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Housing: An investment theme poised for multi-year uptick – Times of India

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Uday Deb
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Investors are always looking for an investment theme or a stock that can generate exponential returns over the long term. However, identifying such a theme/stock is no easy task. In some instances, by the time, we realise the potential of a theme, the best parts of the return would have already come by. Off late, one of the trends creating some noise in the markets is the rise in residential sales data.  The numbers have not only bucked the general trend but are signalling a change in trend for the housing space in general with housing sales volume across even major cities surging by 113% on a year-on-year basis.

Housing, despite being one of the basic needs after food and clothing, lags in our country. But with rising urbanisation and support from both the State and Central Government in the form of various initiatives, it is projected that the real estate sector in India will reach $1 trillion by 2030. Moreover, by 2025, the real estate sector could contribute as much as 13% to the country’s GDP.

For a sector that has been a laggard for the longest time, the question is what has changed, and will this sustain? The answer to this can be gauged from the factors which are propelling the story this time around.

1) Government measures:

The government is one of the biggest proponents of housing development and has been trying to improve the sector through various supportive measures such as the ambitious PM Awas Yojana. The Budgetary allocation to this scheme has steadily increased from Rs. 2,750 crores in FY22 to Rs. 4,800 crores in FY23. Apart from these, several State Governments in Maharashtra and Andhra Pradesh have initiated stamp duty cuts to stimulate activity in the sector.

2) Higher working population

The term ‘demography dividend’ is often used to describe the favourable demographic structure, which is expected to drive growth in the economy over the coming decades. With India’s median age at 30 by 2030, India enjoys a rare privilege that not many other countries have. This is because in the same time frame, the median age of China is pegged at 37 years, and for the rest of the world is at 32 years. Additionally, the ratio of India’s dependent population to the size of the working-age population is expected to decline, which translates into higher household income. Putting together these variables, a significant boost in housing can be expected.

3) Increase in urban population

Consequent to the rise in the working population, the urban population is likely to shoot up. It is to be noted that only 35% of India’s population resides in cities as of 2020. When compared to the global average, India emerges as a laggard. However, estimates suggest that the urban population will grow five times the growth of a rural population in the years ahead. A higher urban population means that there will be further requirements for office space, hotels, and other establishments.

4) Improved Affordability 

Previously seen as a luxury item, people’s perceptions about real estate as an asset class for investment have improved with time as earning power and affordability went on an upswing.

In terms of home affordability, Indian markets are at a decadal high. According to Knight Frank’s Affordability Index 2021, all markets, except Mumbai, are considerably below the 50 per cent affordability threshold. In 2021, Ahmedabad emerged as the most affordable housing market in the country, with a 20 per cent affordability ratio, followed by Pune and Chennai, with 24 per cent and 25 per cent affordability rates. At 53%, Mumbai was the only city with a greater than threshold affordability ratio, although it has improved the most since 2011.

Another factor that aided affordability is the correction in residential prices. For the most part of the last five to six years, home prices in most cities either stagnated or corrected significantly. This made home prices affordable for many individuals when looked at in tandem with the decadal low-interest rate. With India’s job market progressively stabilising, we can expect a portion of household savings to be channelled into buying homes in the years ahead.

All these factors put together show that housing as a theme is set to explode over the next few years. Lower interest rates, the growing trend towards urbanisation, and increased affordability all point to housing being one of the biggest growth areas for at least the next five years.

How can an Investor Benefit from this trend?

One of the easiest ways to capitalise on this opportunity is to invest in a broad housing based thematic mutual fund which has the flexibility to invest across all the sectors which directly and indirectly stand to benefit from the revival in housing. After all, housing is not real estate alone.  It encompasses a wide spectrum of sectors such as banks, financing companies, cement, steel, paints, sanitary ware, and consumer durables to name a few. Such funds emerge as a one-stop solution. One such fund is the ICICI Prudential Housing Opportunities Fund.

To conclude, housing seems poised for a multi-year uptick and the easiest manner one can participate in it is through the mutual fund route.

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Views expressed above are the author’s own.

