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1、IN EMERGING SECTORSNEW OPPORTUNITIES APREA Knowledge Brief Volume APREA Knowledge Brief Volume 9 9TABLE OF CONTENTSIntroduction:New Opportunities in Emerging SectorsIntroduction:New Opportunities in Emerging SectorsBy Sigrid ZialcitaNew Opportunities in Emerging SectorsNew Opportunities in Emerging

2、SectorsBy Shobhit AgarwalAmid Economic Uncertainty,Emerging Sectors and ESG Amid Economic Uncertainty,Emerging Sectors and ESG Offer New Opportunities for Asia Pacific InvestorsOffer New Opportunities for Asia Pacific InvestorsBy Greg Hyland and Henry ChinGrowth of Flexible Office SpaceGrowth of Fle

3、xible Office SpaceBy Quaiser ParvezThe Rise of Flexible LivingThe Rise of Flexible LivingBy Christos MisailidisThe Cloud Lives in BuildingsThe Cloud Lives in BuildingsBy William LeungEduinfraEduinfra:Emergence of a New Asset Class:Emergence of a New Asset ClassBy Shreejith R,Raina Mitra and Ruchir S

4、inhaThe Importance of Integrating ESG to Attain Sustainable The Importance of Integrating ESG to Attain Sustainable and Responsible Growth in Emerging Sectorand Responsible Growth in Emerging SectorBy Rajesh JaggiAsia Pacific Real Assets Association Limited(APREA)does not take responsibility for the

5、 contentand accuracy of articles on this publication.APREA,its respective directors,employees or affiliatesdo not make any representation or recommendation whatsoever regarding articles in any of thepublications.APREA believes the information in the Knowledge Brief publications to be reliable,but we

6、 make absolutely no representation or warranty nor accept any responsibility or liability as toits accuracy,completeness or correctness.Nothingin these publications or website should be takenas a recommendation or to take account of investment objectives,financial situations or theparticular needs o

7、f any reader.Any information is no substitute for the exercise of judgment.Reader should obtain their own expert advice on all matters.APREA accepts no liability for damagesuffered as a consequence of our published publications,research,policies or guidance being usedto mislead athird party.Copyrigh

8、t 2023APREA.All rightsreserved.12345678APREA Knowledge Brief Volume 9:New Opportunities in Emerging SectorsIN EMERGING SECTORSAmid the current challenging times for the global economy,the Asia Pacific region remains a bright spot.This is in part due to new and compelling opportunities for investors,

9、especially in asset classes that go beyond the traditional sectors of residential,commercial,and retail.This issue of Knowledge Brief explores the case for investing in niche and emerging sectors,which have been outperforming traditional asset classes.These include multifamily housing,flexible offic

10、e space,senior living,healthcare and life sciences,renewables,modern industrial parks,warehousing,date centres,and more.What are the trends and opportunities in the regional investment landscape?How has technology,as well as changing lifestyles and working practices,caused investors to rethink their

11、 strategies?The articles in this volume discuss how opportunities abound in the real assets industry,with robust prospects for the Asia Pacific.Shobhit Agarwal of ANAROCK Capital Advisors“New Opportunities in Emerging Sectors”presents an overview of how Indian real estate has rapidly evolved and gro

12、wn in diverse ways.Post pandemic,he observes pragmatic shifts in terms of investment opportunities towards emerging sectors such as data centres,warehousing,multifamily housing,senior living,flexible office spaces,and more.APREA Knowledge Brief Volume 9:New Opportunities in Emerging SectorsINTRODUCT

13、ION:NEW OPPORTUNITIES Despite global economic headwinds softening investor sentiment in the commercial real estate market,Greg Hyland and Henry Chin of CBRE sees windows of opportunity across sectors in Asia Pacific.According to their article“Amid Economic Uncertainty,Emerging Sectors and ESG Offer

14、New Opportunities for Asia Pacific Investors”,the changing landscape has also led to evolving investor preferences across strategies and sectors in the region,with more investors seeking out opportunistic investment strategies in 2023.In“Growth of Flexible Office Space”,Quaiser Parvez of Nucleus Off

15、ice Parks writes about the flex office sector,which has gained strategic importance.The unprecedented growth in the sector has attracted multiple players trying to make a mark.For any large landlord,flex offices prove to be a key amenity and provide solutions for companies which are unable to sign c

16、onventional leases.Parallel to this,Christos Misailidis of Bluegrounddiscusses why flexible living is on the rise,the benefits of this modern lifestyle,and the impact it will have on the real estate market as well as other industries.“The Rise of Flexible Living”expounds on the massive growth opport

17、unities for this sector.In“The Cloud Lives in Buildings”,William Leung of Cohen Steers writes about the real estate that serves as the backbone of our digital age:data centers,towers,and industrial properties.He believes that these communications infrastructure and logistics properties represent an

18、attractive long-term investment opportunity in the coming years.The team at Resolut Partners takes a close look at an emerging sub-set of infrastructure that is garnering increasing amounts of interest from global private equity and pension funds in“Eduinfra:Emergence of a New Asset Class”.EduInfra

19、refers to the infrastructure,building and land used to deliver social services like education,and it promises to be attractive to international annuity investors looking for stabilized yield plays.ESG remains a key theme,as Rajesh Jaggi of Everstone Group emphasizes in“The Importance of Integrating

20、ESG to Attain Sustainable and Responsible Growth in Emerging Sectors”.To ensure that assets are hedged against regulatory and market risks,it has become increasingly important to focus on ESG adoption as part of a companys overall business strategy.We hope that you will get plenty of insights from t

21、hese articles and that your horizons will become wider after reading them.May you all continue to seize opportunities in the real assets industry!APREA Knowledge Brief Volume 9:New Opportunities in Emerging SectorsSigrid is the Chief Executive Officer of Asia Pacific Real Assets Association(APREA).B

22、ased in Singapore,she is responsible for overseeing the strategic direction,initiatives and operations of the association across Asia Pacific.Under her leadership,APREA repositioned to an industry trade group focusing on real estate and infrastructure.Prior to APREA,she served as Managing Director o

23、f Asia Pacific Research and Advisory Services of Cushman&Wakefield(C&W)from 2010 through 2018,where she was responsible for research,thought leadership,strategy formulation and client management.Before relocating to Singapore,she was based in Washington,D.C.and led C&Ws U.S.research group in the Mid

24、-Atlantic region,overseeing all aspects of market research activities in the Washington,DC;Virginia;Suburban Maryland,Baltimore;and Philadelphia areas.Prior to joining C&W,Sigrid served as a Senior Economist for the National Association of Realtors(NAR).In that position,she developed NARs office,war

25、ehouse,retail,multi-family housing,and international research programs.A recognized expert in global economic,public policy and real estate issues,Sigrid is a frequent speaker at industry events.Her commentary on commercial and residential real estate markets is also regularly featured in a wide arr

26、ay of global publications,including the Wall Street Journal,Financial Times,Bloomberg,New York Times and Reuters.Additionally,she has made several television appearances on financial networks and radio such as CNBC,Bloomberg,CNN,National Public Radio and Channel News Asia.SIGRID ZIALCITACEOCEOAPREAA

27、PREA Knowledge Brief Volume 9:New Opportunities in Emerging SectorsIN EMERGING SECTORSNEW OPPORTUNITIES Traditionally,the opportunities explored in real estate sector were largely restricted to the residential,commercial,and the retail segments.However,the pandemic proved to be a game changer for th

28、e industry as it paved way for alternative avenues for investments.Post pandemic,the Indian real estate has emerged to be a resilient asset class and has grown in diverse ways.Indian real estate has been rapidly evolving and has seen a pragmatic shift in terms of business investment opportunities in

