Category

Housing policy

A Time to Build and Buy…Indian Real Estate is facing a Perfect Storm of Opportunity

By Affordable Housing, COVID-19, Housing Need, Housing policy, News, Real Estate Markets

If it walks like a duck and quacks like a duck, it’s probably a duck: which is good news if you’re looking for a duck. And the same faithful formula applies to commercial markets: forget all the background noise, if it’s growing and looks like growing more, it’s probably good to invest in. You don’t need to be Warren Buffett (or Aristotle) to work that one out, and right now the needle for Indian Real Estate is reading high on both counts. Despite the (to put it mildly) dampening effects of COVID lockdown restrictions, the subcontinent’s property markets are facing a perfect storm of growth and opportunity…so this is a time to build and buy.

The sector has grown by 11.2% over the last two years and market analysts now predict pre-COVID levels will be reached again before the third quarter of this year, with the Affordable segment expected to perform especially well in areas including Hyderabad, Bangalore, Mumbai and Pune. 

So what exactly are the factors combining to make this perfect storm?

Disruption and Acceleration

Well, first of all, there’s COVID itself. Like most major market disrupters, the pandemic (beyond its obvious short term impact) has not delayed growth: it has turbo charged existing trends. With more time locked down at home, people are spending more time searching for (and buying) new properties online, which has created a sharp spike in demand. Competitive bidding thrives when there’s little else to look at and nothing else to do, and prices are shooting up as a result. Then, of course, that old (new) favourite Zoom has brought us virtual viewings as well, so you didn’t even need to leave home before splashing your cash. And when you bear in mind that India has the fastest growing population of any large economy on the planet, that’s a lot of cash to splash.

High Yields, Low Interest

The Reserve Bank of India has held the all important repo rate at 4% for several months, and last month announced its intention to keep it there as long as necessary to support future economic expansion, which means two things for real estate. First, the consequential fall and resulting long term hold in deposit rates makes it more attractive than ever to invest in rental properties where yields are holding up at 3% annually: making even a relatively modest appreciation year on year increasingly attractive. And, secondly, tax breaks will bring down still further the real time cost of borrowing for those in higher income brackets, making the move to property investment still more advantageous. With a characteristic sense of understatement, Prashant Thakur (Director and Head of Research at the influential Anarock Property Consultancy thinks “buying now means buying at the lowest possible price”.

He might be right there…

The REIT Revolution

Prime Minister Modi’s Government introduced the Real Estate Investment Trust (or REIT) to the subcontinent in April 2019, with the aim of expanding commercial and property investment, and the pandemic has done little to dilute its impact. Even during the most stringent lockdown restrictions, rental collections, the lifeblood of any REIT, still remained strong through to the first quarter of this year at 97% saturation (according to Motilal Oswald Real Estate): underpinned, of course, by GST and RERA initiatives that have progressively improved liquidity levels within the financial system as a whole. 

Overseas investors haven’t been slow to pick up on the opportunities either, with a surge in levels of FDI likely to drive an even strong recovery in commercial and residential assets over the course of the year.

A Brighter Future

All of which is good news for the future of the subcontinent as a whole: real estate accounts for 7% of India’s economy, the second biggest employer in the country (after agriculture) and a cornerstone for employment in more than 220 ancillary industries. And current growth trends within the sector are projected to increase real estate’s share of the economy to 13% within the next four years.

So now is the time to build in India…now is the time to buy.

Executive Overview

Indian Real Estate has always been a key area of focus for us, and I’m genuinely excited by the trends emerging on the subcontinent as lockdown restrictions are eased. It is, indeed, a perfect storm for growth and opportunity.

 Invest in Red Ribbon Asset Management 

Red Ribbon is committed to identifying and building on investment opportunities that are fully in compliance with its core Planet, People, Profit policy: not only offering above market rate returns for investors but also protecting our Natural Capital.

If you would like to know more about joining our Mainstream Impact Investment journey click here

New Year, New Horizons… Modular Construction is Flexed for Success

By Affordable Housing, Construction Technologies, Housing policy, Modular Construction, News

It’s called Flex Space: adaptable real estate solutions for the home and workplace, addressing rapidly evolving changes in demand and product standards. No longer is it enough just to build a twelve story concrete block in the centre of town, hoping (praying perhaps) to fill it with residential and commercial tenants: because business owners don’t want (or need) those vast fields of space anymore, and those in housing need can’t wait two years for the monolith to be built up in a field of mud, steel and bricks. In the wake of COVID 19, office workers have become home workers, and there’s a worldwide shortage of affordable housing too. COVID has changed everything…

That’s why some of the world’s leading real estate companies are now re-formatting their platforms and services to embrace new technologies, staying on the front foot to add value and flexibility in these fast changing times.