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Views expressed above are the author’s own.

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Westboro Mortgage Investment Fund Announces Bonus Distribution to Unitholders – GlobeNewswire

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TORONTO, May 25, 2022 (GLOBE NEWSWIRE) — Westboro Mortgage Investment Fund has paid a bonus distribution of $0.065 per eligible Class F unit. The bonus distribution equals the excess income earned by the fund for the fiscal year ended December 31, 2021. The total distribution per unit for the 2021 fiscal year, inclusive of this bonus distribution, was $0.65/unit on a monthly basis, or an annualized return of 6.7%, on a monthly compounded basis. The strong performance of the Westboro Mortgage Investment Fund is a direct result of the following: a) long standing and strong broker client relationships b) best in class staff; and c) conservative and thorough underwriting practices.

“It was a record breaking year filled with a unique set of challenges posed by the pandemic. We will continue to be conservative in our underwriting and portfolio management while being competitive on interest rates and terms offered to our longstanding broker client network. In 2021 and early in 2022 we were fortunate to attract top industry talent to join our already dynamic team. We want to fund the best mortgages, not the most mortgages. Our focus is, and always will be, the preservation of investor capital and providing consistent risk adjusted returns to our mortgage fund investors,” said Nick Christopoulos, CEO of Westboro Mortgage Investment Fund.

About Westboro Mortgage Investment Fund

Westboro Mortgage Investment Fund was established in 2004 as a Mortgage Investment Corporation in the Ottawa region. Throughout the years, the fund has strategically expanded its lending region to include Central and Southwestern Ontario and the Gatineau regional area of Quebec. Today, the fund manages assets in excess of $300 million all while maintaining the primary objective of providing investors with a consistent and stable fixed income solution for their investment portfolio.

To learn more about the Westboro Mortgage Investment Fund, including investment opportunities and qualification criteria please visit www.westboromic.com or contact the Vice President of Fund Sales, Scott Roberts at sroberts@westboromic.com.

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Vancouver investment firm fraudulently purchased for $100 million, panel finds – Business in Vancouver

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Vancouver investment firm fraudulently purchased for $100 million, panel finds – Economy, Law & Politics | Business in Vancouver


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Claridge Food Group announces $40 million strategic investment in WeCook Meals – Canada NewsWire

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“This major investment marks a new step in WeCook Meals‘ development plan. We have experienced strong growth over the past few years, and this capital injection combined with Claridge Food Group’s industrial expertise will allow us to strengthen our position as the leading ready-to-eat delivery company in Quebec and Ontario and accelerate our growth across Canada. We want to be clearly recognized as the benchmark ready-to-eat meal brand for all Canadians,” says Étienne Plourde, founder and CEO of WeCook Meals.

The Canadian food delivery market combined with online commerce is growing at an accelerated pace and was estimated to be worth over $5 billion in 2021. WeCook Meals stands out for its unique offering of fresh, ready-to-eat meals that meet the needs of the growing number of people who want to eat well but don’t have time to cook. The company aims to accelerate its annual sales growth (exceeding four million meals in 2021), relying primarily on its extensive food processing expertise, quality meals, menu customization and digital marketing excellence.

“We want to raise awareness of our unique offering to increase our customer base and gross revenue. Our nimble business model allows us to manage the impact of inflation on food prices, as well as adapt the choice of ingredients offered in our weekly menu. This investment will allow us to accelerate the prepared and ready-to-eat meal revolution by offering consumers a wider selection of healthy, tasty, and convenient meals at affordable prices,” added Plourde.

“In just a few years, WeCook Meals has become the leading ready-to-eat company in Canada, thanks to the support of financial partners such as Desjardins Capital and Investissement Québec. The new investment we are announcing demonstrates the deep confidence of all our partners in WeCook Meals’ vision and business plan. We will work with WeCook Meals’ management to provide them with the financial capabilities and management expertise of growing food processing companies, adding value at every stage of their development,” said Pierre Boivin, President and CEO of Claridge.