29、 emerging sectors like data centres,data centres,warehousing,multifamily housing,senior living,flexible office spaces,etc.warehousing,multifamily housing,senior living,flexible office spaces,etc.APREA Knowledge Brief Volume 9:New Opportunities in Emerging SectorsThe pandemic has driven the data cent

30、re business,providing windfall gains for the real estate industry.An upsurge in technology adoption and digitization across real estate sector has led to an explosion in demand for data centres globally.The governments vision and initiatives towards a digital economy received a significant boost as

31、all major functions like banking,education,and buying and selling had to switch and adapt to the newly emerged digital ecosystem.This led to a significant increase in data consumption and internet bandwidth across the country,which has given data centre providers new business opportunities to expand

32、.Although currently the presence of data centres is primarily in the major metropolitan cities,we expect tier II&III cities to emerge and offer quality supply for this new-age asset class.Boost in supply chain and increased dependency of companies on 3PL services have led to a strong demand for high

33、er warehousing capacity.This sunrise sector is already seeing a shift towards Grade-A warehouses from Grade B&C,which has certainly attracted attention of both domestic and foreign developers.Warehousing is aiding dependent businesses like 3PL,E-commerce,Manufacturing&Automotive,Retail,Consumer Elec

34、tronics&FMCG,etc to further develop and expand.Developers,both domestic and foreign,have further prospects to develop Grade-A warehouses even in Tier II and Tier III cities in India given the increase in demand resulting from increased consumption.Warehousing in India has gained significant attentio

35、n from investors as the country is poised to upgrade its supply chain to reach its goal towards a USD 5 Tn economy.Continuous policy support from the Government in the last few years,including infrastructure status to logistics sector,GST implementation,etc,has been crucial in attracting investments

36、 in this sector.DATA CENTRESWAREHOUSINGAPREA Knowledge Brief Volume 9:New Opportunities in Emerging SectorsThe Multifamily Housing sector is one of the oldest types of residential asset class.It broadly refers to the residential real estate industry,consisting of both rental and for-sale apartments.

37、Multifamily Housing is attractive as the demand for higher quality housing is steady.As a result,a considerable number of investors have shifted their focus towards this sector,as well as a considerable number of tenants or homebuyers are choosing multifamily developments as a preferred choice for r

38、esidential purposes.Moreover,both the supply and demand of multifamily units is expected to rise in future due to the growing number of people belonging to young demographic group entering the market,which makes this asset class very lucrative.Senior living housing has been a part of residential ass

39、et class for a few decades but has now seen an improvement in demand during the COVID-19 pandemic,with key focus on health and well-being of an ageing population.Real estate developers have started to cater to this demand,either through development of dedicated towers with necessary amenities for se

40、nior citizens within a regular group housing project,or through building standalone senior living projects.The main demand drivers are:1)a rise in elderly population and nuclear families,2)financially independent senior population,3)highly educated senior citizens,4)rising medical needs of the senio

41、r population,and 5)NRIs returning to India after retirement.MULTIFAMILY HOUSINGSENIOR LIVINGAPREA Knowledge Brief Volume 9:New Opportunities in Emerging SectorsWith the dedicated and continuous use of office space diminishing,companies are turning to activity-based seating or flexible office spaces.

42、This has given a thrust to the nascent hybrid model of working where the employees have an option to work from home or office.With growing flexibility in working,some organizations will be able to occupy a smaller office space and can utilize flexible space to meet any rise in employment.The key dem

43、and drivers for this sector are 1)the ability to reduce capital expenditure,2)allowing new businesses to test new models,and 3)offer employees more choice.In conclusion,the focus has shiftedIn conclusion,the focus has shiftedfrom the traditional asset classes in real estatefrom the traditional asset

44、 classes in real estateto the newer pastures of emerging segments,to the newer pastures of emerging segments,which are expected to perform in near future,which are expected to perform in near future,offering better diversification opportunitiesoffering better diversification opportunitiesto investor

45、s in the real estate sector.to investors in the real estate sector.FLEXIBLE OFFICE SPACESMr.Shobhit Agarwal,MD&CEO of ANAROCK Capital Advisors,is a visionary entrepreneur with professional excellence and experience of over 22 years in real estate investments.In his past role,Shobhit led the Capital

46、Market division of JLL India with aplomb.Having handled many marquee transactions,Shobhit has been instrumental in leveraging Indian real estate to the global capital market platform.At ANAROCK Capital,Shobhit steers the strategic direction through the various investment verticals to ensure that ANA

47、ROCKs core philosophy of technology enabled investor-centric decision-making continues to serve the best interest of its clients.SHOBHIT AGARWALMDMD&CEOCEOANAROCK Capital AdvisorsAPREA Knowledge Brief Volume 9:New Opportunities in Emerging SectorsAPREA Knowledge Brief Volume 9:New Opportunities in E

48、merging SectorsAMID ECONOMIC UNCERTAINTY,EMERGING SECTORS AND ESG OFFER NEW OPPORTUNITIES FOR ASIA PACIFIC INVESTORSDespite global economic headwinds softening investor sentiment in the commercial real estate market,CBRE continues to observe windows of opportunity across sectors in Asia Pacific.The

49、changing landscape has also led to evolving investor preferences across strategies and sectors in the region,with more investors seeking out opportunistic investment strategies in 2023.ESG also remains top of mind for investors.In recent years,we have observed the rise of niche and alternative real

50、estate across the globe.Investors have become more aware of alternatives as a whole,and the relatively attractive pricing and returns of these asset types have led to an increasing amount of capital being deployed in this sector.This outperformance of niche/alternative assets has been observed in th

51、e listed market across Asia Pacific.As of December 2022,CBRE Research observed that the niche/alternative market is currently the best performing sector on the listed market in the region,with Asia Pacific REITs focused on alternatives trading at an average of 13%above NAV.Alternative sectors outper

52、forming compared to traditional sub-sectorsWhile this is a drop-off from the 75%premium observed in Q3/Q4 2020,alternative assets are expected to show greater stability during times of economic turbulence.Typical lease terms for alternative assets in the case of data centres,childcare and healthcare

53、 properties are longer than the traditional sectors,and with tenants being responsible for Maintenance Capital Expenditure,the stability of cash flows is a key point of difference.APREA Knowledge Brief Volume 9:New Opportunities in Emerging SectorsAPREA Knowledge Brief Volume 9:New Opportunities in

54、Emerging SectorsIn Asia Pacific,this increased investor interest in the alternatives sector has been led by the uptake in data centres and healthcare opportunities.However,more recently the nascent multifamily and build-to-rent(BTR)opportunities have become the darling of the investor space.Accordin

55、g to CBREs Asia Pacific Investor Intentions Survey 2023,which surveyed more than 500 investors in the region,the multifamily and BTR sectors have seen the most significant change in investor interest over the past 12 months.While industrial and logistics remains the most preferred asset class,the re

56、sidential sector(especially multifamily and BTR)logged the strongest uptick in interest,with Japan,Australia and mainland China the primary markets of focus.Multifamily will continue to attract the bulk of interest in the residential sector,with 84%of respondents choosing this as their preferred ass

57、et type in the residential space.With 40%of Gen Zers in Asia Pacific wanting to live in shared accommodation(according to CBREs Asia Pacific Live-Work-Shop Report),we expect co-living to be the subject of strong investor demand,especially in Hong Kong SAR and Singapore,where housing affordability re

58、mains a challenge.Source:2023 Asia Pacific Investor Intentions Survey,CBRE Research,January 2023Investors preferred sector for investment in 2023In the alternative space,healthcare-related properties,including life sciences and medical offices,have overtaken data centres to become the most popular a

