Brigade Enterprises Ltd

NSE:BRIGADE

Earnings Call Analysis

Brigade Enterprises Reports Strong Q2 FY25 Performance Amidst Market Growth

Brigade Enterprises delivered strong results for Q2 FY25, with consolidated revenue at INR 1,138 crores, reflecting a decrease from INR 1,408 crores YoY. Nevertheless, EBITDA was robust at INR 358 crores, leading to a solid margin of 31%. Real estate collections surged 47% YoY to INR 1,454 crores, while leasing generated significant revenues. The company anticipates a promising pipeline with plans to launch numerous projects totaling about 16 million square feet. The management projects a continued growth trajectory, aiming for 15-20% presales growth relative to the previous year, driven by new launches and elevated market demand.

Strong Q2 Performance Amid Market Challenges

Brigade Enterprises Limited reported a solid performance in Q2 FY '25, with consolidated revenue standing at INR 1,138 crores, a decrease from INR 1,408 crores year-over-year. However, EBITDA was relatively stable at INR 358 crores compared to INR 366 crores in Q2 FY '24, resulting in an EBITDA margin of 31%. Noteworthy is the consolidated Profit After Tax (PAT) of INR 115 crores, slightly up from INR 113 crores in the same quarter last year. This reflects the company’s resilience amidst ongoing macroeconomic challenges.

Real Estate and Leasing Segments Perform Well

The Real Estate segment achieved remarkable quarterly collections of INR 1,937 crores, a 35% increase from INR 1,439 crores in Q2 FY '24. The Leasing segment also held strong, generating INR 292 crores in revenue with an impressive EBITDA margin of 72%. This indicates a healthy demand for both residential and commercial properties, particularly in the IT and BFSI sectors, which is reflected in occupancy levels of 98% for the company's operational portfolio.

Forward-Looking Growth Pipeline

Looking ahead, Brigade Enterprises has a robust development pipeline for FY '25, planning to bring to market 16 million square feet of new projects, predominantly in the residential segment. This includes upcoming launches such as Brigade Insignia in Bangalore and Brigade Icon in Chennai, focusing on premium real estate offerings. Game-changing for the company is their optimistic guidance of a 15%-20% growth in presales, contingent upon timely project launches.

Financial Health and Debt Management

The company's gross debt stands at INR 4,640 crores, with cash and equivalents of INR 3,784 crores, including INR 1,356 crores from recently raised Qualified Institutional Placement (QIP) funds. Importantly, Brigade's net debt is manageable at INR 857 crores, leading to a favorable net debt to equity ratio of 0.15. This strong liquidity position enables Brigade to support its expansion initiatives effectively.

Challenges and Opportunities in Approvals

One of the highlighted constraints has been delays in project approvals, exacerbated by recent elections affecting various states, including Karnataka and Hyderabad. However, management expressed optimism that these challenges are being resolved and anticipate more approvals forthcoming soon. This clarity is crucial as it directly influences the company’s ability to launch new projects and capitalize on market demand.

Market Positioning and Pricing Strategy

Brigade is witnessing a shift in its average selling prices (ASP), which have climbed to about INR 10,000 per square foot, up from INR 6,500. This increase is attributed to both market appreciation and a strategic pivot to more premium offerings. The company aims to maintain its competitive edge by focusing not only on volume but also on value through higher-end developments, resulting in potential margins expected above 28% or 29%. This is indicative of Brigade's adaptive strategy in a dynamic real estate environment.

Conclusion: A Well-Positioned Player

In summary, Brigade Enterprises demonstrates a strong operational foundation with impressive revenue growth, effective debt management, and a proactive approach to navigating regulatory challenges. The company's focus on expanding its premium housing segment, combined with a focus on maintaining high occupancy rates in leasing, positions it favorably. While external factors remain a consideration, the strategic initiatives and positive outlook for future launches could present a valuable opportunity for investors seeking stability and growth in the real estate sector.

Earnings Call Transcript 2025-Q2

[Operator]

Ladies and gentlemen, good day, and welcome to the Q2 and FY '25 Earnings Conference Call of Brigade Enterprises Limited. We have with us today the management of Brigade Enterprise Limited. [Operator Instructions] Please note that this conference is being recorded.

I now hand the conference over to Ms. Pavitra Shankar, Managing Director of Brigade Enterprises Limited. Thank you, and over to you, ma'am.

[Pavitra Shankar, executive]

Thank you. Good afternoon, and welcome to the Brigade Enterprises Q2 FY '25 Earnings Call. I am Pavitra Shankar, Managing Director. I'm joined today by our Joint Managing Director, Ms. Nirupa Shankar; Directors, Mr. Roshin Mathew, Mr. Amar Mysore and [ Mr. Prasad; ] our CFO, Jayant Manmadkar, along with the members of the senior management team.

