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Growing Better by Being Smarter… Sustainability and Economic Growth go Hand in Hand

By Climate Change, COVID-19, Eco Hotels, Economic Growth, Environmental Policy, News, Sustainable Growth

According to NASA figures (and who’s going to argue with them), we’ve just lived through the hottest September ever: wildfires raged in California, the Amazon Rainforest is still on fire (as it has been since August 2019) and Donald Trump was driven to muse about new “Forest Cities”.

The United Kingdom recorded its wettest September day ever, with a single day’s deluge producing enough rain to fill Loch Ness. And over the last twenty-five years, the Great Barrier Reef has more than halved in size, having been around (undiminished) for more than 500,000 years before that. Every successive decade since 1980 has been hotter than the last, and the previous five years have been the hottest ever.

Only the most swivel-eyed, gimlet lipped climate change denier; only Forest City fantasists of the most extreme kind, could fail to see the signals. Our precious planet is in trouble…

Which is precisely why most countries around the world (except for those currently led by swivel-eyed fantasists) are now committed to ambitious climate mitigation programmes of various stripes and colours: and even in the United States, Joe Biden’s Democrats are committed (if elected) to deliver their Plan for Climate Change which will cost something in the order of $ 2 Trillion. The European Green Deal has been costed at $180 Billion, and China’s National Strategy for Climate Change Adaptation is expected to cost a nose bleed inducing $6.6 trillion: all of those figures daunting, but doing nothing isn’t exactly an option (see above).

So where’s all this money supposed to be coming from? Most economies across the globe are still struggling to come to terms with the impact of COVID-19, and we aren’t exactly living through a period of sustainable economic growth.

Added to which most climate mitigation programmes slow down traditional growth vectors, especially so in economies with a high dependence on fossil fuels (like China), those undergoing rapid economic expansion (like India) and those experiencing exponential population growth (India and China).

So how can effective mitigation actually be delivered in an employment and growth-friendly way, protecting key economies and ensuring, perhaps above all else, that the world’s poor aren’t left behind in the process? How can a policy with a built-in tendency to slow down an economy also create the growth it needs to move forward? As Hamlet might have said (in an expanded script) that’s a very interesting question…

And it turns out there’s an equally interesting answer.

The IMF this month produced a blueprint for sustainable economic growth of precisely the kind required, dauntingly titled “A Long and Difficult Ascent” and structured around the central thesis that climate mitigation strategies can also foster growth, even in those vulnerable economies with high levels of fossil fuel dependency and fast-expanding populations. It can do it through a twin-track strategy of creating “an 80% subsidy rate for renewables production” and then combining it with a ten-year public investment programme, which the IMF calls a “Green Investment Push”. And not only is that a much more jaunty tagline than the puritan sounding “long and difficult ascent”, but it is substantially based on policies that have (to a greater lesser extent) already been tried and tested. Analysts predict that in conjunction with a programme of steadily increasing carbon prices (which has also been tried before), the “Push” can increase growth rates annually globe by 0.7% over the next fifteen years and decrease carbon emissions to zero by 2050.

And that 0.7% may not sound a lot, but based on Global GDP last year it amounts to $994,000,000,000 every year for the next fifteen years, or $14.9 Trillion in all: more than seven times the amount needed to pay for Joe Biden’s Climate Mitigation Plan and enough to make the European Green Deal look like a pocket money project. And that, in a nutshell, is how climate change can be addressed, mitigated and paid for in our rapidly changing world.

With the typical understatement of a bureaucrat wearing hush puppies and checking for typos, the IMF’s Chief Economist predicted The Green Investment Push would put the global economy “on a stronger and more sustainable footing over the near term”.

You can say that again…it certainly beats watching more forests blaze into flames live on Fox News, and Loch Ness brimming over with rain. It just takes a little ambition and pluck (as Hamlet might also have said).

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 Project.

Find out more about Eco Hotels

ECO HOTELS

Red Ribbon Asset Management is the founder of Eco Hotels, the world’s first carbon neutral mid-market hotel brand, offering “green hospitality” as part of a progressive roll out across India which intended to take full advantage of current market opportunities on the subcontinent.

Executive Overview

We desperately need to square the circle and reconcile economic growth with sustainable, planet friendly programmes; and to my mind the newly unveiled IMF Green Investment Push is capable of doing just that. 

