Results of Indian Parliamentary elections, is bound to have far reaching impact on the future of the country for the next 5 years and probably many more years. Managing 900 million voters is a daunting task, which the Indian Election Commission has mastered like nobody else in this world. What is required is stability and a strong purposeful leadership to take this country of 1.2 billion people forward. Our country was the major economy of the world 4 centuries back but lost its position due to colonial rule and missing industrial revolution. While it is poised to become the 3rd largest economy of the world in the next decade, per capita income must cross US$ 5000 for poverty to be eliminated.
During the last 3 years, Real Estate Sector has been facing the brunt of the Government’s policies - DeMo, RERA & GST. Though some aspects of the policies are positive, it did unsettle the Sector for couple of years. While business was appearing to return to normalcy, the GST Council has made major changes in GST rates, methodology & treatment for residential real estate. One fails to understand the logic of these changes which goes against the very essence & principle of GST. While, in its wisdom, the intent may have been to reduce the impact of GST for housing, the changes effective from April are counterproductive except for premium housing (square foot rate of Rs 10,000 & more. See page 56 for more information. Unwittingly, it is a wrong step towards reaching ‘Housing for all’. It will be a challenge to make customers understand the real negative impact of recent changes in GST for residential sector. Hope the GST Council realises this anomaly and takes corrective steps soon. So also, the anomaly on GST rate of 28% on Cement, which is a major ingredient for civil construction industry. 28% rate is meant only for ‘luxury’ & ‘sin’ goods. Big question - Is using Cement in construction a ‘sin’? Good to get an opinion pool.
The last few months saw a flurry of new initiatives at Brigade. Starting with signing an MoU with the Government of Tamil Nadu to set up World Trade Center (WTC) Chennai and an MoU with Government of Kerala to set up WTC at Thiruvananthapuram. Also, the launch of Art Café at Brigade Gateway and most importantly our foray into Co-working business segment with the launch of BuzzWorks!
The last two quarters also witnessed the completion of 10 projects - Brigade Lakefront (2nd Phase), Brigade Tech Gardens (1st Phase), Plumeria @ Brigade Meadows, Brigade Panorama, Arcade, Cedar & Deodar @ Brigade Orchards, Brigade Atmosphere (1st Phase), Brigade Symphony (2nd Phase), Mysore and our 1st hotel in Kerala, Four Points by Sheraton, Kochi InfoPark.
Our new project Brigade Cornerstone Utopia, a 6 million Sq.ft. mixed-use development in 47 acre will be very unique and is bound to become a major landmark in Whitefield zone. Response to the pre-launch was very encouraging. Few other major launches in the next few months will be Brigade El Dorado, in Aerospace Park near Bangalore Airport, Premium Residences @ WTC Chennai and 2nd Phase of Brigade Xanadu, Chennai.
With sincere hope for a good monsoon, a good and stable Government at the centre for a better India, I convey my best wishes to all our associates, customers & staff, and seek their continued support."
—Jaishankar CMD, Brigade.
APRIL 21, 2012 was a red letter day for Brigade Group—the day that Orion Mall was completed. What sets this day apart as an especially significant milestone in our history is that it marks not just the completion of the mall, but, more importantly, the completion of an iconic project: Brigade Gateway. Both the enclave as a whole, and the individual components within it—Orion Mall, World Trade Center, Sheraton Hotel, Galaxy Club, The Brigade School, Columbia Asia Hospital—have set new standards in development. Brigade Gateway has set benchmarks for others to follow. The Orion Mall launch event itself was considered by many to be the best product launch ever in Bangalore. This milestone, coupled with shifting of our Corporate Office to WTC @ Brigade Gateway, should be considered a new chapter in the life of the organisation..
Sheraton Bangalore Hotel @ Brigade Gateway received a coveted recognition at the annual HICSA Conference of HVS: as Best New 5 Star Upscale Hotel in South Asia in 2011. What is significant and very satisfying is that our Mercure Homestead Serviced Residences (now Grand Mercure) won a similar award in the Apartment Hotel category in 2009, making both of our hotel properties the 'best in class'.
As they do every year, the Central and State budgets, in the first quarter, bring new taxes and reliefs. While the Karnataka budget was thankfully mild, giving relief by way of reduced Stamp Duties, the same cannot be said about the Central budget. Excise Duties and Service Tax was increased substantially, adding to inflation when the government is talking of reducing it! While 50 basis points interest reduction by RBI is a positive step, it is insufficient to boost the industry and trade sentiment. It is to be hoped that a further reduction in interest rates will be announced soon.
Finance ministry’s flip-flop policies in taxation, particularly with retrospective effect, has sent a scare to foreign investors affecting fresh FDI into the country. Retrograde legislations like GAAR will only make matters worse. The country has to stop the 1-step-forward-and-2-steps-backward approach to development issues.
The mood among industrialists and businessmen continues to be subdued, with not many positive signals or developments seen in the national and international scene. With all the efforts being made by the European leaders, one is not sure whether the debt crisis bothering Europe (and, in turn, the world) is over.
The power crises in the mid-90s prompted both central and state governments to launch many power sector projects, which helped improve the situation over the past ten years. Then complacency set in and most states are back to a power-starved situation. Power sector policy paralysis has only worsened the outlook for relief in the near term, which is bound to have an adverse effect on GDP growth. The not-so-encouraging monsoon prediction will be a matter of concern to all.
A study by the National Housing Bank, published in Times of India on 21 April, says that real estate prices in Namma Bengaluru have been one of the slowest to rise during the last five years, in comparison to other cities. For the most part, Bangalore rates have remained at what they were in 2007. This should make buyers act fast in making their investment decisions, which, in turn, will bring some cheer to the developers.