59、lternative sector for investment in Asia Pacific.Interestingly,this marks the first time since the survey began that this asset class has ranked higher than data centres.However,the investible universe for this asset class in the region remains limited.Compared to the U.S.and Europe,there is room fo

60、r growth in healthcare-related transactions in Asia Pacific,with just US$717 million-worth of healthcare related assets changing hands in 2022.On the contrary,interest in data centres fell this year,mainly due to these properties high carbon emissions stemming from their substantial power consumptio

61、n.Demand for this asset class remains strong,but assets available for sale and land for data centre development are extremely limited.However,the situation is expected to improve in 2023 as more completed data centres come to market.APREA Knowledge Brief Volume 9:New Opportunities in Emerging Sector

62、sInvestors preferred alternative asset for investment in 2023Source:2023 Asia Pacific Investor Intentions Survey,CBRE Research,January 2023APREA Knowledge Brief Volume 9:New Opportunities in Emerging SectorsESG continues to play a key role in informing investment decisions,not only for the purpose o

63、f fulfilling regulatory requirements,but also to preserve future asset value.However,some investors continue to delay ESG adoption due to unfavourable macroeconomic conditions and rising construction costs.According to the Asia Pacific Investor Intentions Survey,around 60%of investors,the bulk of wh

64、ich are private equity funds,real estate funds and REITs,intend to continue to adopt ESG criteria in all their decision-making.This is due to their prior commitment to various regulatory requirements,environmental protection regulations,and GRESB benchmarking.The remaining 40%of respondents,mainly d

65、evelopers and sovereign wealth funds,plan to delay or postpone their adoption to ESG due to the current macroeconomic and geopolitical climate.CBRE believes that cost-conscious investors can consider participating in projects with shorter payback periods by using green debt financing.CBREs Asia Paci

66、fic Sustainable City Ranking report found that some US$148 billion of green bonds were issued in Asia Pacific in 2021,with about 21%of money raised used for construction.ESG remains key for investorsAbout 70%of investors indicated they would be willing to pay some form of a price premium to acquire

67、an ESG certified property.A majority of those willing to do so would only pay a premium of less than 5%.CBREs Spring 2022 Asia Pacific Occupier Survey also found that 62%of corporates said they have already moved or are considering moving to green buildings a trend that is set to continue in the com

68、ing year.While the overall average green building adoption rate in Asia Pacific stood at 43%in 2022,the rate for newly completed buildings was higher,reaching 63%as of November 2022.Australia and Singapore lead the rest of Asia Pacific in green building adoption as authorities in these markets requi

69、re all new buildings to be green certified.With green buildings set to become the norm across the region,along with the global commitment to achieving net zero emissions by 2050,investors are strongly advised to integrate ESG criteria into their investment decisions.Investing in green buildings to p

70、reserve future asset valueWhat is the price premium that you would give to an ESG asset compared to a non-ESG asset?Source:2023 Asia Pacific Investor Intentions Survey,CBRE Research,January 2023APREA Knowledge Brief Volume 9:New Opportunities in Emerging SectorsCBRE has identified some potential Con

71、formist,Contrarian and Vintage investment strategies for investors to consider.Beyond the traditional asset classes,here are some potential strategies for emerging sectors in Asia Pacific:Investment strategies for emerging sectorsConformist:Pursue multifamily assets offering attractive cash-on-cash

72、yields in Japan and development opportunities in mainland China and Australia.Contrarian:Realise profits by disposing of earlier investments in logistics and multifamily,especially as cap rates are expected to move out across the region.Look at hotels as tourism rebounds in 2023.Focus on mainland Ch

73、ina for trophy office assets in Shanghai,and Beijing;business parks and modern logistics facilities and BTR in Beijing and Shanghai.Vintage:Engage in debt investment including senior to junior loans in Korea and Australia.Examine potential distressed opportunities in mainland China,Korea and Austral

74、ia,where refinancing risk is high.Take advantage of the brief window of opportunity to buy high quality assets.APREA Knowledge Brief Volume 9:New Opportunities in Emerging SectorsDr Henry Chin is the Global Head of Investor Thought Leadership and Asia Pacific Head of Research at CBRE.Henry leads a g

75、lobal research team to identify the key forces influencing commercial real estate investors across all sectors and collaborates closely with CBRE clients to help them understand the intricacies of property markets and make strategic investment decisions.HENRY CHINGlobalGlobal HeadHead ofof InvestorI

76、nvestor ThoughtThought Leadership,Leadership,HeadHead ofof Research,Research,AsiaAsia PacificPacificCBREGreg Hyland is the Head of Capital Markets,Asia Pacific for CBRE.Based in Singapore,he is responsible for all of CBREs Capital Markets teams across the region.With over 20 years of Capital Markets

77、 experience,Greg is accountable for the day-to-day management of all Capital Markets businesses and operations,including real estate investment sales and debt and structured finance,across North Asia,South East Asia and India,and Pacific.In the past five years,he has advised on more than$10 billion

78、of real estate transactions.GREG HYLANDHeadHead ofof CapitalCapital Markets,Markets,AsiaAsia PacificPacificCBREGROWTH OFFLEXIBLE OFFICESPACEAPREA Knowledge Brief Volume 9:New Opportunities in Emerging SectorsAPREA Knowledge Brief Volume 9:New Opportunities in Emerging SectorsWhile these companies co

79、ntinue to work in more conventional set up for their head office;flex gave them an opportunity to grow their businesses and set up new verticals without foregoing initial cash flow or committing to long term leases.Start ups are another segment which have greatly benefitted from the solutions offere

80、d by flex players as it allows them optimum capital allocation towards growing their core businesses.Flex also offers mature companies to cater to demand of employees for creating“Hybrid”options with interim solutions at expanded locations,de-densification and more collaborative spaces.The era of fl

81、ex office started with“co-working”where the likes of We Work aggregated spaces from landlords and started offering seats to individual customers on short term basis.The term has now metamorphosed into various nomenclatures including“Flexible Workspaces”,“Enterprise Solutions”,etc.As the covid pandem

82、ic stuck,companies started focusing on the segment driven by the need to manage their business in times of changing economic environment.Companies realized the need for saving upfront cost and being agile in managing their workforce.The term“Hybrid”started gaining prominence as companies started exp

83、loring options with enterprise players like Tablespace,Simpliworks,Smartworks,etc.who negotiate with the landlord for space and provide a plug and play solution to these companies managing the fit outs,admin and other operations.Why FlexAPREA Knowledge Brief Volume 9:New Opportunities in Emerging Se

84、ctorsConventional leases are generally charged on per sq.ft basis on the area being leased by the companies.The spaces are generally“warm shell”with companies required to do the fit outs and manage operations of their office space.Flex works on the mantra of“Converting Capex into Opex”.Unlike conven

85、tional lease,they charge a cumulative value on per seat basis which would include all outgoings in relation to rent,fit outs,admin,wear and tear,AMCs of equipment,etc.This allowsthe flex player to earn a consolidated value against all expenses being incurred.Their scale allows them to earn margins a

86、cross the spectrum of services being offered.In comparison to a conventional lease,the companies hence end up paying a premium while enjoying flexibility and ability to focus on core business with the office build out and operations completely outsourced to a flex operator.As the flex operators cont

87、inue their growth trajectory,one of the key focus areas remain expansion of portfolio and establishing strong relationships with prospective occupiers.Occupancy,average per seat revenue and center level P&L are gaining prominence as flex operators focus on reducing costs and expanding their revenue

88、streams.Some of the operators are also using technology to their advantage and offering value added services.Economic Drivers for FlexAPREA Knowledge Brief Volume 9:New Opportunities in Emerging SectorsThe sector has now gained strategic importance with a growth of almost 7x since 2016.As of H1 2022

