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Brigade Enterprises Ltd
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Ladies and gentlemen, good day, and welcome to the Q1 FY '23 Earnings Conference Call of Brigade Enterprises Limited. We have with us today on the call, the management of Brigade Enterprises Limited. [Operator Instructions] Please note that this conference is bring recorded.
I now hand the conference over to Mr. M.R. Jaishankar, Chairman and Managing Director of the company. Thank you, and over to you, sir.
Yes. Thank you. Good afternoon, ladies and gentlemen. Welcome to the Brigade Enterprises Q1 Financial Year '23, '22-'23 earnings call. I'm joined by our Executive Director, Mr. Roshan Matthew, Ms. Pavitra Shankar, Ms. Nirupa Shankar and Mr. Amar Mysore. Our senior management is also present. Mr. Atul Goel, CFO; Mr. Vineet Verma, CEO, Hospitality; Mr. Karthi Baskar, COO, Industrial Parks and Logistics; Mr. Omprakash, Company Secretary, Mr. Viswa Prathap, CSO; and Mr. Pradyumna Krishnakumar, Senior VP, among -- plus a few other people.
It gives me great pleasure to report that the positive momentum sustained into the first quarter of this financial year. Demand continued to be robust, driven by strong sales in the residential sector, pick up in the leasing business and a bounce back in the hospitality and retail verticals. We expect the momentum to carry through to the rest of the financial year, provided there are no major upheavals in the global political situation. Although there are talks of recession in America and Europe, we feel the Indian economy can remain resilient.
Some of our business highlights, starting with our residential business are, our residential business registered net new bookings of 1.13 million square feet with a value of INR 743 crores in quarter 1 of FY '23. This corresponds to a growth of 50% by area and 58% by value over quarter 1 of the previous financial year '22. We effected a further price increase in Q1 because of the higher cost pressures driven by global macroeconomic factors. This has been accepted by our customers, a testimony to the strength of our brand and continued positive buyer sentiment.
Last weekend we hosted our annual flagship event for the 15th time known as -- popularly known as Brigade Showcase held physically at the Sheraton Grand and Brigade Gateway. It is for the first time since 2019 and after COVID in 2020 and 2021, we had not held a physical Brigade Showcase. We had a promising number of footfalls with serious buyers as a result of which we closed a good amount of business over 3 days. We had a number of innovations this year at the Brigade Showcase, including an all digital screen experience, markups of our interior brand, Brigade Plus and special offers, including foreign trip giveaways and iPhones for every booking.
We also launched approximately 1.5 million square feet of new projects during Showcase, namely Pearl At Brigade Atmosphere; Brigade Horizon; Brigade Nanda Heights; and Emerald At Brigade El Dorado. We launched our first plotted development Neem Grove At Brigade Orchards, which has been very well received by customers. We also launched a new tower called Iridium at our Brigade El Dorado 50-acre mixed-use township in the Aerospace Park in North Bangalore. Our exceptional performance in collection continues. Q1 collections was INR 861 crores.
Moving on to our office business. Occupancy across offices is at a 2-year high and office absorptions saw a 3-fold rise as compared to last year. We leased 0.41 million square feet, which is 4,10,000 square feet this quarter, almost doubled compared to the quarter 1 of FY '22, with occupiers in an active state, our forecast for the next 2 quarters looks positive. Brigade Tech Gardens in Brookfields in Bangalore East attracted a lot of inquiries, leading to closures and emerged as the highest contributor to our portfolio, leasing 300,000 square feet in quarter 1.
Another marquee development, Brigade International Financial Center at Gift City, known -- generally referred to as BIFC, Gandhinagar, saw a good traction and is expected to be fully leased within the next quarter. Ongoing demand is from players in automotive, IT, pharma, BFSI and flexi office sectors. Collections for the portfolio remained stable at 99%. You will be happy to know that when Prime Minister Modi inaugurated last week, the SGX Exchange, International Bullion Exchange, and JPMorgan, all these offices are located in our BIFC.
The retail business saw a 28% growth in retailer consumption over quarter 1 financial year '20, which is pre-COVID. We saw a good leasing traction across all categories, particularly in family entertainment centers, referred to FECs, and food and beverage restaurants. We leased 112,000 square feet this past quarter, including 40,000 square feet for the family entertainment center for a marquee operator in Orion Mall at Brigade Gateway. Compared to the previous quarter, electronics saw a 11% growth in sales; food and beverage, a 49% growth in sales; multiplexes saw a 117% growth, and FECs family entertainment centers saw a 97% growth, respectively.