It’s certainly a programme we as Red Ribbon can happily buy into, having placed Planet, People and Profit at the very heart of our vision since the company was founded more than a decade ago.

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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

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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.

modular

Closing the Loop…It’s all About Time and Modular Construction is part of the process

By Climate Change, Eco Hotels, Environmental Policy, Mainstream Impact Investment, Sustainable Growth

You wouldn’t buy a new book, take it home and throw it straight on the fire: well you might if it was “The Art of The Deal”, but let’s agree to make this is a Trump free zone for a moment. And it really is all about time, because that book you bought will eventually end up in a fire, adding to a landfill or being recycled. It’s just a question of when it happens, but where it happens couldn’t be more important at the moment. Burning it as waste poisons the air, burying it pollutes the earth but recycling will bring it back as something else (perhaps, who knows, another book). That’s what we mean by the Circular Economy: creating sustainable growth by using our finite resources to bring resources back. It’s all about closing the loop and thinking ahead…and it’s all about time.

Now more than ever there is a compelling need for waste and pollution to be designed out of our economic activities, preserving scarce resources in an effort to protect our environment.

And that applies in particular to the Construction Sector: more than a third of landfill waste can be sourced to building and demolition projects, with an average new build producing 1.8 kg of unrecycled waste for every square foot of floor space created. A 50,000 square foot office block will produce an average 100 tonnes of waste during construction, only 20% of which is recycled. And another 4,000 tonnes when it is demolished: steel, glass and wood that could ordinarily be recycled is impossible to recover because of cross contamination with other (non recyclable) waste products: so it all goes to landfill. It is appallingly wasteful and given the life expectancy of that office block is 50 years, waste on such a scale couldn’t be more significant for the life of our planet.

Modular Construction closes the loop on such a destructive cycle: individual components are manufactured indoors in controlled conditions, so the quality of the build is higher and waste levels inherently lower. Cyclical production to standard models also means materials left over after one project aren’t discarded at all, but used on the next development. Site assembly is three times faster than conventional methods because modular units are 80% complete when they get to site, meaning there’s less time for waste to build up. And taking all those factors together, that adds up to 90% less waste on site with modular than its conventional alternatives: no broken bricks, shredded plasterboard and rusting steel left behind, waiting to be carted off for burial in a landfill.

Because the final assembly on site is so much quicker, modular construction also creates less site traffic over a much shorter period (70% less in fact): and that means less diesel fumes polluting our air and less energy consumed in delivering the finished building.

And that’s not all: when a modular building comes to the end of its useful life, the individual components can be reused or recycled. There is no cross contamination with other non-recyclable materials, because for all practical purposes there is no demolition at all… no need to hammer the building down brick by brick because, module by module, it can be moved to a new location and re-assembled or individual modules re-used elsewhere.

Find out more about Modulex

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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

Global Housing needs have been driving an unprecedented move towards Modular Construction technologies, because they offer an opportunity to deliver at the speed, cost and quality required. But that’s only half the story…

Modular Construction is also more energy efficient and better aligned to the closed loop production methods that are proving so important for the preservation of limited resources. That’s why it will be so important for all our futures.

sunset

Hard to See it, When You’re in it…COVID might obscure the future, but it will also speed it up: The Lessons for Indian Real Estate

By Climate Change, Eco Hotels, Environmental Policy, Mainstream Impact Investment, Sustainable Growth

Guy de Maupassant was a straight talker: the French novelist used to eat lunch every day in the restaurant at the Eiffel Tower, because it was the only place in Paris he couldn’t see the Eiffel Tower from: he couldn’t see it because he was in it. And that’s pretty much where we are at the moment with COVID: looking out from the dark tunnel of the pandemic, it can sometimes be hard to see where all this is going. History, though, has some pointers for us. In 1919 San Francisco had a powerful Anti Face Mask League: mobilising public protests against the compulsory wearing of face masks. Does that ring a bell? And the year before, in 1918, most US States had introduced Social Distancing measures, closed schools and theatres and banned mass gatherings, all of which also has a familiar resonance. Because back then they were dealing with Spanish Flu, there was no vaccine in sight and lockdowns were destabilising economies across the globe.