89、,47mm sf of space pan India is occupied by Flex operators.Close to 30%of the stock is in Bengaluru which has been one of the key commercial space market in India.Flex contributed almost 14%of the annualized absorption in 2022 lagging only behind the IT/ITES sector which contributed close to 29%of th

90、e net absorption.The unprecedented growth in the sector has also attracted multiple players trying to make a mark.It is estimated that the top 10 players today account for close to 60%of the space and the years ahead may witness mergers with 7-8 players dominating the sector.The strategic business h

91、as also attracted interest from private equity players with the likes of Wework,Tablespace and Awfis completing fund raise from institutional investors.Tablespace recently closed a$300m fund raise from a marquee investor which is one of the largest fund raise in the segment.Sector OutlookWe believe

92、that flex is a key amenity across campuses and 8%10%of space being available with flex operators in campus developments are value accretive for the campus.The flex operators can cater to and provide solutions for companies which are unable to sign conventional leases offering them plug and play solu

93、tion with shorter lock ins,unconventional rent structuring and scalability options to grow their real estate space as their businesses and headcounts increase.The flex operators are also able to cater to smaller growth requirements for existing companies within the campus as they attempt new busines

94、ses or hire temporary manpower to manage spurts in volume of work within their existing business.As the business stabilize,these companies naturally become more amenable to lease space directly from landlord and create an office environment in terms of aesthetics which truly resonate with their etho

95、s and culture.What does it mean for landlordsAPREA Knowledge Brief Volume 9:New Opportunities in Emerging SectorsAs the sector continues to grow,it is expected to reach 80mm sf of stock by 2025.In conversation with our occupiers,we have realized that the CRE strategy is still evolving with companies

96、looking at various options to be financially prudent and offer and a solution to their workforce to enable their“Return to Office”strategies.The management and leadership team have been equivocal in their demand to get their employees back to office as they have witnessed the productivity,teamwork a

97、nd collaboration getting impacted.A term which is recently being used is a“Core+Flex”strategy which will allow companies to continue growth in conventional lease format while offering flex spaces in decentralized location,enable dedensification and offer more collaborative spaces.THE FUTUREThe busin

98、ess model is also currently based on the ability of the flex operator to lease and consolidate large spaces from landlords.As time goes by and the sector reaches a matured phase,landlords can try and offer whitelabel orsimilar solutions on their own if the business models prove to be successful.Whil

99、e flex will continue to stay and grow,the sector is still evolving,and we are bound to witness some hiccups as the business models of the flex operators and their ability to scale and deliver profits are tested in the years to come.Quaiser Parvez is the CEO for Nucleus Office Parks,the operating pla

100、tform for fully owned Blackstone offices in India.Nucleus Office Parks currently manages 20 Mn Sq ft of Grade A assets across Mumbai,Bangalore,Chennai and NCR.Prior to Nucleus Office Parks,Quaiser has held key positions managing business operations,development and service&support.He has worked with

101、CBRE&JLL in their Capital Markets group and involved in multiple assignments of asset dispositions,project feasibility and investor services.Before being in Real Estate,Quaiser spent few years with GE Capital&Gallagher India in operations and overseeing offshore delivery centre.QUAISER PARVEZCEOCEON

102、ucleus Office ParksAPREA Knowledge Brief Volume 9:New Opportunities in Emerging SectorsHow people live,work,and explore the world around them is changing.Due to recent global events and evolving technology,the idea of flexible living is not just a dream but a present-day reality.However,it appeals t

103、o different demographics for different reasons.As this phenomenon reshapes what tenants envision for their“home,”were exploring why the way people live is changing and what the future looks like.Currently,renting an apartment is tedious and Currently,renting an apartment is tedious and timetime-cons

104、uming.consuming.Tenants are required to wade through manual processes,interact with multiple parties,and lock themselves into a lengthy contract with inflexible terms.On top of that,these spaces come unfurnished,requiring more time and money from tenants.In essence,renting is too rigid and unable to

105、 meet the needs of those seeking quality housing.THE RISE OFFLEXIBLE LIVINGFlexible living solves these problems in Flexible living solves these problems in a a number ofnumber of ways.ways.Through tech-enabled experiences and all-in-one apps,those looking for housing can easily search real-time lis

106、tings,book the one they want,and manage everything from move-in and apartment details to support and maintenance requests.Better still,tenants enjoy flexible terms with no long-term commitments.The apartments are also already furnished,making them move-in-ready from day one.Blueground is adding to t

107、his growth in flexible living by making thousands of turnkey,fully equipped apartments available where tenants want,when they want,on the terms they want.Several factors have contributed to the Several factors have contributed to the explosive growth of flexible living.explosive growth of flexible l

108、iving.The global pandemic created a necessity for teams to work from home.This new way of working served as proof that remote workers could maintain or even improve productivity.No longer tied to the location of an office,people now have a greater opportunity to live and work wherever they want.In f

109、act,more and more people now desire this flexible lifestyle.In a recent survey of Blueground guests,we found that many who experience this lifestyle want to continue doing so,with 44%of guests in 2022 extending their lease beyond the initially planned terms,up from 39%in 2019.Improved technology and

110、 widespread internet access have contributed further to this shift toward flexible living.These two elements helped increase work-from-home opportunities and how easily teams connect and communicate every day.APREA Knowledge Brief Volume 9:New Opportunities in Emerging SectorsThe rise in flexible li

111、ving will impact other The rise in flexible living will impact other industries as well.industries as well.Firstly,with homes coming fully furnished,tenants will not only reduce their environmental impact but also begin to cultivate asset-light mindsets.This could result in a dip in retail purchases

112、,especially in the home goods sector.Secondly,the ability for people to easily move cities,countries,or continents will decrease the need for auto purchases while driving the demand for ridesharing and public transportation in urban centers.Lastly,there may be an increase in real estate devoted to c

113、oworking spaces due to companies being more open to employees living and working from anywhere.APREA Knowledge Brief Volume 9:New Opportunities in Emerging SectorsTenants value flexible living for a few different Tenants value flexible living for a few different reasons.reasons.Work-life balance:Thi

114、s type of flexible lifestyle is sometimes called a“work-cation”because it combines a persons career with leisure travel.People have the chance to make a living and,at the same time,enjoy attractive areas where they can soak up beautiful scenery or new cultures.Freedom:Lacking the physical(and mental

115、)weight of larger possessions like furniture,tenants arent tied down.They can pick up and move each month or stay for as long as they like.The choice is theirs.Exploration:A turnkey apartment offers the peace of mind and confidence that people need to venture out.Serving as a base camp,this space pr

116、ovides a stable foundation for exploration.Mobility:Without long-term contracts,people have the flexibility to relocate where they want and when they want.If a person is ready to move to a new location for whatever reason,its simpler than ever before.Its not just one type of person that values Its n

117、ot just one type of person that values flexible living.flexible living.Short-term.Long-term.Individuals.Couples.Business travelers.Those who are interested in flexible living have an eclectic mix of reasons why they prefer this option.And since the age of these tenants skews younger,this truly is th

118、e future of living.Here are some of the most common groups that seek out flexible living situations:Explorers:These frequent travelers have a natural curiosity and are ready to discover a new neighborhood,city,or culture.Eco-conscious renters:People with a focus on sustainable living prefer turnkey

119、apartments since this type of housing is usually more energy-efficient,utilizes existing materials,and leaves a smaller footprint in general.Employees and mobility managers:Those moving for short or long-term projects are searching for a quality,tech-savvy alternative to hotels.Corporate apartments,