Coming to our hospitality business, it has shown remarkable turnaround in quarter 1, registered the best quarter ever. Our hotel portfolio saw an occupancy -- average occupancy of 71% for the quarter compared to 49% last quarter. I must mention that in January 2020 only we launched Grand Mercure Gandhinagar. So that is why the percentage is less, 71%. If you eliminate Grand Mercure Gandhinagar and 4 Points by Sheraton in Chennai -- sorry, Kochi; the remaining 6 hotels saw an average occupancy of 80%.
Average room rate were at INR 5,300 compared to pre-COVID, INR 3,900. Overall revenues was 33% higher than pre-COVID levels and adjusted gross operating profit, AGOP, 75% higher than the quarter 1 of FY '20. Our revenues for the quarter touched INR 80 crores for the first time, and the vertical was cash positive, even after taking into account depreciation and interest.
This quarter, we have added 75 acres to our land bank in the KIADB, which is the Karnataka Industrial Areas Development Board of Bangalore, near the Aeropark Phase II in which we'll be evaluating a mixed-use development of office -- industrial parks and logistics, office and residential. We will share further details once the design approach has been finalized. We strongly believe in the growth prospects of North Bangalore, given the continued investment in transport infrastructure and connectivity to the city and the presence of Bangalore International Airport.
That brings me to the end of our business highlights. Thank you for listening. I now request Atul Goel, our CFO, to take you through the financial highlights. Take care and stay safe, Jai Hind.
Thank you and good afternoon, everybody. On behalf of the company, we would like to welcome you to the earnings call of Q1 FY 2023. CMD has already given updates on operational highlights, there has been overall improvement in all segments of the business during the quarter.
Coming to consolidated financial performance for Q1 FY '23, the consolidated revenue for Q1 FY 2023 stood at INR 920 crores versus INR 391 crores for same quarter last financial year, an increase of 135%. The consolidated EBITDA, including other income for Q1 FY 2023 stood at INR 250 crores as against INR 120 crores in Q1 FY '22, an increase of 109%. EBITDA margin, including other income stood at 27% in Q1 FY '23. Consolidated PAT stood at INR 65 crores compared to a loss of INR 86 crores for the same quarter last financial year. Consolidated PAT after MI was INR 88 crores compared to a loss of INR 40 crores for same quarter last financial year.
The Real Estate segment clocked a turnover of INR 655 crores and EBITDA of INR 86 crores in Q1 FY '23, the hospitality -- the leasing segment clocked a turnover of INR 175 crores and an EBITDA of INR 136 crores in Q1. Our hospitality segment clocked a turnover of INR 90 crores and an EBITDA of INR 29 crores in Q1 FY '23, achieved positive PBT during the quarter owing to higher occupancy upon resumption of business travel.
Coming to debt and liquidity position of the company, there was a reduction of INR 59 crores in real-estate debt in Q1 FY '23 because of good sales and collections. Company crossed at, as on 30th June 2020, is INR 4,095 crores. The cash and cash equivalents stood at INR 1,689 crores as on 30th June, 2022. Consequently, company's net debt outstanding as on 30th June stands at INR 2,406 crores out of which we have shared INR 1,635 crores. 80% of the gross debt pertains to commercial portion of which 75 -- 73% is backed by rental income.
Cost of debt stood at 7.75% despite the 90 bps repo rate hike by RBI. Debt to equity stood at 0.66. Cash flow from operating activities stood at INR 369 crores, an increase of 137% from same quarter last financial year. We have projected net operating cash inflow of INR 2,212 crores from the ongoing project and stock sales. We have a strong liquidity position to support future expansion plans.
I will now hand it over back to the moderator for the questions. Thanks.
[Operator Instructions] The first question is from the line of Adhidev Chattopadhyay from ICICI Securities.
Am I audible?
Yes, you are.
Yes, you are audible.
Yes, sir. Firstly, congratulations to the team for -- and great to see the rental and hotel businesses finally seeing a recovery now from this quarter onwards. So just first question is on the rental business. Now this -- whatever leasing we have done during the quarter in Tech Gardens and Gift City. So this -- when will the rentals start flowing from this leasing? And in the 1 million square feet of pipeline, could you just break up in which -- across which properties the maximum pipeline would be over here? And what is the leasing target for the year now?