According to a recent report from JLL (www.us.jll.com), 67% of decision makers in construction are either planning to, or already have, embraced Flex Space as part of their strategic objectives: so for sure, if ever innovative construction was a niche sector, it’s not a niche anymore. Optimising that crucial mix between asset efficiency and speed of delivery has become a priority.

Plug and Play Technology

The next step involves offering a more expansive and responsive product, so technology is predictably part of the equation: digital solutions that radically enhance standards by plugging directly into environmental systems, real time access to value added spaces and critical add ins, like life support systems in those new Nightingale Hospitals. It’s a “plug and play” operating model…and when it comes to Technology, Modular Construction is at the centre of everything: with an operating model that delivers space, people and technology at the core of the asset itself.

Sustainability and Durability

Modular Construction also typically re-uses 80% of its building components, fitting in perfectly with the demands of the Circular Economy (www.oecd.org): prolonging the useful lifespan of materials by combining modularity with durability and reducing embodied energy. A bio-composite exterior panel, for example, can reduce energy levels by up to 50% compared with conventional construction materials.

Speed of Delivery

And as for speed of delivery, modular buildings can be completed three times faster than their conventional counterparts: helping meet the needs of millions of people across the planet who are currently homeless or in housing need.

Affordable Homes

In their snappily titled report, “Build Homes, Build Jobs, Build Innovation”, Cast Consultancy concluded Modular Construction was flexed to deliver up to 75,000 new homes every year in the UK alone (www.cast-consultancy.com): Chief Executive Mark Farmer concluded that, unlike mud, steel and brick alternatives, Modular Technologies not only increase the pace of delivery in these unprecedented times, but also boost productivity, increase quality and significantly reduce carbon emissions. A Paper produced by Herriot Watt University found adoption of Modular technologies reduced emissions by 40% compared with conventional systems.

With COVID clearly in mind, Cast also drew attention to the significant additional benefits of offsite construction, which can be more readily adapted to the demands of lockdown restrictions and social distancing measures.

So all in all, as Mr Farmer said, Modular Construction is “the single biggest game changer when it comes to building more homes”: unsurprisingly the UK Government has taken up the theme and now plans a major new investment programme based on modular construction. The UK Housing Secretary, Robert Jenrick, is publically committed to Modular becoming “a significant part of our future housing investment plans”.

Who can blame him? Modular Technologies are all flexed and ready to go…

Executive Overview

The world is changing beneath our feet; we need to make the most of what we have. Every passing day makes it clearer that when it comes to the future of global housing policy, Modular Construction has the answers: faster, sustainable and better adapted to the needs of our changing world.

We need to build better…we need to do the best for our future

If you would like to know more about joining our Mainstream Impact Investment journey click here

The Lessons of History…Indian Real Estate and Equity Markets still go Hand in Hand

By COVID-19, Housing policy, India, Mainstream Impact Investment, News, Real Estate Markets

For every action there is an equal and opposite reaction: that’s why you can expect a reaction (quite a powerful one actually) if you present your loved one with last minute flowers from the service station. But not so fast, not every action produces pushback: some move together, following the same trend in lockstep. And nowhere is that more true than economic markets. Take equity and real estate for example: history tells us that in the long term, stock and property prices will tend to move together in the same direction (up or down), and in the short term an increase in residential property prices will also push stock prices up.

But before you get on the phone to your broker, a word of warning about what history can tell us about the future…

Although the 1960’s were written in Technicolor, the 1970’s were distinctly beige: the sixties swung, landed a man on the moon and gave us the Beatles, but the seventies limped through Watergate to the music of the Osmonds (I’m using the word “music” loosely here)…and they also gave us Stagflation. Anyone who studied economics in the dark days before Kylie Minogue recorded “I should be so lucky” will be familiar with the Phillips Curve: the theory that high rates of unemployment couldn’t co-exist with high inflation, because higher unemployment meant less earned income, and less earned income meant lower inflation. It all made sense on paper and for a while it worked in practice too, but there was a small flaw in the theory…it was nonsense. Stagflation reminded us that unemployment and inflation could be delivered together, at unprecedentedly high levels as part a beige coloured double whammy. The Phillips Curve said it couldn’t happen…but it did.

So is economic orthodoxy equally flawed when it comes to that important correlation between short-term housing and equity markets?

Well, to test the theory, let’s take a look at trends in Indian markets over the last six months (which, as the short term goes, is pretty short term).