We are pleased to report a strong performance in Q2 FY '25 with continued progress across all key business segments. In Q2 FY '25, our Real Estate division showed stable performance with presales of 1.68 million square feet valued at INR 1,821 crores. Demand in our Residential business remains strong, driven by a preference for properties offering larger spaces, enhanced amenities and premium finishes.

Collections during the quarter stood at INR 1,937 crores, underlining the strong execution of our ongoing projects and customer confidence in our offering. The market continues to demonstrate a healthy appetite for both newly launched projects, and we are optimistic about the upcoming quarters.

During Q2, we launched Brigade Insignia in Bangalore, which along with Brigade Icon in Chennai, is growing our presence in the Luxury Real Estate segment.

In our Leasing business, we are [indiscernible] with 98% occupancy for our operating portfolio of 8.7 million square feet. The leasing momentum remains strong, particularly in the IT BFSI and Flexi Office Spaces. And our buildings continue to attract long-term tenants.

The demand across retail spaces remains encouraging with a mix of lifestyle, entertainment and dining brands continuing to expand in our malls. Retail sales growth was positive despite softer performance in the multiplex segment. In addition, the leasing segment generated INR 292 crores in revenue and INR 209 crores in EBITDA, demonstrating the resilience of the Office segments despite macroeconomic challenges. Rental collections also remained stable, further highlighting the quality of our office assets.

Brigade Hotel Ventures Limited, our wholly owned subsidiary, is proposing, subject to receipt of requisite approvals, market conditions and other considerations, an initial public offering of its equity shares and has filed a draft red herring prospectus dated October 30, 2024, with the Securities and Exchange Board of India and the relevant stock exchanges.

Please note this is also why there are some changes in our usual presentation format. We will eventually resume the old format. Looking ahead, we have a robust pipeline for FY '25 with new developments totaling 16 million square feet, a significant portion of which will be focused on residential projects. We remain confident that our diversified portfolio and strategic initiatives will continue to drive growth, value creation and long-term success for our stakeholders.

With that, I'll now hand over to our CFO, Mr. Jayant Manmadkar, who will take you through the detailed financials for the quarter.

[Jayant Manmadkar, executive]

Thank you, and good afternoon. On behalf of the company, we would like to welcome you to the earnings call for Q2 FY 2025. Our MD already has shared operational highlights. I will be sharing key financial highlights for the quarter.

To start with, the consolidated financial performance for Q2 FY '25. The consolidated revenue for Q2 FY '25 stood at INR 1,138 crores versus INR 1,408 crores for the same quarter last financial year. The consolidated EBITDA for quarter 2 FY '25 stood at INR 358 crores versus INR 366 crores in Q2 FY '24. EBITDA margin for Q2 FY '25 stood at 31%.

Consolidated PAT was INR 115 crores as compared to INR 113 crores for the same quarter last financial year. Consolidated PAT after minority interest stood at INR 119 crores compared to INR 134 crores in Q2 FY '24.

The Real Estate segment clocked a turnover of INR 727 crores with an EBITDA of 15% during the quarter. The Leasing segment clocked a turnover of INR 292 crores with an EBITDA of 72% during the quarter. Real Estate collections for quarter 2 FY '25 was INR 1,454 crores versus INR 992 crores in Q2 FY '24, an increase of 47%. We achieved highest ever quarterly collections of INR 1,937 crores in Q2 FY '25 as against INR 1,439 crores in Q2 FY '24, an increase of 35% on an overall basis.

With respect to consolidated performance for H1 FY 2025. The consolidated revenue for H1 FY '25 stood at INR 2,251 crores versus INR 2,093 crores in the same half year ending last financial year, an increase of 8%. The Real Estate segment clocked a turnover of INR 1,460 crores with an EBITDA of 14% in H1 FY '25 as against INR 1,434 crores with an EBITDA of 11% in H1 FY '24.

The Leasing segment clocked a turnover of INR 554 crores with an EBITDA of 74% in H1 FY '25 versus turnover of INR 444 crores with an EBITDA of 74% in H1 FY '24. The consolidated EBITDA for H1 FY '25 stood INR 686 crores versus INR 572 crores in H1 FY '24, an increase of 20%.

EBITDA margin stood at 30%. Real Estate collections increased by 39% to INR 2,643 crores in H1 FY '25 from INR 1,908 crores in H1 FY '24.