Yes. So basically, you asked me about the rental commencement. Typically, most of the tenants are asking for about 6 months of rent-free period on average. This can vary in some cases by a month or 2, but on average, they are now asking for 6 months of rent-free period to do their fit-out. Most of the area that has been leased has come from Brigade Tech Gardens, followed by Gift City and then we've done leasing in WTC Kochi, and also some leasing in Brigade Opus.
In the coming year, as we have mentioned before, the target has been to lease out all our existing available spaces, which is approximately 2 million odd square feet. So our target is to achieve that, and we are still on track to do so. We have a healthy pipeline over the next 2 quarters. And hopefully, we'll have equally or better results in the coming quarter.
Again, if you look at the [Technical Difficulty] Tech Gardens will be the main focus followed by WTC Chennai.
Okay. Okay, fine. Secondly, on our hospitality business now, obviously this last quarter has been a great quarter for the industry. So in July and basically on the forward bookings you're seeing for the next 2, 3 months, how do you see the overall year shaping up? Are you seeing some softness in demand now because of global macro? Or are you seeing the momentum continuing today?
No, basically we are seeing the momentum continue because most of the business that we're getting is from domestic travel. We're also getting a lot of business in the MICE segment, which is residential conferences, a lot of the pharma companies, medical companies, IT companies are all having a lot of conferences. And there's also a lot of new joinees. There's been a lot of hiring that the IT services and financial services companies have had. So they're having a lot of programs for their new joinees, and we are seeing a sustained revenue in terms of occupancies and ARRs are quite high. In fact, July, August and the coming quarter is projected to be quite robust as well.
Okay. So would it be right to say that the second half of this year, right, hotels perform even better than the first half? Is it a right assessment? Or it's still too early in your view to take a call?
No, if there are long weekends, then the business hotels actually take a dip in the occupancy, but the leisure hotels do better. When you have clear month, like this time, for instance, November, the clear month, Diwali, Dussehra come in October, so then the occupancies are projected better for business hotels, but if there are long weekend, like I said, the leisure business, the leisure hotels actually [Technical Difficulty]. Also, there are a lot of wedding days as the occupancies increase in the second half of the year. So there are very spacious dates, which creates an additional demand for the [ rampage ] as a social side of the demand.
Sure. Then the final question is on our outstanding land payments. So of which the largest ones would be the Mount Road in Chennai under CRD ADB land, which we have tied up. If you could let us know for the rest of this year, what will be the land payments for land outgo we are expecting?
I think overall, you can keep about INR 900 crores to INR 1,000 crores. INR 900 crores to INR 1,000 crores is for the land we are yet to register from TVS in the Mount Road in Chennai, then Pfizer and the KIADB land. And a few other joint developments also we have entered into, approximately you can keep it as INR 1,000 crores.
INR 1,000 crores. Fine, sir. That's it from my side. I'll come back in the queue if I have got more questions. Thank you.
[Operator Instructions] The next question is from the line of Parikshit Kandpal from HDFC Securities.
Congratulations on a good quarter. Sir, you said the INR 1,000 crores will be the land payment to be done in FY '23. So that's the amount which is currently outstanding? So the entire payment which is due right now, so it will be done in FY '23 as well?
Yes, it is FY '23, except in the case of KIADB, they need to comply with a few formalities. If the formalities are done before December, it will get into this financial year. If the formalities are slightly delayed, then it may move into the first quarter of next year.
And how much of that amount is due to KIADB?
INR 250 crores.
INR 250 crores?
About INR 150 crores, INR 150 crores.
Okay. Okay. My second question is on the gross development value addition during the quarter. So if you can touch upon because we see a lot of land getting added on the mixed-use side, commercial 3-year plan, is it getting reflected in the payables. But what's happening on the joint development side, which is not getting reflected here. So what kind of GDV from the JDAs have you already locked in? If you can just break it up in million square feet across geographies like Bangalore Chennai and other places?
We have finalized about 6 million square feet of the JDA in Chennai of which 2 million square feet area is already JDAs registered and signed, another 4 million square feet is in an advanced stage of due diligence, which should happen, say, some time in -- hopefully in the quarter 2. Otherwise, it may get pushed to October.
We have also finalized another 2 million square feet very recently in Bangalore. So all these things are incorporated -- will be incorporated. What is signed post 30th June will get incorporated in the -- subsequently or what is side before is already taken into records.