After the initial shocks of COVID 19 had been absorbed and lockdown measures eased, there has been a marked increase in confidence across the subcontinent’s real estate sector, driven in substantial part by the Indian Reserve Bank’s fiscal stimulus package and interest rate reductions, as well as tax breaks and incentives introduced by Prime Minister Modi’s Government. And that old perennial was helping too: moving into your new home by Christmas. Knight Frank India reported “improved sentiment” (www.knightfrank.co.in) and the mid (affordable) segment saw bellwether rental prices increase sharply by up to 9% year on year. After the COVID enforced lull, developers are also resuming and accelerating construction projects to pick up the slack, with 90% of the labour force now back on site. Property prices are rising across the board.

That’s all well and good, but what about India’s Equity Markets? What were they doing over that same six-month period?

The answer is that since June of this year 95% of BSE500 stocks have risen in price, with the benchmark BSE Sensex Index surging by 37% (after hitting a 52 week COVID low in March). And tellingly for present purposes, Indiabulls Housing Finance more than doubled returns for investors in Q4 (www.indiabullshomeloans.com), further fuelling demand for India’s burgeoning demographic and bringing closer the dream of owning a home of their own.

All of which means that when it comes to Indian Real Estate, it looks like economic orthodoxy still holds good after all: Property Markets and Equity Markets are moving upwards together. But even so, think twice before bringing home those service station flowers for Christmas…you might not get the reaction you were expecting.

Executive Overview

As someone who works on a daily basis in financial markets, I know economic theory can go wrong as often as it sets us right: but keep an eye on that key variable between property and equity markets, it’ has to be a core part of our forward planning.

And the variable is working better than ever in India.

Have a great Christmas and a prosperous new year from all of us at Red Ribbon.

If you would like to know more about joining our Mainstream Impact Investment journey click here

Voting with Their Feet…Indian Migrant Workers are Redefining the Subcontinent’s Housing Market

By Affordable Housing, COVID-19, Housing Need, Housing policy, Modular Construction, News

India’s migrant workers are voting with their feet: streaming onto railways and roads, taking to bikes and byways and making their way back to the Cities they deserted in the aftermath of the pandemic. It’s the biggest movement of people on the subcontinent since Independence more than seventy years ago, and it’s set to have a profound impact on the future of Subcontinent’s housing market across India, from Chennai to Mumbai and all points in between (more of which in a moment)…

Movement of workers back to the cities

A recent survey conducted by the Inferential Survey Statistics and Research Foundation (snappy name, snappy stats) reported 67% of 2,917 migrant workers from 34 Districts are determined now to make their way back to jobs in the City (www.issrf.org.in): a fact already confirmed by the volume and value of cash transfers since the lockdowns were imposed in March.

That old reliable bellwether of migrant activity: sending money home to mum and dad. In the first few weeks after COVID-19 struck cash transfers fell in value by up to 90%, but now they’re back now at 85% of pre-pandemic levels…a sure sign workers are moving in high numbers from the countryside. And since August, non-suburban passenger traffic on India’s railways has virtually doubled.

It’s impossible to overstate the importance of this trend, given migrant workers make up 20% of the subcontinent’s workforce and play a vital part in the success of a number of key sectors: especially informal market segments and MSMEs, which together make up 50% of the subcontinent’s GDP.

No surprise then that for India’s construction sector, which is particularly reliant on migrant labour, the Modi Government has been keen to roll out a raft of new measures to make sure they get back on site as quickly as possible. In May the Minister of Home Affairs produced a policy paper recommending migrant workers should be automatically enrolled for Ayushman Bharat: the Government’s flagship health insurance scheme, providing them with ready access to cashless medical facilities on site (which the vast majority either don’t have back home in the countryside, or are denied by discordant local government regulations). There will also be a new Migrant Workers Welfare Fund to make sure help housing assistance gets to where its needed most (which in this case means India’s Cities: www.labour.gov.in)so you can be sure the pace of urbanisation on the subcontinent isn’t going to be slowing down any time soon.

India and the Subcontinent’s Housing Market

And given India’s already burgeoning need for affordable housing, it should come as no surprise either that the demand for City based real estate is likely to result in an unprecedented surge in real estate growth.

All those workers have to have somewhere to live…and there’s certainly no shortage in demand for something to build.

Which brings us back to Chennai and Mumbai: along with Bangalore, both have become centres of technological excellence, as India continues to establish itself as the planet’s distribution hub.

Skilled workers are moving there and new infrastructure systems (roads, railways and business parks) are being created on an almost daily basis, pushing house prices through the roof (so to speak). That’s undoubtedly a trend that is likely to gain added vigour from the return of migrant workers.

