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Unfortunately, the international scene is quite uncertain with Oil prices going up and the unpredictable approach of the US President resulting in a trade war between the United States & China, the world's two largest economies. This has brought in a lot of uncertainty to the external macro environment though, the United States economy, which contributes more than 25% to the world's GDP, is doing well. The resultant impact on our currency is negative as the Indian Rupee has weakened by 7% and will affect the country's balance of payments.
Though the Indian manufacturing sector is showing good order books, companies are declaring better financial results and though the Monsoon is by & large good, there is a certain amount of anxiety amongst trade and industry due to interest rates beginning to go up, apart from the uncertainty of impending parliamentary elections in early 2019.
After three years of a recessionary trend in real estate, the sector seems to be on the recovery path. With not many new project launches during the last two years, unsold numbers have come down and prices have stabilised. With the implementation of RERA, much-needed customer confidence and positive sentiment are returning back. The Central government is doing its bit by increasing the thrust on infrastructure improvement. The spoilsport can be rising home loan interest rates.
In this background, Brigade has launched a number of new projects and is gearing up to launch several more in Bengaluru, Chennai, Hyderabad & Mysuru. With ‘Parkside' as the brand for ‘Independent Living for Seniors', we are offering well thought out residences in all four directions of Bangalore. We are back to offering Ownership Offices for investment, lease or for own use. In fact, the first three projects of Brigade in the late 80s & the early 90s were all commercial projects. We have also started the concept of ‘Managed Residences' in our villa projects in Devanahalli - Brigade Atmosphere & Brigade Orchards. With ‘Ease of Occupation' for the customer in mind, we have introduced ‘Brigade Plus' initiative offering a host of conveniences. With the launch of ‘One Brigade App', our customers can avail a number of benefits.
With the commencement of the festival season, business & investor sentiments will improve. I seek the continued goodwill and patronage of our customers."
—Jaishankar CMD, Brigade.
The past few months have not been great for India, for that matter many parts of the world. Exception seems to be United States whose economy has seen substantial recovery in recent times. US being the largest economy in the world, brings a ray of hope to the rest of the countries, including India. There is a lot of turmoil in Europe due to the migrant crisis & terrorism, and they are busy grappling with the problem. While low oil prices have benefitted oil importing countries like India, it has created problems for several oil producing countries in the Middle East, South America and Russia. All this is bound to result in continued economic uncertainty witnessed across the world during the last few months.
While the Indian economy is in a relatively better shape with 7% plus GDP growth, it is likely to become a case of missed opportunities to reach double digit growth in spite of its huge potential. Other than creating the much needed positive sentiment, the single party majority government at the Centre hasn’t succeeded in kick starting major infra projects, in implementing majors policy changes and living up to the election promises made. It is rather sad that opposition parties have unfortunately blocked important initiatives like GST which could have had far reaching positive impact on the Indian economy and its GDP growth rate.
Even at the State & Civic authority levels, the progress in introducing policy improvements is painfully slow. Bangalore, which is internationally recognized, contributes more than 2/3rds of Karnataka State revenue. But, the State does not invest adequately to take care of the milch cow resulting in poor infrastructure, traffi c & garbage issues and inability to cope up with urban growth. Citizens can only hope that before it becomes too late (and allowing it to go down like Kolkata) the decision makers will wake up and act. It is too hurtful to witness the negative publicity our beautiful City gets in the national media.
Brigade Group is not a mute spectator and a critic. In recent times, we spent crores of rupees to make neighbourhood improvements - restored the 23 acre Sitharampalya Lake in Whitefi eld; developed a 3 acre citizens park & a 5 acre playground in Malleswaram; and installed a pedestrian bridge with escalators in Rajajinagar. It gave us immense satisfaction. These signifi cant eff orts were recognized recently by All India Real Estate Developers Association - CREDAI National - when they conferred the National Awards to BRIGADE in two categories - one for Environmental Impact and the other for Social Infrastructure.
Real Estate Management Bill, which was in the offi ng since 2013 should become a reality soon. It is bound to protect the customers by answering their concerns and regulate the way business is conducted by the Developers. It is pro long term players and anti ‘fl y-by-night’ operators. Even then, developers fear that it will add time & cost to launch projects and may become one more window to face harassment, as the Bill contains several draconian clauses for non-compliance.
With excess stock and a ‘status quo’ economy, real estate prices are depressed in general and stable in few cities like Bangalore. For a prudent investor, it is a good time to buy. With deposit rates coming down, Bank deposits are not attractive; with US Dollar gaining strength, Gold is losing its luster; with Stock market being very volatile, it has become too risky for a non- professional operator.