So you say 2 million in Chennai has already happened -- that is the part of your one -- first Q FY '23 numbers.
About 9 million to 10 million in Chennai in the last quarter -- last earnings call. Out of that, everything is on track, everything is on track. Only the 4 million square feet is in advanced stages of legal due diligence completion. And post 30th June, we have signed a 2 million square feet joint development team after the June 30th, 2022.
The 9 million which you highlighted, 2 million has already happened, 4 million is an advanced stages, so that takes it to 6 million in Chennai. And another 2 million has happened in Bangalore, so total is about 8 million, right?
Yes, correct, correct.
And for rest of the year, sir, anything because Bangalore is a large part of our portfolio.
Yes, rest of the year, we are hoping to complete about another 5 million square feet of area, if not more. We are hoping. It all depends on the finalization of deals and then a due diligence, whether it will get completed on time or whether it will take longer, so it depends on that.
Okay. And just the last question, sir. On this TVS property, have you finalized on things, because last time you said contemplating on the year. So if you can just help us, when do you expect to close this deal? And when do you expect to bring this on market and what will be the likely consideration there?
Yes. See, it is going to be a mixed-use development with maybe 55% to 60% residential and about 40% to 45% office and some amount of retail. It faces Mount Road, which has got the metro connection right outside the gate, subway metro connection. And also, it also faces a very another important route called Whites Road. So it has got the advantage of both the roads. So it will -- so it is an ideal location for mixed-use development.
And what will be the total area, developmental area here, sir?
Total area will be upwards of 1 million square feet.
Okay, sure sir. Thanks very much, sir.
And it should add, overall, on a sales basis, it should add anywhere between INR 2,500 crores to INR 3,000 crores of revenue on a full project completion basis.
On the residential you are saying, residential will add about…
And office. The office is different, whether we'll keep it as lease or whether we'll lease and sell, all those things it depends. The residential alone should give us nearly INR 2,000 crores of revenue.
Okay. And just last one, sir. We had our residential CEO leaving the organization a couple of months back. So any thoughts on that and if you can highlight any development here?
The replacement is under interview, but it has not affected our business 1 inch. And so it has no issue. We have the right team in place. Sometimes all these propositions are good to have, but look, even without that, we can manage.
[Operator Instructions] The next question is from the line of Pritesh Sheth from Motilal Oswal.
Sir, good to see a strong recovery in hospitality. So a question related to that. Firstly, a suggestion maybe, if we can start again disclosing that total wise revenue, occupancy and AOP numbers, that would be very much helpful in terms of seeing for what asset it is -- we'll know how it is progressing? And another question is, obviously, looking at the recovery in the business, a few hotels we had stopped in terms -- stopped their plans in terms of construction of the hotel. So any revival in those plans?
See, the one in Mysore, where the structure was already up just before COVID or during COVID. So that we are restarting from the month of October, whereas the one in Brigade Tech Gardens, which was supposed to be an hotel fleet, we have repurposed it into residential apartments. The one near the airport, which we were to start, we have still kept it on hold. We may review, we have all the approvals if they are revived.
And the one in Chennai, which was the Marriott Residences, it is under construction, where we still have time to decide whether to make it into Marriott Residences, which are serviced apartments or sell them as apartments. That's decision we may take in the next quarter. So that way, as I said, one hotel is -- will be restarted. One is already repurposed. Another we have kept it on hold. We will -- may start in 3 to 6 months. And the other one is, yet to take a call whether to sell the serviced apartment or regular apartments.
Got it. That's helpful. And secondly, on the CIDB and your logistics warehousing venture, so we have signed off for 44-acre land parcel. What is the strategy there? It will be purely an opportunistic business right now at this stage or we have a definite plans of reaching a scale maybe 2, 3 years later and have some targets in mind on that? And whether it will be build and sell model or are we looking at purely leasing or mix of it? Anything you can highlight on that?
See, it is very well located just 10 minutes from the international airport. So it has got a great potential. For us to fully get the position of the land, it may take, as I mentioned, 3 to 6 months. So the master plan exercise is just, you can say, commenced, just commenced and it will take us maybe another 3 to 4 months to close the master plan exercise. And then it will take at least 10 to 12 months to get all the approvals, because it's a request, environmental approval itself will take 10 months.
So the commencement of the project will be for some time in maybe Q4 or Q4 of FY '24 and not earlier. And the residential will be sold, whereas the office industrial park and warehousing will be on lease basis. So that way the fact that it is a mixed-use development, it makes with the residential, it makes the project feasible and more -- financially more attractive. And with the cash flow coming from residential, it can definitely support the industrial park and logistics business.
