Real estate developers in Bangalore no longer want to sell their commercial and retail projects. They are now banking on rental income from their projects to keep their cash registers ringing,
Developers see outright sale of projects as killing the goose that lays the golden egg and are now turning towards building a regular revenue stream by leasing out commercial and retail projects. This move will also lend more stability to their balance sheets.
Chairman and managing director of Prestige Estates , Irfan Razack, tells CNBC-TV18 that by banking on rentals, they are ensuring constant revenue flow. “We are creating assets for the company which yield steady income. So even if there is a variable in the market in terms of sales, at least the company is 100% sure to get this revenue stream,” he said. With five-six commercial projects and six malls in the pipeline, Prestige Estates wants to take annual rental earnings from Rs 200 crore to Rs 500 crores by FY15.
The Brigade Group also plans to boost revenue from rentals. “Currently rentals contribute 10% to our revenue, but going forward this will go up to 25%,” said managing director MR Jaishankar.
Brigade Group will use two commercial projects and a mall to send rental income from the current Rs 50 crore to Rs 400 crores by FY15.
Nitesh Estates is banking on two commercial projects and malls to hit the Rs 100 crore rental income mark by FY15.
And Mantri Developers is determined not to be left behind. “Creating a portfolio of good rental yielding income is valuable. As of now, we want that to be 50% and even if it goes to 60% over time, that's ok,” said chairman and managing director Sushil Mantri.
Unlike residential real estates, commercial and retail projects don't bring in customer advances, demanding significant capital infusion by developers. Now with the interest in commercial real estate returning, developers are looking at leasing out their property instead of outright sales, as a means of strengthening their long-term revenue stream.
Developers see outright sale of projects as killing the goose that lays the golden egg and are now turning towards building a regular revenue stream by leasing out commercial and retail projects. This move will also lend more stability to their balance sheets.
Chairman and managing director of Prestige Estates , Irfan Razack, tells CNBC-TV18 that by banking on rentals, they are ensuring constant revenue flow. “We are creating assets for the company which yield steady income. So even if there is a variable in the market in terms of sales, at least the company is 100% sure to get this revenue stream,” he said. With five-six commercial projects and six malls in the pipeline, Prestige Estates wants to take annual rental earnings from Rs 200 crore to Rs 500 crores by FY15.
The Brigade Group also plans to boost revenue from rentals. “Currently rentals contribute 10% to our revenue, but going forward this will go up to 25%,” said managing director MR Jaishankar.
Brigade Group will use two commercial projects and a mall to send rental income from the current Rs 50 crore to Rs 400 crores by FY15.
Nitesh Estates is banking on two commercial projects and malls to hit the Rs 100 crore rental income mark by FY15.
And Mantri Developers is determined not to be left behind. “Creating a portfolio of good rental yielding income is valuable. As of now, we want that to be 50% and even if it goes to 60% over time, that's ok,” said chairman and managing director Sushil Mantri.
Unlike residential real estates, commercial and retail projects don't bring in customer advances, demanding significant capital infusion by developers. Now with the interest in commercial real estate returning, developers are looking at leasing out their property instead of outright sales, as a means of strengthening their long-term revenue stream.
Hi,im very much impressed by your blog ,Renting office space is a big step towards establishing your business. First you fix a budget that you can spend for an . office space for rent in bangalore from your business budget.
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