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Kaam, Daam...thank you Ma’am: Indian Housing Policy and the Congress Manifesto

Kaam, Daam…thank you Ma’am: Indian Housing Policy and the Congress Manifesto

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As the World’s largest democracy rumbles towards the finishing line in its polling marathon and with a final announcement due 23 May, neither of its major parties have been pulling their punches. The Congress Manifesto branded BJP’s Smart Cities Mission a “colossal failure and a waste of money with no visible results”. Unlike Jeremy Corbyn then, Rahul Ghandi doesn’t seem to have any difficulty getting off the fence, but spirited and unequivocal as his comments might be, is Congress right to be so critical of BJP’s performance in this crucial policy area?

In the Kaam (“Employment and Growth”) section of its Manifesto, the Congress Party rightly draws attention to the major implications of India’s increasing urbanisation: with more than a third of its population now living in the subcontinent’s sprawling urban conurbations and growing rapidly day by day, what is to be done about the significant macroeconomic challenges this creates? Certainly it feels like something of an understatement for Congress simply to highlight that “India’s Cities can become engines of growth’ when the real question is surely what does it all mean and where is the trend leading.

And it is here that the Manifesto falls strikingly short on detail. Rather than advancing concrete proposals, Congress promises instead that it expects to “formulate a comprehensive policy of urbanisation after wide consultation” and will “support State Governments to build new towns and cities” all of which means very little, and feel alarmingly like the kind of phrases Sir Humphrey Appleby might have coined (or Theresa May in “strong and stable mode”). Perhaps more bravely (or at least more concretely) Congress commits itself to giving the urban poor a “right to housing” and, until the right materialises, a programme of night shelters and clean water for all.

Especially on such an important issue, it all sounds troublingly like jam tomorrow. But doesn’t Nigel Farage remorselessly tell us manifestos and modern politics don’t mix. What should we make of it all? Has the Modi inspired Smart Cities Mission really been nothing short of a dismal failure?

Well, as with most (if not all) matters political, the BJP Policy has certainly not been an unmitigated diet of bread and roses, but to call it a “colossal failure” and a “waste of money” is going way, way too far the other way.

In July last year Prime Minister Modi announced that the Affordable Housing target would be met by 2022, with 5.4 Million homes already by then having received approval for construction out of the target total of 10 Million. And fast forward, by March this year the number of homes approved for construction had risen to 8 Million: well ahead of the rate required to pipeline a further 2 Million within the next two and a half years so as to meet target. Bear in mind too that 8 million figure already achieved is more than the entire number of properties approved for construction in the 10 years of Modi’s immediate predecessors in office.

The problem, as you might imagine, is the real world difference between approving a property for construction and actually building a property. As of March this year only 1.8 million of these 8 Million homes had actually been topped out and occupied. And whilst it takes roughly a year to secure administrative approval (a figure which has incidentally fallen as a result of the Modi “red tape “reforms), the average time it takes to build a property in India is still currently 8 months. That may be where Congress had intended to direct their fire, despite saying little if anything about what they might do instead.

So lets take a look at the nuts and bolts: there are three key factors giving rise to this serious drag in approval to final construction timing: first, an industry wide deficit across the subcontinent in construction technologies; second, a scarcity of urban land and third, the significantly higher price of land in areas such as Mumbai and Delhi. You can’t do much about land availability and market price, so the first of these three is by far the most important.

And that’s one reason why Modular Construction has now risen to the top of the political agenda in India, with a capacity to reduce construction times from 8 months to 6 weeks it is a genuine game changer, which makes it all the more odd that Congress hasn’t made more of its potential in their Manifesto rather than focusing on what are essentially tired and negative platitudes on this, an issue of the greatest social importance.

Modulex Construction is the World’s largest and India’s first Steel Modular Building Company, working to meet the challenge of the subcontinent’s urban housing shortages in a practical and focussed manner. It was established to harness the potential of India’s dynamic and fast evolving markets and to deliver opportunities for investors through Red Ribbon Asset Management.

Executive Overview

Whichever side comes out top in these elections, there will be no escaping the imperative to with the economic after effects of India’s status as the fastest growing large economy in the World, with a burgeoning and increasingly urbanised population projected to be the largest on the planet by 2022. That presents not only challenges but opportunities and that will inevitably make the subcontinent an attractive proposition for any investor.

And as the article points out, there is no escaping the sheer scale of the real estate challenge India currently faces. Traditional technologies just can’t cope with the sheer scale and pace of the delivery required, no matter how successful BJP policies might have been (and they have been successful) in cutting away the unacceptable levels of red tape that previously disfigured the subcontinent’s approval process.

No wonder then than Modular Construction has become policy priority for the Modi Administration. I expect it will only be a question of time before others follow suit…

How modular construction supports advances in technology

How modular construction supports advances in technology

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Technology is central to the ability of the modular construction industry to deliver on numerous fronts when producing new residential and commercial buildings. In this latest article we discuss how modular construction and technological development go hand-in-hand.