Got it. And how are we looking to scale up this business from here on? Are there any similar land parcels already there in mind and that will continue to get ahead. So like you provided a visibility on your residential business, any visibility we have on the logistic warehousing industrial business overall?
Yes. Amar Mysore will answer.
Yes. Hi, this is Amar. So what we're looking at, we're looking at greenfield projects as well. So at the moment, we're looking at few in the Hoskote corridor. And also we are looking at Chennai. So to begin with, we'll start with the land which are operating where we already have operations, whether it's Bangalore, Chennai, Hyderabad and later, we will look at other cities. So to answer your question, we'll look at other opportunities as well where we will acquire the land and aggregate it. So that may be a little -- it may take a little longer.
The next question is from the line of [ Gunit Singh from CCICM ].
I would just like you to share your guidance for the coming year in terms of top line and bottom line. And also, I would like to know what would be the growth drivers for the year going forward? And do we have any other projects in the pipeline or what is the pipeline that we have? And what is the maximum revenue in terms of your projections that we can reach if we're able to achieve what we are expecting in terms of a pipeline. So I want to know about certain forward-looking projections that you have internally for the company.
Generally, we have mentioned it several times. We refrain from giving the forward-looking guidance. But we have also said that we are aiming at 20% to 25% growth in our revenue, if not more, though the aim will be to achieve more. But it is subject to various factors, whether launches or macroeconomic conditions and et cetera, et cetera. Residential will certainly expect it to contribute more. So also the office -- all sectors, I would say. Retail may not very substantially improve because we don't have new malls coming up. But the office will certainly -- our lease rentals will go up. So also the hospitality, which has already shown a turnaround, that is likely to sustain subject to unforeseen circumstances like -- whether it is due to COVID or monkeypox or any other war-related things. If there is a travel restrictions, it may affect. Otherwise, we don't think a hospitality business will be affected in any way. So that's way, as I mentioned, 20% to 25% growth, if not more, we are aiming it.
So that is a conservative figure from your end?
Yes.
The next question is from the line of Amandeep Singh from AMBIT Capital.
So firstly, can you talk about increasing competitive intensity in the Bengaluru micromarket, given new developers are coming in? And also you mentioned about hiring of new CEO from your residential business, but can you also update us on senior level hiring for your commercial segment? And do you think these headwinds cumulatively could impact the annual internal growth rate target of 20%, which you have over the next 3 to 4 years?
See, commercial CEO is already -- our CEO or COO is already recruited. They will -- are expected to report in a couple of weeks. And whereas the residential, I did mention, it is work in progress. It should happen maybe by end of the quarter or early next quarter. And also the team is geared up without the CEO also, and so we also have Executive Director, Pavitra Shankar, who is closely involved in the residential business.
Sure. And any initial comments on -- if you're seeing the competitive intensity increasing given new developers are expanding within the Bangalore micromarket?
Yes, they are welcomed, market is big enough for everybody, they are welcomed to expand. Bangalore developers are also going to Mumbai. So every person, many Bombay and Delhi developers have entered Bangalore and packed their bags and left. So let us see what happens in this case.
Sure. And my second question is on the hospitality segment. So with recovery now, you remain highly confident on improving it further. So any plans on update on monetization or you will still wait few quarters before considering or evaluating the same?
See, like 2 years back things were going to happen. Now that the sector has revived, say, people are chasing us. It is up to us to see, the -- we have to decide on the right timing to decide -- to desire is not wise. And to procrastinate for too long also it is not wise. So we will take a call at the appropriate time based on the valuations we receive.
Sure. And then one lastly, any update on the 1.5 million square feet of land acquisition in Hyderabad which was underway, you had highlighted in the previous call?
See, it is work in progress, Hyderabad, the due diligence issues are much more. So I don't want to make any commitment. I don't want to make any commitment as the due diligence are much tougher in Hyderabad than compared to the Chennai or Bangalore.
The next question is from the line of Parvez Akhtar Qazi from Edelweiss Securities.
Congratulations on a great set of number. So a couple of questions from my side. First, you said that we took a bit of price increase in Q1. So what was the quantum of the price increase taken? And how do we see overall pricing going ahead in the light of increase in mortgage rates and over the last 1.5 years, there's been a bit of price increase at an overall level. So how do we see that going ahead?
