Brigade Group is planning to invest Rs 3,000 crore over the next three years to expand its commercial property portfolio by 8 million sq ft. The Bengaluru-based property developer has office projects spread over 12 million sq ft at present.
“The expansion of commercial portfolio will be funded by internal accruals, bank debt and commercial paper that the firm had raised in the past,” said Vishal Mirchandani, chief executive-retail & commercial at Brigade Group. The developer is constructing a 1.8 million sq ft World Trade Centre in Chennai. Commercial assets account for 20% of the group’s portfolio.
“We want commercial to be 30% of the company’s total portfolio by 2020. It contributes 40% of the EBITDA now,” Mirchandani said, adding that the group will launch 6 million sq ft of office space in the year to March 2017.
Several big construction firms such as RMZ Corp, Embassy Group and Puravankara Projects have in the recent past sharpened focus on rent-yielding office projects amid increasing demand for commercial properties, marking a shift from their overwhelming dependence on the residential segment.
Brigade has 18 million sq ft of residential projects under construction at present. It has a land bank of 545 acres, with a development potential of 49 million sq ft. The debt-to-equity ratio of the company stood at about 0.88% in the third quarter of the current financial year.
Source: Economic Times