 "Pavitra Shankar, Managing Director, Brigade Enterprises Limited")
Bengaluru-based Brigade Enterprises has consciously refrained from offering 10:90 payment plans, subvention schemes or even large discounts on bulk bookings to prevent encouraging speculative buyers, so as to save itself from getting caught in the cyclical trend that typically realty market goes through every few years, its Managing Director (MD) Pavitra Shankar said.
“We still put out payment schedules and requirements for the customer to stay invested in the project in a very conservative manner. So, even if it is an NRI (buyer), I'm not going to offer a 10:90 scheme. We're very careful that we are not encouraging more speculative behaviour than would normally be observed,” she said in an interaction with Business Standard.
A speculative buyer in real estate is typically an investor who looks to getting quick returns on an upcoming property by buying into projects using instalment payments offered by developers at the time of booking, and intends to sell it to another buyer at a premium as the value of the project appreciates over time.
Realty players like DLF are trying to minimise their exposure to overtrading speculators who take advantage of the payment schemes but are unable to bankroll the bookings, leading to inventory as well as funding issues for developers.
“I have lost business in some cases because we've refused to waive a transfer fee at the time of booking,” Shankar said, noting that the share of such buyers in the company’s project portfolio was a small percentage of the total value.
The real estate major is planning to launch 16 million square feet (msf) of projects across residential, office and hotels in its home city of Bengaluru, Chennai, Hyderabad and Mysore in 2025-26 (FY26). Also, the company will continue to focus on greenfield opportunities within these segments even as it faces competition from new players that are entering the Bengaluru market.
Shankar explained that the high holding cost of brownfield projects or those acquired from insolvency tribunal process was the prohibiting factor. The execution strategy of immediate monetisation on greenfield projects, which the company has specialised in over the last several years, tilted the decisions towards greenfield, she added.
However, she noted rising land prices as another challenge in executing the greenfield strategy in the face of new players coming into the market offering better pricing deals.
“Land price increases have happened quite a bit over the last year. It is definitely something that we've accommodated into our underwriting. There are still some opportunities that we will walk away from if we think that the numbers don't support the ask... it does make it a little bit challenging if someone is willing to pay substantially more in order to just get the property,” she said.
To the point of increased loading in residential projects, Shankar said that the company was doing larger unit sizes, which has been a growing demand trend post-Covid. Brigade maintains a land bank of approximately 500 acres, capable of generating 50-55 msf of super built-up area.
For the residential segment, Brigade is targeting 12 msf of launches in FY26, across Bengaluru, Chennai, Hyderabad, and Mysore, including mid-segment, upper-mid-segment, and premium housing, alongside a plotted development. Chennai and Hyderabad are projected to contribute 5-6 msf to residential launches.
In commercial, following recent office space launches of 2 msf, Brigade intends to introduce an additional 2-2.5 msf, with new projects planned for Bengaluru, Chennai, Hyderabad, Kochi, and Trivandrum. Shankar highlighted 98 per cent occupancy and overall income from office and retail amounting to ₹1,100 crore, up 24 per cent over last year.
On Brigade Hotel Ventures’ upcoming ₹900 crore initial public offer (IPO), Shankar said the move was aimed at unlocking value from its hospitality business, which it started back in 2007-08. “It is really to grow the business and to unlock some value on that front. The sector has done well and having come through Covid, we felt that the outlook is good,” she said.
Brigade Hotel Ventures is a fully owned subsidiary of Brigade Enterprises and it owns and operates hotels in Bengaluru, Chennai, Kochi, Mysuru, and GIFT City, by brands such as Marriott and Accor.
