Market positive as residential, hospitality sectors on a high: Brigade MD

Shankar highlights the factors behind the company's revenue growth, the best-performing segments, and the status of their project pipeline

Real estate developer Brigade Enterprises is seeing strong momentum in the residential and hospitality segments and is moving its product offerings from the mid-segment to the upper-mid-segment. The company’s total revenue for Q4 stood at Rs 1,763 crore, up 102 per cent, on the back of strong demand. Pavitra Shankar, managing director (MD), highlights the factors behind the company’s revenue growth and the best-performing segments, in an interview with Aneeka Chatterjee in Bengaluru. Edited excerpts:

What factors contributed to your revenue growth in the last quarter?

All business segments have been good, especially hospitality as the cycle has returned. We have seen a huge jump in hospitality revenues. Leasing is continuing in the same momentum with all spaces being leased up. The increase was mainly due to the residential segment as we have recognised revenue from several projects based on Indian counting standards while the sales have already happened. In FY24, 2-3 large projects have come up such as Eden and Serene at Brigade Utopia in Bengaluru and Citadel in Hyderabad. As a result, all these added to the revenue. It has helped sales jump from FY19; four years later, it started to reflect on the revenue.

Which segments are performing best in the Brigade portfolio?

The overall market cycle is very positive with the residential and hospitality sectors performing the best. Retail is also doing well, although we have three malls that have not yet been added to our portfolio. We have some retail space currently under construction and design as part of a larger project. In the office space sector, all properties in our operating portfolio are fully leased. Currently, we are constructing new office spaces, which are expected to be completed in a couple of years. They will subsequently contribute to our rental income.

 

What is the current status of your upcoming project pipeline totalling 16 million square feet?

The projected figures for the next four quarters represent the projects we plan to initiate. Projects initially planned for Q4 but delayed due to approvals have been moved to Q1 FY25. Currently, we have visibility of 16 million square feet across all business segments. This includes 12.6 million square feet of residential space, 2.5 million square feet of office space, and 0.5 million square feet of hotel space, across three properties.

 

Can you throw some light on the hospitality sector as it showed strong growth?

We are investing in and building several hotels. Currently, we have 1,474 operational keys and plan to add another 1,000 keys across various hotels in our four markets — Bengaluru, Hyderabad, Chennai, and Mysuru. Construction will commence in all these locations over the next couple of years.

 

What are your investment plans for the upcoming quarters?

Overall, with our land bank, we can develop approximately 55 million square feet, yielding a gross development value (GDV) of around Rs 50,000 crore. About half of this amount can be anticipated as land and construction investments.

Can you provide specific details on any new projects or expansions you are considering?

We are focusing on our four main lines of business, particularly in Bengaluru, Chennai, and Hyderabad, with Mysuru as a key Tier-II market. In GIFT City, we have an office, a hotel, and additional land designated for office space development.

We are also exploring residential markets in Kochi and Thiruvananthapuram. Our investments are concentrated in the South, achieved through land acquisition via joint development or outright purchase.

What is Brigade’s growth trajectory for the next financial year?

The current market cycle is encouraging investments, so we plan to rapidly expand our land banks, particularly for residential projects. Our primary focus is on residential developments as the market is absorbing all available supply. We are also transitioning our product offerings from mid-segment to upper-mid-segment, and we are launching several ultra-high-end projects in our top three markets. Historically, we have aimed for a 15-20 per cent year-on-year growth, and as our base expands, we strive to maintain this growth trajectory.