Overall, collections for H1 FY '25 was at INR 3,544 crores versus INR 2,683 crores in H1 FY '24, an increase of 32%. Net cash flow from operations stood at INR 1,100 crores in H1 FY '25 as compared to INR 719 crores in H1 FY '24, an increase of 53%.

Coming to the debt position and its breakup. Gross debt of the company stood at INR 4,640 crores as on September 30, 2024. The cash and cash equivalents stood at INR 3,784 crores as on September 30, 2024, which includes INR 1,356 crores out of QIP funds.

Consequently, the company's net debt outstanding as of September 30, 2024, is INR 857 crores. Net debt to equity ratio stood at 0.15. With the successful issue of QIP, which was oversubscribed by 10x, continued robust cash flow and available debt lines, the company has strong liquidity provision to meet with its expansion plans.

I will hand it back to the moderator for questions. Thank you.

[Operator]

[Operator Instructions] The first question is from the line of Parikshit from HDFC Securities.

[Parikshit Kandpal, analyst]

My first question is on the approvals in Karnataka. So we have been hearing in other calls also from your peers, there has been delays in getting the project approvals. So if you can update us.

[Pradyumna Krishna Kumar, executive]

Parikshit, Pradyumna here. I can't hear you too well. It's not too clear.

[Parikshit Kandpal, analyst]

Is it better now?

[Pradyumna Krishna Kumar, executive]

Yes. Yes. Please go ahead.

[Parikshit Kandpal, analyst]

So, my question was on the approval process in Karnataka. There has been issues of late. I mean, we have been hearing even from your peers, other peers that there has been delay in getting approvals. So just wanted to understand your views on where we stand and how has the process improved now for the industry?

[Pradyumna Krishna Kumar, executive]

No, it's true, Parikshit. There have been some challenges on the approvals front. We ourselves were hoping to launch a little bit more than 2.6 million square feet in the previous quarter in Q2. However, having said that, we are now in the process of getting the last leg approvals out in Q3, maybe start of Q4. It is sort of getting better now as we speak, but there has been this challenge.

And for that matter, I think it's not only restricted to Karnataka, Bangalore. It's -- we're seeing these challenges in both Hyderabad as well as in Chennai. While we're getting most of the approvals through, it's just that final leg of getting the plant sanctioned out and the RERA approval out is taking a little longer than usual or anticipated.

[Parikshit Kandpal, analyst]

Okay. But so when I look at your numbers, the demand is very strong, which is like in the presales of INR 1,800 crores, which is much ahead of my estimate. So if you can help us understand how much was the contribution from the new launches? So which were -- so if you can highlight what were the new launches, what was the sales contribution from new launches, what was sustaining sales? And what is the pipeline for Q3?

[Pavitra Shankar, executive]

Yes. Yes. So in Q2, we had just a very small proportion from completed, but about 47% to 50% from new launches ongoing. So when we define new launches, it's not just what got launched in this quarter of Q2, but basically in H1.

So those projects that we launched, I think we launched about five or six projects. In Q2, we launched Brigade Insignia in Bangalore, which I mentioned earlier in the premium segment. Cobalt Block in Brigade El Dorado, and a smaller project called Nebula in Brigade WTC in Chennai. It's a very small project. But we have seen very good momentum coming from both Cobalt and in Insignia as well as a previously launched block in El Dorado called Beryl. Also Valencia, the second block of Valencia in Bangalore. And of course, Icon in Chennai is doing well. Although there, we are not really pursuing like a volume strategy. It's more about a super premium project where it depends on realization.

So across the board, I have to also say that the performance in the ongoing projects and already -- and under construction projects has been strong across the board as well.

[Parikshit Kandpal, analyst]

And Pavitra, on the pipeline for Q3, the launch pipeline for Q3, if you can? How much of million square feet are in terms of value, if you can help us understand your planning to bring to the market.

[Pavitra Shankar, executive]

So it's difficult to, again, because of approval timeframes, really for us to tell you exactly what will be launched in Q3. But in Q3, we are looking to launch in Hyderabad, potentially in Chennai in Q4, and a couple of projects in Bangalore as well. So it's a bit uncertain whether we would get these approvals the next 6 weeks or so.

But for sure, here a lot of the projects that we had envisioned for this financial year, we do intend to still have launched. So I think while there are delays on the approval side, we will still see the launches. It's a question of the time that we would have had to sell. But considering that the market is also still strong, I think we should still be able to perform quite well for the financial year.

[Parikshit Kandpal, analyst]

Okay. And just the last question on margins. So if you look at historical and then the sales which you're recognizing on the resi side right now and booking around 13% margins. But for the sales doing right now, so Q1 and Q2, so what kind of embedded margins do you believe these presales would be carrying on for Q1 or Q2?

