Global Prime Residential Index Witnesses an Annual Increase of 0.9%:Knight Frank Prime Global Cities Index Q2 2020

* Bengaluru ranks 26thoutperforming New Delhi (27th), Mumbai (32nd)

* Bangkok was the weakest-performing global city in the year to June, with luxury home prices falling by 5.8%.

Knight Frank India, a leading international property consultancy, in its ‘Prime Global Cities Index Q2 2020’ report cited Bengaluru as the26th fastest-growing Indian prime residential market in the world, in terms of annual price appreciation.The premium micro-markets of the city recorded a rise of 0.60% in annual capital value change in Q2 2020 to an average price of Rs 19,727 per sq. ft.

New Delhi ranked 27th on the global index, witha 0.30% rise in terms of annual capital value change in the prime residential market to an average price of Rs 33,625 per sq. ft. in Q2 2020. Whereas Mumbai's prime residential market ranked 32nd in Q2 2020, registering a decline of 0.60% with an average price of Rs 64,388 per sq. ft.

Prime residential property is defined as the most desirable and most expensive property in a given location, generally defined as the top 5% of each market by value. The Prime Global Cities Index is a valuation-based index tracking the movement in prime residential prices in local currency across 40+ cities worldwide using data from Knight Frank’s global research network.

According to Knight Frank’s research analysis, 20 cities that witnessed a decline in prime residential prices in Q2 2020 - nine were in Europe, seven in Asia, two in Australasia, one in the Middle East, and one in Africa. The Prime Global Cities Index, an unweighted price index of prime residential prices across 45 cities, increased by 0.9%; recording the lowest rate of annual growth in 11 years. According to the report, 67% of the global cities registered flat or positive yearly price growth; Australasia recorded the strongest performing world region in the year to Q2 2020, and the Asian prime residential prices declined by 0.2% in the three months to June 2020.

Manila,leads the index with prime home prices rising by 14.4% over the 12 months to June 2020, followed by Tokyo (8.60%) and Stockholm(4.40%). Bangkok was the weakest-performing global city in the year to June 2020, with luxury home prices falling by 5.8%.

While Bengaluru and Mumbai moved up by one place in Q2 2020; Delhi gained five places in the same period.

Shishir Baijal, Chairman and Managing Director at Knight Frank India, said, “The pandemic infused economic stress has engulfed the global markets with a fear of uncertainty. Ultra-rich buyers around the world are seen deferring the high premium purchase of a prime residential asset class and preferring investments in liquid assets, primarily gold and cash equivalents. With the expected price correction and uptick in sentiment depending on the news related to vaccine discovery, buyers with adequate liquidity will find value to enter the prime residential asset class in India.”

Key Highlights:

* Bengaluru’s prime residential market performed better than Mumbai and Delhi. Globally, the city ranked 26th with 0.6% annual price change for the period Q2 2019 – Q22020;with 0.00% price change in Q2 2020compared to the previous quarter.

* Delhiranked 27th with 0.3% annual price change for the period Q2 2019 – Q2 2020. The city saw a flat 0.00% price change in Q2 2020 compared to the previous quarter.

* Mumbai ranked 32ndwith -0.4% marginal annual change for the period Q2 2019 – Q2 2020. The city registered a price decline of -0.50 % in Q2 2020 compared to the previous quarter.

* Manila ranked 1st with 14.10%annual change for the period Q2 2019 – Q2 2020. The city saw a flat 0.00% price change in Q2 2020 compared to the previous quarter.

* Bangkok ranks 45th with -5.8% %annual change for the period Q2 2019 – Q2 2020. The city registered a price decline of -1.40% in Q2 2020 compared to the previous quarter.

Why must enterprises move to Green technologies?

Going green is the mantra often heard among Indian IT enterprises. It is an important business initiative that is driving good corporates towards greener technologies.

Going green is not just about being environment-friendly but also translates into one of the best ways to save money. A recent IDC report indicates that energy and cooling expenses will grow eight times faster than purchasing costs of new servers through 2010. In IDC’s latest Green Poll in the APAC region, almost 81 percent of the participating organizations said that the Green-ness of an IT technology would become increasingly important when it comes to selecting suppliers. About 18 percent of the organizations said that they were already considering this factor while selecting suppliers, while 30 percent said they were putting systems into place to start doing so in the near future. So Green IT opens up an abundance of opportunities for enterprises in any country.

