Good morning, some days simply boggle the mind.
While Elon Musk is mulling over selling his Tesla shares, another electric vehicle manufacturer is asking folks to kindly buy theirs.
Rivian just went public at a monster USD77+ billion valuation, with the goal of raising nearly USD10 billion at its IPO.
While Edison's labour of love, GE - an original founding member of the Dow - got booted from the exchange in 2018, Dalal Street has showered some love on Paytm and their issue is now fully subscribed.
🍬🍬
How The Mighty Split
Founded by Thomas Edison and once the world's most valuable company, General Electric (GE), is splitting into three.
Care To Elaborate?
Sure. GE will break into three smaller, sector focused public companies, each with their own team and board of directors.
- The health care business will separate in early 2023.
- The renewable energy, fossil fuel power, and digital divisions will merge and break off in 2024.
- The last to take off will be GE Aviation—a major supplier for the military.
Looking Back In Time
Founded in 1892, GE was an original member of the Dow Jones Industrial Average. Being a conglomerate and all, GE was into everything, from petroleum to aircraft engines to Telemundo.
However, the company was booted from the Dow in 2018. 😳
Clearly, making soap, soap dispensers, and soap operas all at the same time has never worked for anyone in the history of business.
GE has been slowly imploding since the financial crisis of 2008, and lost 74% of its value from 2016–2018.
Zooming Out
Analysts following the matter feel that GE’s breakup is as much an indictment of the outdated conglomerate model as it is of the company itself.
As for the microwave division? It’s been gone for a while, having been sold off with the rest of GE Appliances in 2016.
Buying The Whole Store
Ecommerce companies are selling, leasing, hiring and IPOing like never before and the common word on the street is - brick and mortar retail is slowly inching towards its doom.
The truth is as far from it, as Monday morning is from Friday evening.
Time To Go Real Estate Shopping
To the untrained eye, it may seem futile for brands to buy stores rather than lease in a time of decreased store footprints and rising e-commerce transactions.
However, per this Forbes story, there are situations in which it is not only viable but advantageous to own retail real estate.
That's because if a brand is going to be around in the long-term and has the capital, then investing in real estate makes sound financial sense.
There are savings on rent, increased fixed revenue from leases, and potentially big gains on the property over time.
More Than A Theory
🛒 IKEA has started writing out some big checks for real estate purchases. It recently bought the Topshop location in London on the intersection of Oxford Street and Regent Street for USD523 million.
🛒 Earlier this year Uniqlo had bought its New York City flagship store for USD160 million.
🛒 In 2020, Chanel bought its London flagship store on Bond Street for USD400 million - 30% more than the asking price.
The Way Ahead
Emerging brands will stay away from the trend as the capital investment for a real estate purchase is incredibly high, while more prominent brands will likely continue to lease small footprint locations, especially in Tier II and III cities.
But established brands with deep pockets know that there is a clear advantage in acquiring retail property, and over and above the financial gains, retail properties are a big value-add for the brand.
Half A Cup Extra
- Asia's most expensive apartment just sold in Hong Kong for USD82.2 million.
- The European Central Bank can no longer ignore a spike in property prices that could lead to an overvaluation bubble.
- How fractional ownership of commercial real estate is more profitable for upcoming investors.
Time To Show It All
If home buyer sentiment needs another solid reason to inch higher, we think there's no need to look any further.
Making Transparency Mandatory
Maharashtra's real estate watchdog, MahaRERA, has made it compulsory for all housing project developers to make their project's mortgage status known to the authority and FYI, there are no exceptions.
A builder mortgaging the same housing project to multiple banks in order to raise more funds illegally is not uncommon in our country.
And if this compliance is seen through, the sector will witness some much needed improvement in hygiene.
A CIBIL For Real Estate Projects - CERSAI
Cersai (Central Registry of Securitisation Asset Reconstruction and Security Interest of India 😅), has been maintaining the central registry that records the filing of security interest of immovable, movable, intangible properties by lenders.
In short, when a builder takes out a loan on a new housing project or a land parcel, the transaction is recorded at the Cersai servers and can be accessed by other lenders running a credit check on the builder or its projects/land.
Setup in 2011, the Centre holds a 51% stake in Cersai and the other 49% stake is held by select public sector banks like the State Bank of India, Punjab National Bank, Bank of Baroda, and the National Housing Bank.
Fraud Prevention Is The Priority
Per a 2011 RBI notification, Cersai records are available for search by any lender or any other person desirous of dealing with the property, turning a whole new page in property information transparency.
Availability of such records can prevent frauds involving multiple lending against the security of same property as well as fraudulent sale of property without disclosing the security interest over such property.
CERSAI has also been entrusted with the responsibility of operating and maintaining a Central KYC Record Registry (CKYCRR), which started operating from 2016.
This helps track money laundering among other things.
---------------
Indian cosmetics-to-fashion platform Nykaa surged 96% in a blockbuster debut yesterday, fetching the country's first women-led unicorn a valuation of nearly $14 billion.
What glass ceiling? More power to the girls. 💚
☕ The Crew@Ginger Chai