Realty major DLF's arm will invest around Rs 1,500 crore in the next two years on construction of over 3 million sq ft office space in Gurugram, Haryana to tap into growing demand for commercial properties from corporates and co-working players.

DLF Cyber City Developers Ltd (DCCDL), a joint venture between DLF and Singapore's sovereign wealth fund GIC, has initiated the development of its new mixed-use project 'Downtown' comprising 11 million sq ft of leasing area. DLF has 67 per cent stake in the DCCDL, while GIC has the rest.

"We are developing 3.2 million sq ft office space in the first phase of this new project, located on national highway and adjacent to DLF Cyber City project," DLF's Managing Director (Rental business) Sriram Khattar told PTI.

To begin with, he said the company has started construction work on two identical buildings of 7.5 lakh sq ft each.

"We are constructing these two buildings on steel structure with no basement for faster execution. The target is to complete by end of the next year," he said.

The construction work on the remaining 1.7 million sq ft will start soon and get completed by end of 2021, Khattar added.

"There is a huge demand for office space in Gurugram from corporates as well as co-working operators. Our commercial buildings in Gurugram are almost completely occupied. Therefore, we have started this new project to cater to the growing demand," Khattar said.

DCCDL has already started leasing space in this project and is expecting a rental of around Rs 120-125 per sq ft per month.

Asked about project cost, Khattar said the construction cost is estimated to be around Rs 5,000 per sq ft.

The DCCDL has started planning for the remaining 8 million sq ft development in the 'Downtown' project.

Talking about other projects, Khattar said the DCCDL has completely leased its commercial project Cyber Park in Gurugram comprising 2.5 million sq ft area. It expects to earn a rental of about Rs 375 crore annually.

The 12-acre project 'Cyber Park' has been developed at an estimated cost of about Rs 1,500 crore.

The DCCDL currently has a rental portfolio of over 30 million sq ft with an annual rental income of over Rs 3,000 crore. It is currently developing 6.6 million sq ft projects across the country.

DLF has developed around 153 real estate projects and an area of about 330 million square feet. It currently has 221 million sq ft of development potential across residential and commercial segment.