When many of us consider modular construction, we focus on details such as speed, cost-effectiveness and sustainability. While all of these elements are relevant and important with regards to the development and greater use of modular construction techniques, they are only possible with the use of powerful technology.

This, of course, ties in well with the current year of construction technology, as recently announced by India’s Prime Mister Narendra Modi. It’s no secret the global construction industry has been slow to adopt and adapt to technology. However, modular construction techniques rely on technology and supports the use of and further advances of technology within the sector.

The technology behind prefabrication

Whilst the use of technology in the modular construction process is clearly portrayed, it may not be completely obvious just how central it is. The basis of volumetric modular systems, or prefabricated construction, is the initial digital 3D design and the ability to utilise Building Information Modelling (BIM) to ensure the building is suitable for the planned location and design requirements. It’s also behind the stackable modules used in several storey homes or larger industrial buildings, including hotels and office blocks.

But the use of technology within the industry goes much further than that.

Measurements and sizes are exact thanks to the software used to cut and move the different pieces of each module. Emerging construction technologies, including robotics, 3D imaging and even the use of drones are becoming increasingly leveraged to aid the design and development of modular construction. Those technological capabilities are enhanced, speeded up and become more cost-effective and sustainable, when utilised in a controlled, factory setting.

This is why together and powered by the right technology, modular construction projects can be completed some 30% more quickly than traditional builds. Indeed, recent news highlights that a new hotel in Folsom, California, opened a full five months early after the building – constructed with the use of modular techniques – was completed months sooner than it would have done, had traditional, on-site only methods, been employed.

Less waste by design

The technology used by modular building businesses also makes it possible to deliver projects while creating less waste. That’s due to the precision achieved through the software and in-factory construction process. Being able to effectively utilise set amounts of the different required materials across the different modules of a building, means waste is reduced to a minimum.

Not only does this support the lower-cost of prefabricated buildings, it’s also promotes less waste and a lower carbon footprint. Both of those details are attractive to:

  • Investors in the industry.
  • Construction tech designers.
  • End-buyers of the building, due to the quicker delivery and potentially lower comparative cost.
  • Governments working to end housing crises and provide homes for all.

It’s important to point out that, as yet, not all modular construction business make the best possible use of the available technology to produce projects that deliver on every element we’ve outlined, from the speed, to cost to the support of technology. One business that does, is Modulex.

Modulex has been created to help deliver the homes and buildings required right now across India. With input from a UK-based management team, Modulex delivers buildings with:

  • A short build time, with up to 90% of construction completed off-site.
  • Fixed cost and time guarantees.
  • Some 30% cheaper to maintain than traditionally built projects.
  • Earthquake proof.
  • Built to British standards.
  • Fully mortgageable.

Modulex has been created to deliver the eco-friendly, cost-effective, safe and long-lasting and quickly constructed homes and businesses that India still requires. We’re proud of our business and know it will produce, not only much-needed buildings, but a welcome profit for its investors.

 

 

Red Ribbon CEO, Suchit Punnose said:

Modular construction continues to develop and expand within India and on a global scale. The right technology is essential to the success of businesses like Modulex, which is why we’ve invested in the right software and systems that will power a successful modular construction business.

A lot is being asked on the construction industry right now and we created Modulex with that in mind. It delivers on every detail that’s important to India, the population, the government and investors.

Climate Change recognition and energy inefficiencies

Climate Change recognition and energy inefficiencies

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Climate change and carbon emissions feature in most of India’s political party’s manifestos, as the electorate votes to decide on the Government for the next 5 years. However, tackling climate change and reversing the recent growth in India’s CO2 emissions will take more than lip service from politicians hoping to win votes. We discuss the importance of following through on eco-friendly and carbon neutral plans.

Changing weather patterns and health problems related to air quality, are just two of the many issues affecting India – and other countries – today. Taking steps to improve the environment aren’t always easy and nor do they always garner the required support, at least in the first instance.

However, some four years after signing the Paris Agreement, many of India’s political parties, including the BJP and INC, have included plans to tackle Climate Change in their political manifestos. This is a major development from the 2014 elections and shows that the topics of air pollution, water scarcity and carbon emissions, are clearly becoming more important.

For the BJP, air pollution is treated as a priority. It states it would introduce a clean air programme across 102 cities, with a target of reducing pollution by 35% over the next five years. For INC, air pollution was also considered important enough to discuss, as it said it would be named as a national public health emergency. However, no specific targets were outlined.

They are not alone in detailing plans to reduce air pollution, with other parties also promising investment in reducing air pollution and using cleaner, renewable energy.

Indeed, the use of renewable energy in technological advancements that support India’s economic growth forecasts, would most certainly have an impact in a relatively short timeframe, due to the sheer size of the country and its population.

Of course, just how far any policies relating to reversing climate change and helping to improve the health of India’s many inhabitants will actually be further developed and implemented, remains to be seen.

India’s CO2 emissions rise

Shortly before India’s political manifestos were released and the electorate embarked on a series of votes that will select the next Government, the latest Global energy and CO2 Status report from the International Energy Agency was published. It showed that India’s carbon emissions rose by 4.8% in 2018 from 2017.

