Using data to do more with less

Source: Yardi white paper

As investors sharpen their focus on sustainability, how do real estate companies respond? Yardi’s regional director Bernie Devine takes stock.

As the Intergovernmental Panel on Climate Change warns that we are now in the decade of decarbonisation, pressure is mounting for lagging economies and companies to step up, and for leaders to make even larger strides towards net zero emissions.

Seventy per cent of the world’s economies, representing two thirds of global carbon emissions, have made strong commitments to carbon neutrality, says the UN, and a third of the world’s assets are moving towards net zero by 2050 through the Net Zero Asset Owner Alliance.

Meanwhile, the Climate Bonds Initiative has tracked US$1.2 trillion of green bonds, and GRESB has recorded a 22 per cent increase in real estate companies disclosing their environmental, social and governance (ESG) achievements in just one year.

Despite the signals sounding loud and clear, sustainability is “still stuck off to the side of business process and reporting, rather than front and centre,” observes Yardi’s regional director, Bernie Devine.

Devine sees a similar scenario playing out across the Asia Pacific.

“The investment manager receives a query about sustainability and funnels it off to the ESG team to answer. This immediately tells me two things. Firstly, that the investment manager doesn’t know the answer; and secondly that the sustainability team is not central to the investment management process.”

Yardi’s latest whitepaper, Using data to do more with less, outlines five steps for real estate companies to take on the road to sustainability. It includes insights from Goodman Group’s chief financial officer, Nick Vrondas, and co-founder of Seoul-based Reimagining Cities, Chunga Cha.

While the report suggests strategies that real estate companies can adopt to capture the right data for better decision making, Devine warns that many business systems need an entire rethink.

“Spreadsheets won’t solve the sustainability challenge,” he says, noting that 58 per cent of real estate companies across the region remain reliant on Microsoft Excel to manage leasing, sales and property management information.

Much like security-by-design is embedded into software, business processes must be redesigned with sustainability at the core, Devine suggests.

“The real estate sector understands it must put the customer at the centre of its mission. To that I would add, if your objective is customer satisfaction, sustainability is central. The goal must be sustainable customer relationships through sustainable outcomes.”

Yardi helps real estate companies to complete sustainability assessments, manage ESG data and advance ESG performance. Download Yardi’s latest white paper: Using data to do more with less.

This article was first published in Property Council of Australia.

This report provides insights to investors into real estate transactional volumes as well as the emerging trends and opportunities in the Asia Pacific commercial real estate markets. So far, we’ve received very good feedback about the report’s content from our audience.

Some key takeaways of the report:

• APAC real estate investment markets are on an upswing following a progressive recovery in the world’s economies since the beginning of the year
• Transaction volumes across the region surged to new heights in H1 2021, up 28% compared to H1 2020, totalling a new record of USD103 billion
• The industrial and logistics markets across APAC are the fastest-recovering sectors, registering 70% growth year-on-year in H1 2021
• Asset dispositions by the APAC PE funds in the years to follow will bring more investment opportunities for investors
• REITs are garnering investor interest with a recovery in market pricing and potential IPOs on the cards
• Large-scale redevelopment strategies will support buy-side demand ahead

“Despite operating under the shadow of the pandemic, warehouse markets across the region have remained largely stable, driven by sustained demand from the e-commerce sector. Recent events that have impacted commitments to customers have put the development of supply chain resilience into focus and major occupiers are responding by re-configuring their strategies through building out inventory buffers and expanding urban distribution nodes. This will have positive knock-on effects for demand to strengthen for logistics spaces. Developers in the region remain on the hunt for opportunities to capitalise on growth trends, indicating sustained confidence in the region’s warehouse markets.”

The ongoing recovery in key property markets across Asia Pacific continued in the second quarter of 2021 and looks set to sustain through the second half, aided by strong demand for commercial assets from end-users as well as investors.