India needs those construction workers back on site, but it also needs to deliver affordable homes at sufficient pace to meet the dizzying needs of what was already the fastest growing population on earth.

That’s why developers on the subcontinent (and around the world) are increasingly turning into modular construction technologies, which not only reduce delivery times by 60% but also ensure cost efficient and compliant delivery standards. This is a sure-fire way to improve the subcontintent’s housing market.  

After all, as India votes with its feet, it also needs somewhere to live…

Executive Overview

Modular Construction delivers faster, at lower cost and with higher quality than traditional alternatives: it’s perfectly positioned to meet the growing demand for affordable housing, not only in India but also across the world.

So as we welcome news that migrant workers are coming back to the Cities, yes: let’s give them somewhere to live too.

If you would like to know more about joining our Mainstream Impact Investment journey click here

Better Connected than Ever? – How Connectivity boosts Indian Real Estate.

By Affordable Housing, Blackstone, Construction Technologies, COVID-19, Economic Growth, Environmental Policy, Housing Need, Housing policy, India, Natural Capital, News, Real Estate Markets, Sustainable Growth

All roads lead to other roads: a dizzying complexity of cables, rail and road networks have literally girdled the earth, making us better connected than ever before. A hundred years ago it took twenty days to travel by steamship from London to Mumbai, now it takes nine hours by plane.

Subject to lockdown restrictions, you can cross the English Channel in two hours by ferry (plus three more waiting for the driver in front to get back to his cab), or else zip through the Tunnel in 30 minutes; and the electrons that carry your Internet messages travel at 2,200 Km a second, which is probably why Zoom is doing so well at the moment.

But none of this happened by accident: it was all planned, built and delivered to meet economic demand…except, of course, the electron, which does what it does by itself. Economic progress is everywhere driven by connectivity.

And that’s where Big Government comes in: periodic swings in the private funding cycles needed to build all those airports, roads and railways are increasingly being offset by government deficit spending programmes (or quantitative easing as it’s now known: the deficit’s more attractive, younger sister). Only big government is big enough to dampen regular (and inevitable) private sector investment fluctuations, which is why most advanced economies over the last forty years have set fiscal spending targets of up to 20% of GDP.

Nothing less will level out the swings and troughs, and without it the roads, railways and airports won’t get built at all…the Channel Tunnel started out as a private venture, ran out of money and finished up nationalised in all but name. Without Big Government you wouldn’t be able to zip under the Channel …you’d be stuck behind a lorry at Dover.

It’s a lesson India has taken to heart.

Connectivity boosts Indian real estate. How?

Over the next ten years the subcontinent is expected to invest a staggering $715 Billion in its new rail networks, with full electrification expected by 2024 and the entire system becoming carbon neutral by 2030 (www.ibef.org/industry/indian-railways).

By 2050 India’s railways will comprise 40% of rail services across the world, meeting a surge in passenger numbers driven by an increasingly wealthy travelling public. All of this is being powered by Big Government (Prime Minister Modi’s Government to be precise): including a programme to expand investment in new rail terminals, new stations and more extensive container operations across the subcontinent (www.outlookindia.com).

And the picture is pretty much the same on India’s highways where the network has doubled in size (from 71,000 Km to 142,000 Km) in the last ten years. As with rail, the expansion is being driven at pace to meet unprecedented levels of demand from a burgeoning and increasingly wealthy population, in stark contrast with the United Kingdom where road traffic levels have increased by 80% over the last twenty years, but capacity has risen by a sluggish 10% annually: and even that unimpressive figure is falling off year by year.

All of which means India is now better connected than ever before; and in combination with those same (unprecedented) demographic trends on the subcontinent, enhanced connectivity is also having a radical impact on India’s domestic housing markets. New Science parks in Chennai and Bangalore and new railways and highways in Mumbai are pushing prices through the roof as an increasingly urbanised population embraces the opportunities offered by better communication systems.

The improvements to connectivity boosts Indian real estate. So with all roads leading to other roads, it means we’re better connected than ever before…but nowhere is that more apparent at the moment than India.

Invest in Red Ribbon Asset Management

Red Ribbon is committed to identifying and building on investment opportunities that are fully in compliance with its core Planet, People, Profit policy: not only offering above market rate returns for investors but also protecting our Natural Capital through innovative programmes like the Eco Hotels Project.

Executive Overview

I suppose it’s a truism that property values are all about location (and location, location): but what’s interesting in India at the moment is just how radically the location itself is changing.

Taken together with an increasingly wealthy, tech savvy and burgeoning population, the Modi Government’s radical infrastructure programmes are re-shaping the commercial environment and pushing property prices higher than ever before.

