The new project of retirement homes in Bangalore has already seen 25 percent bookings and Q4 is bound to be better than Q3, says MR Jaishankar, chairman and managing director, Brigade Enterprise.
Brigade Enterprises has launched a new project of 156 retirement homes in Bangalore with an aim to tap on the increasing retiring population of India. MR Jaishankar, chairman and managing director, Brigade Enterprise says the company is aiming at revenue of Rs 120 crore from the project.
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Speaking to CNBC-TV18’s Ekta Batra and Anuj Singhal, Jaishankar says the project is a combination of 1 Bedroom-Hall-Kitchen (BHK) and 2BHK houses. The company is targeting to earn Rs 40-55 lakhs from each unit.
“We have seen good interest for the project. About 25 percent of the 156 units have already been booked,” adds Jaishankar.
Despite the slowdown in the economy and increase in residential projects, Bangalore market is continuing to do well, says Jaishankar. Increased prices are a reflection of the high inflation levels, which beyond a point developers can’t sustain. “We have to pass it on to customers,” he highlights.
However, the prices, that are at stable levels now are likely to rise post elections, he warns.
“Book your houses now, because it will only get more costly later on,” he cautions before adding that Q4 is bound to be much better than Q3.
Below is the edited transcript of the interview.
Anuj: Looking at the development regarding retirement homes, look like a new niche concept. If you could explain that and also if you could give us the monetary angle, how much it will be adding to your revenues, what kind of margins will you have in this kind of project?
A: We have recently launched 156 unit of retirement homes called Parkside, which is a part of our 130 acre integrated township called Brigade Orchards near the Bangalore International airport.
These are 156 units in the range of one bedroom units which are about 1,000 plus square feet and two bedrooms are in the range of 1,400-1,500 square feet. Each of this are priced between Rs 40 lakh to Rs 55 lakh.
The idea to give this facility is not purely revenue oriented. Ofcourse it will bring in revenue, so our revenue is to the extent of about 150 crore or so or slightly less about Rs 120 crore or so. But overall, it is a great value addition not only to the integrated complex but also a great social need that exists with India having almost 100 million people in the retired age community that is above 60 years. And in years to come, it will only go up to 170 million people by 2025. That way this is a niche which is yet to be tapped and it also has a bit of a social business enterprise approach.
Ekta: Can you detail how big this project is to us as well as how much interest has you already seen in it?
A: Out of 156 units we have received booking for about 25 percent and this is part of the 130 acre township where we are building 4,000 apartments, about 100 villas then there are two social clubs. There is a neighbourhood shopping facility and we have also tied up with Steve Waugh to create a sports academy not only for cricket but also for football, swimming, basketball and athletics.
In addition to this particular retirement home, we have tied up with HelpAge India’s Age venture which is their arm to manage this because in retirement homes, management is a key aspect of the facility and Age Ventures in-turn have knowledge sharing agreement with Methodist Housing Association of United Kingdom who are in the business of caring for old people above 65 years of age.
Anuj: What about the overall Bangalore market. You had a spectacular quarter last time around. What has been the trend in this quarter so far?
A: We are confident of performing better than our Q3. Fourth quarter is bound to be good. In general, the market is performing reasonably well considering the kind of uncertainty the country is facing due to the impending parliamentary elections. So, we are hopeful the elections will throw out some stable government, so the business community particularly real estate sectors can look forward to better times in the years ahead.
Ekta: Can you detail to us which are the current projects which are on sale by Brigade and what is your pipeline looking like in terms of launches. Would you possibly scale it back till there is more clarity with regards to elections or you are not doing that?
A: We are not overly concerned with elections. We have not changed our plans. We are by and large bullish going forward for the country as such.
Ekta: Can you detail to us which are the current projects?
A: We have 25 projects ongoing in different parts of Bangalore and southern cities. So the flagship projects are Brigade Orchards which is a 130 acre development, 6.5 million square feet and there is another in south Bangalore called Brigade Meadows, which is a 3.5 million square feet. In addition to that in the whitefield area which has number of technology information companies, we have seven projects; residential and commercial offering office space and residential units ranging from as low as Rs 50 lakh to Rs 200 lakh.
The project names are Brigade Lakefront in the EPIP Zone, Brigade Cosmopolis in the Whitefield Main Road, Brigade Exotica and Brigade Golden Triangle on Old Madras Road and there are three office buildings also.
Ekta: I want to understand how real estate prices are moving at this point in time because there are some reports indicating that around 16 out of 26 cities have seen an increase in residential prices. Is that the same for your projects?
A: Bangalore has also witnessed increase in residential prices primarily due to the inflation that year on year inflation which we need to give affect and pass it on. We can only absorb up to a point and beyond that it needs to be passed on to the consumer.
We are quite sure that prices at the current levels are fairly stable and with the positive outcome in the elections, the prices are bound to go up. It is not a sales stock but I would advise the prospective customers to take their decision now in the next couple of months than dillydallying in the future because they are bound to be benefited for a decision taken now.