Bengaluru headquartered real estate firm, Brigade Enterprises, plans to invest Rs 4000 crore to develop commercial properties in South India by 2020. The firm is also looking to divest stake in the hospitality business.
Brigade Enterprises has chalked out plans to launch another 8.2 million sq. ft of office and retail space in cities such as Bengaluru and Chennai over the next three years. It already has a partnership with Singapore-based private equity firm, GIC Singapore.
“We have an indicative investment platform of Rs1500 crore but as and when there are opportunities that can go up too. We are targeting rental income of Rs 900 crore over the next four years from Rs 250 crore now,” said Atul Goyal, CFO, Brigade Group.
The platform has concluded land deals, two in Bengaluru and one Chennai. Together, both parties invested Rs 1000 crore in buying land parcel across the Southern cities. “With GIC, we are building 5.5 mn sq ft currently that is expected to be concluded by 2020,” he said.
GIC has stuck at least a dozen real estate transactions since 2007 and has been very aggressive in acquiring assets across residential, commercial and retail segments in the country. The sovereign wealth fund had invested $1.4 billion for 33% in DLF Ltd’s rental arm, creating one of the biggest commercial platforms in India’s real estate market. It also has exposure to Godrej Properties.
Additionally, Brigade Enterprises has also moved all its hotel assets into a separate unit to raise funds to fuel future strategy. It plans to increase the number of hotel rooms to 2,000 by 2022 from 1200 now. “We are looking to divest equity minimum of 25 per cent equity in the hotel business depending on investor appetite,” said Goyal.
The company currently has 18 mn sq ft in residential development and plans to launch an additional 9 million sq ft by next financial year. The company sold residential units aggregating to 0.78 million sq. ft. with a total value of Rs 446 crores sold in Q3 FY19 with average price realisation of Rs. 5,741 per sq. ft.
The net debt of the company as on 31st December 2018 stood at Rs 2833 crore.