[Pavitra Shankar, executive]

Yes. So definitely, [Technical Difficulty] we are seeing in the EBITDA margins today. We are assuming costs also sort of hold up [indiscernible] rate. So if we do that, then we should definitely see north of 28%, 29% in terms of EBITDA margin.

[Operator]

[Operator Instructions] The next question is from the line of Saksham from AMBIT Capital.

[Saksham Mongia, analyst]

I have two questions. First question is finally related to the commercial portfolio strategy. As noted, the commercial portfolio contributed around 6% of presales in the current quarter. With the company planning to add 3 million square feet for the commercial portfolio, what is the strategy moving forward? Will the new space will be leased out? Or will it be sold or a combination in between the two? And I'll go with the second question also. Can you provide more insights on the company's plan to expand its residential portfolio in Chennai market? Where do you see the company's market share in this segment over the next 3 to 5 years? These are the two questions from my end.

[Nirupa Shankar, executive]

Yes, Nirupa here. See, basically, every time we take on a commercial project, it really depends. But overall, we expect [Technical Difficulty] project 5 million square feet in the commercial segment. And all of that is actually just for leasing. But sometimes in case there is a very good opportunity, we might consider a sale for that. But currently, we have about 2.5 million under construction, which is currently all slated for leasing.

Right now, only for Brigade Twin Towers, one tower, 550,000 square feet is slated for sale. We are also looking at Padmini C block for sale.

[Pavitra Shankar, executive]

Yes. So your question on residential in Chennai. Yes, as you have seen and over the last couple of years, we've been expanding our presence in Chennai across all the segments. I wouldn't say it is only residential. But as of today, I would say our market share is not really among the top few in Chennai. Maybe we are within the top 3. But I think considering that we have another 12 million square feet of upcoming launches and pipeline for Chennai, we should be have -- we will certainly maintain that top 3 market share and continue to keep building on that.

The focus for Chennai is, again, mid-segment [Technical Difficulty] a couple of projects that are premium, similar to Brigade Icon as well. And all of our locations in Chennai are really top-class locations with high demand. So we're very confident of our Chennai growth.

[Operator]

The next follow-up question is from the line of Parikshit from HDFC Securities.

[Parikshit Kandpal, analyst]

So Pavitra, again, referring to my other -- earlier questions on. If the launch delays continues, if you're not able to bring these launches, do you think there's a possibility that H2 may actually see a decline in terms of presales?

[Pavitra Shankar, executive]

Well, it's not H2, it will certainly be in Q1. So it's -- I would say we are sort of forced to look at this business on a quarterly basis. But I would say from a demand perspective and project profitability standpoint, we don't have any confirms on that front whatsoever.

We do expect a substantial portion of our H2 numbers to be coming from the new launches. So certainly, if there is any impact on that, then our H2 numbers will also be impacted. But as I mentioned earlier, we have a substantial amount of ongoing projects. In fact, we have around 4.7 million square feet of existing inventory before we launch anything in Q3 or Q4. So we will still look at trying to maximize our sales in our existing and ongoing projects. And in addition, trying to make the best of whatever time we have in the rest of H2 to drive sales from our upcoming launches.

[Parikshit Kandpal, analyst]

But you see a probability of like all these launches is bunching up in the Q4, Q3 maybe a slight kind of a miss if you are not able to get approvals?

[Jayant Manmadkar, executive]

Yes. That's the way we are looking at it for now.

[Parikshit Kandpal, analyst]

Okay. Q3 declined and then...

[Pavitra Shankar, executive]

It's not like we have -- we are not in the early stage of design approvals on any of these. But, these are just at the very final stages. So it's just a matter of getting the things out in hand. So we are not deliberating in terms of having any comments going back and forth on designs or whatever. It is just literally getting the approvals in hand so we can launch.

[Parikshit Kandpal, analyst]

The question is not on demand. The question here is that you're not able to bring the supply. So that's why Q3 could be, if things don't work out, could be a decline. Maybe out of the 3, 4 quarters, worst could be 3, the third quarter and then you see a sharp uptake as launches happen in Q4?

[Pavitra Shankar, executive]

So there's absolutely no question on demand. I think demand is very strong. Like I said earlier, we need to see the launches come in to get the kind of numbers we would like to achieve for the second half.

[Parikshit Kandpal, analyst]

Okay. But as of now, you're maintaining the 15% to 20% kind of growth over the last year of INR 6,000 crores of presales?

[Pavitra Shankar, executive]

Providing we can launch, yes.