A Disruptive Innovator…Modular Construction has become Housing’s Future

By Affordable Housing, Construction Technologies, COVID-19, Economic Growth, Environmental Policy, Housing Need, Housing policy, Modular Construction, News, Productivity, Sustainable Growth

“The arrogance of success is assuming what you did yesterday is enough for tomorrow”: William Pollard wrote that 100 years before Disruptive Innovation theory was formulated in 1955’s Harvard Business Review, but he perfectly captured the essence and importance of understanding disruption innovation in a modern economy.

Think of established companies like Amazon, Google and Uber, business models that have all disrupted existing markets and delivered outcomes that are radically reshaping our future (and our present come to that).

But disruptive innovation is driven as much by market need as invention, and burgeoning housing demand across the planet is currently driving change like never before…so welcome to the world of Modular Construction, and a new future for housing.

Using outmoded technologies, traditional construction companies have become increasingly focused on long-term (high value) projects, where profit margins are high enough to nurture a culture of inefficiency.

All those piles of rusting steel and timber left scattered around when the project finishes, fossilised remnants of yesterday’s world: all those days lost to rain when workers huddle in huts waiting for the sun to come out, and still more days lost waiting for delayed (piecemeal) deliveries, brought slowly to the site by a seemingly endless convoy of lorries.

But, by definition, all that waste matters more if margins are tighter: on lower margin projects, waste and delay on such an industrial scale can turn a viable development into a loss-making disaster.

That’s why traditional developers have (traditionally) paid far less attention to affordable and mid market housing projects, preferring to focus on profitable customers and build yet another penthouse studded glass tower: the inefficiencies of their business model matter less when the client is a Russian oligarch.

Which means more rusting steelwork, more days lost and more time wasted waiting ankle deep in mud for the latest lorry full of bricks to make its way at walking pace through another inner city traffic jam. This outdated model largely ignores speed of delivery, because speed of delivery largely doesn’t matter. Russian Oligarchs have all the time in the world…they can wait.

But the homeless can’t wait: according to Shelter (www.shelter.org.uk) 320,000 people are currently homeless in the United Kingdom (one in 201 of the population), in the United States the figure is 567,000 (a year on year increase of 40% since 2017), and in India 1.77 Million are in housing need despite the Modi Government working to deliver its ambitious Affordable Housing Programme (www.bajajfinserv.in/housing-schemes), striving hard to meet the demands of the fastest growing population on the planet.

And that’s where disruptive innovation comes in…

Adopting smarter and more efficient technologies, smaller construction companies can challenge these dinosaur incumbents: targeting market segments they either can’t or won’t reach, and that means in particular the homeless and those in housing need.

Economic orthodoxy tells us these smaller (disrupter) companies will then move on to gain a progressive foothold in increasingly higher margin segments by delivering better functionality at a lower price.

By making use of their core technological advantage: and finally, the dinosaur developers will also adjust their own business model as disruption takes root: bad news for Russian oligarchs looking for another penthouse, good news for the rest of us.

Modular Construction is a paradigm case in point: units are fabricated off site and delivered in ready to build panels, so no more convoys of lorries delivering materials piecemeal and no more waiting endlessly for them to arrive.

Built to order in a controlled environment, modular units are also higher quality and waste levels are lower, and costs are lower too.

It enables modular platforms to deliver projects at a third of the cost of traditional alternatives, which is why they are moving into (and will eventually take over) lower margin segments in a way traditional developers at the moment find unfathomable.

And it’s why in time dinosaur developers will be forced to change their business model …that’s the power of disruptive innovation.

What we did yesterday is no longer sufficient for tomorrow: Modular Technologies are important for all our futures.

Find out more about Modulex

Modulex modern method of construction

Modulex is setting up the world’s largest steel modular buildings factory based in India. It was established by Red Ribbon to harness the full potential of fast-evolving technologies and deliver at pace to meet the evolving needs of the community.

Modulex is setting up the world’s largest steel modular buildings factory in India.

Executive Overview

According to McKinsey more than 80% of developers are now to a greater or lesser extent committed to modular construction models: that should come as no surprise to anyone. Modular construction delivers faster, at lower cost and with higher quality thresholds than traditional alternatives.

And now, more than ever, we need those benefits to meet the planet’s burgeoning housing need. It’s time for the world to move on…

red ribbon invest

What’s Growth got to do with it…as it happens plenty, and Indian Infrastructure is a key driver for Housing Policy

By Affordable Housing, Construction Technologies, COVID-19, Housing policy, Real Estate Markets, Sustainable Growth

Keynes wondered about kick starting an economy, paying people to bury bottles with £10 notes in them, and then paying others to dig them up and spend the cash. Of course, the great man’s tongue was probably firmly in his cheek, but he was making a serious point: modern economies are driven by expansionary policies. That’s what lies at the heart of quantitive easing strategies. But it’s much better to spend those £10 notes on roads that don’t go nowhere, which is why infrastructure policy is so important. And there’s no better example of that at the moment than India, which has seen unprecedented infrastructure spending over the last decade and COVID has done little to slow it down.

