Good morning, today is the day from when we mostly stop making that annual date writing mistake, but other than that, 2021 can't be forgotten in a hurry.
Here's why. . .
Global venture capital funding smashed records last year, nearly doubling the previous year’s total. In 2020, VCs spent USD335 billion, and last year, hold your breath, they spent USD643 billion.
We hope everyone was able to shake off the holiday cobwebs last week, but if not, rejoice: the first real Monday of 2022 is here.
😷↔1 metre↔😷
2022: Investment In Proptech To Remain High
In 2021, a bewildering amount of investment was lapped up by property technology startups globally - a total of over USD21 billion per industry data.
And 2022 Is Going To Be No Different
Going into 2022:
📎 More investments are going to continue in the construction and rental management space, a continuation of the 2021 trend, and
📎 More consolidation is expected in proptech as companies mature and look at exits.
Follow The Money
With the pandemic changing almost everything globally, and real estate offering stable and high yields in a low interest rate scenario, institutions are falling in love with property again.
And naturally, where the investment goes, technology must follow.
Rental Management Tech
With the latest breed of tech savvy and DIY renters across the globe, virtual property walkthroughs, showings and even digital keys to enable do-it-yourself property visits are becoming mainstream.
The lockdowns accelerated the normalization of virtual tours and transactions, and now there’s a compelling opportunity to invest in technology that appeals to the Gen Z renter.
Construction Tech
Per JLL, in construction tech generally, there’s a new wave of companies cropping up that want to combine design, offsite construction and new materials, and those sorts of companies will likely be “key areas for investment” in 2022.
Maturing Proptech Startups
Per Crunchbase, 125 venture-backed companies in the real estate industry group were acquired in 2021, the highest in the last 5 years.
That consolidation is expected to continue, especially as legacy players look to add proptech software companies to their portfolio.
Things We Are Watching
Failing Health: One of China’s healthiest real estate developers - the Shimao Group - has reportedly defaulted, a sign of how more pain is ahead for China's heavily indebted property developers.
Large Deals Are Coming Back: Global investors, looking for stable yields and steady returns, are expected to bet big on India's new-age realty assets, like data centres, cold storage, co-living and other emerging portfolios in 2022, per Colliers India.
Check Out Time: Reliance Industries Ltd is paying nearly USD100 million for a controlling stake in Mandarin Oriental New York, a five-star hotel in midtown Manhattan, through the purchase of its Cayman Islands-based parent company. The deal is expected to be fully complete by March, 2022.
Time Travel Is Free
A view of the Bangalore market centre during the 1890s.
The Bangalore Pete was established in 1537 around the Mud Fort built by Kempe Gowda I as the nucleus, with roads laid out in the cardinal directions, and entrance gates at the end of each road.
Guaranteed to blow away any Monday morning blue with it's sheer rewind shock value.
🤯 We mean, that's Bengaluru? Really?
Repeat Play: Real Estate Inc's Budget22 Wish List
The blokes who come up with the homebuyer sentiment and housing demand numbers must be congratulated, because when they promised that housing would recover through 2021, they were spot on.
While housing sales are expected to be robust through 2022, the pandemic among other things, has pushed hard on input costs, eroding profitability.
This means that the real estate sector is expecting the Union Budget 2022 to create some breathing space for it first, and then fuel growth.
Here are the top requests to the FinMin (again):
📢 Upgrade Status: Granting the status of ‘infrastructure’ has been an age-old ask of the sector and it's a primary expectation from Budget 2022 again. While infrastructure status has been accorded to affordable housing, expanding it to all categories of assets in real estate will attract investments from large pockets of sovereign wealth funds /pension funds who have been granted tax exemption on income streams from ‘infrastructure’ investments. [⚠Not addressed in 2021]
📢 Revise Income Tax Exemption: Currently, concession can be availed in income tax on up to INR 2 lakhs paid as interest on home loans. This should be revised and increased to improve demand for housing. [⚠Not addressed in 2021]
📢 Revise GST On Raw Materials: With rising cost of raw materials, more so since the pandemic began, the real estate sector has been asking for a reduction on GST levied on commodities like cement, steel, tiles, metals and others, to help check the unnatural spike in construction cost. [⚠Not addressed in 2021]
📢 Reduce Shared Economy TDS: Because most of the receivables from an occupier is towards services, there is a request to bring coworking spaces under the ambit of a 2% TDS slab as in the case of services, from the present 10%. [⚠Not addressed in 2021]
📢 Miscellaneous Notes: A GST waiver for under-construction properties, incentives for private investment in the affordable housing sector, easing of liquidity, and short term tax holidays are on the wish list too. [⚠Not addressed in 2021]
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What does 2022 hold for Cryptocurrency?
Crypto research firm Messari has put together a 165 page report, spanning Bitcoin to Web3, trying to figure that out.
Have a great day ahead. 💚
☕ The Crew@Ginger Chai