120、such as Blueground,cost 30 to 50%less than a first-rate hotel,offer fully equipped kitchens for preparing meals,and are typically much more spacious and stylish than the alternatives.Expats:For people wanting to live or work outside their home country,there are fewer hurdles today.More and more of t

121、hese types of relocations are being driven by employees.In a recent survey,33%of Blueground for Business guests,not their employers,initiated a move to their new homes.APREA Knowledge Brief Volume 9:New Opportunities in Emerging SectorsThe flexible living industry has opportunities The flexible livi

122、ng industry has opportunities for massive growth.for massive growth.Its estimated that by 2035 the supply and demand for flexible living will grow by more than 10 times,especially in major cities around the world,including APAC,where private and institutional landlords can partner with proptechcompa

123、nies like Blueground to maximize their revenue.The untapped potential for cities and neighborhoods throughout Asia is seemingly limitless.Our plan is to be present over the next 5 year in all major capital cities of Asia Pacific.To accelerate this growth,we will be seeking partners to develop with t

124、hem cities in APAC through the FranchisingFranchising,Managed by Managed by BluegroundBluegroundand Joint Ventures Joint Ventures partnership programs we are offering globally.Christos Misailidis is the Chief Strategic Partnerships Officer and Head of APAC for Blueground.With over two decades of exp

125、erience,Christos leads both the Asia Pacific region and the companys global expansion through partnerships like JVs,Franchise,Management agreements.Prior to joining Blueground,Christos was the CEO-Asia Pacific&Middle East for IWG for six years.There he led 35 countries,including large markets such a

126、s China,Japan,India and Australia,and areas of major importance for the global economy,such as Hong Kong,Singapore and the United Arab Emirates.Christos Misailidis holds a Bachelors degree in Economics from the Athens University of Economics,an MBA from Portsmouth University and certificates from bo

127、th INSEAD and IMD Senior Leadership Programs.CHRISTOS MISAILIDISChiefChief StrategicStrategic PartnershipsPartnerships OfficerOfficer&HeadHead ofof APACAPACBluegroundIn conclusion,flexible living will continue growing in popularity,becoming a significant part of the housing industry in Asia while ga

128、ining a foothold as the first choice for a certain segment of tenants.The future of living has arrived.As the line blurs between how people work,relax,and explore,the opportunities for flexible living will expand even more.APREA Knowledge Brief Volume 9:New Opportunities in Emerging SectorsTHE CLOUD

129、LIVES IN BUILDINGSOur digital age of high-speed global communications and on-demand availability of computer system resources is built on real estate.Consider when a customer purchases from an online retailer.The order is typically transmitted from a computer or mobile device via a cell tower to a s

130、erver housed in a data center where it is processed.The order is then fulfilled from an industrial warehouse,where it is picked up for delivery to the customer.Theres a good chance the tower,data center and warehouse involved in the transaction are owned by listed real estate companies.We believe th

131、ese communications infrastructure and logistics property owners represent an attractive long-term opportunity driven by potentially substantial investments in the coming years.Over the next decade,5G-powered applications are expected to disrupt nearly every sector of the global economy.Companies tha

132、t own and operate data centers and cell towers provide critical infrastructure supporting the continued growth in data consumption.These companies are expected to enjoy well-defined growth as increased storage and computing capacity are needed to support the data volumes generated from 5G applicatio

133、ns.By 2028,global wireless data consumption is expected to increase more than tenfold from the levels seen at the start of the decade.And there is the potential for substantial upside to that growth in the years beyond from the launch of new use cases,with a meaningful amount of data traffic expecte

134、d to move to machine-to-machine communications with the Internet of Things,smart manufacturing and autonomous vehicles.The growing reliance on on-demand computing and digital platforms to manage video streaming,social interactions and remote work is driving the need for secure exchanges where servic

135、e providers can connect on neutral territorysomething data center REITs are uniquely positioned to provide.In 2022,data centers were caught up in the technology sectors sharp selloff,even as the property owners raised their earnings guidance amid strong tenant demand and 1030%year-over-year pricing

136、increases.We believe data center landlords with more densely interconnected assets(so that data can be transported faster and more efficiently)that are hard to replicate should stand out.We also see long-term opportunities in China,where growth potential is higher.The backbone of the connected econo

137、myU.S.and Europe-based infrastructure companies lease the space on their towers to wireless carriers,government agencies and broadband data providers under long-term contracts that often have annual rent increases.Historically,data consumption has proliferated with each new generation of wireless te

138、chnology,forcing carriers to keep investing in their networks to satisfy this demand,which we believe will lead to new leases and revenues for cell towers.Deploying 5G networks will require increased investments in traditional“macro”cell towers and small-cell nodes interspersed to provide capacity i

139、n higher population density areas.These nodes can be placed on macro towers or existing structures,such as traffic lights,streetlamps and rooftops,connected to local data centers via underground fiber.Historically,a typical technology investment cycle lasts about a decade.If this trend holds,we woul

140、d expect the 5G network buildout now underway to sustain an elevated level of capital investment for perhaps another 10 years,which could continue to benefit tower operators.However,in the near term,tower company valuations are not particularly compelling relative to other parts of the listed real e

141、state market,in our opinion.That said,we believe towers remain a key defensive sector heading into an uncertain 2023.APREA Knowledge Brief Volume 9:New Opportunities in Emerging SectorsAlong with the demand for e-commerce fulfillment centers,we believe industrial property owners will continue to ben

142、efit from growth in reverse logistics(processing customer returns from online purchases),higher inventories and reshoring of manufacturing as companies avoid supply chain issues,as well as expansion into new categories,such as groceries.In 2022,in addition to being caught up in the broad equity mark

143、et selloff,industrial property owners were pressured by Amazons plans to scale back its U.S.logistics expansion after adding millions of square feet of warehouse space during the pandemic.However,we think industrial REIT fundamentals remain among the best in listed real estate,with net absorption st

144、ill above the long-term trend.E-commerce penetration is expected to continue to expand at a healthy pace globally,and demand from other tenants,including companies seeking to avoid supply chain disruptions,is expected to remain strong.At the same time,the rising cost of capital and construction cost

145、s may limit new supply.Together,these factors are expected to support revenue per available foot growth of 45%annually for the sector for the next few years.Last-mile distribution and moreAPREA Knowledge Brief Volume 9:New Opportunities in Emerging SectorsAPREA Knowledge Brief Volume 9:New Opportuni

146、ties in Emerging SectorsData quoted represents past performance,which is no Data quoted represents past performance,which is no guarantee of future results.guarantee of future results.The views and opinions presented in this document are as of the date of publication and are subject to change.There

147、is no guarantee that any market forecast set forth in this document will be realized.This material represents an assessment of the market environment at a specific point in time and should not be relied upon as investment advice,does not constitute a recommendation to buy or sell a security or other

148、 investment and is not intended to predict or depict performance of any investment.This material is not being provided in a fiduciary capacity and is not intended to recommend any investment policy or investment strategy or to account for the specific objectives or circumstances of any investor.We c

149、onsider the information to be accurate,but we do not represent that it is complete or should be relied upon as the sole source of appropriateness for investment.Cohen&Steers does not provide investment,tax or legal advice.Please consult with your investment,tax or legal professional regarding your i

150、ndividual circumstances prior to investing.Risks of investing in real estate securitiesRisks of investing in real estate securities.The risks of investing in real estate securities are similar to those associated with direct investments in real estate,including falling property values due to increas

151、ing vacancies;declining rents resulting from economic,legal,political or technological developments;lack of liquidity;lack of availability of financing;limited diversification,sensitivity to certain economic factors such as interest rate changes and market recessions and changes in supply of or dema

