Half of calendar year 2023 is over. Unfortunately, there isn’t much ‘feel good’ news in the world, except in India, Middle East & few countries in Southeast Asia.
The mindless war between Russia & Ukraine continues. Other than helping clear the stockpile of weapons in few western economies & securing billions of dollars of fresh orders for manufacture of weapons, it has only resulted in destroying large areas in Ukraine & displacing millions of its citizens. The war resulted in much of Europe to go into recession. From a unipolar world with United States ruling the roost since the disintegration of USSR during 1991-92, the world is getting back to a bipolar world with the 2nd largest economy of the world, the communist China supporting Russia.
While politically the world has become bipolar again, economically countries have become more interdependent than ever before due to globalisation & WTO policies. This is posing a huge challenge to different economies, particularly to the United States and to the countries in Europe.
The Indian Government has played its cards smartly. Our country is beginning to see the benefit of China+1 strategy of the developed economies, not only for sourcing their product requirements, but also because they see India as a good investment destination. This has greatly helped the Indian economy to become resilient and not be affected so far by the war in Ukraine. The best indicator is the stupendous increase in Sensex & Nifty indices and Indian foreign exchange reserves crossing US$ 600 billion again. Many senior bankers feel that for the 1st time after many many years, all sectors of business are doing well. One can only hope this good show sustains for a longer time thereby helping Indian GDP reach US$ 5 trillion, sooner than later. The spoil sport can be poor monsoon, interest rate increase and unexpected events like political turmoil.
The ruling party at the centre got the shock of its life by badly losing State Elections in Karnataka. The smart electorate of Karnataka has punished the unexpected poor performance of the previous Government, apart from succumbing to the lure of multiple freebies offered by the winning party. While this has invigorated the opposition parties against the ruling party at the centre, it has also made the 2024 parliamentary elections more unpredictable. Anything can happen. What India requires is political stability and retaining its position in the world order & the goodwill generated during the past few years. What all this means to the business is the question? Uncertainty to a great extent. One never knows when the current positive sentiments will start turning negative, though there is absolutely no indication at present.
The Residential Real Estate sector is continuing to grow in a healthy way. Financial year 2023 is the best so far for the sector. The WFH/ A (work from home/ anywhere) culture continuing in a big way in USA & Europe has created millions of square feet of vacant office space in those countries, which has resulted in cautious approach by Indian & MNC companies in the tech sector to sign up new office space. Most experts feel this could be a cyclical and temporary phenomena. The good news is many MNC companies are increasing the size of their GCCs (Global Capability Centres) in India as a way to cut costs by offshoring work thereby helping to retain/ improve their profitability. This is the saving grace for the Indian Office Real Estate sector. The data localisation policy of the Indian Government has also resulted in increased demand for Data Centres. So also, the growing organised retail business has increased the demand for Fulfilment Centres/ Warehouses.
In such a macro environment, Brigade is trying to play its cards well but carefully. We have made headway in increasing our presence in Chennai significantly. We are trying to do the same in the highly competitive real estate market of Hyderabad.
While a number of new launches are slated in this financial year, obtaining civic authorities approvals is becoming more challenging than ever before, for a variety of reasons. By adhering to the multiple rules, administrative procedures and after overcoming red tape, if one succeeds in real estate business in India, they deserve to receive accolades and a pat on their back.
Rightly, the new Congress Government in Karnataka is talking of ‘Brand Bengaluru’ – to improve the image of the city which has taken a beating due to severe traffic congestion, insufficient infrastructure planning & implementation. Bengaluru deserves much better treatment by the State Govt.
Bengaluru, which contributes more than 50% of the tax revenue of the State; should receive similar share in the expenditure budget of the State to improve its infrastructure. Bengaluru is not just a city of Karnataka, it is now a Global City, known for innovation and home to 100s of MNCs.
Hyderabad with its superior infrastructure is already breathing down Bengaluru‘s neck and sure to overtake Bengaluru as an attractive investment destination, if the Karnataka Government continues to be complacent.
The advent of ChatGPT & AI (Artificial Intelligence) into our lives, slowly but surely, will have a profound effect, not fathomed by us so far. It will become a necessary evil in the years ahead. While there would be demand for people with new skills, it may also lead to thousands of job losses. So, it is very important for people and businesses to gear up the skills to keep pace with the ever changing technological advancements.
The festival season is approaching. My warm season's greeting to all our readers.
—Jaishankar CMD, Brigade.
THE last few months have been event-filled and eventful at Brigade Group. In June, we successfully bid for a prime property of Hindustan Unilever and have taken private equity, for the first time, from the very reputed and huge sovereign fund of Government of Singapore (GIC). July saw the successful launch of Value+ Homes at Brigade Orchards, Devanahalli. To name a few more of the many significant events that took place in this period: we opened a representative office in Silicon Valley, through a tie up with Legion Real Estate; Orion Mall went into top gear with events; and another round of successful property exhibitions—Brigade Showcases—were held across India and abroad.
CREDAI, the industry body, recognising Brigade Gateway as the Best Integrated Township and WTC as The Best Commercial Office Space in the country is the icing on the cake. I thank the leading industry magazine,Construction World, for their editorial decision to bring out a special supplement on Brigade Gateway. When the editors visited Brigade Gateway, they were so impressed with the project that they took an instantaneous decision to feature it in a supplement!
IT feels good to get the recognition of Great Place to Work Institute for the second year in a row. Our standing has improved. On the subject of Brigadiers, I am amazed at the wealth of cultural talent in Brigade Group, which was wonderfully evidenced in the Annual Culture Fest.
PEOPLE in the know say that most western economies—the USA and Europe—are recovering. The gloom and doom of last couple of years should soon be over. But unfortunately, our country and state are continuing to witness political chaos and rudderless governance. With a billion-plus population and huge internal market, there was no need for India to be in this position after many years of 8%+ growth. It is a self-inflicted injury; the result of carelessness, complacency and lack of vision and thought for the future. I heard in a talk given by Singapore's Urban Development Minister last year at the CREDAI Annual Convention that after their Independence in 1965, the vision of the Singapore government was to make Singapore like our Calcutta! (Yes, one may feel it difficult to believe this!) Singapore’s current situation shows what one can achieve with proper vision and a desire to do good for the country.
As if adding insult to injury, many parts of Karnataka are facing drought. The weather pattern across the globe seems to have drastically changed, making meteorological predictions that much more difficult. Care for the environment should be the top agenda for any city, state or country.
THE demand for housing continues to be healthy, but is becoming more segmented. Still, there is a crisis of confidence in the way the economy will shape up in the months ahead. Top level changes in the finance ministry at the centre are expected to bring some cheer, after all the policy damage created in the last one year.
THE festival season has begun. It gives reason for people to forget the tough realities of life and celebrate with their near and dear ones. We wish you the very best for the festival season.