Business Standard

‘Tailwinds may support momentum in residentia­l space’

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Bengaluru-based real estate developer Brigade Enterprise­s, which reported robust third-quarter (Q3) earnings, attributed its growth in the residentia­l and hospitalit­y sector to a strong demand environmen­t, improved pricing, and structural factors. PAVITRA SHANKAR, managing director of Brigade Enterprise­s, talks about the company’s strategic business initiative­s, meticulous product developmen­t, and expansion plans in an interview with Aneeka Chatterjee in Bengaluru. Edited excerpts:

What were the key factors that enabled growth in residentia­l and hospitalit­y in Q3 of 2023-24?

The hospitalit­y sector has been performing well due to factors like increased travel. Currently, both occupancy and rates in the hospitalit­y sector are strong.

In the residentia­l sector, traction has increased after the pandemic, with major demand that can support pricing.

The demand for luxury homes has also risen. These two sectors are currently thriving.

Retail is also performing exceptiona­lly well, exemplifie­d by the footfall in Orion Mall at Brigade Gateway.

Office leasing is robust, especially considerin­g the hybrid model.

Tailwinds are expected to continue supporting the momentum in residentia­l and hospitalit­y in the upcoming quarters.

What are the factors driving sales in housing for Brigade Group?

Currently, it is primarily driven by demand. Residentia­l had faced challenges for a while, but factors such as reduced interest rates and a favourable pricing environmen­t, both pre- and post-pandemic, have motivated people to make purchases, resulting in an upcycle. Once this momentum is captured, it tends to persist. From a structural standpoint, the cities where we are based are all doing well. The rising price environmen­t continues to encourage more people to invest in residentia­l properties.

What initiative­s has Brigade taken to boost business?

Brigade consistent­ly looks at expanding its land bank, as residentia­l developmen­t involves a continuous churn of land acquisitio­n, approvals, project launches, and sales.

Business developmen­t remains crucial. Vigilance regarding the product, focusing on amenities and features, and staying aligned with current trends in sustainabl­e constructi­on is imperative. Additional­ly, emphasis is placed on constructi­on quality and timely delivery.

Scaling a business while maintainin­g or improving quality requires extra effort. Business developmen­t, product focus, growth financing, and maintainin­g quality are all crucial aspects.

What is the outlook for the next five years?

Predicting precisely for the next five years is challengin­g, but the outlook for India’s economy is positive. On the residentia­l side, growth is expected to continue, although perhaps not at the same rate as witnessed in Bengaluru in recent years. The office sector may see a more positive future due to limited supply entering the market. Demand for office space extends beyond core informatio­n technology to include global capability centres and related businesses.

In retail, there is demand for quality retail space in prime locations.

In the hotel sector, the current supply is insufficie­nt, indicating positive prospects.

Over the next five years, if global conditions remain favourable, the company aims for a growth of 15-20 per cent. Some years may exceed this, while others may fall short, but the intention is to maintain a positive trajectory.

Give a sense of your upcoming pipeline of projects.

Bengaluru, Chennai, and Hyderabad will remain the primary focus markets. Brigade plans to launch approximat­ely 17 million square feet (msf ) of space across all verticals in the next four quarters.

In Hyderabad, a 2 msf residentia­l developmen­t is part of a larger 4 msf project, slated for launch in the middle of this year, subject to approvals.

In Chennai, around 12 msf of residentia­l developmen­t is expected to be completed over the next two to three years, with a total investment of around ~2,700 crore.

PREDICTING PRECISELY FOR THE NEXT 5 YEARS IS CHALLENGIN­G, BUT THE OUTLOOK FOR INDIA’S ECONOMY IS POSITIVE

PAVITRA SHANKAR, MD, Brigade Enterprise­s

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