Good morning, India and Russia signed 28 investment pacts on Monday, including deals on steel, shipbuilding, coal and energy.
Office buildings across the country could do with a few new deals though, while for proptech startups, a new deal is simply not a big deal anymore.
All this and more in today's newsletter.
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Green Warehouses Only
While offices, malls, high streets and hotels face headwinds in the current scenario, there just doesn't seem to be enough warehousing around to occupy.
With the stellar rise in ecommerce adoption, online marketplaces are seeking bigger catalogues and faster delivery times - both requiring more and more Grade A/B warehouses across India.
But Telangana Wants Them Green
The Telangana state government plans to usher in a green building code for new as well as existing warehouses and data centres across the state.
Minister KT Rama Rao announced that the Confederation of Indian Industry (CII) will work on preparing guidelines for the upcoming and established warehouses to be energy efficient.
Do Green Guidelines Exist?
The Indian Green Building Council (IGBC), a part of the CII, has already put in place a green building rating system for 30 important real estate categories including schools, townships, railway stations, data centres, logistics parks and warehouses.
Green warehousing has many pluses, such as zero pollution, lower power consumption, better waste management, water efficiency and as a result - lower operating costs.
Inclusive Effort, Please. . .
🎙 "If the government offers incentives, old warehouses will also upgrade to fulfil the shortfalls and get better rating.", said C Shekar Reddy from the Indian Green Building Council's Hyderabad office.
FYI, total warehousing space in India should exceed 380 million sq. ft. by the end of 2024, say reports.
Investments At Record High In 2021
As the real estate sector awakens to the changes needed to reach net zero targets, developers, investors and occupiers are realising that technological adoption is the only way to future-proofing assets and meeting sustainability pledges.
And with developers and investors increasingly leaning towards sustainable real estate assets, more money is being pumped into proptech naturally.
A Lot More. . .
Globally, proptech has seen a significant increase in investment lately, with more than USD20.57 billion invested so far this year.
That's more than double the USD9.37 billion invested in 2020 and almost three times higher than the USD7.06 billion in 2016.
Per Pi Labs, this record-breaking surge in proptech investment over the past 12 months has been driven by the creation of technology solutions to address common issues in the real estate world, such as:
- sustainability,
- logistics,
- construction,
- robotics,
- workplace wellbeing, and
- bringing the metaverse to the built environment.
What Lies Ahead?
🎙 “On the back of the large wave of capital raised this year, and accelerated adoption within the sector, many proptech companies are now achieving scale and we can expect later stage funding rounds and M&As to drive investment growth in 2022.”, thinks Faisal Butt, CEO, Pi Labs.
'There's moooore money coming', is what we hear.
Making Patiala Proud
A global survey asked more than 32,000 people from 22 countries what their alcohol consumption was last year.
After going through the survey results over a cold one, Australians have been named the heaviest drinkers in the world after spending more time drunk in 2020 than any other nation.
📌 Australians drank to the point of drunkenness an average of 27 times a year, almost double the global average of 15, and about 25% of them reported feeling regret for going so high, so often.
2024: When Office Leasing Normalises
Demand for office space will have to wait till it gets it's very own 'Reached Pre-Covid Level' signboard.
In fact, per Ramesh Nair of Colliers, "At least 2024 till we reach 2019 level."
Thought Things Were Going Well
For a while they were. New demand for office space increased dramatically since bottoming out in June 2020, reaching new heights by August 2021, before running out of steam again.
Globally, experts believe that the large ramp-up in 2021 was due to pent-up demand—a surge of employers driving out of the pitlane and into the market once sentiment brightened in light of rapid vaccinations.
The recent decline in new demand for office space suggests that the initial wave of pent-up demand has been satiated.
It Should Start Improving Soon
2021 should end with around 27 million sq. ft. of office space leasing, against 26 million sq. ft. in 2020.
FYI, Net leasing of office space across seven major cities stood at nearly 50 million sq. ft. in 2019.
With rents becoming more affordable and landlords throwing in incentives like capex and lower security deposits, corporates, which over the last year were mainly renewing their leasing agreements because of uncertainties, are now expected to lease new offices - to expand.
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Today should be all about a cheerful mood, a hearty meal, a long walk after work, and praying there are no Zoom call invitations from the CEO. 😅
See you tomorrow. 💚
☕ The Crew@Ginger Chai