by THO
Bengaluru-based listed real estate company Brigade Group plans to launch more than 6.5 mn sq ft of residential projects this fiscal, predominantly in Bengaluru and Chennai that are likely to entail an investment of around ₹2,700 crore, said Pavitra Shankar, Managing Director, Brigade Enterprises Limited.
“This financial year we would be launching close to 6.5 mn sq ft primarily in Bengaluru. The company has so far launched 4 mn sq ft in Bengaluru across different submarkets In the coming four quarters, we look to launch projects in Hyderabad and Chennai in addition to Bengaluru,” she said.
Brigade Enterprises, which recently posted a profit of Rs. 56 crore, has a presence in Bengaluru, Chennai, Hyderabad, Mysuru, Kochi, Gift City-Gujarat, Thiruvananthapuram, Mangaluru and Chikkamagaluru across residential, office, retail and hotels.
Asked if the company has plans to expand to Delhi-NCR or Mumbai, Shankar told HT Digital that the company plans to focus on South India for now “as we have invested here in terms of having a presence and creating a network. When we enter a market, we want to be present across segments – office, retail, residential and hospitality. We much rather go deep into a market rather than spread across one-off projects in multiple markets.”
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Having said that, NCR and Mumbai are the largest markets in the country and “we may evaluate them at some point but in the near to medium term we are focusing on the South Indian markets,” she added.
Residential plans for Bengaluru
In December, 2023, the company launched a new housing project, Brigade Sanctuary in Bengaluru, under the joint development model. It will comprise 1,275 units. The company hopes to earn a revenue of around ₹2,000 crore from the project that is spread across an area of 14 acres in Yelahanka in North Bengaluru. The total development area will be around 2 mn sq ft.
She said that the company intends to focus on the mid and luxury segments. “With heightened customer expectations for amenities and higher product specifications, prices have gone up. Demand is robust despite the increase in prices,” she said.
The real estate firm also plans to focus on projects that involve outright purchase of land as well as the joint development model, based on the landowners’ preferences. “Residential sales form almost 60-70% of our revenues and demand is expected to remain strong in the next couple of years,” she told HT Digital..
Plans for Mysuru
The company announced in December that it had entered into a partnership to develop a luxury housing project in Mysuru with an estimated revenue potential of ₹300 crore. The project is spread over 4 acres and is located in Kurubarahalli, Mysuru.
“The developable area of the project will be about 0.40 million sq ft with a Gross Development Value (GDV) of ₹300 crore,” she said.
The JDA will add to Brigade Group’s residential portfolio in Mysuru of over 25 residential projects. “Brigade has been a strong brand in Mysuru over the last three decades. This is our 27th project in Mysuru. The project is currently in the design stage and may take about 10-12 months to launch,” she said.
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The company would soon be handing over 90 units (of another project) in Mysuru. Last year the company had also launched a plotted development that may take a year or so to hand over. ‘We are evaluating other projects as well,” she said.
The company had also launched a hotel in Mysuru before Covid-19. “We should be opening it in a year’s time. This is an Ibis Styles hotel in association with Accor and will have 130 keys. We also have another project in the office retail space that is in the design stage right now,” she said.
Commercial projects
In December last year Brigade Enterprises had informed the stock exchange that it had entered into a joint development agreement (JDA) to develop a premium ‘Grade A’ office space on Sankey Road in Bengaluru’s Central Business District.
“With a developable area of around 0.20 million square feet, the project has a gross development value of around ₹500 crore,” she said.
The company is expected to launch close to 5 mn sq ft in the next four quarters. “Two projects are part of existing townships in the Whitefield IT belt. This may be launched in the next financial year. The capex will be close to ₹2,300 crore,” she said.
The company’s operational rental commercial space portfolio is close to 8.5 mn sq ft and does about ₹750 crore annually. The IT sector contributes maximum to the rental portfolio followed by BFSI and GCC, she added.
Plans for REIT
The company currently has close to 8.5 mn sq ft of operational commercial space and another 1.4 mn sq ft is under construction.
“We continue to look for new projects that we can add to our overall portfolio and depending on the market circumstances and size of portfolio, we may consider going in for a REIT structure at some point,” she said.
On the SEZ amendment
In December 2023, the government had issued a notification allowing floor-wise denotification of Special Economic Zone spaces into non-SEZ use within information technology and IT-enabled services parks.
Shankar said that this provides an opportunity for companies who have yet to be leased SEZ spaces.
“It gives landlords an opportunity to denotify the SEZ space and lease it to a non-SEZ tenant. There is a trade-off here – some of the tax benefits that have been taken advantage of need to be evaluated. We do not need to denotify any spaces as most of our SEZ office vacancy has been addressed and we have visibility on the remaining lease-up.”