That increase in emissions was higher than both the US and China, which are the world’s two largest carbon emitters. The rise in India’s carbon emissions, meanwhile, was attributed to increased consumption of coal.

To put the near 5% increase in CO2 emissions into context, the global average CO2 rise in 2018 was calculated at 1.7%, less than half the increase across India. India is currently the fourth largest emitter of CO2 and its increased use of coal in 2018, was part of a wider trend in which coal accounted for 30% of all global emissions last year.

Of course, India isn’t the only country where emissions rose. However, its notable that India’s use of coal grew by more than any other country. In fact, the report shows coal use fell in the US, Europe and Japan. It’s also interesting that the IEA did point out that despite the huge increase in CO2 emissions, per capita emissions in India are below the global average.

That suggests the country is moving in the right direction and with some further improvements, including even less reliance on coal for energy, the country can help to make a real difference to lowering global CO2 emissions.

Carbon neutrality

Together, these two important developments highlight the growing importance of tackling Climate Change and creating, then effectively promoting, the use of sustainable, low carbon emitting energy projects, businesses and general practices.

At Red Ribbon we’re already doing our part to promote cleaner air and sustainable energy solutions. But our ambitions don’t stop there. We’re also interested in supporting India’s economy and creating eco-friendly, sustainable investment options for those interested in securing their share of returns from the still strong growth across India’s various industries.

Eco Hotels is one such investment opportunity that we’re proud to be part of. The first of its kind, this carbon-neutral hotel brand has sustainability and emissions-controlled planning at its core.

Not only does it provide domestic and international travellers the opportunity to visit parts of India in a cost-effective way, the brand has also been designed to ensure it gives back to more than just India’s financial economy.

Sustainability is increasingly important to India’s future, as it is across the globe. Eco Hotels gives investors the chance to truly diversify their portfolio, while being part of an expanding eco conscious that tomorrow’s business leaders will support and develop even further.

 

 

Red Ribbon CEO, Suchit Punnose said:

There are an increasing number of developments pointing to the importance of tackling climate change and lowering CO2 emissions. These details have always been important to us at Red Ribbon and are more than a consideration when we create new businesses and investment opportunities.

Eco Hotels is just one way that we continue to support and promote sustainable living and investing across India and we know it will be among those businesses that stand the test of time in India. Not just as a brand, or even as an example of sustainability for the economy and for investors, but also as a way of creating new businesses, by always keeping the future of the land it’s built on in mind.

 

How to benefit from India’s construction boom

How to benefit from India’s construction boom

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India’s construction needs are no secret, nor are the forecasts for impressive growth across the country’s construction industry. When investing in India it makes sense to capitalise on growth markets within the country. Right now, there options for businesses and investors both, to become a part of a construction industry that’s set to be the third largest in the world, just a few years from now.

With India’s general election on the way, Prime Minister Narendra Modi and his government are working hard to re-iterate their promise on housing and infrastructure development across the country. Even if the ambitious targets aren’t quite met, achieving a high percentage of them still requires a significant amount of investment and construction. That’s something that appeals to many investors and companies who wish to grab their part of the potential activity, business and return on investment that’s available.

Looking at the potential for India’s construction sector, according to KPMG, India’s construction sector will be third largest in the world by 2025, behind only China and the US, with a valuation over $1 trillion.

Meanwhile, international construction consultancy Mace Group, estimates that by 2050, India’s urban population will be around 814 million, almost double the 449 million people living in urbanised areas today.

Doing business in India

These forecasts all stem from India’s huge construction, urbanisation, smart city and industrial corridor plans. With so much construction required to achieve even part of those targets, India has also made changes to make it easier for foreign-owned businesses to work and operate in the country.

According to World Bank rankings, India has climbed up its ease of doing business rankings, to 77th, from 100th and 133rd, prior to that. Of course, improvements could still be made, but its certainly moving in the right direction.

Improvements include:

  • Tougher and more standardised regulatory oversight.
  • New foreign direct investment rules that overseas investors can own 100% of an Indian-based business.
  • A clearer tax code.

But, its not all plain sailing, particularly for businesses with no links to, or knowledge of the way business works in India. That remains the case for the construction sector, despite the huge building needs across the sub-continent.

With the potential for growth and profits as high as the country’s needs for every kind of construction specialist, many small Indian businesses, including startups, are working towards securing their own piece of the investment returns that are available.

That means winning those contracts and operating in a way that will secure a future across India, won’t be easy – if you go it alone.

Collaboration and investment

One way for foreign-owned businesses and investors to become part of the construction boom and benefit from the huge government and private investment across the country, is through collaboration with existing Indian-based companies.

Of course, forming a relationship and building enough trust to encourage both parties to make a significant investment and work together, doesn’t come easy. But the end rewards will certainly make the effort of doing this correctly, worthwhile.

If that doesn’t appeal, there is another option: to invest in an existing construction-sector related business. One that has all the connections and capabilities in place to expand in response to the ongoing needs of India’s planned construction and infrastructure projects.

