Welcome back to another edition of Alta Views, where we delve into the thrilling trends reshaping the financial and tech landscapes. In this edition, we uncover the rising opportunities in the European and UK real estate markets, explore Alibaba’s global ambition in expanding its cloud and AI horizons amidst fierce competition, and highlight Microsoft’s Pinnacle Program, which is empowering SMEs in Singapore. Plus, we’ll examine the global shift towards electric vehicles. Join us as we navigate these exciting developments and their potential impact on our world!
Rising Opportunities in the European and UK Real Estate Markets
As 2024 progresses, the European real estate market is showing strong signs of recovery with strong rental growth in logistics and residential markets, while office vacancy rates continue to remain high resulting from hybrid work arrangements. Real Estate Valuations fell from a peak of 17% in Q4 of 2023, however, rental activity is exhibiting resilience across operational conditions including increasing rental rates and reducing vacancies. European prime real estate yields increased from 4.3% in June 2022 to 5.4% in December 2023.
Similarly, in the UK, slowing inflation and interest rates are positive signals indicating the recovery of real estate. According to Abrdn, the sector is forecasted a 3-year annualised average of 7%, driven by strong growth from logistics and residential property. A combination of resilient demand from ecommerce retailers, escalation in rental rates, and constrained supply signal robust long-term opportunities for investors.
Moreover, recent developments in the ESG regulatory landscape has set higher threshold for environmental standards for buildings. According to the EU, US$ 300 billion has to be spent by property owners across Europe each year to meet its climate requirements.
Hence, in the current climate, the interplay of elevated borrowing costs, stringent environmental standards, and significant refurbishment expenses is carving out a niche for global investors to acquire assets at values that are perceived to be below their intrinsic worth. This regulatory landscape, coupled with the anticipation of moderating interest rates and ascending yields, is cementing real estate’s status as a compelling avenue for investors aiming to broaden their investment horizons.
In the UK, slowing inflation and interest rates are positive signals indicating the recovery of real estate | Image credit: Pexels
Alibaba’s Global Ambition: Expanding Cloud and AI Horizons Amidst Intense Competition
At the Alibaba Cloud Global Summit on 23rd May, Alibaba announced a significant expansion plan to launch its first cloud region in Mexico and establish data centres in Malaysia, the Philippines, Thailand, and South Korea. This strategic expansion underscores Alibaba Cloud’s commitment to enhancing its global presence, facilitating the widespread adoption of its sophisticated AI products, which are integral to the company’s innovative cloud services portfolio. After scrapping its Initial Public Offering and because of increased competition from local players - ByteDance and Baidu - AlibabaCloud is focusing on the growth of its AI products globally.
According to Synergy Research Group Currently, Amazon, Microsoft, and Alphabet account for 67% of global cloud market, while Alibaba takes up approximately 4% of the space. In China, however, Alibaba accounts for 39% of the market. Moreover, by launching its large language model (LLM) - Model Studio, Alibaba aims to provide cost-effective solutions to enterprises and developers to create custom AI applications.
In the cloud’s expanse, Alibaba’s AI ambition positions it strategically to contest existing cloud foundations.
Alibaba’s AI ambition positions it strategically to contest existing cloud foundations | Photo credit: Unsplash
Microsoft’s Pinnacle Program: Empowering SMEs in Singapore
On 21 May 2024, Microsoft announced the launch of the second wave of the Microsoft AI Pinnacle Program, to enable small and medium-sized enterprises to scale adoption of AI-powered solutions. It builds upon the first wave of the Program that focused on empowering businesses and employees in an AI-enabled economy. Efficient and effective usage of AI tools will be critical for SMEs to achieve financial and innovative boosts across business lines.
Microsoft, Enterprise Singapore, and AI Singapore will work together to help SMEs boost productivity by utilizing Microsoft Copilot – to empower more than 1,000 SMEs over the next two years to tap the benefits of AI for their business. This follows Microsoft’s recent launch of Copilot+ PCs, integrating AI into the Windows Operating System. Embedding AI into SME workflow will be crucial for enhancing customer experiences and future-proofing businesses in a competitive market.
Microsoft AI Pinnacle Program will enable small and medium-sized enterprises to scale adoption of AI-powered solutions | Photo credit: Unsplash
Electrifying the Future: The Global Shift Towards Electric Vehicles
In 2024, more than one in five cars sold in 2024 will be electric; furthermore, the global electric vehicle (EV) sales are expected to hit 50% of total vehicle sales by 2035.
EV ownership is propelled by the ease of availability with policy certainty, reducing costs owing to improving technology and manufacturing capacity, expanding charging infrastructure, and increasing battery recycling capacity.
The growth of EVs provides a myriad of opportunities across its value chain. Raw materials, battery production and recycling, manufacturing, and charging infrastructure are some of the major drivers behind the estimated US$906B EV ecosystem by 2028.
Globally, state bodies are pushing towards electrification as the first step of decarbonisation and aim to catalyse innovation by actively implementing policies to incentivise EV development and expansion.
Consumer preferences towards EVs are promising. In a survey conducted by McKinsey, 42% of consumers indicate that they want their next car to be an EV. For consumers, improving the driving range and expansion of the charging infrastructure are vital for EV adoption. For example, in Norway more than 80% of new vehicles sold are EVs. To facilitate the demand, 220,000 public chargers were strategically installed to service more than half a million EVs. A scalable strategy surrounding infrastructure is pivotal for consumer demand to be met and subsequently grown.
The EV value chain presents unique opportunities to players depending on the maturity of the ecosystem. Countries like India,China, and the USA have each explored unique opportunities in the ecosystem by creating conducive regulatory conditions, building improved infrastructure leading to high demand of EVs, or creating opportunities for alternate sources of energy to facilitate EV growth.
The global shift towards EVs is accelerating, driven by technological advancements, policy support, and changing consumer preferences. The growth of the EV market is creating a wealth of opportunities across the value chain. Companies like BYD are giving automobile giants reasons to change their approach to EVs, ushering an era where electric mobility is the norm, not the exception.
The global shift towards EVs is accelerating, driven by technological advancements, policy support, and changing consumer preferences | Image credit: Pexels
DEEPX| US$80.5M | Series C | Artificial Intelligence
DEEPX specialises in developing AI semiconductors, which infuse every electronic device with intelligence. The company embraces the challenges of bringing the most efficient and advanced NPU(Neural Processing Unit) for IoT devices. It specialises in original on-device AI semiconductor and computing solutions across multiple sectors, including physical security, robotics, smart mobility, and artificial intelligence. Its portfolio boasts 259 patents.
Allozymes is a deep tech company that is transforming ingredient manufacturing by unlocking enzyme potential. Allozymes provides rapid and affordable discovery, evolution, and development of unique and custom-designed enzymes for the sustainable future of industries ranging from pharmaceuticals and cosmetics to food and beverages.
PhiGent Robotics specializes in the R&D of next- generation intelligent driving solution centered on visual 3D understanding. PhiGent focuses on general AI for the real world, with stereo vision as the key difference, to offer a highly-differentiated and cost-effective autonomous driving product solution, serving global vehicle manufacturers and component suppliers.
A fortnightly collection of the latest news from Private Capital Markets. Put together by Alta’s team of analysts, we bring you the most critical and timely pieces from private markets, to help you navigate the broad horizon. Stay tuned as we bring you the most notable fundraises, analysis on industries and companies trending within investor networks, the latest headlines, and more!
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