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Real estate innovation: The next phase of growth

Real estate strategies will have to go on to add value through a broad array of services through partnerships and astute asset selection. For example, warehouse real estate space has received significant investments over the past few years. The question is: How will the market evolve as demand further picks up?

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Real Estate Sector

As the Indian economy evolves, value-creation opportunities in real estate will exist as much in capturing the consumption-growth upside as in pursuing strategies of specialisation. The last decade has seen significant investments in real estate and real estate-related infrastructure, as investors braced for growth and development. The next phase of growth will be driven as much by value-added real estate strategies as by capital market innovation in real estate financing.

Mapping real estate by larger secular trends would give us fascinating insights into the real pockets of demand. Some of the broad secular trends we see are rising income profiles, a gradually larger pool of senior citizens with life expectancy increasing, increased retail consumption (both online and offline) and increasingly high consumption of data, among others. Not only have these trends created the need for specialised real estate, but also the need for greater partnerships between service providers and real estate investors.

Real estate strategies will have to go on to add value through a broad array of services through partnerships and astute asset selection. For example, warehouse real estate space has received significant investments over the past few years. The question is: How will the market evolve as demand further picks up?

The key to warehouse businesses is twofold. Firstly, scale up from being purely real estate providers to “solutions providers”. Such warehouse businesses should have the capacity and know-how to cater to an increasingly large and fragmented user-base with technology, real estate and supply-chain expertise to help support the business ecosystem. While this trend has started already, the future holds greater promise and investment returns, if done well.

Secondly, for warehouse businesses and platforms, it is essential to keep building on the spoke and hub model. Large-scale warehouses, linked to dispersed smaller warehouses, catering to increasingly quicker delivery times is how it is going to be in the future.

Another sector where the real estate partner can provide both real estate expertise and relatively inexpensive access to capital to the service provider will be healthcare. Assets such as hospitals and high-end laboratories need access to significant real estate. Usually, either the hospital acquires the real estate or rents it. There is potential going forward for institutional platforms to purchase land to be leased to hospitals. The key to the strategy mentioned above versus piecemeal renting of hospital land is the ability of the platform to source capital at a significantly lower cost versus what the hospital chain can do.

The healthcare real estate focused platform may able to do so for a variety of reasons such as having access to a pool of investors with a lower cost of balance sheets and better credit ratings. Both the factors will provide a lower cost of capital. Additionally, for platform investors, a diversified pool of real estate assets does lower the risk profile through diversification, which in turn reduces the cost of capital for healthcare real estate asset.

Such innovative real estate strategies will be vital to fuel the next phase of growth for real estate-heavy sectors such as healthcare. The ability of healthcare providers to focus on healthcare services and have a less demanding debt-burden will be a significant value creator in the ecosystem. Real estate-focused investors, funds and, eventually, healthcare Real Estate Investment Trusts (REITs) will provide a liquid capital base with which to scale business.

Ultimately, investor-access to platforms that allow for some degree of secondary market liquidity will further help reduce the cost of capital for businesses. A combination of innovation in real estate and the “capital structure” that drives the real estate will be significant business drivers.

The previous strategy or some modified version of it will apply to many of the new sunrise sectors. A sector such as datacentres is also a component of a differentiated real estate strategy, whereby a combination of technological capacity combined with real estate acumen will drive the data centre real estate play. In an economy such as India with a structural demand, value creation opportunities abound.

A word of caution: A thorough analysis of demand-supply dynamics will be critical for long-term success. Given the very nature of real estate, both macro and local factors have a significant influence on investment returns. Past experience suggests that when local factors are ignored, investment returns can be adversely affected even with positive macro fundamentals.

By Taponeel Mukherjee

(Taponeel Mukherjee heads Development Tracks, an infrastructure advisory firm. Views expressed are personal. He can be contacted at [email protected] or @Taponeel on Twitter)

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Manipur student activist released on bail by Imphal court

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Veewon Thokchom

Imphal, Feb 19 (IANS) A court here on Tuesday granted bail to Manipuri student activist Veewon Thokchom, who was arrested from Delhi on charges of sedition.

The court of the Chief Judicial Magistrate, Imphal west, where Thokchom was produced after brought from Delhi, turned down the police plea for his custody and released him on furnishing a bond of Rs 30,000.

