted as the earlier board
880-638: The Congress government. This matter has led to an investigation by the Central Bureau of Investigation involving Robert Vadra , Bhupinder Singh Hooda, and the DLF, as of around December 2017. Commercial real estate Commercial buildings are buildings that are used for commercial purposes, and include office buildings , warehouses , and retail buildings (e.g. convenience stores , ' big box ' stores, and shopping malls ). In urban locations,
924-700: The United States was approximately $ 6 trillion in 2018. The relative strength of the market is measured by the US Commercial Real Estate Index which is composed of eight economic drivers and is calculated weekly. According to Real Capital Analytics, a New York real estate research firm, more than $ 160 billion of commercial properties in the United States are now in default , foreclosure , or bankruptcy . In 2024, office leasing volume rose to its highest level since 2020, but roughly 60% of active office leases went into effect prior to
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#1732798324223968-442: The buyer's criteria, they may signal their intent to move forward with a letter of intent (LOI) . Letters of Intent are used to outline the major terms of an offer in order to avoid unnecessary costs of drafting legal documents in the event the parties do not agree to the terms as drafted. Once a Letter of Intent is signed by both parties, a purchase and sale agreement (PSA) is drafted. Not all commercial property transactions utilize
1012-470: The buyer's purchase decision specified in the PSA. In competitive real estate markets, buyers may waive contingencies in order to make an offer more appealing to a buyer. The PSA will usually require the seller to provide due diligence information to the seller in a timely manner and limit the buyer's time to terminate the deal based on its due diligence review findings. If the buyer terminates the transaction within
1056-495: The city. To create this infrastructure facility, DLF had engaged Parsons Brinckerhoff for project management consultancy and construction work had been awarded to IL&FS . In August 2011, a penalty of ₹ 6.3 billion (US$ 75 million) was imposed on DLF by the Competition Commission of India (CCI) after finding DLF guilty of breaching laws regarding the unfair pricing of goods and services. The complaint
1100-500: The company developed 21 colonies in Delhi , including Model Town , Rajouri Garden , Punjabi Bagh , South Extension , Greater Kailash , Kailash Colony and Hauz Khas . The passage of Delhi Development Act in 1957 was the first serious challenge to company's growth. The Act meant that the government would assume control of all real estate development activities in the city. As a result, DLF decided to move beyond Delhi and focused on
1144-436: The contribution to Europe's economy in 2012 can be estimated at €285 billion according to EPRA and INREV , not to mention social benefits of an efficient real estate sector. It is estimated that commercial property is responsible for securing around 4 million jobs across Europe. Typically, a broker will market a property on behalf of the seller. Brokers representing buyers or buyers' representatives identify property meeting
1188-681: The default. However, the Bombay High Court passed an interim order to prevent "coercive action" by the Government against the firm. As of September 30, 2024, the group has resolved Rs 55,000 crore, as against the Estimated Debt Resolution target of Rs 61,000 crores, representing nearly 90 per cent of resolution value. This includes debt that been discharged by way of monetization, transfer to InvIT, debt servicing and interim distribution, while all along preserving
1232-443: The due diligence timeframe, the escrow deposit is commonly returned to the buyer. If the buyer has not terminated the agreement pursuant to the PSA contingencies, the escrow deposit becomes non-refundable and failure to complete the purchase will result in the escrow deposit funds to be transferred to the seller as a fee for failure to close. The parties will proceed to close the transaction in which funds and title are exchanged. When
1276-480: The group's many financial subsidiaries had defaulted on repaying about ₹450 crore worth of inter-corporate deposits to Small Industries Development Bank of India (SIDBI). On 27 September 2018, IL&FS Financial Services informed the Bombay Stock Exchange that it had defaulted on a ₹52.4 crore repayment of short-term deposits and ₹104 crore term deposit. However, in its replies to investors and
1320-513: The largest infrastructure projects in India including India's longest tunnel , Dr. Syama Prasad Mookerjee Tunnel , which opened for traffic in April 2017. After the company defaulted on its loans in 2018, the Government of India took control of the company and appointed a new board. IL&FS was formed in 1987 as an "RBI registered Core Investment Company" by three financial institutions, namely
1364-409: The money that is put into, or received from, the property including the original purchase cost and sale revenue over the entire life of the investment. An example of this sort of investment is a real estate fund. Cash inflows include the following: Cash outflows include: The timing of cash inflows and outflows is important to know in order to project periods of positive and negative cash flows. Risk
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1408-695: The new promoter of the Maytas Infra Ltd. and in January 2011, Maytas Infra was taken over by IL&FS and renamed to IL&FS Engineering and Construction Company Limited In September 2009, it picked up a "significant minority stake" in the Reliance Industries ' special economic zone project in Haryana . IL&FS was the principal lender behind the construction of the 9.28 km long Dr. Syama Prasad Mookerjee Tunnel , located on