Why should your IT go Green?
Rising global warming, increased energy costs and greater awareness about its socio-economic implications has forced organizations to look for ways to reduce their carbon-emission footprint. However, what has escaped attention is the massive amount of energy your IT consumes. Enterprise IT, which accounts for up to 40 percent of an organization’s energy requirement, has a big role to play to reduce greenhouse gases. According to a Forrester survey, over 41 percent of people in the IT departments believe energy efficiency and equipment recycling are important factors that need to be considered. In the same survey, 65 percent believed reduction of energy related operating costs as the driving factor for implementing Green IT.

What drives Green in India?
Adoption of Green IT is not just about buying green data centers and setting up Green IT infrastructure. It needs a complete 360-degree approach - starting from the vision of the top management to the awareness among employees. “An environment-conscious organization should define what ‘green’ means to it as there is no global, industry-wide recognized standard today that defines a green data center or organization, and take steps to follow the corporate green guidelines. The long-term goal of the green data center operation is to achieve carbon neutrality.

Data centers – The Energy Guzzlers
Undoubtedly, data centers have the maximum energy requirements, given the massive number of powerful servers that are housed in today’s data centers, which are sometimes as big as the size of a football field. And these data centers may require as much cooling power as the electricity to run them. Some studies say that these data centers account for between 1.2 and 2.0 percent of electricity consumed in the United States. It is also a known fact that many of the servers in the data centers run at a low utilization level of 10% to 15%. This causes significant wastage through redundant hardware, memory, network devices and power supplies. In earlier times, enterprises would have put up with this excess capacity, given the IT department’s risk-aversion. However, with maturing IT coupled with need to rein-in energy use, organizations are now forced to adopt strategies to reduce their data center operational costs.

Strategies to implement Green technologies
What are the steps you should take to optimize the consumption of electricity as well as reduce the number of servers in your data center? Enterprise IT groups are looking at various options – such as PC Power management software and deployment of energy efficient servers and network devices. However, these piecemeal steps will not yield the desired results; you need a more holistic approach to solve this problem. The answer lies in the adoption of Cloud computing and Virtualization within your enterprise IT – two strategies that can a go a long way in reducing your energy-dependency and thus make your organization truly green.

Embrace Cloud Computing
Cloud computing lets you use computational power and storage space from a third-party service provider, thus lowering demand for addition of more servers in your data center. You can also reduce the number of applications deployed on your data centers by using similar applications hosted by SaaS providers. Now, cloud computing means different things to different people – depending upon which vendor you talk to. Therefore, it could be utility computing or grid or Software-as-a-Service or even Platform-as-a-Service. However, one thing is clear – all of them refer to some service provided by a third-party provider outside the corporate firewall. It is true there are concerns with respect to security, availability and customer’s data privacy in these services – as shown recently by the outage at Amazon’s S3 storage service. However, these issues will get addressed as the technology and industry matures.

There are primarily two types of cloud services, namely Infrastructure in the cloud and Applications in the cloud. Infrastructure in the cloud refers to raw CPU power and data storage space you can use on-demand over Internet.

You should also explore applications in the cloud type of services as a tool to minimize data center load. Look at business applications that are not critical to your business or those you can’t afford to maintain with a separate IT group in-house – such as CRM apps, HR/HCM, Backup and Restore, Security etc. Instead of running these applications on your data center, you should consider using applications provided by third-party service providers. This, in turn, reduces the number of servers in your data center – which means you have less energy consumption.

Virtualize your data center
As you look for ways to optimize your data center operation, consolidation of servers through virtualization technology provides considerable energy savings. Virtualization is a technology that allows you to partition a physical hardware into multiple logical boxes, with each having its own operating system and network connectivity running in a sandbox. This makes additional standby servers redundant since you can dynamically provision a new virtual machine and then run a new instance of your application on this VM. With advances in virtual machine technology, you can now move a running virtual machine from one server to another server. This further increases the utilization rate of your server stack in the data center; hence you can host more applications with reduced number of servers.