“There is a K-shaped recovery in the real estate sector,” said Pavitra Shankar, executive director, Brigade Enterprises, in an interview with CNBC-TV18.
“The real estate scenario is good, we are in residential, office, retail and hospitality. The market is positive,” she said.
Brigade Enterprises has been doing well on the residential sector. “We have launched aggressively over the last two quarters and we continue to have the same kind of expectations for the rest of the financial year,” she added.
Retail is doing very well, theatres in malls are opening today in Karnataka and hospitality is still dependent on international travel but there is decent domestic demand, she noted.
She hopes that the stamp duty reduction by the Karnataka government would get extended for the foreseeable future.
“We hope the stamp duty cut will get extended for the foreseeable future because many of the builders who are doing affordable housing, meeting the government criteria of Rs 45 lakh and sub-60 square meters carpet area, all of that inventory will start coming up for registration maybe 18-24 months from now. So, when you are looking at actual impact on registrations and so on, it may be quite less. So it would be great if it was applied across the board,” she said.
In terms of price movement in the Karnataka market, she explained, “It is too soon to say that price hike will happen across the board for the entire market. In our portfolio, we have observed that certain projects are meeting the customer demand exactly. We are basically saying that we are able to increase the prices since demand is there.”
Also, there is a lot on the input cost front – price of steel, raw materials have gone up and all the developers are figuring out how their business model gets impacted with the loss of the input tax credit, Shankar explained.
“Given all these things, we would like to at least cover those cost increases and wherever possible we would like to take up the price. But it depends on project to project and on the micro market and the developer,” she said.
Both August and September were very good months for the company. “We saw the entire Q2 coming back very well as compared to Q1. We have been able to increase some prices but at the same time we are foreseeing that input cost will rise but most public real estate developers are working within single digits or very low double-digit margins, I don’t see that dramatically reducing. Wherever we can cut costs in terms of becoming more efficient, wherever we can improve processes, use technology, we have been trying to do that since the pandemic. We have been trying to get more efficient and protect margins,” Shankar explained.
For the full interview, watch the accompanying video.