1452-508: The pandemic. In Europe, approximately half of the €960 billion of debt backed by European commercial real estate is expected to require refinancing in the next three years, according to PropertyMall, a UK‑based commercial property news provider. Additionally, the economic conditions surrounding future interest rate hikes; which could put renewed pressure on valuations , complicate loan refinancing, and impede debt servicing could cause major dislocation in commercial real estate markets. However,
1496-728: The passage of the Delhi Development Act in 1957, the local government assumed control of real estate development and banned private real estate developers from Delhi proper. As a result, DLF began acquiring land at a relatively low cost outside the area controlled by the Delhi Development Authority , in the district of Gurgaon, and in the adjacent state of Haryana . In the mid-1970s, the company started developing their DLF City project at Gurgaon . This included hotels, infrastructure , and special economic zones -related development projects. The company
1540-477: The property management subsidiary of IL&FS (IL&FS Property Management & Services Ltd) in a cash and stock deal. The deal was done through its subsidiary A2Z Infraservices Ltd for ₹ 25 crore . While ₹7 crore cash payment was made to IL&FS Infrastructure Equity Fund and IL&FS Employees Welfare Trust, the infrastructure major also took a 20% stake in A2Z Infraservices by way of
1584-592: The route of NH 44 in Jammu and Kashmir . Its work was started in July 2011 and the tunnel was opened for traffic after its inauguration by the Prime Minister of India Narendra Modi on 2 April 2017. Built on an estimated budget of ₹ 3,720 crore (US$ 550 million), the main tunnel is 13 metres in diameter, while the parallel escape tunnel is 6 metres in diameter. The main and escape tunnels are connected by 29 cross passages located at intervals of every 300 metres. It
1628-543: The suburb of Gurgaon in Haryana, which had the potential for development of residential and commercial properties . As DLF started to acquire land under the leadership of Chairman K.P. Singh , Gurgaon embarked on a period of rapid growth. A ₹ 58 crore deal was cancelled between DLF and Robert Vadra by IAS officer Ashok Khemka . In 2008, DLF became the title sponsor of the Indian Premier League ,
1672-528: The task of distributing the available cash and units, closure of pending transactions approved by Courts as well as those pending in Courts, remains yet be accomplished. In April 2020 the Indian Government's Corporate Affairs Secretary, Injeti Srinivas, said he expected to recover a substantial part of the company's ₹94,000 crore debt. He said it was strange that nobody foresaw the problem, whether it
1716-545: The terms of the agreement are still acceptable. The buyer may have the right to terminate the transaction and/or renegotiate the terms, often referred to as "contingencies". Many purchase agreements are contingent on the buyer's ability to obtain mortgage financing and buyer's satisfactory review of specific due diligence items. Common due diligence items include property financial statements , rent rolls, vendor contracts, zoning and legal uses, physical and environmental condition, traffic patterns and other relevant information to
1760-467: The troubled infrastructure lender. He was accused of granting loans to entities that were not credit-worthy or declared as non-performing accounts causing loss to the company and its creditors. The SFIO was granted custody of Sankaran till 4 April. The initial SFIO probe revealed that there were major lapses in Deloitte 's audit of the IL&FS. The Government had moved to ban Deloitte for its role in
1804-414: The value of national assets by maintaining their going concern status. Further, out of total 302 entities to be resolved, 188 entities have been resolved by way of monetization, transfer to InvIT and Liquidation. Additionally, 38 entities are with the Courts at different stages of approval and a few entities are regularly servicing the debt of around Rs.3,000 crore. Besides resolving balance debt and entities,
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1848-497: Was deemed to have failed to discharge its duties. The new board consisted of Kotak Mahindra Bank managing director Uday Kotak , former IAS officer & Tech Mahindra boss Vineet Nayyar , former Securities and Exchange Board of India chief G N Bajpai , former ICICI Bank chairman G C Chaturvedi , former IAS officers Malini Shankar and Nand Kishore. The Serious Fraud Investigation Office (SFIO) started an investigation as there were huge procedural lapses and top management
1892-608: Was lodged against DLF by buyers in its residential projects Belaire & Park Place, located in Gurgaon . In February 2015, the CCI ordered its investigative arm to probe two more projects of DLF in Gurgaon , namely, DLF Regal Gardens and DLF Skycourt. DLF land grab case pertains to the alleged illegal acquisition of 50 acres of land in Amipur village, Haryana , back in 2013, during Bhupinder Singh Hooda 's tenure as Chief Minister under
1936-581: Was not reachable. Newspapers reported the lavish salaries management had given itself at the expense of public money. In the absence of adequate supervision by the RBI or shareholders or any claw back provisions on remuneration , the management treated the company as its fiefdom. On 2 April 2019, the SFIO arrested the former vice-chairman of IL&FS, Hari Sankaran , in Mumbai for fraud and causing wrongful loss to
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