And that certainly rings a bell…

Between 1918 and 1920 Spanish Flu infected some 500 Million people, more than a third of the world’s population, and of those 17 Million subsequently died. So as anguishing as COVID 19 might be (and is), the social and economic impact of Spanish Flu was far worse than COVID: in large part because of the gruesome success of bodies like the Anti Face Mask League, something Donald Trump and his red faced “freedom” followers might want to bear in mind.

And just like today, back in 1920, it was difficult to see what the future would look like, because just like us, they were living in the heart of the disruption. So how did things turn out then?

Well, just five short years later, by 1925, the cinemas had all re-opened: audiences were packed to the rafters and, appropriately enough, watching Charlie Chaplin in The Gold Rush because the world’s economies were soaring too and construction projects were getting underway at unprecedented rates…the World had entered the Jazz Age and the Anti Face Mask League was rapidly forgotten. So there in a nutshell is the lesson of history, something we ought to keep front and centre of our thinking in these troubled times: a pandemic won’t change the future, it just brings it about quicker…

Take Indian Real Estate for example.

As a result of COVID the subcontinent’s residential sector had predictably slumped in the second quarter of this year, but in the third quarter (to September) sales in India’s top seven property markets (including Mumbai, Hyderabad and Chennai) had shot up by 34%, with 14,415 new builds. A powerful market mix of low interest rates, ongoing government growth initiatives and an increasing level of involvement on the part of Non Resident Investors (NRIs) had been supressed and concealed by COVID, but has now irresistibly re-emerged as lockdown measures start to be eased. We just couldn’t see it at the time…because we were in it.

And then there’s that reliable old bellwether of construction on the subcontinent, Cement Production, which is also picking up from a six-month slump: driven forward in particular by pent-up demand for new building and increased rates of rural residential building. India Cements held its (predictably virtual) AGM on Monday this week and forecasts quarter on quarter growth over the foreseeable future, as well it might.

These are precisely the sort of trends and signals that the immediate impact of COVID has tended to conceal… but at the same time COVID itself is a disrupter of (almost) unparalleled magnitude, so it’s just as likely to accelerate development of those trends. You just need to look for the signals…

Find out more about 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

As I’ve said in the past, near and long term economic trends are likely to be a lot more important than any of our current fixations: and goodness knows we have enough of those at the moment.

So it’s certainly interesting that just as COVID has suppressed some key trends over the last six months, it may well also be acting act as a classic disrupter: accelerating core developments that may otherwise have taken a lot longer to emerge. All of which makes it all the more important that we keep our focus on the future.

Energy saving lamps and planting trees on the soil ground Electric energy saving concept

Is Donald Ducking Out?…Setting the Restart Button for Sustainable Growth

By Climate Change, Eco Hotels, Economic Growth, Environmental Policy, Mainstream Impact Investment

Whatever the outcome of November’s election, Donald Trump has already made his mark on history: more carbon dioxide in the skies above Delaware, rivers more polluted than they’ve been for decades (think Flint) and wildlife reserves destroyed to make way for ever more drilling gantries. The fact is most environmental regulations dating from Obama’s era have either been abolished or fatally weakened in the last three years and with what, even for him, amounts to a depressing lack of perspective, Donald Trump justified dismantling no less than seventy key regulations by claiming they were “unnecessary and burdensome to the fossil fuel industry”. And despite the ravages of COVID 19 (with more than 176,000 deaths in the United States, by far the worst fatality figure in the World), Trump has still found sufficient time since March to scrap thirty more regulations …Thanks a lot, Donald.

So is this really the sort of freedom most Americans are yearning for?

Freedom for coal-fired power stations to start discharging mercury emissions into the atmosphere and dump mining debris in rivers; freedom for oil companies to ignore “burdensome” wildlife protection measures and liberated to drill across nine million acres of previously protected heritage land (including the Arctic National Wildlife Refuge): free to forget those tedious methane emission reports that aren’t needed anymore. And fracking can start up again on federal and Indian lands (let freedom ring); in California, farmers are free to drain rivers without worrying about killing (endangered) salmon and smelt and protected migratory birds are once again fair game: free to be to shot from the skies and their “parts” used to make novelty gifts for tourists stopping over in Juneau (I’m not making that up).