Thokchom’s lawyer Meihoubam Rakesh said that his client, who was preparing for examinations in Delhi, was arrested on February 15 by a combined Delhi and Imphal police team. According to his family members, he was not even given time to wear his slippers.

A former president of the Manipur Students’ Association Delhi and now an adviser, Thokchom had opposed the Citizenship (Amendment) Bill, 2016, which had been passed by the Lok Sabha on January 8. Recalling the mass agitations in Manipur on June 18, 2001 during which 18 persons including a woman had died, he had contended in a Facebook post that if the bill is passed by Parliament, the state’s people may renew demands for self-determination.

There had been demands from various students’ bodies to release Thokchom or face intensified protests from the students and people.

Some time back, the BJP-led state government had arrested Kishorechandra Wangkhem, an anchor with a local cable channel, on charges of sedition.

A local court was of view that that the offence he was charged with was not seditious and ordered his release. However police arrested him at the court’s door and detained him under the National Security Act for one year.

Massive protests from the media circles in India and abroad have been of no avail.

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Pulwama Attack: Terror gets a quantum Jump in Kashmir Under Modi

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suicide attack in Kashmir

In one of the most barbaric and brutal attacks, 40 Central Reserve Police Force (CRPF) personnel were killed in a car-bomb explosion triggered by a lone wolf named Adil Ahmad, also known as “Adil Ahmad Gaadi Takranewala” and “Waqas Commando of Gundibagh” in South Kashmir’s Pulwama on Thursday, 14 February.

The ferocity of the terror attack far exceeded even the Uri attack of 18 September 2016, in which four heavily armed terrorists targeted an Army brigade headquarters, killing 19 soldiers. This was clearly, the worst ever terror attack in lat twenty years in the Kashmir valley.

Both the Uri and Pulwama attacks were said to have been carried out by Pakistan-based terror outfit Jaish-e-Mohammed, which has subsequently taken the responsibility for this heinous attack on the CRPF convoy in Pulwama. This was one of the most audacious attacks and it established the fact that the Jaish-e-Mohammed is still very active and holds the capability of carrying out an attack of such a scale. It also reflects the failure of Modi government’s Kashmir policy much more than even the Uri strike.

While carrying out much criticised demonetisation on 8th Nov, 2016, Mr Modi cited checking terrorism in Kashmir valley as one of its objectives . But that never happened. On contrary, the terrorism received an unprecedented fillip post demonetisation. Modi Govt in a reply to the Lok Sabha admitted that terror incidents in Jammu and Kashmir have increased by 261 % in the last five years – from lowly 170 incidents in 2013 to a mind-boggling 614 incidents in 2018.

There were two key moments related to major spikes in terror incidents: In 2016, when Hizbul Mujahedeen commander Burhan Muzaffar Wani was gunned down in an encounter and again in 2018 when the no of local youth joining the terror outfits surpassed the record level from 16 in 2013 to 191 in 2018, an increase of nearly 1093%.

Now let us find out where Modi Govt went wrong. The problem lies in the way it tackles this decades old problem not as a political, but as a battlefield for some kind of ideological war. The BJP’s policies on Kashmir are guided by its desire to fulfill its ideologue Syama Prasad Mukherjee’s unfinished mission of establishing their rule in the Valley.

This was quite evident in their attitude towards capturing power in the state. They initially pushed Mufti Mohammad Sayeed into a corner to force him for an alliance and later on showed the same brinkmanship to make his daughter and successor Mehbooba Mufti to fall in line. Eventually, she also walked out from the coalition which left Mr Modi no choice but to impose the President’s Rule in the state.

This was diametrically opposite to what Vajpayee government did. The actions taken by the then NDA Govt resulted in fostering a PDP-Congress alliance government led by Mufti Sayeed in 2002.This was said to be one of the few phases in the violent history of Kashmir when the state experienced a relative calm. The intransigence of BJP government under Modi has led to a disastrous Kashmir policy that has nullified whatever goodwill the New Delhi had achieved in Kashmir since 2002.

In the 2014 J & K assembly elections, the highest turnout in Kashmir in last over 25 years was recorded. The increase in voting was more perceptible in the South Kashmir constituencies that have historically seen low turnouts, mainly due to boycott calls by the separatists. The other element which added to this increase in voter’s turnout was the reaction of majority Kashmiri Muslims to the aggressive campaigning by the BJP in the Valley. Kashmiris were apprehensive of BJP’s intention of abrogating the article 370 and felt that their identity as a special status would be in danger if the BJP came to power in the state.