One that not only has a management team experienced in doing business in India and the UK, but has also been created with sustainability at its core.

Modulex is one such prospect. Construction of the first Modulex factory is already underway and set for completion in December 2019.

Providing a modular construction facility in Indapure, Pune District, 250 Kms from Mumbai, Modulex will have an annual capacity to create 200,000 square metres of steel commercial and residential buildings, off-site. And that’s just the beginning.

Demand for modular construction in India is growing and Modulex will become an intrinsic part of fulfilling the demand for every type of building, to support India’s ongoing urbanisation. Why? Because modular construction provides a cost and time-effective answer to India’s huge construction needs.

Modulex can help India achieve its goal of housing for all and the creation of modernising existing cities, while also building new ones. What’s more, it can do so in a sustainable way that doesn’t diminish the natural capital of the country.

Red Ribbon CEO, Suchit Punnose said:

India’s construction goals are no secret and the forecasts for growth across the industry in the next 5 – 15 years are of real interest to investors and business around the world. Doing business in India is easier than its ever been, but for the uninitiated, challenges remain.

Investing in Modulex is something that brings many benefits beyond the potential for a strong return on investment. Modulex is managed by experienced asset managers, with expert knowledge of India and the UK investment and business markets.

Its sustainable and scalable and has been developed to remain a feature of India’s construction industry now, at its hour of need and also well beyond.

Government continues to support technological innovation in construction

Government continues to support technological innovation in construction

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The Government continues to strive to achieve its target to house every inhabitant of India by 2022. A new initiative to encourage technological innovation in the construction sector was launched earlier this year and modular construction could benefit from this new push to solve India’s domestic construction needs and also, lift the country’s reputation in the industry.

Ever since Narendra Modi’s Government announced plans to house every inhabitant of India and build millions of new, affordable homes across the country by 2022, there has been a real push to approve and build those properties. As in most countries around the world where more housing is required, a combination of construction techniques are being employed to create an adequate amount of housing.

In recognition of the sheer size of the challenge, some Governments, including India’s, are increasingly supportive of new technologies that can impact on the delivery of those homes:

  • Faster.
  • In a cost-effective manner.
  • With eco-friendly techniques.
  • In a way that can also provide a long-term boost to the economy.

India’s latest push to encourage more technology and efficiency in construction, is the Global Housing Technology Challenge. The idea is to instil new and innovative ideas that can be used to propel India’s construction industry forward, both in the short-term to help achieve its domestic construction targets and in the long-term as an industry on a global scale.

How technology can improve construction methods

Technology is something that now plays a part in most industries, that for many years relied on traditional methods, systems and processes. However, the construction industry is one that has lagged behind in the development and encouragement of change and innovations.

However, there remains a real and still growing need for homes across many countries, not just India. New innovations are urgently required from builders and construction companies. Without that, they will struggle to deliver cost-effective, quickly built but still safe and longstanding, residential and commercial buildings.

Among the construction technology, or ConTech, techniques that could support India’s construction needs are:

  • Drones – which can be used to improve precision and accuracy on building sites.
  • Construction software platforms – supporting real-time collaboration on construction developments of all types and sizes.
  • Robotics – something that can be utilised both in traditional and modular construction sites and factories.
  • Modular construction – where materials and time can be used more effectively, lowering costs and construction time and creating more energy efficient projects.

This represents just a handful of the types of technology and innovation that could become widespread across India’s construction industry, in a matter of just a few years. What’s more, the prefabricated construction industry has already been slowly gaining support in India for some time, making now the perfect time to develop it more vigorously.

Modular construction in India

The modular construction industry is already growing across India and being utilised in different ways. Of course, where housing construction increases, so do thoughts towards luxury homes and higher profit margins.

While there’s no doubt that prefabricated homes can produce unique and beautiful homes – for a price – the industry is also perfectly placed to provide the low-cost, quickly built properties that India so desperately needs.

By encouraging fresh technological innovations to support India’s construction needs, its likely PM Modi is attempting to ensure that the momentum in the low-cost homes market isn’t lost. The timing is poignant, given the March 2019 construction targets don’t appear to have been met. Indeed, it could be considered an inventive ploy to help drive India’s construction industry to become one that gains global recognition.

That’s something that could have a lasting, positive effect on the country’s economy, while also delivering the required homes and buildings across India, right now.

Suchit Punnose, CEO of Red Ribbon said:

The modular construction industry is one that answers many of the requirements of India’s housing needs, including the desire for sustainability and economic benefit, not to mention speed and cost-effectiveness. That why we identified Modulex as the right investment opportunity for us and our clients.

Modulex is India’s first steel modular building factory, which delivers on all three pillars of sustainability – Planet, People and Profit. Modulex is perfectly poised to help answer India’s construction needs and is already an innovative solution within the industry.

Red Ribbon is proud to support the growth of innovative, modular construction across India. Not only because it can be a part of a broader construction solution, it can help deliver a reputation for innovative industry developments and a sustainable economic growth.

