01 Aug 2019
Our entry into the affordable housing segment has been a major factor.
Brigade is one of India’s leading developers with over three decades of experience in building positive experiences for all its stakeholders. The company has transformed the skylines of Bengaluru, Mysuru, Mangaluru, Hyderabad, Chennai, Kochi and Ahmedabad with its developments across the residential, office, retail, hospitality and education sectors. The company is among the few developers who enjoy the reputation of developing Grade-A commercial properties. The license owners of the World Trade Center across southern India, its commercial spaces have top international clients operating out of them. Since inception in 1986, Brigade has completed over 250 buildings, amounting to 66 million sq ft of developed space, in the residential, office, retail and hospitality sectors across seven cities. MR Jaishankar, Chairman & Managing Director, Brigade Group, shares more….
Name one major challenge faced in FY2018-19. How did the company approach the same?
Apart from the tough market conditions, a lot of it was regulatory challenges in FY18-19. And the challenges were not just one, but multiple. Change in GST for real estate was one major regulatory challenge, which could really turn the business topsy-turvy. And if one were not careful on managing that, it was a sure way of going bankrupt. Only people in the business would know the gravity of this challenge. The only way for us as a company to stay safe was by understanding the gamut of the problem and trying to resolve it in a multifold way. Different steps were required to be taken in different situations.
Another challenge the sector has been facing for a couple of years is the financial challenge. The company managed this by ensuring proper discipline and strict control of finances only for the purpose of the business, and not diverting funds for any other reason. Also, we focused on sales and collections, which is an important aspect, to ensure a net positive operating cash flow.
What is one decision you consider the biggest contributor to the company’s growth in FY2018-19?
Our entry into the affordable housing segment has been a major factor. We have launched nearly 2,000 units in the affordable housing segment and have received approvals to launch another 6,000 apartments in this category. That is a major decision and we have entered this segment at the right time; it is the flavour of the season.
Name one single factor you avoided that could have otherwise impacted the company’s topline and bottomline.
We have consciously avoided entry into the NCR and Mumbai markets, despite receiving nearly two dozen proposals. The intention has been to focus on few markets and not to stretch our management bandwidth and resources.
Going forward, what are your plans for the company’s growth in FY2019-20?
We are formally launching a large integrated township, which will include apartments of various sizes along with offices, retail, mall and multiplex in the IT belt, which can range from 6 to 12 million sq ft. This will be a major project for us.
Also, we are trying to divest equity in our hospitality segment. While we are presently operating 1,200 rooms, we should reach 2,000 rooms by by FY20. So, in order to further grow beyond 2,000 keys, we are planning to dilute our equity in the hospitality company to grow further in the sector. That would be a major decision.