Brigade Enterprises gears up for FY25 with thrust on commercial segment

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₹6,012.5 crore. New launches and sustaining sales momentum in ongoing projects translated into highest ever collections of ₹5,915.1 crore in FY24. The outlook for FY25 is also upbeat.

Project launches of 12.6 million square feet (msf) are the line-up in the residential space spread across key markets of Bengaluru, Hyderabad and Chennai. These projects have a gross development value of ₹13,000 crore. The company expects to spend more on business development over the next two years.

“This will provide growth visibility in the residential segment and lead to further re-rating," said Motilal Oswal Financial Services. On the commercial side, net office space absorption in FY24 was more than 1msf with 97.5% occupancy across the leasing portfolio. The management expects office demand to be robust in FY25, driven by medium and large-sized tenants, dominated by automobile, technology, manufacturing, and engineering sectors.

It anticipates rental income to grow by 15-16% year-on-year and reach Rs700 crore by the end of FY25 from around Rs600 crore in FY24. Despite the sluggish performance of multiplexes, its mall business saw consumption surpassing pre-covid levels with footfall rising 10% in FY24. In the hospitality segment, the key metric of average room rate (ARR) grew 8% in FY24 at around ₹6,500, surpassing the pre-covid level of ₹5,400.

The average occupancy rate for the segment rose to 72% in FY24, much higher than the pre-covid level of 62%. The management expects ARR to grow 10% in FY25 aided by improvement in occupancies. Going ahead, the company eyes 3msf of new office projects in Bengaluru, Hyderabad, and Chennai, and 0.5msf in hotels.This will entail a capital expenditure of around ₹2,000 crore over FY25-28.