NEW DELHI: India’s residential real estate market has seen a strong post-pandemic upcycle, marked by visible premiumisation, improving affordability and rising buyer aspirations, according to M. R. Jaishankar, founder and executive chairman of Brigade Group. But he cautions that while premium housing has gained traction, the deepest and most durable demand continues to lie in the mid-income and mass housing segments.
In an exclusive interview with Ankit Sharma, Jaishankar said the sector’s long-term outlook remains positive, backed by rising incomes and economic growth, but developers need to remain disciplined on expansion. He also called for a review of affordable housing policy, arguing that current thresholds are outdated and that the government must play a larger role through cheaper land supply and lower transaction-related levies if the segment is to scale meaningfully. Edited excerpts:
In the last two years, how have you seen the real estate segment perform? Where do you think it is headed? Is the momentum largely in premium housing, or do affordable and mid-segment housing also have room to grow?
Particularly after Covid, the real estate market has really zoomed. Across the country, with very few exceptions, there has been a tremendous amount of premiumisation. People who were earlier looking at two-bedroom apartments are now considering three-bedroom homes, and those who wanted three are moving to four.
More broadly, affordability in the country has improved as India’s economy continues to expand. With GDP growth, rising incomes and higher disposable income levels, more people will become homebuyers over time. Those who are not customers today can become customers tomorrow. That way, the long-term future for real estate remains promising.
Many developers are expanding beyond their core markets into western and northern cities. Is Brigade looking at similar expansion into markets such as Mumbai, Pune or NCR?
At present, we are in six south Indian cities: three tier-I and three tier-II cities. We are also present in GIFT City, Ahmedabad, although not in residential, but in office and hospitality.
We have been receiving inquiries from Mumbai and Pune and are at a serious stage of exploration. Our thinking so far has been to focus more on the tier-I cities where we are already present, Bengaluru, Chennai and Hyderabad, which continue to offer significant growth potential and strong employment drivers. But we are not averse to exploring other cities.
Why do you think this cross-market expansion is happening now? Does it carry risks of over-expansion?
I fully agree that there are risks. I remember what happened in 2008-09, when many developers aspired to become pan-India players. There is nothing wrong in wanting to become pan-India, but real estate remains a very localised business. So one has to tread carefully.
I am not saying developers should not expand. We ourselves have expanded to six cities. Others can expand to nine or ten cities if they have the strength. But they must assess their balance sheet, management capability and bandwidth before taking such decisions.
There is both desire and pressure to show growth, especially for listed companies where there is constant pressure for quarter-on-quarter expansion. But each company has to decide what it can realistically handle without stretching too thin.
A number of developers have gone public in recent years. How do you view the rise in IPO activity among real estate companies?
I see it as a welcome development. More IPOs indicate that governance standards in the sector are improving. Once a company is listed, there are stronger compliance requirements, from the stock exchanges, the Registrar of Companies, independent directors and from the company’s own intent to become better governed.
The other reason is capital. If developers want to scale up at a faster pace, public capital becomes important. Land values have risen significantly, and it is not easy for everybody to fund growth entirely through internal resources. So greater access to capital markets is both logical and positive for the sector.
Many listed developers are increasingly focused on premium housing because of better margins. What happens to homebuyers in affordable and mid-income housing if supply shifts too heavily toward the top end?
That is a very important issue. I am not in favour of developers moving only toward bigger and bigger apartments. Premiumisation is real, and there is nothing wrong with building premium homes, but the top end of the pyramid is always narrow. That demand may be 10% to 15%.
The real demand lies at the bottom of the pyramid and in the middle-income and high-income housing segments. In cities such as Chennai, Bengaluru and to some extent Hyderabad, much of what we offer is in the ₹1 crore to ₹2 crore range. In southern cities, that is still considered high-income group housing, whereas in some other cities that may be considered more mainstream.
The problem is that the official affordable housing definition has become outdated. The current threshold of below ₹45 lakh was set several years ago. With inflation and rising land and construction costs, that threshold should, in my opinion, be at least ₹75 lakh today.
The industry, including CREDAI, has been requesting the government to revise this, but it has not happened. For affordable housing to grow meaningfully, the government has a much bigger role to play. Land for affordable housing has to be made available at affordable rates. Taxes and charges also have to come down. Today, levies such as stamp duty, GST and various civic charges account for 35% to 40% of the value in many middle-income and high-income housing projects, and in affordable housing that share can be even higher.
So merely stating that affordable housing should be encouraged is not enough. Policy support has to be tangible.
RERA was a major reform for the sector, but there is now growing debate on whether the framework needs review. Do you think it is time to revisit RERA?
Yes, it is certainly time to revisit RERA and examine where the framework needs to be made more consumer-friendly or developer-friendly. Developers will have their list of issues, and consumers will have theirs.
We support RERA and its objectives, but improvements in rules and processes are welcome so long as they balance both sides. It cannot be entirely one-sided in favour of either the customer or the developer.
The developer should act as a trustee of the customer’s money, because for many buyers it represents life savings. At the same time, consumers and authorities should also recognise the hurdles developers face, from land acquisition to approvals, construction and final handover. It is often a four-to-five-year cycle, and many challenges arise, both internal and external. There has to be greater recognition of those realities, particularly in cases where developers are acting with genuine intent.
How was FY26 for Brigade Group in terms of revenue and sales, and what are your expectations for FY27?
FY26 has been challenging for us in terms of profitability, but it has been a good year in terms of sales. The main issue was delays in approvals for around half a dozen projects. As we move into the fourth quarter, most of those approvals are falling into place.
So FY27 should be a very good year for Brigade.
What were your targets for FY26, and what are you looking at for FY27?
Our sales target for FY26 was around 8.5 million sq ft. We will be slightly short of that, but profitability remains healthy. For FY27, we are aiming for sales of around 9 to 10 million sq ft.