Yes. Parvez, this is Pavitra here, I'll answer that question. So at the beginning of the financial year, we actually took a pretty big price jump of around 5% to 8% across the portfolio. That was also coming off the back of an additional price increase which we had done at the end of Q3, beginning of Q4. So definitely, it did have some kind of impact in April, the first couple of weeks. We actually did not see too much momentum in our sales. But fortunately, I think once customers also realize that this is something that we are particular about doing. [Technical Difficulty] already reflected in our numbers, even in the movement of ongoing and completed inventory.
So I think it's been well accepted because what we've seen is the trend towards consolidation and towards developers who are trusted and will deliver on time and with quality. So therefore, we feel we are in a position to do 2 command, a price increase and of course, in the environment of increasing input cost increase.
On the impact from increasing interest rates, thus far, we have really not seen anything. But of course, if the RBI continues to increase rates, we could see some kind of effect I've also been maintaining that it may not necessarily change how much is absorbed, but could impact the type of inventory that is absorbed, which is the opposite effect of what happened during COVID and the pandemic when interest rates decreased, we didn't see so much of an increase in buying, but rather [Technical Difficulty] like a 2 bedroom, 2 or 3 bedroom because of the increased affordability. So I think, first, we will start to see that impact that maybe the demand for very large sized units or larger units may actually get rationalized a little bit before the overall exuberant in the real estate or in the residential sector really changing dramatically.
So we are quite confident, all of our new launches have been very well accepted despite having pretty hefty price increases right in the beginning of the launch cycle itself. So we are quite confident of the coming quarters.
Sure. And a couple of data-related queries. What would have been the share from Hyderabad and Chennai to our pre-sales this quarter?
This quarter, not much, because we're at the end of the life cycle of our Brigade Citadel project. So by area above 6%, it did come down from more than double that over a year ago. We just have a few remaining units to sell in Citadel.
So when can we expect another launch in both of these markets?
Yes. So on Citadel, we have -- I'm sorry, in Hyderabad we actually have 2 more projects, about 0.85 million square feet, which we said will be launched within the next 3 to 4 quarters. All our launch projections are on a rolling 4-quarter basis. So we are working on that. For Chennai, as Chairman had mentioned, we have signed up new land. Those are the ones that are in various stages of due diligence, design and so on. Those have not yet come into our rolling 4 quarters projections, but that is definitely on the card. And just to sort of close that loop, Chennai last -- this past quarter was around 12% of our -- sorry, 14% of our area, which has remained consistent over the last few quarters.
Sure. And just one last question to Atul, sir. Sir, what was the rental income from BTG and WTC Chennai this quarter?
Yes. So the rental income from BPPL, that is BTG was around INR 27 crores. And from Chennai, it was INR 29 crores.
Sure. That's it from my side, and all the best for future.
The next question is from the line of Siddhant Dand from Goodwill.
You mentioned about monetizing, now you're getting offers in the hospitality segment to monetize it. So are all our hotels available for sale? Or will it be like hotel-wise or even the ones that are performing well or not performing well? What's the outlook over there?
Yes. This is Nirupa here. The idea is to actually do it as a portfolio. And we remain bullish on the hospitality front. So it's not that we are looking for a complete exit. If we do investor, it will be for a steak sale in the portfolio. We don't believe that it's the right strategy to allow investors to cherry-pick the hotels. It's -- I don't think it's in the best interest of the portfolio. So it will be on an entire portfolio, that's what we're looking at.
Okay. That's perfect. And could you give a ballpark range, just what kind of valuation are we expecting for the hotels?
We'll share the good news once we have an investor in place [Technical Difficulty] valuation now because it -- because we're not in a position to say that.
Okay. Okay. No issues, okay. Actually, I had one more question. Are we looking at, in our hotel, in our leasing business of offices to do a similar thing or not writing?
See, in the office portfolio, we're not looking at it at a portfolio level. There, we're looking at it at a project level, because we are looking for financial partners to help us grow that business and ideally a financial partner who will come in as a greenfield state. So we can procure large parcels of land together and expand. So here, in this case, we are looking at it at a -- first at a project level, and then we can always expand that multiple projects at a time.
The next question is from the line of Mohit Agrawal from IIFL. Mohit Agrawal from IIFL.
Yes, am I audible?
Yes, you are.