152、nd for similar properties in a given market.DisclaimerForeign securities involve special risks,including currency fluctuations,lower liquidity,political and economic uncertainties,and differences in accounting standards.Some international securities may represent small-and medium-sized companies,whi

153、ch may be more susceptible to price volatility and less liquidity than larger companies.No representation or warranty is made as to the efficacy of any particular strategy or fund or the actual returns that may be achieved.Cohen&Steers Capital Management,Inc.Cohen&Steers Capital Management,Inc.(Cohe

154、n&Steers)is a U.S.registered investment advisory firm that provides investment management services to corporate retirement,public and union retirement plans,endowments,foundations and mutual funds.Cohen&Steers U.S.registered open-end funds are distributed by Cohen&Steers Securities,LLCCohen&Steers S

155、ecurities,LLCand are only available to U.S.residents.Cohen&Steers U.K.Ltd.Cohen&Steers U.K.Ltd.is authorized and regulated by the Financial Conduct Authority of the United Kingdom(FRN 458459).Cohen&Steers Asia Ltd.Cohen&Steers Asia Ltd.is authorized and registered with the Hong Kong Securities and F

156、utures Commission(ALZ367).Cohen&Steers Japan Ltd.Cohen&Steers Japan Ltd.is a registered financial instruments operator(investment advisory and agency business and discretionary investment management business with the Financial Services Agency of Japan and the Kanto Local Finance Bureau No.3157)and i

157、s a member of the Japan Investment Advisers Association.Cohen&Steers Ireland Cohen&Steers Ireland Ltd.Ltd.is regulated by the Central Bank of Ireland(No.C188319)2656290William Leung is Head of Asia Pacific Real Estate and a portfolio manager for global real estate securities portfolios.He has 27 yea

158、rs of investment experience.Prior to joining the firm in 2012,Mr.Leung was with RREEF Real Estate/Deutsche Bank for 12 years,where he was lead portfolio manager of the Asia real estate securities team.Previously,he was a research analyst with Merrill Lynch Asia Pacific.Mr.Leung has an MBA from the H

159、ong Kong University of Science&Technology and a BA from Hong Kong Polytechnic University.He is based in Hong Kong.WILLIAM LEUNGSeniorSenior ViceVice PresidentPresidentCohen&SteersEDUINFRA EMERGENCE OF ANEW ASSET CLASSAPREA Knowledge Brief Volume 9:New Opportunities in Emerging SectorsAPREA Knowledge

160、 Brief Volume 9:New Opportunities in Emerging SectorsIn recent times an emerging sub-set of infrastructure is garnering increasing amounts of interest from global private equity and pension funds Educational Infrastructure or EduInfra.EduInfra refers to the infrastructure,building and land used to d

161、eliver social services like education.India especially has a growing education sector,with the 2nd largest schooling system in the world,and the K-12 sub-segment constituting more than 50%of the overall size of the education industry in India.EduInfra is attractive to annuity investors looking for s

162、tabilized yield plays.The sector has an edge over other similar asset classes due to its non-GDP linked and rather recession proof character with significant potential for capital appreciation.Conventionally,deals in the education sector have involved private equity players investing in the asset he

163、avy model with very few school operators choosing to hive-off the underlying assets due to the impact on P&L.Emergence of Educational Infrastructure as a new asset classFrom a buy side perspective,EduInfra offers the best of both worlds higher than commercial real estate yield coupled with security

164、of underlying real estate with minimal vacancy risks,and a cash rich tenant that could operate at an EBITDA margin of up to even 50%(where the asset is not leased).A typical structure in this sector is illustrated below.Generally,there will be a public trust(or society or section 8 company)holding t

165、he educational institution.All school fees comes into this public trust,and the public trust incurs the operational expenses.Trust may outsource rendering of educational services and other operational matters to a management company(“ManCoManCo”)for a certain service fee.Infrastructure investors wil

166、l typically come in and acquire the real asset(land and building)and enter into a lease arrangement with the public trust.Lease rentals are often backstopped by the ManCo.The education sector offers great opportunities for growth with a burgeoning middle class and the high value ascribed to educatio

167、n.The sector also enjoys tremendous pricing power,seeing relatively low elasticity of demand.School operators who have been hobbled by the lack of growth capital can now turn to monetizing their underlying infra for their growth needs.This structure offers an asset light operations model allowing fo

168、r rapid expansion.This is similar to the sale and leaseback model widely deployed by airlines allowing for efficient capital deployment and significantly lower capital requirements.For annuity investors,these assets could offer an entry cap rate of 10%+on a netoperating basis with local leverage at

169、around 8.5 9.5%.The leases are long-term(usually 25 years+)and generally on a triple net basis(NNN),which essentially means that property tax,insurance and common area maintenance costs are paid for by the operator,thus minimizing operating expenses for the infrastructure investor.The cap rate could

170、 further be compressed by about 300 500 basis points.Ajay Kumar from Investcorp,a large global sponsor which is making EduInfra its central investment strategy said“The asset class has stable long-term yields and an attractive and resilient underlying sector creating a meaningful opportunity set for

171、 international investors with an attractive risk adjusted return profile.Also subsequent potential listing of an Infrastructure InvIT under Indian regulations can provide a favorable and efficient path to exit for investors.”What is the commercial story for EduInfra?APREA Knowledge Brief Volume 9:Ne

172、w Opportunities in Emerging SectorsAPREA Knowledge Brief Volume 9:New Opportunities in Emerging SectorsRegulatory uncertainty around(a)the commercialization of social infrastructure,and(b)the categorization of social infrastructure as real estate or infrastructure contributed to a certain degree of

173、regulatory morbidity.Both positions now stand clarified.Thanks to the overall push for development of social infrastructure,land and building of schools now qualify as infrastructure and have been added accordingly in the harmonised list of infrastructure assets.Infrastructure qualification has seve

174、ral advantages.1.Access to prioritized infrastructure funding:First,access to lower-cost bank loans due to EduInfrabeing a“priority sector”and access to certain infrastructure specific domestic institutions that offer credit at competitive rates.EduInfra Real estate or infrastructure?2.Tax exemption

175、s for patient capital:The potential to seek complete tax exemptions on income from interest and capital gains for sovereign wealth funds and pension funds.The list of infrastructure sectors to which the exemption currently applies doesnt include social infrastructure.However,the list has been expand

176、ing basis industry representations and we are hopeful that social infrastructure could soon be included basis industry representations.3.Exit through InvITs:Infrastructure investment trusts(InvITs)are increasingly becoming popular,attracting some of the worlds largest annuity and growth investors.In

177、vITs are tax optimized vehicles with light touch regulation by SEBI.Investors of an InvIT are subject to a reduced interest tax of 5%(as against 40%generally and say 10%for investors investing from the Netherlands,15%for Singapore etc.),and exempt from tax on dividends(10%in the Netherlands).Importa

178、ntly,InvITs are not subject to thin capitalization norms(unlike a company)making distributions to foreign shareholders tax optimal.Roll-over of assets to an InvIT in exchange of InvIT units is also tax neutral.Unlike REITs,which can only be public listed,InvITs could be public listed or private list

179、ed as well-a unique classification which allows for listing with just 5 investors.Hence,InvITs can act as an efficient platform for housing such infrastructure assets,and also benefit from cheaper leverage.Today,InvITs have attracted SWFs and PFs and leading global financial sponsors.A private liste

180、d InvIT can easily tap into public funds and convert into a public listed InvITfor optimal value unleashing at the appropriate time.APREA Knowledge Brief Volume 9:New Opportunities in Emerging Sectors1.1.Sophisticated counterparties,though not dealSophisticated counterparties,though not deal-makersm