In fact, there were several voters in the valley who came out to vote for the first time since the 1987 elections, which were heavily rigged by most accounts. However, this anti-BJP mood in Kashmir was squandered by the PDP when Mufti Mohammad Sayeed opted to form a government in the state in alliance with BJP.

This must have given a huge setback to the local Kashmiris because soon after this coalition Govt came in power, the increase in local youth joining the ranks of militants began. It just can’t be a coincidence that the PDP’s areas of influence in South Kashmir shortly emerged as the main hub of militancy.

Most of the top militants of the past few years hailed from South Kashmir – Burhan Wani from Tral in Pulwama district, Riyaz Naikoo from Awantipora in Pulwama district, Saddam Padder from Heff in Shopian district and even Ali Ahmad Dar, who carried out fidayeen attack on the CRPF personnel, from Kakpora, also in Pulwama.

Most of the young men from South Kashmir who joined the ranks of militancy, hailed from pro-Jamaat-e-Islami families. Interestingly, in the past, Jamaat is said to have had a tactical understanding with the PDP. In both the 2002 and 2008 Assembly elections, Jamaat cadres were said to have ignored the boycott calls and came out and voted for the PDP but the alliance of PDP with the BJP ruptured the PDP’s traditional ties with Jamaat and alienated its supporters across the Valley. Therefore, when the extremely popular Hizbul Mujahideen commander Burhan Wani was killed in an encounter in 2016, the PDP’s implosion accelerated dramatically.

Soon, a cycle of violence and mayhem began – protests, crackdown by security forces resulting in civilian casualties and sparking more protests. Every civilian casualty and pellet injury created further resentment from central Govt among an average Kashmiri which in turn resulted in more youth joining the militancy. The locals which earlier provided the helping hand to the security forces in its drive against militants stopped doing that and in process, PDP’s credibility nose-dived.
One of the crucial fallouts of this alienation deprived security forces of the human intelligence network almost entirely comprised of local Kashmiris. This breakdown in human intelligence is probably one of the reasons why security forces have become sitting ducks for attacks like the one we just witnessed in Pulwama on the Valentine ’s Day.

It appears, the government has learnt no lessons even after the Pulwama attack as most of its reactions are based on its flawed view of Kashmir. Take for instance MoS in the PMO, Jitendra Singh, who chose to attack NC and PDP, the mainstream political parties of Kashmir, which are perhaps the only set of well-wishers of some importance New Delhi has in Kashmir.

The problem of Modi government is it cannot differentiate between its political opponents and threats to national security. This is the reason; it has been unable to stop the rise of militancy in Kashmir in the past five years. The same is true for its inability to differentiate between Kashmiri civilians and the terrorists. It won’t be an understatement, if we say that armed forces personnel and the civilians in Kashmir are paying with their lives for this disastrous and flawed handling of Kashmir crisis by Modi Govt.

(DISCLAIMER : Views expressed above are the author’s own.)

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Analysis

Fake Operations – Column: Spy’s Eye

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FBI

A national Intelligence organisation — like that of India — earns the respect of the countrymen because it helps the State in discharging its sovereign function of safeguarding national security, stays completely non-partisan and establishes a method of working that is secretive but never crooked. Since security, by definition, is protection against a scheming adversary resorting to a ‘covert’ attack, the counter-intelligence effort relies on tradecraft techniques perfected with professional training – like surveillance, infiltration into the enemy’s camp, communication monitoring, raising human sources and carrying out an interview under ‘cover’. The adversarial entity has to be identified and then targeted keeping in view the aim that security by definition is preventive – if there is therefore the danger of an enemy infiltrating its vanguard into the country clandestinely, these ideally have to be picked up right at the point of entry.

For this a lot of effort is made round the clock by operational teams to garner intelligence about the identity and location of ‘enemy’ agents. Intelligence operators could try to ‘turn in’ a member of the adversary’s set up or ‘plant’ a person of their own trust there. The results are never easy to get but the intelligence agency is prepared to ceaselessly slog for getting access to the plans and activities of a ‘real’ enemy. A professional and upright intelligence organisation goes for the hard targets and does not fall for the temptation of somehow creating an illusion of success for credit in the eyes of the political masters — by manufacturing a narrative of threat without establishing the presence of an ‘enemy’.