[Parikshit Kandpal, analyst]

Got it. Just another question on business development. So one is that, you had raised this money and one is that you already were doing. So what was the total business development, new business and new sales value added in H1 FY '25? And from the proceeds from the QIP, how are you looking to deploy it towards new land acquisitions?

[Pavitra Shankar, executive]

So on the QIP, we basically raised the funds for growth of the organization, focused a lot on the residential sector. In terms of business development, I think every year for the last few years, we've been adding about and doing about INR 1,000 crores of business development activity.

In the past, I think, 6 months, we've added around 5 million to 6 million square feet of product in terms of the business development activity and continue to see good opportunities, both for outright as well as joint development. We did raise the fund so that we would be ready for more outright and larger projects on the JV basis as well.

[Parikshit Kandpal, analyst]

So this fund QIP proceed will also go -- part of that will go towards the hospitality or no hospitality will rely in the money, then should, the CapEx will be funded from the proceeds of the IPO. So how will you allocate this money? Are this largely be resi, and commercial and then hospitality, like it's on its own gets money from the IPO proceeds?

[Pavitra Shankar, executive]

Yes. So we raised the funds in BEL for the QIP predominantly for the residential business. Since we have filed the DRHP for hospitality, we won't be making too many comments on that.

[Parikshit Kandpal, analyst]

But, largely this is for resi businesses QIP?

[Nirupa Shankar, executive]

Not so. As I mentioned earlier, it is for the residential business. So it is not for hospitality.

[Operator]

[Operator Instructions] The next question is from the line of Parvez Qazi from Nuvama Group.

[Parvez Qazi, analyst]

Congratulations for a great performance. So my first question is regarding the upcoming launches. Our share of launches on the resi side over the next year is about 10.5 million square feet. So fair to say this would have a GD of some -- GDV of somewhere between INR 10,000 crores to INR 12,000 crores?

[Pavitra Shankar, executive]

Yes. Yes.

[Parvez Qazi, analyst]

And the 3 million square feet upcoming commercial projects, these will be largely on the lease model? Or can we look at a sale model going ahead also?

[Pavitra Shankar, executive]

Currently, these are all for leasing.

[Parvez Qazi, analyst]

And these will be largely in Bangalore? Or you will have some portion coming up in the integrated projects in Hyderabad also? Will that also form a part of the 3 million square feet?

[Nirupa Shankar, executive]

No. So the commercial part in Hyderabad has not yet been launched. In the ongoing projects that we've mentioned in our deck, everything is in Bangalore, except for Brigade Square, which is in Trivandrum and Brigade Tech Boulevard, which is in Chennai.

[Jayant Manmadkar, executive]

And just to add to what Nirupa was mentioning, the Hyderabad one, we still haven't concerned as part of our future launches.

[Parvez Qazi, analyst]

Sure. The other is a data question for Jayant, sir. Sir, what were the BTG and the WTC rentals in Q2?

[Jayant Manmadkar, executive]

Sorry, could you just repeat that again?

[Parvez Qazi, analyst]

What was the rental contribution of BTG and WTC in Q2?

[Nirupa Shankar, executive]

WTC was about INR 50 crores in Q2 FY '25, and BTG was about INR 63 crores in Q2 '25.

[Operator]

[Operator Instructions] The next follow-up question is from the line of Parvez Qazi from Nuvama Group.

[Parvez Qazi, analyst]

So this is with regards to the potential usage of the QIP proceeds considering that we already have a substantial pipeline in Chennai. Would it be fair to assume that bulk of these QIP proceeds will be used for business development in Bangalore and Hyderabad? Or are we open to looking at any new city also?

[Jayant Manmadkar, executive]

So it will be for Bangalore, Chennai and Hyderabad, all three cities. Chennai is also part of the plans for as far as the QIP proceeds go. But having said that, it's only limited to these three cities. We are not looking at any other geography at this point in time.

[Parvez Qazi, analyst]

Sure. And any update on the Kokapet project? By when can we have some clarity on that?

[Jayant Manmadkar, executive]

Yes, the target continues to be Q3 to launch Brigade Neopolis. We will be tentatively calling it Brigade Gateway Hyderabad for now, because it is a mixed-use development along the lines of Brigade Gateway Bangalore. And like I said, we are targeting to launch it in Q3.

[Pavitra Shankar, executive]

So on that project, we will be launching residential first. So that's also why we have mentioned that the commercial will not be part of our upcoming pipeline. So we plan to launch residential and then we eventually launch the commercial block.

[Parvez Qazi, analyst]

Sure. And lastly, what would have been the share of Bangalore in the Q2 presales?

[Pavitra Shankar, executive]

About 90%.

[Operator]

The next question is from the line of Prem Khurana from Anand Rathi.

