Founder's Message
We are in the middle of the 2024 parliamentary elections. What the resilient Indian economy needs is a stable government with a vision to make India into a seven trillion dollar economy by 2030, and to give ‘a better quality of life’ to its large masses. By June, we will know who will be in the saddle to lead the country for the next five years.
The huge population of India, what seemed like a curse few decades back, is now being portrayed as a ‘demographic dividend’ with 60% of India’s population below 35 years of age. The growth in GDP and, in turn, increase in per capita income is surely helping millions of Indians to come out of poverty month after month, thereby increasing domestic demand for products and services. PM Modi’s push to increase manufacturing activity through PLI and other schemes is slowly but surely helping create lakhs of blue collar jobs, although Vietnam seems to have over taken India in benefitting from the China Plus One strategy of MNCs.
While the world is chugging along with all the strife in Eastern Europe and the Middle East, one never knows when and what will upset the delicate balance that is making many countries function as if ‘nothing is happening around them’, and everything is ‘bold and beautiful’! Terrorism in di erent forms is the greatest threat to development and existence in the world. Israel’s response to the Palestinian terrorist activities is too severe and tough for us Indians to understand, as we are used to the soft pedalling nature of our governments in the past. It is very important for the ongoing conflicts to end for peace and co-existence.
The Indian economy is generally firing on all cylinders, and I wish it continues to do so, thereby helping achieve the aspirations of millions of Indians. With a higher educated younger population from rural areas seeking new pastures, urbanisation is increasing, as witnessed earlier in China and many other countries. Most countries with high industrialisation have upwards of 65-70% of its population in urban centres, as compared to 35-38% of Indians in urban centres due to India's economy still being dependent on agriculture in a big way. With greater urbanisation, one can imagine the increase in demand for housing and necessities like clean air, food, water, entertainment and good infrastructure.
Happy to record the good performance of Brigade in the financial year closing March 2024. We made fresh sales exceeding 7.50 million square feet, earned lease rental income of upwards INR 900 crores, and all eight operating star hotels posting best results.
The momentum for growth will continue as long as the Indian economy continues to perform well. There is no doubt on this aspect. We are still a country with a low per capita income below USD 3000, and a low global ranking of 125 out of 200 countries. One needs to look towards China to know what happens to the country’s economy and prosperity of its people when the per capita increases to $5,000 or $7,000 or more.
The Global Business Forum 2024 of WTC Association New York, hosted by our World Trade Center Bengaluru in March was a resounding success with the participation of more than 200 international delegates.
Jt. Managing Director, Nirupa Shankar qualifying as an ‘Ironman’ at the Copenhagen event is a phenomenal achievement due to the sheer toughness and endurance required.
As part of our CSR initiatives, Brigade is happy to have undertaken the much required renovation of the well-known state government owned Venkatappa Art Gallery. It should reopen by the end of the year. The 108-bed hospital, a philanthropic initiative in association with St. John's Medical College Hospital is in its final stage of completion at Brigade Meadows, Bengaluru South.
In closing, we should all hope and pray that our country and our state get a good monsoon to bring smiles to both rural and urban population alike, including the parched throats of Bangaloreans.
JAI HIND.
—Jaishankar CMD, Brigade.
Reflections on Brigade Group completing 25 years.
ON 10th October 1986, the foundation stone for Brigade Group's maiden project—Brigade Towers on Brigade Road, Bangalore—was laid in a simple Ground Breaking ceremony. I started the partnership firm Brigade Investments, which created Brigade Towers, with the support of my family and two family friends. The firm was a single-project venture and the result of an earlier missed opportunity by the family to invest in a prime real estate project in Bangalore. It was formed with no clear plan or vision for the business, at a time when I was planning to diversify from the chicory processing business I had started in 1980, because of a serious industrial relations problem in 1984. (In retrospect, I should warmly thank the labour leader who created the problem!)
Brigade Towers, the first 14-storied building in Bangalore (and, at that point of time, one of the very few projects to market ownership offices) was an instant success. This was one of the few real estate projects to be marketed in a planned manner; ours was the very first real estate advertisement released in India Today! What was a one-project venture became two projects, then four, then eight … growth continued slowly but steadily. Then a lack of consensus on growth strategy with a partner led to the partnership firm Brigade Investments being dissolved in 1997, to be restructured as Brigade Enterprises Pvt Ltd in 1998, at the height of the real estate recession.
