Bangalore-based publicly-held real estate company Brigade Enterprises has started monetising the commercial spaces in its integrated township project — Brigade Gateway — in the city as part of its efforts to make the balance sheet asset light.
Brigade Gateway is a Rs 1,000 crore integrated project comprising of commercial, retail and residential space spread over an area of around 40 acres which is fast nearing completion in North-West Bangalore. The project comprises of two office space parcels — the majority of this space coming under the World Trade Centre brand spread over 1.1 million square feet.
According to industry information, Brigade is understood to have sold 10 per cent of the office space at the World Trade Centre, which towers over 29 floors. The company plans to sell 25-30 per cent of the World Trade Centre (WTC), which is close to around 300,000 sq ft in the near future.
“The company has sold around 10 per cent of its commercial spaces to individual investors as part its efforts to make the balance sheet asset light,” industry sources familiar with the development, said. Brigade officials offered not to comment on the transactions.
The real estate company has around Rs 162 crore of debt outstanding on its book against the World Trade Centre. Proceeds from these sales are expected to part repay the debt and the remaining is likely to be used for other new projects of the company.
Meanwhile, companies like Amazon, Siemens and KPMG have already taken spaces in the WTC on rent. “Brigade wants to lease out the whole property by March, 2012, and is likely to sell 30 per cent of the WTC space by December, 2011,” sources said.
This move by Brigade Enterprises comes a couple of quarters after it had sold a land parcel in this township for around Rs 125 crore on which a hospital is being put up. Industry sources indicate that Brigade is looking at more such deals to monetise its developments.
Taking this strategy forward, the company is understood to be mulling the sale of all the office space on another 40-acre integrated township project Brigade Metropolis coming up at Whitefield in East Bangalore. The office space in this project comprises 800,000 square feet under the brand — Summit.
According to industry sources, the company earns a margin of around 40 per cent on its commercial spaces. Brigade Enterprises, which has a presence in residential, commercial and retail segment of the real estate industry, plans to launch around 9.2 million sq ft of new projects in Bangalore, Hyderabad, Chennai along with some tier-II cities in Karnataka like Mangalore, Mysore among others.
The realtor is also planning to launch two affordable projects in the near future.
Brigade Enterprises has registered a 9.8 times rise in its net profit, to Rs 58.12 crore, during the third quarterending December of the present financial year on the back of a higher income from growth in sales and also by monetising land bank at the Brigade Gateway.
The total income of the company rose 2.2 times to Rs 144.23 crore compared to Rs 65.31 crore registered during the corresponding period last year. During October-December, operating profits of the company rose 6.79 times to Rs 94.28 crore compared to Rs 13.88 crore reported during the same period last year.
Brigade Gateway is a Rs 1,000 crore integrated project comprising of commercial, retail and residential space spread over an area of around 40 acres which is fast nearing completion in North-West Bangalore. The project comprises of two office space parcels — the majority of this space coming under the World Trade Centre brand spread over 1.1 million square feet.
According to industry information, Brigade is understood to have sold 10 per cent of the office space at the World Trade Centre, which towers over 29 floors. The company plans to sell 25-30 per cent of the World Trade Centre (WTC), which is close to around 300,000 sq ft in the near future.
“The company has sold around 10 per cent of its commercial spaces to individual investors as part its efforts to make the balance sheet asset light,” industry sources familiar with the development, said. Brigade officials offered not to comment on the transactions.
The real estate company has around Rs 162 crore of debt outstanding on its book against the World Trade Centre. Proceeds from these sales are expected to part repay the debt and the remaining is likely to be used for other new projects of the company.
Meanwhile, companies like Amazon, Siemens and KPMG have already taken spaces in the WTC on rent. “Brigade wants to lease out the whole property by March, 2012, and is likely to sell 30 per cent of the WTC space by December, 2011,” sources said.
This move by Brigade Enterprises comes a couple of quarters after it had sold a land parcel in this township for around Rs 125 crore on which a hospital is being put up. Industry sources indicate that Brigade is looking at more such deals to monetise its developments.
Taking this strategy forward, the company is understood to be mulling the sale of all the office space on another 40-acre integrated township project Brigade Metropolis coming up at Whitefield in East Bangalore. The office space in this project comprises 800,000 square feet under the brand — Summit.
According to industry sources, the company earns a margin of around 40 per cent on its commercial spaces. Brigade Enterprises, which has a presence in residential, commercial and retail segment of the real estate industry, plans to launch around 9.2 million sq ft of new projects in Bangalore, Hyderabad, Chennai along with some tier-II cities in Karnataka like Mangalore, Mysore among others.
The realtor is also planning to launch two affordable projects in the near future.
Brigade Enterprises has registered a 9.8 times rise in its net profit, to Rs 58.12 crore, during the third quarterending December of the present financial year on the back of a higher income from growth in sales and also by monetising land bank at the Brigade Gateway.
The total income of the company rose 2.2 times to Rs 144.23 crore compared to Rs 65.31 crore registered during the corresponding period last year. During October-December, operating profits of the company rose 6.79 times to Rs 94.28 crore compared to Rs 13.88 crore reported during the same period last year.
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