[Prem Khurana, analyst]

Congratulations on very good set of numbers. So my question was with respect to our residential real estate vertical. So what I observed from the data that are given in the presentation is, I mean, we generally used to be around INR 6,000, INR 6,500 of number in terms of weighted average realization until some time back. And we've gradually moved to almost around INR 10,000 a square feet sort of number. And even in the launch pipeline, I mean, the way you're guiding in terms of GDV potential seems that it's mostly INR 10,000, INR 12,000 a square feet sort of number.

So is it that -- I mean, what part of this -- the shift that we've seen from INR 6,500 to INR 10,000 would be, because of the organic price appreciation that we would have experienced in the market? And what -- how much of this would be essentially because of the changed of product? And is it, I mean, fair to assume that, I mean, we moved up, I mean, in terms of the product that we offer now compared to and what we used to offer, let's say, 3, 4 years back?

[Pavitra Shankar, executive]

Yes. So if you look at the quarterly APR trend over the last couple of years, as you mentioned, it used to be around INR 6,000. Even as recently, I'd say, just 5 quarters ago, it was more like INR 7,000. In terms of the like-to-like price change, it moved from about INR 7,000 to around INR 9,000, INR 9,500. So the typical mid-segment or slightly upper mid-segment to sell is around an average of INR 9,000, INR 9,500. Again, that can change depending on which submarket you're looking at.

But in terms of the product itself, product change moving into more premium and luxury category projects, I think that is where we are seeing the shift go beyond and upwards of INR 10,000 on an average. So Brigade Icon, where the average ticket -- with the average price per square foot is [ INR 10,000 ] that is going to contribute, some of the Insignia is also north of INR 12,000. So that's all causing the average to increase much of about INR 10,000. And I think it's also a contribution of which are the projects that are selling and which ones get launched. So I think in the next few quarters, we should still see average price realizations above INR 10,000 or so.

[Prem Khurana, analyst]

Sure. And any thoughts on, would you want to kind of go even more premium, I mean, let's say, even beyond Icon, which is where I mean, you will all still get to have some more movement in the average realization? And generally, I mean, what we get to have from the market essentially people are saying that it's difficult to be able to find quality contract. Is it a conscious decision on our part to kind of balance between volumes and value, you don't intend to take up more volumes. I mean, part of the growth also needs to come from value, which is where you will be able to kind of optimize construction even if there is, let's say, some dearth of contractors in the market?

Or I mean, how should we see it? I mean, when you say 15%, 20% sort of growth, is it -- would it be a function of more volumes than value or more value than volumes?

[Pavitra Shankar, executive]

So I would say that, see, we want to play across all segments in the residential space. We'll go where the opportunity is presenting itself. If in future, there was affordable housing, we would look at that, too, if there was opportunity there. But currently, there is a lot of demand in terms of premiumization of consumer demand itself, whether real estate or any sector. So that's why we are capitalizing on this trend. We are open to any kind of opportunities, including higher priced products than, say, a Brigade Icon in Chennai.

We just need to find the right land parcel and put the right product in that situation. But we do see the maximum amount of demand coming from mid-segment, whether that's just starting to skew towards upper mid segment as we're seeing today, then [indiscernible] focus that we have.

But I want to reiterate that we are not sort of boxing ourselves into one product or the other. In residential, we're open to opportunities across the space. And I think that's the best approach for us as we're already looking only at three markets: in Bangalore, Chennai and Hyderabad, we'd like to play across the entire residential spectrum.

[Prem Khurana, analyst]

Sure. And on the Twin Towers, because I mean, you're almost there. There's hardly any CapEx left. I mean, any thoughts on the way the demand is, the inquiries or LOIs. I mean, if you could share your thoughts on have we started engaging with the clients for the area that we intend to kind of lease out?

[Nirupa Shankar, executive]

Yes. So I think that's a relatively new market for office. We will -- we are one of the first projects there to get OC. The Tower B is one which we have included under the Real Estate segment, because we've kept it for sale. We've seen very good traction from an end-user customer to -- in the local domestic market, and a lot of the people using the space are from our domestic companies wanting to upgrade their office spaces.

So we're getting a very healthy rate of about higher than INR [indiscernible] square foot, which is good for that market. So what [indiscernible] kept for sale because of the demand for it. And the [indiscernible] Tower A, we have kept aside for leasing. So we plan to finish one tower before we move on to the next. But if the demand for purchase and owned offices continue, at the right time, might consider even putting Tower A under the sales part of it.