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The new millennium brought cheer to the real estate sector and Brigade Millennium—Bangalore's first integrated enclave project, launched in 2002—brought cheer to Brigade Group. We have not looked back since then. Of the 20 million square feet promoted by the Group since inception, 90% (comprising a wide range of projects) was completed in the last ten years. We are proud of every project we have executed, confident we have given our best each time. Many of our projects belong to the ‘first-of-its-kind’ category in Bangalore and Mysore. Our best project yet is probably Brigade Gateway, undoubtedly the most integrated city-centric mixed-use project. Nowhere in the world does one come across residential apartments, club, offices, school, mall, hotel and hospital, all within one campus close to the centre of the city. A fine example of the concept of 'Live-Work-Play', it is the perfect answer to many traffic-related problems in urban centres.
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The real estate sector is full of challenges, the primary one being dealing with multiple civic authorities. If one were to have projects across Bangalore, we would have to deal with at least eight planning authorities (before 2007 it was 13!), each with a different set of building bye-laws—not to mention another nine authorities for NoCs and utilities. Also, the business is bombarded with multiple taxes and duties. Ours may be the only industry where the transaction of marketing a house / apartment by a developer is considered a 'sale' by the state revenue department; a 'works contract' by the state commercial tax department and a 'service' by the central service tax authorities—attracting stamp duty, vat and service tax along the way. This is doubly strange when you think this is a sector catering to one of the basic needs of mankind: shelter. It is shocking to know that 40% of the cost of an apartment goes towards direct and indirect taxes. If this be the case, how will the government policy of 'housing for all' succeed?
After the 2008-10 recession in the sector, the second major one in 15 years, the developer community was expecting a boom in 2011. But the financial turmoil in the western economies and rudderless governance in our own country (leading to inefficiency and very high interest rates) has subdued business prospects. One can only hope that quick corrective steps will be taken by the government to avoid further slippage. A silver lining for the real estate sector may come in the form of higher NRI investments and improved earnings for the software sector due to a weaker rupee.
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THE nice part of the real estate business is the tremendous satisfaction one derives from creating a long-lasting edifice and in the contribution one can make to satisfying the home-owning aspiration of so many people. While developers should act as 'trustees' of the life savings of clients, in many a case it has become a huge challenge to meet the ever-increasing expectation of today's informed customer. Increased construction activity during the last decade coupled with overall improvement in the economy has led to a tremendous shortage of manpower and managerial talent in the sector—for which there doesn’t seem to be a solution. Substantial mechanisation is yet to happen; when it does it will also lead to increased costs. With India's trillion dollar GDP expected to more than double in the next ten years, I shudder to think how solutions to the complex problems facing the sector would be resolved.
The governments at the centre and various states should invest time, money and effort to upgrade the quality of town planning for hundreds of towns and cities in the country, which will help improve the quality of living. Chandigarh and New Delhi—and Brigade Gateway at the project level—have shown what good planning is all about. Improved quality of life and opportunities in smaller towns will reduce urbanisation and the pressure on utilities. But this may end up remaining a pipe dream with the lack of attention shown by authorities to urban planning and the redevelopment of old congested areas in the cities.
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The immediate internal challenge for Brigade Group is to launch and complete 30 million sft of new projects across seven South Indian cities. The Group will continue to focus on real estate and hospitality in the immediate future. We intend taking the concept of integrated townships to the next higher level in our Brigade Orchards project, near the Bangalore International Airport.
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I am very glad our Not-for-Profit initiative in education—Brigade Foundation— has made a mark in imparting quality education through its three schools in J. P. Nagar, Malleswaram and Mahadevapura, all in Bangalore.
As part of Brigade Group’s Corporate Social Responsibility, we will be supporting a Museum of Music (a first of its kind in the country), promoted by the Indian Music Experience Trust. To give back to society in our own field, we will also soon be setting up a Not-for-Profit company to take Social Housing projects to the urban poor. At an appropriate time, the company will also initiate vocational training and management development programmes in the construction field. I hope these initiatives will receive the generosity of the general public and will also help motivate others to take up similar initiatives.
I would like to record my sincere thanks to team Brigade, directors, shareholders, to our family of associates (architects, consultants, contractors, bankers, suppliers, officials in the civic authorities and government), friends, well-wishers and, of course, all our customers, who have shown their confidence and support in me and the organisation during the last 25 years and helped in shaping Brigade Group.
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With 31st December 2011 fast approaching, many will be happy that a most forgettable year is coming to an end. As usual, one hopes the New Year will bring good cheer and happiness to our lives.
I wish all readers a great 2012.
