Brigade Enterprises Could See Rental Gains As Amazon Plans Bengaluru Office Relocation

Brigade Enterprises Ltd. is yet to confirm Amazon's exit from its office space at the World Trade Center in Bengaluru, as it is still left to submit an exit notice.

The company's management is confident that they will be able to lease the space quickly, given the strong demand for high-quality Grade-A office properties, according to an Axis Capital report.

Additionally, Amazon’s current rental rate of Rs 100 per sq. ft. is lower than the latest leasing deal at Rs 140 per sq. ft., which could result in a significant market-to-market gain if the space is re-leased.

The real estate developer reported a 29% year-on-year growth in pre-sales, totaling Rs 2,900 crore in the first half of fiscal 2025, the brokerage said.

This growth was fueled by 37 lakh sq. ft. of new launches in Bengaluru and Chennai, valued at Rs 3,700 crore, which accounted for 50% of the company’s overall pre-sales.

Over the last two years, Brigade Enterprises has developed a robust project pipeline worth Rs 16,000 crore in Chennai, along with a large project in Hyderabad, the brokerage said.

In fiscal 2024, these two micro-markets contributed Rs 400 crore to the company’s overall pre-sales, and this figure is expected to grow significantly to Rs 4,000-5,000 crore over the next two years.

With Bengaluru also poised for a high launch velocity, BEL's pre-sales are projected to grow at a compound annual growth rate of 28% from fiscal 2024 to fiscal 2027, reaching Rs 12,400 crore, the report said.

Share price of Brigade Enterprises closed at Rs 1,302.95 per share on the National Stock Exchange, reflecting a rise of 2.16%. In contrast, the benchmark Nifty fell 1.02%.

Over the past 12 months, the stock has increased by 51.49%, and it has risen 45.3% year-to-date.

All 14 analysts monitoring the company have a 'buy' rating on the stock, according to Bloomberg data. The average 12-month analysts' price targets from analysts suggest a potential upside of 11.7%.