The Hindu Business Line : ‘Realty in Bangalore witnessing stabilisation phase’

Bangalore, Oct. 11 As long as India’s future is bright, the real estate industry will have a bright future; and the recent reduction in the home loan rates is a big positive sign, said Mr M.R. Jaishankar, Chairman and Managing Director, Brigade Group. “From now to March, we expect a further reduction of home loan rates by 2 per cent,” he added.

According to him, the real estate sector in Bangalore is witnessing a stabilisation phase. Land prices are much more stable now, he said, because with the new city master plan in place, additional land has been brought under the city limits, “which has taken care of the supply side”; and with the Reserve Bank of India’s lending policies limiting the borrowing power of people, “speculative activity has been curbed,” he added.

Currently, the company has 12 million sq ft in various stages of development, and about 43 million sq ft of development in the pipeline.

Hospitality and retail

On the demand-supply gap in the hospitality sector, Mr Jaishankar said there will be a supply of about 6,000 five-star category rooms in the city in the next five years, besides the existing 3,000 rooms. “There will be a 100 per cent increase in room inventory in the next two years,” he said. The increased supply of rooms would help softening of room rates. The serviced apartments segment would see at least 2,000 keys being planned in the next 3-5 years, he said.

The company’s hospitality division, Brigade Hospitality Services, plans to invest about Rs 1,000 crore in various projects in the next three years. It has tied up with the hotel chain Sheraton and is developing a hotel in Brigade’s integrated community project. Brigade Hospitality plans to increase room inventory of its Homestead brand of serviced apartments to 300 keys by 2010 from the current 90 keys.

As far as the retail space goes, Mr Jaishankar said that Bangalore would see about eight malls (4-5 million sq ft mall space) being developed in the next two years.

Brigade Enterprises, one of the leading real estate companies in Bangalore, has recently filed the draft red herring prospectus for its IPO. It intends to dilute 15 per cent of the equity, and hopes to raise about Rs 600-1,000 crore. With significant presence in Bangalore and Mysore, Brigade Group plans to expand into Chennai, Hyderabad, Mangalore and Kochi with a mix of residential, commercial — IT parks and retail, and hospitality projects at an investment of Rs 3,000-4,000 crore. “The IPO will help partly fund these projects,” Mr Jaishankar said.

More Stories on : Real Estate & Construction | Karnataka

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page