This month alone Indian Railways launched 22 new local and 18 main line services in Mumbai (on 10 October); on 12 October the 11 km rail tunnel connecting Howrah to Salt Lake (via Kolkata) was completed (part of a 17 km system including 6km of elevated sections), and the Union Ministry of Road Transport announced 2,921 km of new highways had been completed as part of the Bharatmala Pariyojana Project. All of which are having a knock on effect on expansion across key areas of the Indian economy, including housing and construction, which are growing like never before. Those roads certainly aren’t going nowhere…

Since 24 September The BSE Sensex Index (which tracks stock on the Bombay Exchange), has rallied by nearly 11%: its strongest performance since June, the best of any equity benchmark anywhere in the world. And it’s now within 2% of wiping out its entire losses for the year to date: given the economic shocks of COVID 19, that’s no mean feat. 

Sameer Kaira (of influential, Mumbai based Target Investing) has predicted a third quarter bounce in GDP on the subcontinent, with Sensex likely to hit a record high by December. With a Delphic sense of understatement, Kaira highlighted a key factor as “various steps taken by policy makers”. But what does he mean by that?

Well, for a start Prime Minister Modi’s Government is set to relax COVID restrictions further, allowing schools and entertainment complexes to re-open from October 15, and also loosen restrictions on large gatherings: so that’s certainly one important step from a policy maker. But more expansive policymaking hasn’t gone away either. The Reserve Bank’s Monetary Policy Committee has announced further steps to increase liquidity: leaving the repo rate (the rate at which it lends to other banks) unchanged at 4% and promising to maintain its “accommodation stance” well into the next fiscal year. The Governor of the Bank also announced another round of quantitative easing as part of its Operation Twist initiative, much to the delight of financial markets and external investors (10 year Bond yields fell to 5.9%).

All of which is fuelling the infrastructure boom.

And because all those roads, trains and tunnels aren’t going nowhere, its also giving added impetus to India’s Real Estate Markets: primed to meet the needs of the fastest growing population on the planet and spurred on by the Government’s Affordable Housing Programme. Better infrastructure suddenly makes building projects across the country a much more attractive proposition. 

It’s certainly better than burying cash in a bottle…

Modulex Construction is the World’s largest Steel Modular Building Company. It was established by Red Ribbon to harness the full potential of fast evolving technologies and deliver at pace to meet the subcontinent’s evolving needs.

Find out more about Modulex

This image has an empty alt attribute; its file name is Modulex-Logo-300x77.jpg

Modulex is setting up the world’s largest steel modular buildings factory based in India. It was established by Red Ribbon to harness the full potential of fast-evolving technologies and deliver at pace to meet the evolving needs of the community.

Modulex is setting up the world’s largest steel modular buildings factory in India.

Executive Overview

With a further easing of lockdowns underway, the subcontinent’s financial markets are starting to move forward: faster than other equity markets across the world. And that has a lot to do with the Central Bank’s Operation Twist Programme, which is fuelling growth across the country.

No surprise then that the impact of these emerging trends will be first felt in Infrastructure policy, something I’m sure will act as a key driver for the rest of the economy.

rrmarticle

Dinosaur Developers have had their day…It’s time to reach for the Moon

By Affordable Housing, Construction Technologies, Housing policy, Modular Construction, Reconstruction

Don’t let them fool you…Kennedy never wanted just to land a man on the Moon and bring him safely back home: his real challenge to Congress, his real purpose, was to land a man on the Moon before the decade was out. And eight years later NASA did just that: by the skin of their teeth perhaps, with two men, not one, tragedy and setbacks along the way and just five short months to spare, but they still did it. And Kennedy’s 1961 speech to Congress has since become a cornerstone of every Business School syllabus from Wharton to Wolverhampton (yes it does have one, look it up), principally because it sums up the essence of all successful project planning: you’ve got to have a big, clear objective but you also need a bold, clear timeline to achieve it. There’s no point thinking big and bold if your clock has no hands: something Boris might care to pay attention to as he struggles with his own COVID Moonshot challenge.