“The agri-food industry is a flagship sector of our economy and one of Investissement Québec’s priority industries to ensure sustainable economic development throughout Quebec. We’re proud to participate in this round of financing to help a young company like WeCook Meals realize its growth plans and to continue the unifying role we are committed to playing in the financial ecosystem, particularly in facilitating access to development capital,” says Guy LeBlanc, President and CEO of Investissement Québec.

“Our $10 million investment in the new financial vehicle of Claridge Food Group allows us to combine Desjardins Capital’s credibility, experience and agility with the leading-edge expertise in the food processing sector that this partner offers,” says Marie-Hélène Nolet, Chief Operating Officer of Desjardins Capital. “As demonstrated by this joint investment in WeCook Meals, our partnership will help agri-food companies undertake their growth projects and overcome the challenges of inflation and supply, while remaining relevant to changing consumer habits. We’re all the more proud to offer additional leverage to this company that we’ve been supporting since 2019, always in keeping with the founders’ vision.”

Advisors

Raymond Chabot Grant Thornton and Desjardins Capital Markets acted as financial advisors to WeCook Meals.

About
Claridge Food
Group 

Claridge Food Group is an investment vehicle created by Claridge Inc. with the participation of Investissement Québec, the Fonds de solidarité FTQ, and Desjardins Capital. Its mission is to support Quebec food processing companies with significant growth potential by providing them with financial resources, managerial and operational support, knowledge of global trends, and a large network of partners to support and accelerate their growth in Quebec, Canada and North America. 

About WeCook Meals

WeCook Meals was founded in 2013 by two young entrepreneurs who wanted to spend less time in the kitchen, without compromising on a high-quality, nutritious diet. Meals are curated by an in-house chef, using only freshest ingredients sourced from local suppliers in a zero-waste facility. Demand for WeCook Meals’ read-made meals have increased 300% and the Montreal-based company has successfully created 600 new jobs. The Montreal-based company currently has two production facilities delivering more than 4 million meals a year throughout Ontario and Quebec. For HD images.

About Investissement Québec

Investissement Québec’s mission is to play an active role in Quebec’s economic development by spurring business innovation, entrepreneurship and business acquisitions, as well as growth in investment and exports. Operating in all the province’s administrative regions, the corporation supports the creation and growth of businesses of all sizes with investments and customized financial solutions. It also assists businesses by providing consulting services and other support measures, including technological assistance available from Investissement Québec – CRIQ. In addition, through Investissement Québec International, it also prospects for talent and foreign investment and assists Quebec businesses with export activities.

About Desjardins Capital

Over 45 years strong, Desjardins Capital has a mission to value, support and nurture the best of Quebec entrepreneurship. With assets under management of C$3.0 billion as of December 31, 2021, Desjardins Capital helps contribute to the longevity of more than 670 companies, cooperatives and funds in various sectors from across Quebec. In addition to helping to maintain and create many thousands of jobs, this subsidiary of Desjardins Group offers business owners access to a large business network and supports their business growth. For more information, visit our website.

About Claridge

Claridge is a Montreal-based family office that represents the interests of the Stephen Bronfman family, with a focus on maximizing long-term capital appreciation. Claridge is actively engaged in managing a diversified portfolio of investments in private companies as well as interests in third-party managed funds in a variety of industries across the globe. As a strategic financial investor, our direct equity participations span a range of industry sectors, including holdings in food, technology, entertainment, renewable energy, and real estate. Claridge focuses its investments in small and medium-sized businesses and contributes its expertise in partnership with management to accelerate growth.

SOURCE Claridge Food Group

For further information: WeCook Meals, Christina Krcevinac, Senior Marketing Manager, Tel: 1 514 562-4904, [email protected]; Claridge, Manager of Claridge Food Group, Daniel Granger, Tel: 1 514 232 1556, [email protected]; Investissement Québec, Catherine Salvail, Advisor, Medias and Governmental Affairs, Tel: 1 514 876-9600, [email protected]; Desjardins Capital, Marc-Antoine Lavoie, Senior Advisor, Public Relations, Tel: 1 418 563-8853, [email protected]

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