But the three years of the Trump Administration (maybe eight all told, who knows), these three years are a fleeting moment in the long life of our planet: no more profound in the greater scheme of things than the blinking of an eye, and the shocks caused by COVID 19 on existing social and environmental policymaking across the globe are likely to be around a good deal longer than Donald Trump, especially when it comes to climate policy. Because traumatic as it might have been (and is), written off and misunderstood by Trump on a weekly basis, this pandemic has presented us with a series of challenges and opportunities from which to plan a better and more focussed climate change policy in the future, policies that are capable of delivering genuine sustainable growth.

Dr Tara Shine (author of “How to Save your Planet One Object at a Time” and co-founder of the influential Change by Degrees Group) has described the Pandemic as a “restart button”, clearing the way for developments including the new EU Green Deal as well as the UK Government’s own Environmental Programme (launched in June): in her own words, “To be resilient to the next pandemic we have to build some of the same core skills and capabilities that we need to be resilient to climate changeThe point is this is what societal change looks like when something changes”: traumatic, pervasive and long lasting.

In other words, Donald Trump has merely been traumatic…but the perfect storm of social and economic shocks we are experiencing at the moment might well bring pervasive and far-reaching change finally within our grasp, and that has potential to change all our lives for the better.

 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

So much is happening to divert our attention at the moment, socially and economically, with rolling news accumulating on an increasingly pressing and hour by hour basis: it’s all too easy to lose sight of the importance of thoughtful environmental planning, not to mention the need for short and medium term policies capable of supporting sustainable growth. 

And that, in a nutshell, is why we need to put Planet, People and Profit at the heart of our common vision for the future, and we need to do it now: that’s not a lesson any of us can afford to lose sight of, least of all now.

growth india

The Prospect Theory of Gain… Why Climate Change isn’t a Single Issue Matter

By Climate Change, Eco Hotels, Environmental Policy, Mainstream Impact Investment, Sustainable Growth

Daniel Kahneman won the Nobel Prize for his “Prospect Theory of Gain”, the theory that losing a benefit and ending up better off is still worse than winning in the first place. Take a prosaic example: the National Lottery call you up to say they made a mistake yesterday and you’ve won £2 Million, not £3 Million. But you’re still £2 Million better off right? And then you find out the fellow down the road got a call too, and he won £2 Million: not the £1 Million he was told yesterday. Who feels happier? Both of you have £2 Million you never had before, the exact same sum down to the last penny: but, of course, it’s you that’s unhappier. Economists call this the Endowment Effect: precisely the same economic outcome can produce radically different reactions for purely emotional reasons. After all, the fellow down the road is probably cock-a-hoop with joy…

And all this is way more than a light-hearted parlour game: the angst of meeting a (purely relative) loss, animated by the green-eyed envy of seeing another’s (relative) gain, can have drastic consequences on how we go about dealing with some of the major challenges facing us across the planet today.

Take Climate Change for example…

The UK is committed to reducing greenhouse gas emissions to zero by 2050: there are no deep coal mines left in Britain and only four functioning coal-fired power stations all of which went offline for various periods this year and last, meaning that for the first time since the industrial revolution there was no coal-fired generation at all. All well and good you might say, unless you’re a coal miner or work in a coal-fired power station. But over in China, they’re still mining and burning coal like it’s going out of fashion (which in fairness, it is), and China’s emission rates are still going up from a 2016 base of 20.09%, compared with the UK’s more modest 1.55%, which isn’t such good news at all. But, unlike Trump’s America, China and the UK are both signatories to the Paris Climate Change Accords so, despite such variances, they’re still working to a common objective that can be expected to benefit them both (and Trump’s America too come to that).

So, here’s the question: who’s left feeling worse off between China and the UK? Daniel Kaheman would say it was the UK, because the UK suffered a loss in mining revenues, and the gain of cleaner air starts to look a bit tarnished as a result. On the other hand, China made a gain, so despite the fact, both are working towards a common beneficial objective, the irritating angst of relativism starts to kick in, meaning China must be to blame for the problem, which it just so happens is another of Donald Trump’s sound bites…the Planet just happened to get in the way of the angst.

That may all sound familiar in an increasingly polarised world, but does any of it really make sense?