India's eco-friendly stance on plastic pollution reduction

India’s eco-friendly position on plastic pollution reduction

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Action against pollution is growing and India is emerging as a country willing to take a tough stance on the . It’s previous announcement on eliminating single use plastics in the country by 2022 has won praise from the UN and now, it has amended a rule to end the importation of plastic waste into the country. This week we highlight India’s eco credentials and why it’s the perfect country for the eco hospitality industry.

India’s promotes eco-friendly policy through plastic pollution reduction

India’s commitment to reducing plastic pollution was further highlighted last week, by high praise from the UN Environment acting Executive Director and a new directive from the Election Commission, for political parties to avoid the use of single-use plastics during campaigning.

Both these developments follow the country’s plan to ban single-use plastics in the country by 2022 and also, a March amendment to its Hazardous and Other Wastes (Management & Transboundary Movement) Rules, which bans the import of waste plastics across the entire country.

While India isn’t alone in its commitment to limit the level of plastic waste around the world, due to the sheer size of its population, the success of such plans would prove a huge boon for the broader eco-friendly cause.

Praise for India’s tough stance on single use plastics

The UN Environment acting Executive Director Joyce Msuya, told independent India newswire, IANS, that the countries plan to eliminate single use plastics in less than five years was “a tremendous move by the Government”.

That announcement was made by the Indian government in August 2018 and has been followed up more recently, with an amendment to an existing rule regarding the importation of plastic waste.

Previously, India had banned such activity, with the exception of certain zones around the country. A number of companies worked to evade the ban by operating in those zones. That led to a notable increase in the amount of plastic waste that was imported into a country that already creates some 9 million tonnes of its own plastic waste, each year.

From August 31st 2019, that activity will cease and India can turn to finding suitable ways to recycle more of its own waste, than the less than 50% it currently manages. Once the importation of 48,000 tonnes per year of plastic waste stops, India can then begin working on sustainable solutions to manage its own single-use problem.

However, while ending the importation of plastic waste is good for the local environment, its less beneficial on an economic front. It’s possible

An eco-conscious country

As this recent eco-friendly and anti-plastic pollution action highlights, India is not among those countries who doesn’t believe the science behind the pollution headlines. Indeed, it’s a country that is taking more steps than many others to put sustainability and an eco-conscience at the heart of its future growth.

That’s an attitude and outlook that we at Red Ribbon identify with. Yes, we work hard at uncovering investment opportunities that produce the right level of returns. But also, we only consider the creation and support of sustainable businesses and projects. Ideas that will help support the global environment and reduce the amount of energy and natural resource hungry developments, that remain popular among other investment plans.

Eco-hospitality is an industry that is growing in size and popularity, two important details supportive of a healthy return on investment.

The creation of the economical and ecological, carbon neutral Eco Hotel, is something that attracts many visitors. Not only from the millions of people from within India who enjoy travelling around the country, while exerting their eco-conscience at the same time. But also, holiday-makers around the world who want to enjoy India’s scenery and culture without impacting on it, in any way.

This latest raft of news highlights that India is the perfect location for the Eco Hotel brand to begin its journey. We know it will help support the country’s economy for many years to come, just as the country and government has supported the development of a carbon neutral, sustainable, eco hospitality industry.

 

Red Ribbon CEO, Suchit Punnose says:

As an entrepreneur and business man, I’ve always understood India’s desire and ability to become a country that will support the right business ideas that can, not only have lasting and positive impact on a national scale, but on a global one too

That’s why Red Ribbon has been there every step of the way as Eco Hotels was developed and has become a popular destination for holidaymakers of every type, including those with a keenly developed eco-conscience.

Eco Hotels’ carbon neutral design is something that can work across different countries, continents and landscapes and now is the right time to support and invest in sustainable, eco-hospitality.

Why modular construction is the perfect fit for every want and need

Why modular construction is the perfect fit for every want and need

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Modular construction has been growing in popularity among investors and governments in recent years. The reason? Because without it, the ability to create the housing and other buildings that are required, will be greatly diminished and delayed. This week we discuss just why prefabricated building methods can help countries deliver on their construction development needs.

Why modular construction is the answer to many construction-related requirements

Modular construction is an industry that, up until recently, had been gaining support, interest and investment, relatively slowly. Now, however, the outlook for prefabricated, off-site building construction is booming, from every angle that could be considered.

Of course, we’ve discussed previously that while much modernisation and technical development has greatly altered prefabricated construction techniques, the broader idea of modular construction, isn’t a particularly new one. That begs the question, just why has it become so popular?

An additional, perhaps even more pertinent question that many potential investors into the industry might ask, is why is it the right option for India’s specific needs?

The popularisation of modular construction

As the global population climbs, a lack of investment in the construction sector; both from a technical and modernisation perspective and simple delivery basis, mean that right now, in a number of countries, there is a huge shortage of residential housing.

Even in countries and regions where home building has a rich heritage, its proving impossible to construct the amount of homes that are required for the number of residents who need them. Indeed, while existing populations are struggling to find suitable accommodation, current rates of building are set to create a more pronounced future shortage, too.

