At the receiving end

The formal closure of its Mumbai land sale for R27.27 billion in October-end has increased the visibility on early-debt reduction by R20-25 bn by the end of Q, which is positive given the skepticism among investors. Our informal channel check suggest a high probability of Aman Resorts sale taking place shortly—this would further enhance debt reduction visibility to R185 bn by March 2012, significantly boosting stock sentiment that was impacted by recent news on political links.

Attractive at 50% discount to NAV: The discount factors delays in efforts to cut debt and slower than expected execution ramp-up. That said, we still believe DLF has superior business model and good asset-geographic mix, strong growing rental income of R18 bn per annum, which differentiates it from peers. Our NAV per share of R400 includes R292 for the development portfolio and R108 for rental income yielding assets.

We have eliminated the land/assets sold and also factored in higher customer advances in our assumptions. Other key assumptions are cap rates of 10% ascribed to value its 22.5 million square foot (msf) leased commercial assets (20% of NAV), other developable commercial assets valued at 10-11% cap (17% of NAV), and non-core asset sales of

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