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.
It may seem strange that while the Indian economy is subdued, the Indian stock market indices are breaking records every other month. While too much hot money is channeled into the stock market, one only hopes, that this reflects the underlying strength of the economy.
Our country is slowly but surely recovering from the shock of Demonetisation and GST. Unfortunately for the government, Demonetisation did not succeed as expected and it also did not give the government, the expected windfall. Despite this, Demonetisation was a bold initiative which helped in bringing idle black money into mainstream circulation, resulting in softer interest rates.
On the other hand, GST implementation is a mammoth effort. We must credit the State & the Central Government for all the proactive steps, they are taking to make this most complicated initiative a success. Over time, the benefit to the country will be immense and there will be a paradigm shift in the way, business is conducted across the country. While there are many critics, one should remember - Nothing ventured, Nothing gained.
GST is one major legislation to help integrate our subcontinent. It is generally felt that other initiatives like ‘Make in India’ are beginning to make the intended impact, as order books of several Indian manufacturing companies are believed to be full.
The much-awaited RERA has come into effect in most States during the last 6 months. It is bound to have its disruptive impact on the sector but will help separating the ‘grain from the chaff’. Realising that the Indian Real Estate is still reeling under the three-pronged attack (Demonetisation, GST & RERA), the Central government has liberalised the Pradhan Mantri Awas Yojana (PMAY) scheme by extending credit linked subsidy of about `2.30 lakhs to even good sized apartments of upto 150 sq.m. for people with income up to `18 lakhs. This should surely help in giving the required push, to improve demand for real estate.
With ‘profit booking’ expected in stocks & mutual fund investments, some amount of the profits are expected to flow into the Real Estate sector, which is also showing ‘green shoots’ in Q3 as compared to earlier quarters.
During the last few months of the year, we were able to complete a number of projects (Brigade AT No. 7 in Hyderabad; Brigade Mountain View & Pearl at Brigade Palmgrove in Mysore; Brigade Cosmopolis and Brigade Lakefront ‘A’; Brigade Omega and Wisteria @ Brigade Meadows; Cedar, Deodar and Parkside @ Brigade Orchards; Brigade NorthRidge; Brigade Bhuwalka Icon, all in Bangalore).
Our 274 keys CBD hotel, Holiday Inn Express Race Course Bengaluru became operational helping us cross the magical 1000 room mark, under our portfolio. And we are gearing up to launch several exciting, new Commercial & Residential projects, mostly in Bangalore and a few in Mysore.
With all the surprises and shocks of the last twelve months behind us, one hopes that the New Year will augur well for Brigade and for the Indian economy. With that hope, wishing everyone, Season’s Greetings and a Happy and Prosperous New Year.
A lot has happened in the macro environment since the last issue of Brigade Insight in December – from successful demonetisation to introduction of GST proceeding in the right direction; commencement of RERA (Real Estate Regulatory Act); from BJP’s handsome win in the crucial assembly elections in Uttar Pradesh to BJP losing bye-elections in Karnataka (a wake-up call to Karnataka BJP); from a booming stock market to the monsoon predicted to be normal, et al
Full credit to our Honourable Prime Minister for successfully managing the demonetisation of INR 500 & 1,000 currency notes. This has resulted in crores of rupees getting deposited in the Banks, resulting in increased money in circulation due to reduction of black money; increase in tax collections & number of taxpayers; expected reduction in corruption; lower lending interest rates (good for business & industry) and increased use of digital currency, among other advantages. Our Honourable Prime Minister debunked the criticism by many reputed economists and showed that he means business by coming up with a slew of well thought out supporting measures. His vision backed-up by clear-cut strategies & implementation is sure to make him the Best Prime Minister our country has seen, apart from making him an enviable Statesman to reckon with in the world order. The result is the stupendous confidence shown in BJP by the electorate of Uttar Pradesh. Actions of our Honourable Prime Minister & that of Uttar Pradesh Chief Minister is a lesson for all leaders that good governance is bound to be appreciated by the citizens, and the impact it can have on electoral gains.
With the announcement of tax rates, the suspense surrounding the much-anticipated GST (Goods & Services Tax) seems to be over. Now, it is a question of ensuring that it is implemented both in letter & spirit. The exemptions given and rates announced by the committee of finance ministers seems to be very fair. By & large, GST should help business & industry in overall reduction of costs which is expected to be passed on to the ultimate customer/consumer. But, there would be a settling down period and confusion/misinterpretation galore during 2017-18 at the least.
Similarly, there is bound to be confusion in the implementation of RERA. There are no experts in the industry, in the consulting community or in the Government. Everyone will have an opinion, the correctness of which will be known over time, once the RERA Authority/Tribunal starts passing orders. There is bound to be a storm before calm can settle in. The developer community should tighten their belts and brace themselves for hard times from authorities & activist groups. While RERA will have long-term positive effects on the sector, with no entry barrier earlier resulting in all kinds of questionable characters entering the business. It is also bound to add cost due to delay in obtaining additional approvals from RERA authorities before a project is launched. The real estate sector already suffers from the problem of dealing with too many civic authorities, who have been conveniently let off by the Government from the regulations of RERA. Once the sector recovers from the impact & negative sentiments of demonetisation, the real estate costs/prices should go up at least by 10% due to the provisions of RERA and the recently revised National Building Code for new projects. For the real impact of RERA to be felt on unauthorised constructions, the all India developer body - CREDAI has requested the Government not to exempt apartment buildings of less than 8 apartments & properties of less than 500 square metres. Most of the large-scale deviations happen in this category by unorganised and one time developers.
Affordable housing will soon become the flavour of the season for developers and consumers alike. Rightly so, what with more than 20 million homes to be built in the next 5 years to meet Prime Minister Modi’s noble target of ‘Housing for All’ by 2022, to coincide with the 75th Anniversary of Indian independence. For the mission to succeed, the State Government and civic authorities should give incentives (if not subsidy) by way of allotment of Government/slum redevelopment land, reduction in stamp duty, reduced approval fees for building plans, water, sanitary & electrical utility connections for affordable housing projects.
Our first & much awaited 202-room hotel project in Chennai - Holiday Inn OMR IT Expressway opened for business on 21 April 2017. Its super location and great design has become the talk of the town in the Chennai hospitality market. Coupled with this, we were able to launch Brigade Xanadu - luxury residential apartments in a large 33-acre central located land parcel in West Mogappair - Nolambur, Chennai. It is bound to be a landmark project for Chennai & Brigade, offering superb quality of life. Brigade in partnership with the Government of Singapore Investment Corporation (GIC) is gearing up to commence work on World Trade Center Chennai in another landmark location on OMR, Perungudi. This is apart from commencing Brigade Tech Gardens, IT SEZ in Brookefields, Bangalore.
Two other residential projects of significance were also launched recently - Brigade Buena Vista on Budigere Road & Brigade 7 Gardens in Banashankari, Bangalore. Both received encouraging response in an otherwise subdued market.
With school holiday season coming to an end, with good monsoon round the corner, with NIFTY & Sensex having crossed 9,500 & 30,000 respectively (which should result in profit booking by investors), with business sentiments turning positive, central government taking continuous positive measures to improve the economy, RERA & GST in place, with incentives to affordable housing and home loan interest rates at the lowest in 10 years, there is no reason why the Indian real estate sector should not look up. It should happen sooner than later. So, it is time for fence sitters to jump to the right side of the fence and make their decision to acquire their dream home from Brigade!”