That’s not to say that traditional home building techniques aren’t fit for purpose. Far from it! New techniques, eco-friendly developments and making the most of a location are all elements of typical, on-site building techniques that are worth the wait.

However, there are also a growing number of situations where inhabitants can’t wait much longer for a suitable home to live in. It’s here where modular, off-site construction has a lot to offer.

Prefabricated construction methods can provide:

  • Cost-effective building.
  • More timely construction timetables, including fewer weather-dependent delays.
  • Better adherence to quality control measures.
  • Delivery of large developments quickly.
  • Easier modification of elements of homes to satisfy specific and changing, local requirements.

The level of skilled construction labour required to construct a modular home, from start to finish, is lower than that of a typical, on-site build. In addition, any delays related to the materials being used for the home, would typically be discovered early on in the process, allowing time for an alternative to be sourced, without bringing the project to a grinding halt.

All of these details, plus many more, work to ensure modular construction is an investment worth making, as returns can only benefit from more timely delivery of the finished product, along with the lower costs associated with the required labour.

India and modular construction

When it comes to modular construction and India’s specific needs, there are additional reasons, to those listed above, that make it a perfect fit. Among them are that it will help drive up construction standards more quickly and in a way that can be easily understood, measured and confirmed.

Given the huge number of homes and other buildings that are required to support, not only the fast-growing urbanisation of the city regions, but also the need for an improved standard of living in rural areas, a construction system that can build trust that building standards are in place and being adhered to, will always be welcome. That’s true, not only for those who will live and work in the properties, but also for:

  • The Government.
  • Modular construction firms.
  • Investors.
  • Construction professionals, of all levels.

Prefabricated construction methods can also make it easier to alter a design and make it more suitable for the very different areas across India. Where small, quick to build homes are required, once a design is created it can be manipulated, as required, reliably and easily.

For those larger homes or buildings, the same is also true. The initial design can be changed as required, with all safety details in place, in accordance to the available land plot and other relevant details.

In addition, let’s not forget the sheer amount of homes and buildings still required across India. No one method is equipped to provide that in a timely manner. Only by utilising all methods, including the modern, modular construction process that’s now available in India and much of the world, can countries hope to home their mainly growing populations.

 

Suchit Punnose, CEO of Red Ribbon said:

Modular construction is an industry that expected to grow by some 75% to around $181 billion by 2026, from its 2018 valuation. To achieve that rate of expansion, it’s clear there’s a real appetite for the industry, on a countrywide Government level and on a business and investment one, too.

The need for housing and commercial buildings that will be safe to use and also suitable for each specific requirement is something that can only be achieved with a combination of modular and traditional construction.

At Red Ribbon we’re proud to support the development of the modular construction sector across India. We know with absolute certainty that our investment in this area will reap benefits for shareholders, India’s Government and population, alike, today and in the years to come.

India’s economic growth outlook remains positive despite weaker-than-expected GDP

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An initial glance at India’s third fiscal quarter GDP data may have proved mildly disappointing for some. However, looking into the deeper details of the report shows a brighter picture than might have been expected. In addition, the data is backward looking and not overly indicative of what the future holds for India’s economy. This week, we take a closer look at the data and consult more timely measures and assessments of India’s economic performance.

Last week India’s Central Statistics Office (CSO) published the latest GDP figures for the country, which showed growth slowed to 6.6% in the final three months of 2018, the third quarter of India’s fiscal year.

The initial reaction was of disappointment, as the number was below the median estimate for GDP to grow 6.7%. Added to that was the downward revision to GDP growth in the previous quarter; the CSO now calculates GDP grew by 7% in the second quarter of India’s fiscal year cycle, down from the 7.1% increase previously reported. However, the report also contained some positive details, particularly with regards to investment activity.

Separately, more timely survey data on the country’s manufacturing sector along with a broadly upbeat assessment from Moody’s Investor Service also provided brighter news on an economy that is still expected to grow at a rate above that of the broader global trend, for some years, thanks to increasingly business friendly policies and the continued urbanisation of a country with a population of around 1.34 billion.

India’s third quarter GDP details

The details of the GDP data showed a mixed performance across the country’s shifting economy. Growth in the agricultural sector proved a disappointment, as it was notably weaker when compared with GDP from the previous year.  The manufacturing sector also posted a slower pace of growth.

Other sectors were much more promising for the future outlook of the country, including strong readings from the construction and the financial and real estate professional services sector.

Meanwhile, the report also showed that average per capita incomes, were higher than the previous year. Add to that, higher levels of consumer spending and investment, along with stronger exports levels and the overall picture of India’s countrywide economic performance in the third fiscal quarter, is indicative of broad health.

In addition to the detail highlighting strength across India’ economy, was the news that despite a weaker than expected reading and a downgrade to the second quarter growth number, other economies are slowing too. That shows that while India is being affected by other global issues, so far it hasn’t lost as much momentum – or looking likely to – as some other countries have.

But, as we know, while the GDP numbers provide plenty of interesting details on India’s economy, it is a backward-looking assessment. Other, more timely surveys and assessments, proved that despite a situation which has resulted in a tough period for many farmers and led to the Government creation of a financial relief package for them and difficulties with Pakistan, the Indian economy remains in a promising position.