Of course it doesn’t…and that’s because dealing with the challenges of climate change isn’t just a single-issue policy. One competing issue can’t be discounted against another: its not like someone setting out on a drinking spree, determined not to think about the hangover until it hits him tomorrow morning. The common purpose is everything and there’s no discounting to be done when it comes to the future of our planet: either everyone wins, or everyone loses. It’s as simple (and as complicated) as that.

Or to put it another way…burning coal is just the flip side of cleaner air: land on one side and you start to lose the other. So why focus on just one side at all? Burning less coal means breathing more clean air, so in the UK we’ve just had the equivalent of a call from the Environmental Lottery telling us we haven’t won small after all (as we may have thought), we’ve won pretty big. China’s news, at least for the short term, is not so good: but there’s no need to think of it as a trade-off, not when both countries (and many more) are moving forward to meet the challenges of climate change together.

If we can just raise our eyes from the complex politics of relativism, we might just find we’ve all won big.

 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

We certainly need to raise our eyes from the short term and often highly political tangles of day-to-day politics, creating short-term obsessions that can so often blind us to the importance of longer-term strategic planning.

That’s why at Red Ribbon we’ve put Planet, People and Profit at the heart of our common vision for the future, and it’s not a lesson any of us are going to lose sight of.

Jaisalmer city and Fort at sunset

Joining the Dots for the Future…A walk around Indian Real Estate Markets

By Blackstone, Construction Technologies, COVID-19, Housing Need, Modular Construction, Real Estate Markets

History doesn’t move in straight lines, we’re much too unpredictable for that: so nobody should be surprised that in the same month as a group of glum beancounters at the Office for National Statistics reported a 20.4% slump in GDP for the UK (the worst ever), their happier colleagues at the Land Registry were trumpeting a 2.6%, year on year increase in UK property prices. There isn’t a straight line between the two: the underlying decisionmaking is just too unpredictable to allow for anything more than a childish squiggle. It’s what practitioners of the dark arts of econometrics call “a random walk”, like a drunk stumbling home from the pub: we know where he started out from and where he ended up, but it’s the bit in the middle that’s a mystery. Why did the catastrophic oil crisis of 1973 barely make a dent on US property prices, having sent the rest of the economy into free fall? Why did an otherwise localised slump in US property prices cause economies across the world to crash in 2008? These are random walks between two points (or pints in the case of our drinker) … the trick is to join the points up. 

Which means searching for medium and long term trends, key drivers that act as a platform for what the future might look like: and there’s no better example right now than India’s Real Estate Markets.

According to an influential IBEF forecast, Indian Real Estate will be worth $1 Trillion within the next ten years (from a base of $120 Billion in 2017), and by 2025 (just five years away in case we forget), the sector as a whole will make up 13% of the subcontinent’s GDP. That’s worth reflecting on: despite the near term, COVID driven shocks, not to mention the pandemic’s catastrophic impact on overall levels of social cohesion, there is no straight line in sight: the subcontinent’s residential and commercial property markets are showing persistent and robust signs of long term growth, and this particular honey pot is proving as attractive as it was when, in 2019, overseas and mostly private equity investors staked no less than $14 Billion in the sector.

Blackstone alone has invested more than $12 Billion in Indian real estate since 2018: including the first of the subcontinent’s newly established REIT’s, which raised $670 Million in 2019 in collaboration with Embassy Group.

In response to (and partly in anticipation of) that inexorable trend, the Indian Government launched a series of property-related initiatives, including the Smart City Mission: delivering more than a hundred better-connected infrastructure and technology centres across the country and offering a prime opportunity for investors. Add to that the recent launch of the Alternative Investment Fund (AIF), which green-lighted investment across 1,600, previously stalled urban housing projects in major conurbations from Mumbai to Chennai and, of course, the continued resurgence of the Affordable Housing Fund. Prime Minister Modi’s Government has also approved the creation of 417 new Special Economic Zones, of which 238 are now live. Impactful as it might be at the moment, COVID 19 has neither the persistence nor potential to stand in the way.

As Blackstone themselves could no doubt testify, Foreign Direct Investment is a key part of this mix: increasingly responding positively to enhanced levels of market transparency on the subcontinent, a transparency that has acted as a powerful nudge to create a more investment-friendly environment increasingly aligned to western markets (and due diligence requirements in particular).