And in essence, back on the ground, that’s the essential dilemma of modern construction: there’s nothing inherently wrong with building knee-deep in mud, with bricks and girders scattered randomly across a field, and the building will probably come out fine in the end, but its way too slow. And the fact is all those dinosaur developers, lumbering around in the mud with the urgency of teenage sweethearts trying to get off the phone, the clock has simply lost its hands. So does any of that matter? Well, yes it does…it matters a lot because the moon we’re all reaching for now is a lot closer to earth.

In the UK, for example, COVID’s ravages created an urgent demand for new hospitals: eight of them in just ten weeks and mud rooted developers would have taken an average of three years to build one. But all were completed on time (in fact ahead of time in some cases), using modular technologies. Shelter reported in December last year that more than 320,000 people were homeless in the UK, sleeping on streets and sofas: that’s a shocking one in 200 of the population, and the National Housing Federation reported this week that 4 million people are living in overcrowded accommodation in the UK: 90,000 affordable homes need to be built every year for the next decade to meet the resulting need. But at the same time, dinosaur developers have been building new social housing at the lowest rate for decades, only a little over 5,000 a year. 

So if ever there was a Moonshot moment, a time to set Kennedy-esque challenges with bold targets and timelines, this is it…we can’t afford the luxury of limitless time any longer, and those dinosaur developers simply aren’t up to the job.

That’s precisely why, according to this years Bradley SmartMarket Report, 90% of Property Developers are now committed to adopting Modular Technologies as part of their project platform, offering radically improved quality and delivery times as well as lower cost and wastage levels. In headline terms, this means on average that a Modular property will be built three times faster than its bricks and mud counterpart and at half the cost. It gives us cause for hope that those big, bold challenges (the challenge of building 90,000 new homes a year) can actually be met.

And as for the remaining 10% of Dinosaur Developers…well, it seems they’ve run out of time.

Find out more about Modulex

This image has an empty alt attribute; its file name is Modulex-Logo-300x77.jpg

Modulex is the World’s largest Steel Modular Building Company. It was established by Red Ribbon to harness the full potential of fast-evolving technologies and deliver at a pace to meet the evolving needs of the community

Executive Overview

We’re facing an acute and unprecedented shortage of affordable housing across the globe and, like many of us I expect, I just don’t believe conventional construction technologies are capable of rising to the challenge. 

I’m convinced Modular Construction will be important for all our futures: delivering at pace, working off a low-cost platform and incorporating levels of quality conventional methods simply can’t match.

Plant small plants on coins stacked on the concept of saving money and growing money.

Its Time to Take the Blindfold Off: New Visions for Sustainable Growth

By COVID Slowdown, Economic Growth, Housing policy, Mainstream Impact Investment, Natural Capital

Any blind, unthinking pursuit of money can still return a profit (and sometimes does), but its very exclusivity of focus (money) also obscures those unintended outcomes that can be (and frequently are) so disastrous for our planet. And this dynamic between fiscal growth and sustainability isn’t just another variable in some global game of blind man’s bluff, with economies across the world stumbling helplessly between one unexpected outcome and the next, trading growth for hope and indifferent to the chaos left behind: it can also be matter of life and death. All of our futures, yours and mine, are dependant on the sustainability of natural resources: from the food we eat, to the buildings we live and work in, our capacity to meet disease (particularly at the moment), right down to the very air we breathe: Natural Capital is our bedrock, and it’s vital for economic growth too…

That’s why we have to start treating our stock of Natural Capital (including plant life, clean air, minerals and soil resources) in precisely the same way we do any other item on the macro economic balance sheet: in precisely the same way we account for Built Assets, including roads, railways and hospitals, because there is no acceptable trade off between the two: Natural Capital and Built Assets together make up the sum total of our wealth and they both belong on the same side of the ledger.

All of which makes it alarming that according to the UN Environment Programme, per capita Natural Capital has decreased since 1992 by 40%, while over the same period Built Capital has increased by 13%. Currently leading an economic diversity review for the UK Government, Partha Dasgupta points to these statistics and warns that “the very language of economics is failing us, making us miss the message”: by which he means we’re not seeing the connection between Natural and Built Capital properly: with Natural Capital in the debit column, the balance sheet’s out of balance … its time to take the Blindfold off. 

Perhaps now more than ever, we need economic planning that is both robust and clear sighted in its objectives but also sustainable by reference to its impact on the environment: in other words, we need to have a holistic regard for Planet and People as well as a clear recognition that in the long run (and the short run come to that) there is no Profit without Planet and People: joined up planning that is capable of making a difference to all our lives.

So why is that matter of life and death?

