Good morning, let's open the last week of 2021 by informing you that ‘Unlocking Opportunities’ - Jammu and Kashmir's maiden real estate investment summit is taking place today.
A collaboration between the State and Central governments, and in association with NAREDCO, the event will witness discussions on real estate opportunities, investment trends, the economy, and the ease of doing business in J&K, among other things.
We hope that this ice-breaker event lays the foundation for a vibrant real estate industry in the state.
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3 Big Hurdles For Proptech
Property technology (proptech) has seen widespread adoption over the last 2 years but real estate is an old fashioned industry where tech faces some real-world challenges that are not easy to overcome.
The Big 3
⛔ Proptech is evolving fast, meaning real estate firms must learn to adapt more quickly and not shy away from spending capital.
Tech will not replace people but is a necessary scaling up tool - must be truly understood by the sector to unlock the required amount of investment to create tech solutions for large scale application.
⛔ While technology is bridging many different gaps in the post-pandemic world, it still does not adequately overcome the essential interpersonal connection that is gained through a simple handshake.
In a large transaction, like a real estate deal, this first point of physical contact significantly impacts trust and rapport, something technology just can't relay yet.
⛔ Real estate is full of old school clients who need extensive service and often, you just have to print out the documents, put little red sign-here flags all over them and then drive across town to get the deal done.
Expecting homebuyers to rapidly adopt technology, while letting old fashioned paper run all other aspects of the business is a practice that needs to be unlearned.
In One Sip
🎙 "In our rush to digitize, we're all learning that while we will not be successful simply because of technology, we will not be able to thrive without it either." - Clark Twiddy to Forbes.
2022: Commercial Real Estate Outlook Positive
Not all real estate is made equal. Take the example of the office segment, which found its nose touching the real world avatar of force majeure.
The work from home and hybrid models, which caused ecommerce adoption to soar, leading to an all time high demand for warehousing, simultaneously resulted in a sharp drop in office and retail real estate demand.
The Office Is Still In Vogue
The second Covid wave was especially unkind to offices and with Omicron and Delta doing their tag team thing globally, uncertainties about a full return to the office loom large.
But, the collective corporate intention is clear. Nearly 80% employers are prioritising physical offices while being open to offer a greater degree of flexibility and choice to employees, per CBRE.
2022 Will See Demand Revival
Per Vijay KR, Deloitte, slower offtake will be the norm for the next 3 to 6 months as the taskforce settles for hybrid models but as normalisation happens, office space off-take will increase.
Digging Deeper
📎 Banks and financial institutions will be first to go back to normalisation, and IT and ITES will be among the last.
📎 Mumbai will see a higher and quicker rebound, while IT driven cities like Hyderabad, Pune and Bengaluru will see slower absorption initially.
📎 Due to social distancing requirements, office space, which had dwindled down to 80-100 sq. ft. per staff, now stands at a mandatory 120 sq. ft. That's an increase of 20% to 30% in terms of space required per person.
📎 A major rental downslide is highly improbable. Grade A office spaces will hold on to or even move up from current per sq. ft. rent.
Bringing Joy To Mondays
Chowringhee Road (Esplanade), Kolkata in 1945.
Though over 7 decades have gone by since this photo was clicked, the hand pulled rickshaw and the tram look exactly the same to this day.
The Great Divide Between Metaverses
If you spend any time on the internet, you would have heard that virtual land plots are increasingly selling out (some at unbelievable prices) across multiple metaverses.
A Space Dominated By American Firms
Today, virtual real estate markets are a critical aspect of metaverses — virtual worlds where users can work, socialise, shop and game, using augmented and virtual reality.
And, USA is at the forefront of this virtual frontier, with investors from Asia, Europe and the Middle East buying virtual real estate, in metaverses created on its shores.
Wait A Sec, Says China
In November, China formed the Metaverse Industry Committee, affiliated with the state-supervised China Mobile Communication Association, to explore metaverse platform development.
Tencent, China's biggest internet game company, has welcomed potential business opportunities in the metaverse and numerous Chinese companies are rushing to register their metaverse related trademarks.
However, as Chinese tech giants, keen to get into the market face statutory roadblocks, a rift is beginning to show.
Google, Twitter And Now Metaverses?
Dr Li Wei, a China economy expert at the University of Sydney, feels that as China develops metaverses, there is a possibility of another technological divide.
Currently, the Chinese can buy virtual property only in Chinese metaverses using the local yuan currency rather than crypto.
Under the current geopolitical situation, Li thinks it is possible to see two metaverses: the Chinese metaverse within the Great Firewall and the Western one outside.
And what Beijing ultimately decides for it's metaverses could drastically re-shape the way businesses move from the real world into virtual ones.
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The Greater Noida Industrial Development Authority recently held a draw for 83 industrial land plots, sized between 450 to 2,000 sq. m.
For the 83 plots, there were 1,450 applications and 1,350 of the applicants opted for the one-time payment if they were allotted a plot of land.
More updates tomorrow morning. Good day. 💚
☕ The Crew@Ginger Chai