☕ Change of plans

Good morning, transportation major Hertz has just asked for 100,000 electric cars from Elon Musk for it's fleet, before 2022 ends. With this move, EVs will make up 20% of the company's vehicles globally. Kudos.

Another company, in the news for all the wrong reasons is also banking on the world's love for EVs, to ride out a big crisis. And it's working as you will see.

It seems pivots are becoming the new norm and to keep in line with this trend of change, we have also put off our Goa plans for this winter. 🙈


Switching On Gravity

Just after the second wave of lockdowns began, a monumental surge took place in the online shopping space with e-commerce players hearing more ka-ching than they had ever heard before. 

But does that mean e-commerce will continue to grow and people will be making fewer trips to shopping centres? Well, no.

Retail and consumer behaviour analysts say that there is still a very strong social and recreational aspect to shopping and that is never going to change.

Context, Please.

Shopping centres are back, thanks to an accelerated vaccination drive, policy reforms, and increasing urbanisation. 

Also, with more investors looking at REITs and fractional ownership of commercial real estate, the sector is expected to keep growing from here on.

Currently, organised retail real estate in India is at 64.3 million sq. ft. as of H1, 2021 and is expected to cross 82 million sq. ft. by 2023.

Attracting Billions Again

In Australia, one of the hardest hit countries as far as urban lockdowns are concerned, investors have roared back into the shopping mall space, checking out $4.52 billion worth of assets in anticipation that the pandemic-hit sector will rise again and provide high-yielding returns.

Such investments have defied the impact of the global pandemic, which forced most non-food retailers to shut shop for many months.

But with restrictions easing, investors are rushing to get a foothold in brick-and-mortar retail.

Zooming Out

The return of institutional money into organised retail real estate, combined with strong private investor demand, will lead to increased transactional activity in 2022, global experts predict.

Clearly, the comparative returns and value proposition are compelling, especially with big mall operators rebalancing portfolios, allowing incoming investors to strategically acquire some of the world's best retail assets. 


Rich, Please!

Yesterday, the Delhi High Court dismissed a petition seeking regularisation of unauthorised colonies omitted by the authorities, stating that legalization of such colonies was not for the rich class. 

Wait, Wait. What's That?

Here's what happened, in a nutshell.

In a bid to regularise unauthorised colonies in the national capital, proposals had been sent to the central government earlier this year.

To ensure better living conditions and to push for regularisation of such colonies, the proposal entails regularising colonies as it is, where the respective colonies meet basic requirements.

Where basic conditions like road width and other infrastructure are not met, colonies have to go for a mandatory redevelopment, transforming them into better living spaces.

A list of 1,797 such colonies was made but 66 colonies were removed from the list upon scrutiny because they were found to be affluent colonies, which can easily afford a modern redevelopment.

Okay, So What's The Noise About?

Folks from these 66 left out communities cried poverty and petitioned the high court that they deserve to be regularised on an as-it-is basis, instead of having to take the redevelopment route.

A bench of Chief Justice D N Patel and Justice Jyoti Singh termed the petition as a motivated litigation filed at the behest of residents of affluent unauthorised colonies - like Sainik Farms, Mahendru Enclave and Anant Ram Dairy Colony.

“The primary purpose of these regulations and enactment is to grant relief to the lower income group of the society, which constitute majority of the inhabitants of the unauthorised colonies, and not affluent sections of the society. The law can make and set apart the classes according to the needs and exigencies of the society,” the Centre said in its affidavit on the matter. 


Half A Cup Extra

  • Despite the initial resistance and confusion, rain water harvesting systems are now being installed in Delhi's high rise apartment blocks. 
  • With the demand for real estate picking up, the sector could be turning a corner. In such an environment, would investing in REITs be a good bet
  • Starbucks aims to hasten its India expansion with smaller stores and drive-through outlets.

Not RE, It's EV Now, Thanks.

Chinese real estate giant Evergrande, drowning in over $300 billion in liabilities, averted a costly default last week with a last-minute bond coupon payment but there's little respite for the company.  

Evergrande next needs to find $47.5 million by Friday and has nearly $338 million in other offshore coupon payments due in November and December.

Hooray Nevertheless.

However, an announcement by its chairman, Hui Ka Yan - that in the coming 10 years it would make its new electric vehicle venture its primary business, instead of property - cheered investors on Monday. 😲

Yes, Raymond Cheng, CGS-CIMB Securities' head of China research, said the business shift makes sense given Beijing's growing support for EVs and its increased tightening of the frothy real estate sector.

"This is the best outcome, if Evergrande just focuses on existing developments and maintains the operation," Cheng added.

As if on cue, despite the benchmark Heng Seng index remaining flat, Evergrande rose as much as 6% during the session before closing down 0.7% and China Evergrande New Energy Vehicle Group Ltd rose 11.4%.

Are Evergrande' EVs So Good?

Per Reuters, Evergrande's new vehicle business, founded in 2019, has yet to reveal a production model or sell a single vehicle.

In fact last month, the unit warned it was still seeking new investors and asset sales, and that without either it might struggle to pay salaries and cover other expenses.

Umm, Anything Else?

On another note, Evergrande says construction work has resumed on more than 10 projects in six cities including Shenzhen.

Many of its projects had been halted due to payments owed to suppliers and contractors.


It's going-green month and Saudi Arabia has pledged to achieve net zero emissions by 2060. However, it has made no plans to wind down fossil fuel production - the backbone of its economy. 

Well, as we've seen, those plans could change too. More tomorrow. 


☕ The Crew@Ginger Chai

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