Bengaluru-based real estate developer Brigade Group plans to add about 2 million square feet (msf) of Grade A office space in Bengaluru by the end of the current financial year, Nirupa Shankar, joint managing director of the group, told Moneycontrol.
Separately, construction of a little over 0.2 msf of office space in Trivandrum is ongoing. Brigade Group will double its office portfolio across Bengaluru, Hyderabad and Chennai within four years, Shankar added.
Last financial year, the company leased 1.25 msf of Grade A office space and raked in revenue of Rs 654 crore from its office verticals, a 43 percent increase over the previous year.
"This year we are confident of doubling the office space portfolio compared to last year's development. While office space absorption showed a slow start, we are expecting the second and third quarter of the current fiscal year to be game-changers," she added.
Till last fiscal year, the company had about 87 percent of commercial leasing in non-SEZ space and the balance in the SEZ segment. While the non-SEZ segment is completely leased, the company is looking to lease the remainder of the SEZ segment within the next few quarters.
Doubling the flex portfolio
Brigade Group said it plans to double its flex office space portfolio under the brand BuzzWorks by the end of the next financial year. "We currently have 2,500 seats, and will be adding more seats to double it with a development potential of 2 lakh sq ft," Shankar said.
Among the upcoming launches, managed office space will have a major share, with most new developments in the north and eastern IT corridor of Whitefield.
Shankar added that most of Brigade Group's clientele have resumed work from the office.
The company is also looking at Hyderabad to boost its commercial portfolio.
Strong retail pipeline
Currently, the company has 1.3 msf of mall space in Bengaluru and is also open to exploring new opportunities in Chennai and Hyderabad.
"For new launches, we are looking at mixed-use developments and will be adding retail space to existing townships. We are adding about 4.5 lakh sq ft in the 47-acre land township of Brigade Utopia. And about 2 lakh sq ft in Brigade Valencia close to Hosur Road," Shankar said.
The company is also looking to add standalone malls, for which land is being identified.
Last financial year, the Group's retail rental income stood at Rs 156 crore, up 60 percent, with a footfall increase of 106 percent.
Today, rentals for the malls have increased by almost 33 percent compared to pre-pandemic levels and most of the increases are in malls close to the central business district, Shankar said. Occupancy has jumped to about 80 percent compared to 60 percent before the pandemic.
"During Covid, a lot of smaller operators shut down and thus the bigger players have jumped back. We surprisingly see a lot of American brands looking forward to expanding while some shut down a few years back. Sports and casual wear are the biggest gainers followed by electronics, with an average lock-in period of three years," she added.
Brigade Group is also adding about 3-4 hotels, including one close to the Bengaluru airport, and another in Chennai.
Currently, the residential segment continues to be the major contributor to annual revenue, said Shankar, followed by office space at 35 percent, hotels at 10 percent and retail at approximately 5 percent.
To date, the company has raised three private equity (PE) funds with Government of Singapore Investment Corporation (GIC). In addition, it is in talks with potential offshore investors to raise more PE funds.
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