Well, the wholesale destruction of our natural resources (remember that 40% debit entry) has also increased the risk of life threatening diseases crossing the wildlife to human barrier, which brings us (inevitably) back to COVID 19. The clumsily but appropriately named Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES) warned earlier this year that “Rampant deforestation, uncontrolled expansion of agriculture, intensive farming, mining and infrastructure development, have all created a ‘perfect storm’ for the animal to human spillover of diseases.” And that was before the full, horrific impact of COVID became a daily feature of all our lives: so rolling back on those key drivers identified by the IPBES has literally become a matter of life and death…

COVID has changed our world in so many ways, most of them all too visible: but the way in which we respond to those changes also has real potential to create a better world for the future. We don’t have to go back to the way things were done, we don’t have to keep playing blind man’s bluff…it’s time to take the blindfolds off.

 Invest in Red Ribbon Asset Management 

Red Ribbon is committed to identifying and building on investment opportunities that are fully in compliance with its core Planet, People, Profit policy: an investment policy that not only offers above market rate returns but also protects Natural Capital through caring meaningfully for the environment.

Executive Overview

Like most of us, I suppose, I’m concerned about the potential consequences of a headlong rush for short-term economic growth: essential though it is to secure growth in these difficult times, we can’t afford to lose sight of the importance of environmental responsibility.

They aren’t alternatives: this isn’t a zero-sum game and there is no acceptable trade-off. We need to build growth in a responsible way by putting the Planet, People and (yes) Profits at the heart of our strategic thinking.

Kota, Rajasthan, India,- March 2020 : Labour is working on a new construction of building in Kota

Compared with What?… Consolidation Counts in Indian Real Estate

By Construction Technologies, COVID-19, Housing Need, Housing policy, Modular Construction, Productivity

Compared with the same period in 2019, Real Estate sales fell globally in the last quarter by 80%: but the clue’s in the question, the rate of decline is constant across the globe, so territorial markets are more or less as stable and ready to move on as they were before lockdowns were imposed. In India, for example, a nine-year programme of deregulation had already created rapid market consolidation by the end of last year, with almost half of existing developers leaving the sector between 2011 and 2019: no bad thing frankly, given most of them were smaller, flighty operations; incapable of complying with increasingly rigorous safety requirements, GST Regulations and (darkest of all) financial compliance provisions: remember all those rupees under the bed that Demonetisation was designed to get rid of?  

Schumpeter called it Creative Destruction: in other words, we’re better off without them…

The plain truth is that COVID downturns are operating more or less uniformly across the globe and are (hopefully) short-term: experienced with equal force from Manhattan to Mumbai and Berlin to Beijing, but proactive market consolidation is what really matters. And when it comes to that, Indian real estate is showing every sign of embracing a period of successful change, making it stronger than ever before. Joseph Schumpeter would have been proud…

So, just for a moment, think back to the subcontinent in 2019, dented since by COVID, but already by then experiencing unprecedented levels of consumer demand, renewed confidence, greater access to finance and, more than anything else, the success of the Affordable Homes Programme under Prime Minister Modi’s stewardship. These are the same conditions that are locked and loaded into India’s future as it emerges from pandemic restrictions. Even the most cynical observers can’t claim they’ve gone away…

All of which makes the second wave of consolidation increasingly likely on the subcontinent: already cleared of developers with little or no regard for compliance strictures, we can now look forward to radically improved business practices, new and improved sectoral strategies and key changes in construction technologies (with Modular Construction front and centre of the pack). Any Developer still clinging to outdated bricks and mud technologies, blinkered to the reality that growth will come by building affordable homes rather than another glass skyscraper in Mumbai, are certain to be consigned to the wastebasket of history.

Recent market studies forecast developers wedded to one or other of those fossilised views, some 30% of developers in all, are likely to leave the industry (forever) within the next year.

So, it’s true, property sales have fallen because of COVID: but that’s neutral, it’s the same the whole world over. Look instead to what pre-COVID economies looked like before COVID snapped its jaws, and nowhere is there a more resilient market than on the subcontinent: poised to become the most populous on the planet, more aspirational than ever before, increasingly urbanised and better connected than at any point in its history. Previous consolidation has made Indian markets leaner and better able to address challenges, but they are now profiled for future consolidation, and that will make them stronger still.

Find out more about Modulex 

Modulex Construction is the World’s largest and India’s first Steel Modular Building Company. It was established by Red Ribbon to harness the full potential of these fast-evolving technologies and deliver at a pace to meet the evolving needs of the community.

Executive Overview

There is a severe shortage of domestic housing stock across the globe: but as economies start to kick into gear after emerging from worldwide lockdowns, I’m sure those with solid and resilient foundations will be most successful in meeting burgeoning demand.

India went into lockdown ahead of the field, and it looks like it’s going to come out ahead of the pack too…

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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