Tailwinds may support momentum in residential space: Brigade Enterprises MD

Shankar talks about the company's strategic business initiatives, meticulous product development, and expansion plans

Pavitra Shankar, managing director, Brigade Enterprises
Pavitra Shankar, managing director, Brigade Enterprises
Aneeka Chatterjee Bengaluru
3 min read Last Updated : Feb 20 2024 | 9:16 AM IST
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. The total investment of around Rs 2,700 crore. 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.

Topics :BengaluruBrigade groupQ3 resultsIndian companies

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