Manufacturing growth expands, growth seen steady

The latest manufacturing purchasing managers index from IHS Markit, meanwhile, which was published just hours after the GDP data, showed that activity in the sector grew at the fastest pace in 14 months. Orders, output and employment across the manufacturing industry were all upbeat, providing a boost.

But that wasn’t the only up-to-date piece of positive news on India’s economy. In its latest Global Macro Outlook, Moody’s Investor Service predicted stable economic growth for the country over the next two years. That was despite its view for the global economy to weaken across 2019 and 2020.

As asset investment managers with a specific interest in India, we pay close attention to all relevant details about the country’s economy, plans, Government and investment-related news and opportunities. We know that the final months of 2018 weren’t quite as strong for India as previous quarters. However, policy makers are also acutely aware of this and that detail was among the reasons for the recent interest rate cut – action that will likely be repeated in a few months.

For Prime Minister Narendra Modi, the headline GDP data was likely considered a bit of a blow, coming as the 2019 General Election approaches. As we’ve detailed though, it’s not the only measure to take notice of.

Investment in India remains strong and not surprisingly, worthwhile opportunities are developing all the time. Whether you’re interested in eco-friendly assets, modular construction possibilities or infrastructure related options, India is currently a real land of opportunity for investors and will be for some years to come.

Red Ribbon CEO, Suchit Punnose said:

The latest CSO release of India’s third quarter fiscal GDP are a case in point. The headline number was a little disappointing. However, the details showed key areas performed well and are primed to remain economically supportive going forward. Overall, India’s economy is in a stronger position than other major countries, which is good news for existing and prospective investors.

We continue to identify the best investment opportunities for ourselves and our clients and believe there are many more years of positive investment outcomes across India, ahead of us.

Affordable housing and slum redevelopment

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Slum dwellings across India’s urbanised areas have been around for as long as many can remember, growing up alongside wealthy parts of the city as the low paid workforce required to keep those cities working, struggled to find somewhere affordable to live. Indeed, in a country with a population of 1.37 billion, according to the latest UN figures, at least around a quarter of the urban population are living in slums, many of whom don’t have reliable access to sanitation, electricity or homes that are safe to live in.

Recent fires in neighbouring Bangladesh, in the capital city and a coastal slum area, highlight the problems of slum dwellings and the dangers they pose to those living in them and the surrounding areas, too.

In recent years, a number of ways to improve or even remove the slums of the Indian sub-continent, have been discussed. One previously popular way to modify India’s – and other countries’ – slums, was to remove them completely, bulldoze them out of existence. However, while this method does eradicate many of the issues that arise with slum developments, it also displaces everyone who lives in them.

After assessing different approaches to solving the problem of slum areas, which has gained in importance amid the increasingly rapid urbanisation of India, two answers have proven popular enough to take forward. They are:

  • Improve existing slum areas, without displacing those existing households and eradicating their investment.
  • Find ways to build affordable housing across India’s cities for lower income households to live in.

With those solutions now being formalised by the Government, the next step is to find a way to finance these methods, in order to achieve the target of creating affordable housing for the entire population by 2022.  

PPP and affordable housing

Among the ways in which India is seeking to provide enough affordable and safe housing for its growing urban populations, is through Public Private Partnerships (PPP). As the value of land is high in cities and nearby urban areas and can account for up to 60% of the total cost of housing developments, the Government has sought a way to lower the cost of urban real estate. They do this by allocating a proportion of publicly owned land to be developed by private companies and investors.

This vehicle has been created to encourage private real-estate investors, who previously have predominantly favoured higher income developments, to take an interest in India’s affordable housing sector. The potential rewards are three-fold:

  • Affordable and safe housing in the right areas, for India’s fast-developing urbanisation.
  • The beginning of the end of the growth of slum areas in urban regions.
  • Reliable and attractive returns for investors.

There are a number of ways in which this works financially for investors, all of which result in a notable increase in affordable housing across the areas of India in which it’s required.

Coupled with the improvements to investing and doing business in the country, the option of affordable housing and real-estate as an investment vehicle is one that is beginning to appeal to a growing proportion of investors. Both from overseas and within the country, too.

How to access India’s affordable real estate investment opportunities

Of course, knowing about and understanding the real-estate opportunities in a country whose population is undergoing a fast and significant change, is one thing. Accessing those opportunities in a secure and moderated fashion is quite another.

However, doing business in India has become easier, more transparent and accessible to all kinds of investors. Among the ways in which investors can benefit from the opportunities in India’s real estate sector, is through Funds specifically created for the purpose.

According to data from JLL, the value of investment grade, real estate projects under construction, has risen from $173.9 billion in the fourth quarter of 2012, to $242.6 billion in the second quarter of 2018. That number doesn’t take into account future options, plans or approved, shovel ready projects.

Red Ribbon will soon launch its own Indian Real-Estate Fund, to bring investment access into the sector to those investors interested in diversifying their portfolios with something that will benefit from Government support and help provide a solution to a real need from the existing and changing population.