Whatever may be the external factors, hope is what keeps an optimist going. Let us hope 2016 will bring us cheer!
Wishing our readers the Very Best in the year ahead - 2016.
It is a fantastic feeling to be adjudged as ‘The Best Place to Work’ among all the Real Estate Companies in the country. We sincerely thank the Economic Times & the internationally acclaimed The Great Place to Work Institute for this recognition. It will certainly motivate us to continue to adopt & innovate, when it comes to people friendly HR policies. It is heartening to note our Group received a number of Awards during the last few months; be it ‘Hotel Owner of the Year’ at the Hospitality Leaders Industry Choice Awards, or the Best Luxury Residential project for Brigade Caladium and even those awarded to individual Brigadiers.
The Indian economy is just chugging along. Unfortunately, the new Government has not been able to meet the high expectations of the people & the industry. Probably they promised too much in a short span of time. All said & done, ours is a complicated economy with too many pulls & pressures from all directions, apart from multiple vested interests. One can only wish & pray that our dynamic Prime Minister will ultimately succeed in his efforts to improve the growth rate and put the Indian economy on the right track. For too long we have been a third world country.
While the government understands the importance of Tourism, too little is done to improve the inflow of foreign tourists with high spending power. With a population in excess of 1200 million, we have tourist inflows of only 6 million. That hardly works out to 0.5% of the population. A not so prominent country like Croatia, has a tourist inflow of 12 million with a population of just 4 million. The impact of tourism on Croatia’s economy & job creation for ordinary citizens is huge.
Bangalore Citizens will elect new representatives (Corporators) to the City Council in BBMP (Bruhat Bangalore Mahanagara Palike). Hopefully, the representatives who get elected will actively work towards improved Urban Infrastructure like better quality roads, traffic management, waste management & related issues.
Recently, Sheraton Bangalore Hotel at Brigade Gateway was rebranded as Sheraton Grand at Brigade Gateway. It is one of the only 10 hotels in the world to be rebranded amongst all Sheraton Hotels, based on parameters such as superior product, service & customer satisfaction.
We recently concluded Brigade Showcase, our annual property exhibition. The event witnessed robust support in an otherwise subdued market environment, thanks to a good choice of product offerings in different locations, apart from the Group’s brand strength.
The Festival season is around the corner - Onam, Ganesh Chaturthi, Eid Ul-Adha, Dussehra, Diwali & Christmas - Seasons Greetings and best wishes to each and everyone.
The first 4 months of the new year witnessed Awards galore to Brigade Group's projects & its people: Brigade Meadows was awarded the Best apartment project in its category by NDTV; Orion Mall was considered the Best Shopping Mall in South India; Nothing gives more satisfaction than being recognized by ones own fraternity - CARE Awards instituted by Credai Karnataka considered, in their categories, Brigade Rubix as the Best Commercial building; Brigade Sparkle as the Best dwelling; more importantly recognized Brigade Group's CSR efforts as the Best by a Developer. At a personal level I was recognized for my Outstanding Contribution to the Real Estate Sector in Karnataka. Our CFO Suresh & COO Manjunath Prasad also got recognized by different organisations. Certainly satisfying. This should motivate all in Brigade to continue to perform well & exceed expectations.
Post Central Budget, there is a sense of disappointment by the business & industry. Much was expected but the budget pronouncements fell woefully short. While the new government proclaimed 'Housing for All' by 2022, the budget contained zero incentives or policies to encourage housing. Affordable Housing for the Middle Class & EWS Housing for the poor certainly deserves tax incentives apart from favourable regulations.
With inflation under check, by & large, lower interest rate regime was expected, but that has not happened. While RBI knows best what it is doing, lower rates have the capability to give the push the Indian economy deserves. Increased activity in infrastructure & real estate has tremendous positive impact on the core sectors of industry and will help improve our GDP growth. Our neighbour China is the best example of what improved infrastructure can do to the economy.
Number of our projects have reached the critical stage of completion. It is a challenge our team is ready to face & working hard to achieve before Diwali.
IPL cricket is growing from strength to strength. It has helped spot talent and has given opportunity to many cricketers to show their mettle. I wish similar efforts in other sports also taste success. A nation of billion plus people is bound to have the talent. Right environment & encouragement will help deserving sports people blossom.
Unseasonal rains have created havoc to agricultural sector in many states. We should hope & pray that the country receives good monsoons in the next few months, which should in turn have a favourable impact on the economy.