Yes. So my question is on your warehousing foray. So just trying to understand that the idea behind getting into this, is it more opportunistic? Or do you think this will kind of support longer-term growth in terms of volumes? Or you think that this will yield higher or similar IRRs to residential business. So what is the thought process behind getting into the warehousing business?
Yes, this is Amar here. So the reason why we explored this is because it is a lot -- it gives a lot of potential for us to grow and also diversify our business. And some of it will be opportunistic. So there is lot of RFPs in the market. And we would like to see if we can bag one of these. And basically, you're seeing a lot of e-commerce penetration in the market. So -- and as a consequence of that, warehousing also, there's a lot of demand and gray day is what we're looking at.
And would this have similar IRRs as your residential business? Any color on that?
No, no, no. No, no, this will be a lot lesser. But since we are looking at a mixed-use, it will kind of -- each one will complement each other.
Okay. Sure. My second question is, Atul, just gave the numbers for the rentals from WTC and BTG, INR 29 crores and INR 27 crores. What is -- how much is -- like based on the leasing that you have done so far, which is 1.9 million square feet and 1.5 million square feet in WTC, how much rental is due and versus how much you are collecting? And in what time -- in about 6 months, should we start to see that kind of rentals coming in? And also connected to that is how much more LRD can we take based on the rentals that are going to come in, based on the leasings that we have done so far.
So see, rental as Nirupa said, it takes 6 months for the fit-out period. But overall, if you see in Tech Gardens and Chennai, we should close around INR 130 crores of revenue by the year-end. So INR 130 crores will be in Tech Garden and around INR 130 crores also in Chennai. So that is what we are targeting based on the leasing, which has been done, any incremental leasing will also help in improving this number. As far as LRD potential is concerned, we have around INR 1,000 crores to INR 1,200 crores of LRD, which can be done from these properties and from the other properties, which are leased.
Okay. So just to clarify, sir, you're mentioning about INR 260 crores of total rental based on the current leasing that has been done versus about INR 55 crores to INR 60 crores that you are getting right now, correct?
This is based on the rent commencement, which we'll have during the year. So that is the number we'll have.
The next question is from the line of Parikshit Kandpal from HDFC Securities.
So my question is on the debt now. So we have to make payments of INR 1,000 crores for the rest of the 9 months in the current net debt, Brigade's share is about INR 1,500 crores. So how do we see this ending up by the year end?
So see, the repayment for next 3 quarters is around INR 284 crores. So this number will be our debt, if you see our slide also, has been more or less gross debt has been more or less same. And our 80%, 81% out of that is commercial debt and out of that, 73%, 75% is a rental backlog. Obviously, that will not come down, all the CapEx that will convert LRD into a more cost-effective debt. But definitely, there will be reduction in residential. We have done around INR 52 crores this year as well. And if the collection and the sale continues, definitely, we'll try to reduce more.
So I was saying how will you fund the INR 1,000 crores of land CapEx, if that was my answer. Can you read it with your internal accruals or…
Yes. So cash, cash equivalent today also we are sitting on INR 1,600 crores. So there's enough money where we can land it, even QIP money of around INR 350 crores are lying with us. So that is not an issue.
So our net debt will go up, basically, you are saying, you'll utilize the cash, but the net debt will go up, gross debt may remain same, but the net debt can go up.
Yes, yes. Net debt will not go up. It should come down. Yes, of course, if we have a new commercial where we are going to launch project, definitely some CapEx debt will be taken, otherwise residential, right now, we are not taking debt. And I just want to correct that the QIP money, which we have is around INR 250 cores.
Okay. My second question is on the asset pipeline of maintenance square feet on the commercial side. So can you break it up like -- is it like larger deals and 2.3 million or these are like multiple deals? Because what we hear from the market is, there's a strong recovery in the office leasing segment. So we still have about 1 million square feet to use, so just wanted your sense on that?
So like you said, these are in the pipeline, so hard to say what will actually get converted. But the range of the request that we get is anywhere from what we see smaller spaces in North Bangalore ranging from around 20,000 to larger requirements in East Bangalore going up to, say, 100,000 to even 200,000 and a couple of requests for even 400,000. So I would say we're seeing smaller spaces being looked at in North Bangalore, and larger areas being looked at in east Bangalore. But I can't get into the individual breakup of the pipeline.
So I was more specific about the BTG property. So out of this 1 million square feet active pipeline, how much will be like attributable to the BTG properties?