If this is done by fabricating a ‘trap’ by way of creating a fake university for getting unsuspecting individuals — who could not, by any stretch of imagination, be described as ‘enemy agents’ — to land in the country for joining that educational institution and then hauling them up as unlawful people precisely on the ground of being in a fake institution, this is a rogue operation and not an intelligence effort. The criminality here would be on the shoulders of the phoney entity and its creators alone and not on the victims of the ‘fraud’ committed by the former.

Imagine the shock that the people across the democratic world would feel over the recent media reports to the effect that the Homeland Security agents in the US apparently in collaboration with the Federal Bureau of Investigation (FBI) — both are a part of the US Task Force against Terrorism — have rounded up hundreds of Indian students precisely in this way and tried to claim it as a great operation designed to detect infiltration into US. India has sent a demarche to the US Embassy in Delhi questioning this action and the Indian Embassy in Washington has intervened to help the imperilled students but this raises serious questions about the spurious operations and unethical ways of some lead agencies engaged in counter-intelligence work.

The Trump regime had no doubt taken a serious view of illegal migrations and fraudulent entry of outsiders into the US from countries which traditionally posed a threat to the American security. But are the American intelligence agencies totally oblivious of the complete convergence that India and US had achieved on security matters or are they so desperate about creating an impression of being pro-active after their Chiefs had run into problems with President Trump that they wanted to secure ‘results’ through such dubious means?

The ‘University of Farmington’ based in Michigan was reportedly created two years ago by undercover agents of Homeland Security and its head — one Ali Milani — wrote letters to the prospective students imploring them to come to his university, getting in this questionable manner more than a hundred Indian students on its rolls during this period with the help of a gang of recruiters. The Immigration & Customs Enforcement agency (ICE) is now treating these students as a prize catch to prove its great work against ‘illegal’ immigration. It should have targeted the fraudulent intermediaries, something it did not do precisely because it had connived with them for ‘operational’ reasons.

The blind pursuit of Indian students is incongruous with the facts of the case. First, does the Homeland Security consider India as an adversary that would pump in its ‘agents’ into the US to indulge in unlawful missions there like some hostile neighbours and countries breeding Islamic radicals would possibly do? Secondly, considering the known keenness among Indian students to study in American universities with the legitimate objective of receiving higher education and jobs, the entrants would have responded to the ‘invite’ from this fake university with enthusiasm and come in only on legal travel documents.

In case a fake university was created by a fraudulent group outside of the government, it would have been the responsibility of the FBI to unearth that activity before any entrants were trapped but in this case a US government agency itself was the creator of an illegal entity, spending a whole lot of time, energy and funds to set it up just to be able to show that they had caught some Indian students on the wrong foot. Even if some students might have suspected the credentials of the university they would rightly expect the US government to deal with any irregularities about the institution they had joined in. But in this case, US undercover agents themselves were behind a university that fronted a trap operation. This is neither a good intelligence effort nor a worthwhile national security mission.

In any case, India should strongly object to this offending move of US agencies and treat it as an affront to its national standing. Is it possible that this is a deliberate act of Ali Milani to put India at par with those nations that had received adverse attention of President Trump and thus spoil Indo-US relations? The US policy makers should be interested in closely auditing the output of the country’s agencies entrusted with counter-intelligence work. The FBI should be concentrating on spurious institutions run by unlawful elements on its soil. Becoming a party to an operation meant to entice students to a fake university established by agents of the government themselves does not add up to a legitimate intelligence work in this case.

The FBI and other intelligence agencies, it is presumed, would be focusing on detection of sleeper cells of terrorists in the US that were posing a greater threat than before because of the unsuccessful ‘war on terror’. The danger had further increased with the known use of social media by the adversary for spreading radicalisation. The Commission on 9/11 had brought out many failings of US intelligence particularly, the inadequacy of follow up on signals that had indicated presence of radical aliens on American soil. American agencies can hardly afford not to devote all their time and resources to the serious threats to the security of US from terrorists and clandestine infiltrators. Violations of immigration laws and procedures can be detected — without resort to devious trap operations — through a professionally competent intelligence-based endeavour.

(The writer is a former Director Intelligence Bureau)

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