181、akers:Founders,usually sophisticated academics and educationists,may not be quite keen to part with the real estate asset.Rakesh Gupta,Managing Partner at LoEstro,an investment banking and strategic advisory firm active in the EduInfra space said,“Most promoters tend to look at the business in entir

182、ety as an asset heavy business.Considering the way in which real estate has historically appreciated in India,promoters are conservative in their approach and the idea of an asset light model doesnt sink in easily.A combination of hand-holding and promoter education discussing the merits of an asset

183、 light model is therefore required.”With many schools being run as family businesses,there is a fair bit of effort required in the initial stages as the promoters may not be as growth oriented.With the sector remaining largely unorganized,it is primed for platforms to aggregate ideally a platform wi

184、th an operator,a growth investor and a yield investor with a different monetization story for the growth and the yield assets.2.2.GST Hit:GST Hit:GST of 18%on lease rentals tends to eat into the annuities,and there is a need for policy advocacy measures to reduce the rates.Currently,education servic

185、es provided by educational institutes are charged a nil rate while a large part of their expenses(rent and infrastructure fees)are charged at 18%.This could defeat the purpose of exempting education services from GST as the costs are likely to be factored included in computing the education services

186、 fees payable by students.Rationalization of this structure will have the benefit of reducing fees of students and further increasing access to education.3.3.Swelled up P&L:Swelled up P&L:School operators may not be keen on sale and leaseback structures as the lease rental payments could swell-up th

187、e P&L.So,the demand side could appear weak.What are the key challenges?4.4.Operator risk:Operator risk:Heavy reliance on the school operator delivering the high dividend yield often discounts the comfort from the ownership of the real estate due to perceived challenges in evicting the operator.Evict

188、ion of school management could no doubt be tricky.However,with newer operator chains coming in play,replacing the operator in the existing premises is not as difficult as it used to be.In fact,some EduInfra owners have also set up their operator platforms to ensure seamless transition of management

189、in case of operator default.The private fund may also require the lease rentals to be secured by the operator or by a parent/affiliate of the operator which can add a significant layer of comfort.5.5.Cash traps and regulatory approvalsCash traps and regulatory approvals:The underlying infrastructure

190、 assets may be held privately or through a trust.Where the assets are held by a public trust,transfer may require regulatory approval,which could be time consuming depending from state to state.Even where such approval is procured,unless there is a growth play planned or there is existing debt to re

191、tire,the sale proceeds tend to be trapped in the public trust since withdrawals from the public trust could be under close scrutiny.Hence,the end-use of the proceeds should be carefully structured before.While the market has significant depth,it is largely fragmented and hence challenging to deploy

192、large cheque sizes.On the operator side,with the entry of global super aggregators of schools like Nord Anglia(Oakridge),ISP(Sancta Maria),Cognita(CHIREC),and funds like KKR(Lighthouse Learning),Sofina&Sequoia(K-12 Techno),Foundation Holdings(Ryan International),Morgan Stanley(Narayana Group)the lan

193、dscape is evolving.On the asset side,players like Investcorp and Cerestra Ventures are actively building a portfolio of educational infrastructure assets with Cerestra setting up an InvIT to monetize their asset portfolio.Traditionally,assets like transmissions,telecom and other non-GDP linked asset

194、s were preferred by investors as against GDP-linked assets like roads or airports.Social infrastructure,while offering substantial cap rate compressions also providesConclusionaccess to an operating income that is better protected during economic downturns,while offering alpha during periods of GDP

195、growth.In an inflationary market where risk-free securities are trading at close to 7%,investors are recalibrating strategies to look for higher annuities.Opportunities are limited,especially when seen on a risk-adjusted basis.EduInfra,relatively less understood,appears to fit the bill.Shreejith reg

196、ularly assists the firm in advising sovereign wealth funds,global financial sponsors and large corporates,primarily on private equity and M&A transactions.He has also worked on aspects relating to securities regulations and cross-border tax.He has contributed to the firms policy advocacy measures in

197、 the real asset space and in the evolution of the securities law framework.His approach is to deliver practical,incisive legal advice rooted in a deep understanding of the commercial foundations of each transaction.SHREEJITH RAssociateAssociateResolut PartnersAPREA Knowledge Brief Volume 9:New Oppor

198、tunities in Emerging SectorsAPREA Knowledge Brief Volume 9:New Opportunities in Emerging SectorsRuchir has 17 years of experience advising clients primarily on private equity,PIPE,M&A and structured finance transactions.With background in fund formation and tax,he has been involved in developing the

199、 first generation of asset-specific tax optimized investment platforms and managed accounts.He advises leading global financial sponsors,SWFs and other institutional investors on private equity and PIPE deals primarily focusing on financial services(BFSI),technology and infrastructure sectors,few of

200、 which have been recognized as most innovative by Financial Times,London.He was involved in structuring the first unlisted InvIT,and advised on several other listed InvITs.He regularly advises strategic acquirers,SWFs and other global sponsors on cross border deals in listed and unlisted space,with

201、a special focus on control deals.Ruchir has been rated as a distinguished practitioner for years 2021 and 2022 by AsiaLaw and nominated as Dealmaker of the Year by Asian Legal Business.Ruchir co-chairs APREAs Infrastructure and InvITs committee and has been closely involved in the development of the

202、 SEBI REIT and InvIT Regulations.Prior to setting up Resolt Partners,Ruchir headed the corporate transactions group(PE,M&A,Structured Finance and Fund Formation)at a leading Indian law firm.RUCHIR SINHAPartnerPartnerResolut PartnersRaina focuses on private credit/structured finance,private equity an

203、d cross-border transactional tax,.She has worked with large asset management funds,sovereign wealth funds and investors across a broad range of innovative investment structures and financing models,including pure-play equity,debt and mezzanine funding.Her practise is tax-enabled,and her sector focus

204、 is infrastructure(including renewables)and new-age real estate(including hospitals,schools and social infra).RAINA MITRAAssociateAssociateResolut PartnersAPREA Knowledge Brief Volume 9:New Opportunities in Emerging SectorsThe importance of integrating ESG to attain sustainable and responsible growt

205、h in emerging sectorsOwing to sustained economic growth,rising affluence and consumer spending,the real estate market in the APAC region is expected to witness significant changes in the long term.The upcoming decades will be marked by the growth of niche and emerging sectors such as renewables,heal

206、thcare and modernized industrial parks,among others.Moreover,an aging population,which is expected to grow most rapidly in the APAC region,will drive the demand for alternative housing spaces such as multifamily housing and senior living facilities.Such projections have understandably attracted both

207、 regional and global investors to real estate opportunities in the APAC region.However,to ensure that their assets are hedged against regulatory and market risks,it has become increasingly important to focus on ESG adoption as part of overall business strategy.APREA Knowledge Brief Volume 9:New Oppo

208、rtunities in Emerging SectorsAgainst a backdrop of climate change,global warming and other factors warranting environmental responsibility,emerging sectors like industrial parks and renewables have a lot to gain by embedding sustainability among their long-term goals.To begin with,regulators are bec

209、oming increasingly focused on enforcing strict sustainability standards on businesses.This is further accompanied by a growing sense of environmental consciousness among consumers,combined with a decreasing tolerance for governance and social issues from both investors as well as regulators.ESG metr

210、ics are becoming increasingly critical in consumer purchasing decisions,with younger consumers(17-38 years)being twice as likely as older(over 38 years)ones to consider ESG issues before buying.This makes ESG an important factor to consider for businesses seeking sustainable growth in the future,as

211、non-adherence to such directives can lead to severe market risks.An ESG-aware approach is,therefore,becoming an essential component of business strategies adopted by both forward-thinking investors and business leaders.And this increase in the preference for ESG-based investment is becoming more and