In China, a total of 30 deals were finalised across major markets, as both domestic and foreign market participants sought to acquire key assets across property segments. Korea continued to witness record-high unit prices for prime office space in Seoul, and Japan’s property markets remained buoyant in the face of stringent restrictions. In Singapore, investment activity was dominated by the privatisation of REITs, while in India, global private equity (PE) firms and developers made significant acquisitions in metro markets. Taiwan witnessed a surge in demand for commercial property from manufacturers on the back of strong export growth. In the Philippines, e-commerce companies and outsourcing firms took up space in data centres while healthcare and logistics companies should lead office take-up in the coming months. Thailand’s office market remained stable though its troubled hospitality industry could see higher transaction levels as beleaguered owners look to sell assets. We also expect to see more joint ventures between Thai and international investors across sectors. In Indonesia, the residential sector is expected to receive a boost from the extension of a tax waiver while urban mixed-use projects in the capital, Jakarta, received an influx of foreign funds as investors bet on a speedy post-COVID-19 recovery.

One of the four core APREA services together create synergy for sustainable growth of members across the region:

Advocacy through:

• Sustaining effort to proactively and strategically engage with policymakers across Asia Pacific
• Ensuring long-term growth of the securitised real assets sector in Asia Pacific
• Promoting employment, economic growth and a sustainable environment among stakeholders
• Harmonising industry standards especially in reporting transparency and sustainability

Read on for the full updates from our 2021 Q2 Advocacy Bulletin Updates which includes the following items: 

• NDRC has made a new announcement for China Infrastructure REITs on 2 July
• India’s SEBI reduces the trading lot size for REIT and InvITs to enhance liquidity
• Greater Sydney Construction Activity Pause
• Grant scheme for OFCs and REITs in Hong Kong
• SGX launches world’s first ESG Reit derivatives
• Singapore Land Betterment Charge Act 2021
• Implications of the G-7 Global Minimum Corporate Tax for Singapore
• Extension to Temporary Relief Measures for Property Sector due to Coronavirus Disease 2019 (COVID-19) Pandemic
• Refinements to Criteria for Publicly Listed Housing Developers with Substantial Connection to Singapore to be Exempted from Qualifying Certificate Regime

尽管新冠疫情前景尚未完全明朗，其对亚太地区写字楼租户的干扰正在减少。在灵活办公和新型工作模式日益普遍的趋势引导下，区域内企业已经在重启对不动产策略的长期规划。

针对“新常态”之下的写字楼发展和企业租户的应对措施，CBRE世邦魏理仕于5月启动了《未来的办公场所——2021年亚太区写字楼租户调查》，并于近期发布调查结果，确立了“区域内经济稳步复苏”、“企业不动产组合规模增长预期提高”、“混合办公趋势上升”、“未来的工作场所将更重视促进沟通与协作”、“企业将实施更具灵活性的工作场所设置”等五个主要的写字楼趋势。

该项针对亚太区各地不同行业写字楼租户的调查发现，大部分（71%）受访企业都认为企业经营环境正持续改善，这一比例显著高于2020年4月（22%）与10月（48%）的两次调查结果。其中，大中华区和太平洋地区受访企业的市场信心水平最高，而印度和东南亚地区企业对市场的乐观程度则相对较低。

With many markets succeeding in containing the pandemic and relaxing restrictions on business and social activity to some degree over the past six months, this year has seen a significant improvement in business sentiment across Asia Pacific. About 71% of survey respondents believe current business conditions are improving, marking substantial progress from the two surveys CBRE conducted in October and April 2020. Confidence was highest in Greater China and the Pacific, while India and Southeast Asia were less optimistic as they struggle to contain a new wave of infections. The unpredictability of infection rates will continue to weigh on the pace of the regional recovery for the foreseeable future. However, the rapid increase in vaccination rates in mature Asia markets and the reopening of offices globally will further strengthen corporate confidence in the handling of the pandemic.

Winning Strategies for Asia Pacific Real Estate

Top real estate and finance executives gathered in Singapore to discuss the opportunities and challenges ahead for the region’s real estate industry at an event hosted by the Asia Pacific Real Assets Association (APREA).