[Prem Khurana, analyst]

Sure. And just one last. Yes, so just one last if I may, please. On the CapEx side, I think the slides suggests, I mean, we still have around INR 700 crores, INR 800 crores to grow on CapEx, the balance amount, which is yet to be kind of spend from our side. And the launch pipeline gives us a number of almost around 3 million square feet that you intend to launch. I mean, let's say around INR 1,500-odd crores with incremental CapEx.

And given the fact we still have some more CapEx to go, so fair to assume this three would be spread out, we won't get to have this entire thing come through in this year itself, which is where suddenly the CapEx pipeline would go up from INR 700 crores to INR 2,200 odd crores sort of number. Would you want to phase this out or?

[Pavitra Shankar, executive]

Yes, the CapEx is typically phased over 3 to 4 years. Whatever as mentioned, especially in the upcoming launches, that will be phased out over 3 to 4 years, over the course of the development of the project.

[Prem Khurana, analyst]

Okay. Sure. So if you get to have a permission, this entire 3 million square feet could come to the market and you would start construction on the entire 3 million square feet itself?

[Jayant Manmadkar, executive]

Yes, yes, that's the intent.

[Operator]

The next question is from the line of Abhishek Khanna from Kotak Securities.

[Abhishek Khanna, analyst]

I wanted to check what is the share of your attributable presales in 2Q? I think you not shared that number in the presentation. So what is that number out of INR 1,820 crores?

[Jayant Manmadkar, executive]

Sir, can you just repeat that?

[Abhishek Khanna, analyst]

I'm asking what is the share of your attributable presales in 2Q of the INR 1,820 crores that you've done, what is your attributable share?

[Pavitra Shankar, executive]

Okay. Sorry, I didn't fully get your question. But about INR 1,800 crores in presales, about 75% to 80% of that would be Brigade share.

[Abhishek Khanna, analyst]

Sure. Second, on the commercial portfolio, your earnings, of course, have improved significantly in the last 3, 4 quarters. One thing that I wanted to check, when you say 95% is the occupancy, I would assume you're referring to the committed occupancy, right? What would the actual occupancy be like? And when we're speaking of these INR 2.9 billion of rentals that you got in 2Q, is almost all of that coming in on the 95% of the portfolio?

[Nirupa Shankar, executive]

So the occupancy that we are referring to is the current operating portfolio. It doesn't include some of the projects like Twin Towers and Padmini, which is -- which have not yet been capitalized.

[Abhishek Khanna, analyst]

So all 95% of this is giving you rentals as of 2Q? Or do you expect this INR 2.9 billion to pick up further?

[Nirupa Shankar, executive]

No, no, that's right. It's the same thing. So are you saying, is the full potential achieved? Is that what you're saying?

[Abhishek Khanna, analyst]

Yes. Have you started getting rentals for all 95% of the occupied area or the rentals are yet to commence for some of them?

[Nirupa Shankar, executive]

Yes. We are getting rental for all 95% of it.

[Abhishek Khanna, analyst]

Perfect. And the last one. When you've referred to delays in getting approvals, is it primarily pertaining to the general elections? Or was there something else also that was happening in any of the cities or locations that you're present in?

[Jayant Manmadkar, executive]

It's a combination. Elections has played a part, whether it's the state elections in some of these states or whether it's the central election. There have also been changes in resources, changes in committees, et cetera, that have taken time to be sort of reinstated. So all of that we are hoping is now past us and that we will see more approvals come through in the course of the next 2 to 3 months.

[Abhishek Khanna, analyst]

Okay. So it was all largely election-related state or general, which you think is largely behind you.

[Jayant Manmadkar, executive]

Yes.

[Operator]

The next question is from the line of Biplab Debbarma from Antique Stockbroking.

[Biplab Debbarma, analyst]

My first question is on the Chennai market. So I'm seeing a lot of traction in Chennai market. Are you gaining market share in Chennai? Or is the Chennai market itself is growing?

[Pavitra Shankar, executive]

So I would say it's both. The Chennai market, I think, has long been overlooked. Starting from even pre-COVID, both our projects, World Trade Center Chennai, the Residences at World Trade Center Chennai as well as Brigade Xanadu have really started to do extremely well. And that's also why we started focusing on residential there a little bit more. So market overall has increased [indiscernible] absorption, but also Brigade has been able to identify good land parcels, and we expect good absorption of our launches as they come up in the next couple of quarters.

[Biplab Debbarma, analyst]

Okay. That's great. And just wondering of the -- in terms of demand in Bangalore. So of the projects that you launched in Bangalore in first half of FY '25, what percentage has been sold so far, ballpark number? Just trying to understand. For example, 50%, 60% has been sold till date or lesser than that. Just trying to understand whether the demand if we compare to, say, FY '24 is the same or not?

