Good morning, the World Economic Forum (WEF) has just postponed its annual meeting at the Swiss ski resort in Davos due to the spread of the Omicron coronavirus variant, shifting the event scheduled for January to mid-2022, as of now.
While a sense of uncertainty looms over most economic activity, investments into property tech and climate tech continue with careless abandon - which we think is a great sign.
So is this one - 😷↔😷
It's Either The Rent Or Kids In Australia
A recent University of Sydney research has unearthed some hard facts that spell - no kidding.
A Stark Correlation
Per this study, Australia’s skyrocketing housing cost is discouraging people who live on rent from having children, while having the opposite effect on folks who own their homes.
Historically, Australia - with a fertility rate below the replacement rate - has relied on immigration to drive population growth, and this first ever study linking housing prices to fertility has policy makers worried.
What's Driving It?
Akin to most developed countries, Australia too is struggling with soaring housing costs thanks to record-low interest rates as central banks attempt to nurse their economies through the pandemic.
The direct result of that measure has had a profound effect on the country's housing market value, which jumped by AUD596.4 billion (USD425 billion) to almost AUD9 trillion in the three months through June, the largest quarterly jump ever recorded.
And It Adds Up To...
An AUD100,000 increase in housing wealth is linked to an 18% rise in the probability of home-owners having a new child, the research showed.
On the flip side, renters with no rise in housing wealth coupled with increasing liability of rental payments are deciding to put off having children.
Word On The Street?
🎙 Sydney University said the research was the first time in Australia that family plans had been measured against home prices, adding that the findings matched similar work in the U.K., U.S. and Canada.
Retail Leasing: What's Up?
Despite a meteoric rise in ecommerce transactions over the last year and half, the experience hungry human is slowly walking back to the retail store, resulting in new store openings and some such.
And before you let brick-and-mortar naysayers fill your cart with one-sided online opinions, please take a look at the current retail leasing trends.
📌 Ecommerce Brands Are Opening Brick-And-Mortar Stores: Brands that started online are jumping aboard the physical store wagon. Many are creating in-house teams and opening stores across the world if they have the money.
For smaller brands with shallower pockets, working with a ghost-retailer to open new locations has become a popular choice.
📌 Smaller High Street Stores Are Hot: Instead of occupying space in large, commercial malls, retail brands are more keen to build smaller footprints in pedestrian-friendly zones.
As the need for large storage spaces for inventory is negated due to e-commerce, last-mile facilities, and delivery services, smaller stores are increasingly making business sense.
📌 Class A Retail Assets To Thrive: While contemporary, class A malls are seeing rising rents, rents fell quarter-over-quarter for Class B and C assets, signalling the need for malls to step-up and adapt to changes in retail demand if they want to survive.
📌 ESG Scores Are Gaining Importance: As the climate crisis has come sharply in focus, retail brands have developed sustainable goals.
This new green focus means brands will be seeking environmentally conscious real estate, including refurbished old buildings in high-demand locations.
Shut Up And Take My Money
Property technology (proptech) seems to have put the pandemic behind it already, going by the amount of investment the sector has vacuumed in through 2021.
Over Pre Pandemic Levels Now
Per this venture funding report, VCs invested USD32 billion in proptech firms in 2021 - a 28% increase in funding over 2020 and a 3.23% increase when compared to 2019.
Dragging and dropping inflation, supply chain issues, and the Delta-Omicron tag team into the recycle bin, proptech has emerged as a compelling investment opportunity for venture capitalists this year.
Investment Trends
Proptech startups in the residential segment claimed the lion’s share of investment in 2021, with 49%, while multifamily came in second with a 29% share.
On the stage side of things, 36% of the total USD32 billion invested went to firms with Series D funding or greater, and 31% went to Series C rounds.
In One Sip...
Right through 2021, funding continued to gather momentum, while also showing signs of evolution as VC investments skewed away from the early-stage to the mid- and late-stage proptech firms.
Industry watchers feel that 2022 will likely mark another record year for VC investments into real estate technology.
---------------
As global warming accelerates, investors are dumping truckloads of money at the crisis.
Between 2013 and 2021, over USD222 billion has been invested in climate tech worldwide, per a new report by PwC, as companies try to create tech that helps keep the planet below the 1.5 degrees Celsius recommended by the Paris Climate Agreement.
Also, more than USD87.5 billion—or 39%—of that was invested between H2 2020 and H1 2021 - a 210% jump in funding, YoY.
Have a great day ahead. 💚
☕ The Crew@Ginger Chai