Jointly organized by APREA, SS&C and Intralinks, the event, “Accelerating Technology in the New Normal of Real Assets,” the livestreamed event covered a wide range of issues transforming the industry, from real estate data to ESG (Environmental, Social and Governance) goals.

ある調査会社によると、今年上半期におけるある調査会社によると、今年上半期におけるオーストラリアへの不動産投資は対前年比で倍増となり、コロナ対策を着実に行い一定の成果を示し続けているオーストラリアに対する投資家の注目度は高い。こうした状況を踏まえ、このほどAPREA はオーストラリア不動産市場の現状や税務に関するWebinar を開催した。今回は市場概要をお届けする。

コロナ対策に一定の成果コロナ対策に一定の成果経済回復は早期に実現

メルボルンでのロックダウン期間は長かったもメルボルンでのロックダウン期間は長かったものの、オーストラリア政府はコロナウィルス対策を効果的に行い封じ込めに成功したと言えるであろう。オーストラリアの感染人数は約３万人、総人口のたった0.12％に過ぎない。政府は景気刺激策に2000 億ドル超を投入、事業主に対しては雇用継続向けに900 億ドル超の賃金支援を行った。ただ、シドニーは変異株の流行により先週から２週間のロックダウンが行われている。ワクチン接種率はほかの先進国よりはやや遅れておりまだ人口の1/4 程度だが、今後は順調に接種が進む予定である。

金利引き下げ策および量的緩和策の実行金利引き下げ策および量的緩和策の実行により国債利回りは低いため、不動産利回り同様魅力的なスプレッドとなっている。政策金利は0.1％で、コアの負債コストは140～190bp の範囲に収まると予想している。コロナウィルス感染拡大は28 年ぶりのリセッションをもたらし、2020 年第２四半期のGDP は７％の落ち込みを示したが、回復は早く2021 年３月の数字は1.1％と、パンデミック以前のレベルまで持ち直1.1％と、パンデミック以前のレベルまで持ち直し2022 年は3.5％、2023 年は３％と予測されている。

前回のリセッションと比べ失業率は急激に悪前回のリセッションと比べ失業率は急激に悪化したものの、回復も早く2021 年３月は5.1％まで回復しており、政府の支援策が功を奏したとのようにも見える。セ

With the need for quality and cost-effective manufacturing becoming even more necessary due, to the disruption and economic implications of COVID-19, and global corporations looking to diversify their manufacturing bases and de-risk their supply chain, India has spotted an opportunity to capitalize on this strategic shift.

India has been active on the policy front and is paving the way to become the world’s most preferred manufacturing hub. The Production Linked Incentive (PLI) scheme is the cornerstone of the Indian government’s masterplan to boost domestic manufacturing and make it globally competitive. Introduced in April 2020, the scheme has set in motion aseries of game-changing reforms that will attract global manufacturing majors with a focus on sectors such as mobilephones, electronics, pharmaceuticals, food processing, IT, battery storage, automobile components and specialty steel.The core objective is to signal a turning point for Indian Industry and gain a global presence while boosting economicgrowth through job creation.

A measure of the government’s seriousness and the scale at which it is pushing the scheme is its outlay: Rs 1.97 lakhcrore, or $26 billion, across 13 key sectors. The highlights are:

● Linking incentives to output: Incentives will be based on the overall rate of growth in that industry. Beneficiarieswill have to consider additional investments in greenfield facilities or even to carry out facility expansions toachieve this increment. All of this will reduce imports too

● Results matter: Incentives will be disbursed only after production has taken place in the country. This will boostexisting capacities in domestic manufacturing for sunrise and strategic sectors, and make domestic manufacturing globally competitive

● Creating ‘champions’ to maximize impact: The focus is on size and scale for the selected industry players todeliver volumes. This will make it exceedingly effective and can make the beneficiaries globally competitive