[Pavitra Shankar, executive]

Yes. So it is -- we are not seeing any demand-related issues. We've launched very different types of projects in the first half of the year, especially in Bangalore. We did launch Brigade Insignia, which is a little more premium. So there, we have sold about 30%, 35% of the project already since it launched in the first half of the year.

The other projects that have launched have all been sort of mid segment also. So there also, we're seeing good traction. Considering it's only been 6 to 7 months, we've sold around 40% to 50% of the inventory. So we're quite happy with the progress, and we expect demand to continue to be strong even with the upcoming launches.

[Biplab Debbarma, analyst]

And my third and final questions, basically, assuming that approvals are not an issue. Let's be optimistic. And so if that is the case, there is no challenges in getting approvals. I'm just trying to understand what would be the four, five key projects there in the pipeline in the second half? Like one that you mentioned in Hyderabad and Chennai and a couple of projects in Bangalore. Just if you could give us a breakdown of four, five projects, key projects and their GDV -- launch GDV in the second half of FY '25?

[Pavitra Shankar, executive]

See, we have around [ 3 million ] square feet of launches for Chennai, so a few quarters. There, that's about 3 million square feet, I would say the GDV there would be around INR 3,000 crores, assume an approximate pricing of INR 10,000 or so, maybe that's a little more.

For Hyderabad, we have a 2 million square feet project launching. There, I would expect the GDV to be around INR 2,400 crores there. So -- here also, we have around, say, 2 to 3 -- 2 million to 2.5 million square feet of projects, which, again, I would value at around INR 10,000 a square foot for Bangalore as well.

So in that sense, these are the approximate numbers that could be coming up, but we don't necessarily want to mention project name.

[Biplab Debbarma, analyst]

Okay. That's fine. So 3 million square feet we expect in second half -- 3 million square feet in Chennai, we expect in second half of FY '25? Or this would be over the period of, say, second half of FY '25 and FY '26 kind of?

[Jayant Manmadkar, executive]

Yes, in the next, say, in a matter of 3 quarters, may not be necessarily 2 quarters, or say 3 quarters, yes.

[Operator]

[Operator Instructions] As there are no further questions from the participants, I would now like to hand the conference over to Ms. Nirupa Shankar, Joint Managing Director, for closing comments.

[Nirupa Shankar, executive]

Good evening, everyone. Before we close, I just wanted to make 1 clarification to Abhishek's question from Kotak Security. I think the hard option that we have has not yet started yielding rental at Brigade Tech Gardens. So that should yield about another INR 40 crores to INR 50 crores per annum in terms of the rental.

Okay. So in terms of the closing remarks, I'd like to share a couple of other highlights that are non-financial in nature. The 108 beds St. John's Medical College Hospital at Brigade Meadows, a unique collaboration between Brigade Foundation, which is Brigade Group's not for profit trust, St. John's National Academy for Health Sciences, opened its doors on November 5. This hospital is designed to provide affordable, accessible and quality health care to the other people of South Bangalore -- to the people of South Bangalore. Furthermore, we will be starting construction of [indiscernible] another operation with St. John's in our 50-acre township, Brigade El Dorado.

We recently also laid the foundation stone for a memorial dedicated to the enduring legacy of Mahatma Gandhi in Chikmagalur. The World Trade Center Chennai is now a premier accredited member of the World Trade Centers Association in New York with the highest level of certification from WTCA for a World Trade Center.

WTC Bangalore is also a premier accredited member since 2023. Out of 320 World Trade Centers globally, only 17 have attained this premier accredited status so far, and this includes our two World Trade Centers.

Some of the other accolades and awards received over the last few months. Brigade Enterprises Limited has been recognized among India's Top 50 Best Workplaces for Millennials in 2024. Our Chairman, Mr. Jaishankar, was honored with the Lifetime Achievement Award by CNBC Awaaz Real Estate Awards. Additionally, he was also honored with the Real Estate Visionary of the Decade Award by HURUN INDIA and GROHE.

Happy to add that Pavitra and I have been recognized by Business Today as the most powerful women in business 2024. Our projects, Brigade Trade Center Kochi won Sustainability Award at the Society of Energy Engineers & Managers, SEEM, 2023. We also received two awards at the fourth edition of the Sustainability Summit and Awards 2024 for Best Sustainable Initiative of the Year. And Brigade Cornerstone Utopia won Residential Project of the Year at the GRI Awards 2024.

On that note, we would like to conclude this quarter's earnings call. Thank you all for joining and taking time to hear from us today.

[Operator]

On behalf of Brigade Enterprises Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.