212、 more evident from the increasing number of investors directing funds based on ESG parameters.It is expected that ESG-based AuM is expected to more than triple by 2026 to reach 3.3 trillion dollars.ESG framework as a Risk-mitigation StrategyAPREA Knowledge Brief Volume 9:New Opportunities in Emergin

213、g SectorsIn addition to serving as a hedge against regulatory and market risks in the future,adherence to ESG benchmarks also serves as a catalyst for growth in a more direct sense,especially in the commercial real estate space.For instance,green buildings,such as grade A warehouses,offer greater ef

214、ficiency in regard to the consumption of water,energy and materials,driving significant savings for businesses in the long run.Apart from the environmental impact,businesses ensuring compliance with ESG guidelines can also help maintain their Social License to Operate(SLO).Companies having higher ES

215、G scores have been reported as being more favourable for employee satisfaction and attractiveness as compared to other companies.This can boost employee motivation,retention,and ultimately,productivity.Investors are becoming more cognizant of these factors and are comprehensively embedding ESG audit

216、s into their due diligence processes.In such situations,companies and investors with strong sustainability practices may be seen as more responsible and may have a better reputation,which can enhance their brand and appeal to customers and stakeholders.The Importance of ESG as Catalyst for GrowthMor

217、e importantly,for investors,ESG-compliant businesses can fetch higher valuations as compared to businesses that arent.As investors expand their ESG knowledge,it is very apparent to them that companies integrating ESG and sustainable practices are more likely to outperform benchmark indices,which mak

218、es investing in these companies all the more attractive.And the fact that greater returns go hand in hand with sustainability is becoming more apparent,a majority of executives reporting that ESG delivers significant ROI.Companies having higher ESG scores have been reported as being more favourable

219、for employee satisfaction and attractiveness as compared to other companies.APREA Knowledge Brief Volume 9:New Opportunities in Emerging SectorsAs part of their responsibility towards the planet and its inhabitants,investors and business leaders alike need to incorporate ESG as an integral part of t

220、heir organizations and investments.This comes from the ESG values inculcated in all the stakeholders,from investors to employees.A cultural change in organization is necessary to drive this kind of change.However,this is much easier said than done.Environmental initiatives such as reducing the organ

221、izational carbon footprint,investing in green buildings and boosting renewable energy;Social initiatives such as diversity and inclusion and health,safety and well-being of people;and Governance responsibility like addressing stakeholder ESG queries and advocating for more robust ESG policies and pr

222、actices,may only be feasible to implement for individual enterprises.However,no enterprise that is large enough operates in a silo,and operates as part of large,often global,supply chains.So,the only way for businesses in emerging sectors to align with ESG directives is to partner with organizations

223、 that are not only ESG-conscious from a compliance perspective but are actively working towards responsible growth.However,enterprises may not find ESG-conscious contractors or suppliers easily.Hence,it is important for regulators and ESG-compliant partners to work with their non-compliant counterpa

224、rts by investing in capacity building and ensuring that entire supply chains become ESG-compliant.Driving real change with ESGCompanies can adopt a value chain approach to make the most out of ESG.The value chain framework will enable companies to identify key ESG risks,analyze opportunities for imp

225、roving efficacy and define ESG priorities.These can be backed by implementing rigorous plans and programs.What is more important is collaborative action by all global organizations,regardless of sector,and research institutions,and industry bodies to adopt practices that ensure sustainable and respo

226、nsible growth for everyone.APREA Knowledge Brief Volume 9:New Opportunities in Emerging SectorsIndoSpace(www.indospace.in)is Indias pioneer and largest developer of Grade A industrial and logistics real estate.IndoSpace has the largest network of 46 logistics parks with 51 million square feet delive

227、red/under development across ten cities.With Indias largest and most experienced industrial real estate team,IndoSpacecontinues to lead the development of the world-class warehousing backbone of Indias growth.For more information,visit www.indospace.in.ABOUT INDOSPACERajesh Jaggi is the Vice Chairma

228、n-Real Estate,at the Everstone Group,one of Asias premier investment groups,one of Asias premier investment groups focused on domestic investments in India and Southeast Asia,focused on domestic investments in India and Southeast Asia,and cross border North America and cross border North America Asi

229、a investments.Asia investments.Rajesh joined Rajesh joined EverstoneEverstone in 2012 as a partner and is responsible in 2012 as a partner and is responsible for all real estate investments and operations of the group.for all real estate investments and operations of the group.He has over 25 years o

230、f real estate leadership experience in India,including strategic planning,acquisitions,finance,sales and marketing,legal,and project and facility management services.Under his leadership,Everstone Groups industrial real estate business IndoSpace,has become the pioneer and the largest developer and o

231、wner of Grade A industrial and logistics real estate in India and has taken the total commitment to total commitment to India to above US$3.2 billionIndia to above US$3.2 billion.IndoSpace is the only pan-India developer of modern industrial real estate and has a portfolio of 49 million square feet

232、across 44 logistics and industrial parks49 million square feet across 44 logistics and industrial parkswith a marquee tenant profile consisting of blue-chip,multinational conglomerates such as IKEA,Amazon,Nissan,RAJESH JAGGIViceVice CharimanChariman RealReal EstateEstateEverstone GroupAPREA Knowledg

233、e Brief Volume 9:New Opportunities in Emerging SectorsDHL,DB Schenker,Delhivery,Steelcase,Ericsson,Bosch,and Aptiv.These facilities are in and around nine major industrial corridors/consumption hubs Delhi NCR,Mumbai,Pune,Bengaluru,Chennai,Ahmedabad,Coimbatore,Anantapur,and Rajpura and well connected

234、 through rail,road,air,and sea.In the same survey,IndoSpace was also awarded the Best the Best Innovative Green Developer in India for 2020,Innovative Green Developer in India for 2020,based on IndoSpaces continuous efforts to integrate sustainability and adopt sustainable technology to reduce carbo

235、n footprint.IndoSpace has also been named the Firm of the Year Firm of the Year-India India thrice in a row by the respected PERE magazine,the real estate arm of PEI,at PERE Awards 2021.In 2018,IndoSpaceformed a strategic longformed a strategic long-term partnership term partnership with GLPwith GLP

236、,the leading global provider of modern logistics facilities and technology-led solutions.GLP has over US$100 billion assets under management.Through this partnership,GLP has become an investor in IndoSpace Core,a joint venture established in 2017 by IndoSpace and Canada Pension Plan Canada Pension P

237、lan Investment Board(CPPIB)Investment Board(CPPIB)focused on acquiring and developing modern logistics facilities in India.CPPIB initially committed approximately US$500 millionUS$500 millionto IndoSpace Core.Rajesh is also a Young Presidents Organization(YPO)member in the YPO Gold Mumbai Chapter si

238、nce 2013.Before joining Everstone,he was the Managing Director of Peninsula Land Limited,a USD 400-million market capitalization listed real estate company,where he led the successful commissioning of projects that totalled 28 million square feet of real estate across residential,commercial,and reta

239、il space.Recently under Rajeshs guidance,EverstoneEverstone Group has Group has established established EverYondrEverYondr a joint venture with the a joint venture with the YondrYondr Group,Group,a global leader,developer,owner-operator,and service provider of hyperscale data centers,to develop and

240、operate to develop and operate data centersdata centersin India and support hyperscale clients and service in the fast-growing Indian market.EverYondr has already received commitments of$500 million and will seek to raise an additional$500 million to take the final capital commitment to final capital commitment to US$1 billion.US$1 billion.Rajesh is a graduate of the University of Mumbai and an alumnus of F.W.Olin Graduate School of Business at Babson College,Boston.He was featured as one of