So there’s no straight line to follow in these turbulent (short term) times, only an increasingly less random walk firmly rooted by a long-term compass. And, to repeat the point, there’s no better example of that at the moment than Indian Real Estate Markets.

Find out more about Modulex

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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.

Executive Overview

Every so often we have to raise our eyes from the papers on the table, and goodness knows we’ve had enough to distract our attention from the bigger picture over recent months: that’s why, as we gradually emerge from global lockdowns, I’m confident longer term trends will be much more important than any of our day to day fixations.

I’m confident, in short, that the future can’t and won’t be navigated by straight lines…

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…

Modular prefabricated houses made of panels with large panoramic windows.

Not so much a Policy Imperative as a Crisis…Modular Construction has the Answers

By Construction Technologies, Housing Need, Housing policy, Modular Construction, News, Productivity

Best estimates are nearly 250,000 people left London during the COVID lockdown to live in their second homes, seeking comfort in a pale view of the hills or the slopping of the sea (or, in Dominic Cummings’ case, the car park at Barnard Castle). And some of them, perhaps looking for a third home, spent the idle hours rootling around the Internet looking for property bargains, with real estate prices slumping in the UK by 10% in May alone (they’ve rallied since, thanks to a new Stamp Duty regime). So what’s wrong with this picture? Well, for at least the last thirty years the UK, and London in particular, has been cursed by a shortage of new homes: housing lists have never been longer, rents have never been higher and houses and flats never more expensive than they are now. The UK also has steeply rising rates of eviction, radically increased homelessness and a new generation of millennials who are resigned to sleep on a friend’s sofa or face the prospect of living with their parents into their forties.  

Being locked in during the lockdown was no picnic for any of us, but spare a thought for how hard it hit the homeless and those living in overcrowded flats with children climbing up the walls and no garden to escape to. Spare a thought for those who were safe and secure in March, only to emerge from the lockdown with no job and the imminent arrival of eviction papers. These are real issues facing real people every day. We can’t all escape to the hills and the seaside…

And the United Kingdom certainly isn’t alone in all this: India to is facing an acute housing shortage and in the United States (the richest country in the world, lest we forget) no less than 567,715 people are homeless: that’s seventeen in every ten thousand.

So what’s to be done? 

First of all, let’s express the issue with a little more clarity: current housing policy, not just in the United Kingdom but across the globe, has so far been driven by a series of policy imperatives designed (unsurprisingly) to make builders build: low-interest rates, soft planning protocols, minimum regulatory thresholds and (at least until 2008) liberal financing structures. All of them working to the advantage of investors in real estate and existing homeowners: supporting the stock of existing housing wealth, but doing little or nothing to create new, low cost and environmentally friendly homes for those with more pressing housing needs: Stamp Duty reforms are no kind of answer.

And as part of this increasingly polarised dialogue, excessively high front-end construction costs are often (indeed usually) cited as a driving factor. Building new homes on conventional models is expensive, and governments are reluctant to invest directly in new programmes: so even though local authorities in the United Kingdom can now borrow to build, for decades now they have received virtually nothing from Central Government towards funding affordable housing programmes. 

But it doesn’t have to be that way…

The technology already exists to create new homes at volume and at pace, not only with lower front-end costs but lower costs across the board: and with significantly more environmentally friendly outcomes too. Modular Construction allows units to be created off-site in controlled conditions, with delivery rates three times as fast as traditional methodologies, lower development costs and optimal quality. So its no wonder the McKinsey Global Institute reported this year that Modular Construction in European and the US Markets will be worth $130bn by 2030. Not only is it quicker, less expensive and more efficient, but it plugs directly into the pressing needs of our troubled planet: providing a workable platform capable of meeting burgeoning housing needs across the globe.

We might not all end up with second homes with a pale view of the hills, but there might be a better chance of all of us having a home.

Find out more about Modulex 

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

Executive Overview

I’m acutely conscious that all across the globe we’re facing a dire shortage of domestic housing, and increasingly aware that existing housing policies no longer providing any of the answers. We need a paradigm shift to meet what could otherwise be a looming crisis.

That’s why I’m convinced modular construction will be so important: it delivers at the pace we need, working off low-cost platforms and with quality assurance levels conventional construction technologies simply can’t match.

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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