Yes. So it's multiple clients and typically, what they look for is at least a floor. So floor could be anywhere -- or multiple floors, ranging again, like I said, from 40,000 to 120,000. That is the typical size of lease that we do.
And just lastly, on these launches, about 7.6 million square feet in resi and 1.94 million square feet in plotted. So if we break it up quarter wise, like Q2, Q3, Q4, so how will it be timed out?
Hi, so just wanted to say, of the number that you're seeing there, we have actually already launched 1.5 million within the past month itself. All of them came on during our Brigade Showcase, which our Chairman had talked about. And so that's already launched in terms of Q2. So the remainder of them will come into Q3 and Q4. We would like to aim for about 2 million to 3 million square feet in Q3 and the remainder in Q4. Of course, the exact timing will really depend on the pending permissions, RERA program and so on, but this is what the team is entirely here towards making sure that it happens.
And there's nothing from Chennai and this side, because you said the 2 million will come in from Chennai next year mostly.
Right, right. No, there is one project in Chennai. It is actually part of our World Trade Center project. It's a very small project. So it's really only like 45 room, which is -- so that is something that is just included there, but it won't add too much to the overall area in terms of the launch.
The next question is from the line of Pritesh Sheth from Motilal Oswal.
Just one bookkeeping question. If you can provide the breakup of collections, I mean, residential was INR 861 crores, which you highlighted. What about the rest of the business?
Yes. So residential was INR 867 crores. Commercial sale was INR 14 crores. Commercial lease was INR 126 crores. The retail was INR 49 crores, hospitality INR 105 crores and our maintenance services of INR 49 crores. So that totals to INR 1,210 crores -- sorry, INR 121 crores.
The next question is from the line of Siddhant Dand from Goodwill.
My question is on the 36 million square feet of land bank that we have, what is the value on our books? And could you share the market value if possible?
So market value is difficult to assess. We have not got into that exercise. This is -- but definitely [indiscernible] what is the acquisition rate. But the breakup is given, I think, breakup CMD mentioned.
Okay, so the cost of land, you would -- okay, so the cost of land that you've given in the presentation, and it has appreciated, it's definitely not depreciated over there.
Yes.
As there are no further questions from the participants. I now hand the conference over to Ms. Pavitra Shankar, Executive Director, for closing comments.
Thank you everyone, for your patience and listening in as always. We like to close the earnings call with a few other highlights from the Group. As part of our CSR activities, we commenced work for our 120-bed hospital at the 60-acre Brigade Meadows Township on Kanakapura Road in Bangalore. This initiative will contribute significantly to the healthcare needs of South Bengaluru. The aim is to reach out a wider section of society and make quality healthcare available to the common man at affordable cost.
Further, in line with our focus on community development, the Brigade Foundation announced its partnership with GoSports Foundation on the Equal Hue Cricket Excellence Program, which was conceptualized to support and empower young women from across the country aspiring to make a professional career in cricket. The foundation will be an associate partner for the 3-year term program, donating INR 50 lakhs per year.
To commemorate the Finale of its Birdsong Exhibition, the Indian Music Experience Museum or IME, founded and supported by Brigade presented a concert entitled Wings of Melody, featuring an ensemble of noted classical musicians from across the city. This was a culmination of a 4-month series of public programs, featuring award-winning photographs, interpretive panels, audiovisual, kiosks and computer interactive. Birdsong was visited by over 20,000 people since April 2022.
On the tech front, our Accelerator program, Brigade REAP has completed 6 years, 11 cohorts have graduated and the start-ups now have a combined valuation of $150 million. 40% of these start-ups are in a sustainability phase and will help the real-estate industry build in a sustainable and responsible manner. We will also play a role in helping various developers achieve their ESG goals.
Over the last few months, a proud moment for us was when Brigade El Dorado received the prestigious Pradhan Mantri Awas Yojana Award under affordable housing project at the PMAY Empowering India Awards 2022. We consider this award as a recognition of the best practices we follow right from the conception stage [Technical Difficulty] undertake.
We also won the [indiscernible] Economic Times Real Estate Awards South. Brigade Orchards won Best Residential Project Township. Brigade Xanadu won the Best Theme Based Project; Brigade Atmosphere for Best Villa project; and finally, our Chairman, Mr. Jaishankar was recognized as Realty Personality of the Year.
On that note, we'd like to conclude the Q1 FY '23 earnings call. Stay safe and stay healthy. Thank you.
Thank you. On behalf of Brigade Enterprises Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.