As with all of Red Ribbon’s asset management options, sustainability, eco friendly and broadly beneficial outcomes form the basis of most of the assets that make up the Fund. Providing affordable and sustainable properties for the millions of people moving from rural to urban living is a challenge that can be met, provided every investor in Indian real estate takes it into consideration.

 

Red Ribbon CEO, Suchit Punnose said:

India’s Government has shown real willing to support the rapid urbanisation of the country and encourage a country in which investors can feel confident in doing business, both from a transparency and prospective returns, perspective. Red Ribbon is proud to be the forefront of supporting an economy that is of major importance on a global scale, while working to create a country with real prospects that future generations can enjoy and reap the benefits from.

Our Indian Real Estate Fund will help provide affordable and sustainable homes for the millions of people moving from one way of life to another. It also gives investors the chance to create a well-balanced investment portfolio, with exposure to a growing and developing economy.

Modular Construction

Saving Time, Money and the Environment through Modular Construction

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Saving Time, Money and the Environment through Modular Construction

Modular construction methods are often hailed as a more cost-effective option, but that’s far from the only benefit pre-fabricated buildings can have. We take you through how modular construction firms can save on time, the environment and money, while also delivering a return on investment many would be happy to receive.

It’s no secret that global real-estate related costs are rising. The value of property is broadly on the up. Meanwhile, the cost of materials is also climbing, while skilled construction professionals are becoming more scarce, pushing their value up, too. But there is a solution to this problem: modular construction.

Just like many other countries, across India, many people still have a dream of owning their own home. However, with more people moving into urban areas of the country from the rural regions, that’s not always an easy achievement, even for those with stable, well-paid jobs. Indeed, research suggests some 110 million additional housing units will be required by 2022. That’s a tall order and once that is simply unachievable through traditional construction methods alone.

However, major advances in modular construction techniques mean homes can be built quickly, in an environmentally friendly way, while also proving a more cost-effective option.

Saving you time and money

Much scepticism remains over how reliable and practical modular construction techniques are. Although, there are signs the opinion of the sector is improving as more businesses opt for it over traditional building methods.

One major factor that’s encouraging more businesses and home-buyers to choose a modular property is time. Once you gain permission, finalise plans and pay deposits, the fabrication of a modular building is much quicker than one constructed on site, in a more traditional manner.

That’s because templates and machinery in an established and regulated factory can create the specified shell of your building quickly and to approved safety standards.

Once those elements of the building, be it a home, a commercial office or even a hotel, are created, it’s then checked and verified through a reliable, tech-based system. This ensures all the required parts are there, of the right size and structure and are ready to be transported to the previously prepared building site.

This is where the costs savings come into play. Where a traditionally built property can require up to hundreds of on-site construction professionals to build up walls, ensure measurements are perfect and all the materials are as they should be, a pre-fabricated construction team is typically much smaller. That smaller team will also need much less time on site to construct the unit and ensure its safely in situ as planned, ready for the next step.

Again, with so much of the required works already done, the modular building requires only a little additional work on site, before the owner can get to work on the inside and make it habitable.

This means that while the cost of the materials used to construct a modular building aren’t particularly cheaper than for any other property, costs are saved through the shorter period of time skilled construction professionals are required on site. Meanwhile, the requirement of fewer construction professionals is also a financial benefit.

Environmental benefits

We then move onto the environmental benefits of the modular construction sector. First of all, the question of sustainability is one the massive global construction sector is increasingly being asked to answer:

  • Are the chosen materials sustainable, eco-friendly and long-lasting?
  • Can the pre-fab factories use sustainable energy sources?
  • Are the pre-fab factories sustainable and energy efficient?
  • Can they construct increasingly eco-friendly modular homes off-site?    

These are just a few details that require a positive answer from those modular construction companies who are beginning to gain support, momentum and business across India.

Modulex Modular Buildings PLC is one modular construction firm that can answer in the affirmative to the above questions and many more. It’s the world’s largest and India’s first, steel modular building factory.

Like all Red Ribbon investment projects, Modulex was created with three essential pillars of sustainability in mind:  Planet, People and Profit.

At a time when we need to find more economical ways of providing everything the huge population of India needs, in a way that protects their environment, while also delivering on profit to the investors who support those businesses, Modulex delivers on all three and is well-placed to do so for many years to come.

Red Ribbon CEO, Suchit Punnose said:

India’s Modular Construction market is expected to be worth close to $130 billion by 2023 and at Red Ribbon we think its imperative that as much of the growing industry as possible, is created with sustainability in mind, from the outset.

Providing the answers to India’s housing and construction needs is one thing, but doing it in a way that future generations can benefit from it on multiple levels, is something every investor in the industry should aspire to. That’s why we support Modulex and strive to ensure its green credentials can match its productivity and investor returns.

Red Ribbon

At Red Ribbon we understand that the transition towards a resilient global economy will be led by well-governed businesses in mainstream markets, striving to reduce the environmental impact of their production processes on society at large and on the environment as well.

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