HydrogenSource Demonstrates Catalysts for Hydrogen Applications
HydrogenSource, LLC recently announced it has demonstrated the viability of new advanced noble metal Water Gas Shift (WGS) catalysts as “cost-effective components in fuel processor systems for fuel cell and hydrogen generation applications.”
According to the company, the new catalysts — jointly developed by HydrogenSource, Sud-Chemie, Inc., and United Technologies Research Center — are 10 times smaller than conventional catalysts and “don’t have the self-heating and handling issues associated with…base metal catalysts.” HydrogenSource noted that the new catalysts have been incorporated into many of its new products, including the five-kWe Vega 5TM and the 150-kWe stationary platforms.
“Our technology advancements allow us to offer fuel cell developers a lower-cost and compact [fuel processor system] with outstanding durability,” said HydrogenSource vice president of technology Fran Kocum. “HydrogenSource is proud of these accomplishments and pleased with the collaboration with Sud-Chemie, who has taken a non-exclusive license of HydrogenSource’s noble metal WGS process technology.”
Engelhard develops new auto catalyst
A new trimetal auto catalyst developed by Engelhard Corp. has been proven to reduce hydrocarbon (HC), carbon monoxide (CO) and nitrous oxide (NOx) emissions by 50 percent.
The Trimax-brand catalysts optimize the use of platinum, palladium and rhodium by having more thermal stability than conventional three-way catalysts, according to the Iselin, N.J., company.
The new technology allows the catalyst to be placed closer to the exhaust manifold, which promotes a quick lightoff period.
The catalyst initially was designed to meet stringent new European auto emission standards set to take effect in 1996, according to a company spokeswoman, who noted that it already was being used in new-model BMW cars.
The new European specifications call for total emissions of HC and NOx to be reduced from 0.97 to 0.5 grams per kilometer (g/km) and CO emissions to be reduced from 2.72 to 2.2 g/km.
The Trimax catalysts also were specially designed to address growing environmental concerns in Europe concerning the impact of nickel disposal. The new catalyst does not use nickel, which is commonly used in the U.S. auto market to reduce hydrogen sulfide emissions, company reports said.
The new technology is being tested by three other European automakers and may be used by U.S. automakers in the near future.
“The catalyst technology can help auto companies meet California’s low emissions standards because of its fast lightoff characteristics and high conversion efficiencies,” according to Joseph Gonnella, vice president and general manager of Engelhard’s Automotive Emissions Systems group.
Sriram Sivaram Named President of Catalyst Power
Catalyst Power, a leading distributed power generation service headquartered in Carlsbad, Calif., has appointed Sriram Sivaram president.
Sivaram, who joined Catalyst Power as chief technology officer in May of this year, has also recently served as chief operating officer for the company.
Kimberly Samaha has resigned as president of Catalyst Power because of personal reasons that require her to relocate to Europe. Samaha will continue to serve on the Catalyst Power advisory board and as a consultant to ABB New Ventures. George Ritchie continues as chief financial officer and John Rodenhausen as vice president of sales at Catalyst Power.
According to Samaha, “Sriram Sivaram brings a strong background to the position of president at Catalyst Power. In both his chief technology officer and chief operating officer assignments, Sivaram has demonstrated his ability to manage all aspects of our business. I’m confident he will lead Catalyst Power to continuing success.”
“I am excited to have the opportunity to lead Catalyst Power with its distributed generation solutions,” Sivaram said. “I look forward to continue working closely with the senior management team to make Catalyst Power the supplier of choice for on-site energy power quality management services.”
Sivaram holds a BS from the Indian Institute of Technology in Madras, India, and MS and MBA from Cornell University in Ithaca, New York. Prior to joining Catalyst Power, Sivaram held various leadership positions at American Power Conversion Corp. (APC), a leading provider of global, end-to-end power protection products and services. Sivaram served as the Business Unit Leader — Ancillary Equipment Group and was responsible for building APC’s capability in delivering 3-phase ancillary electrical equipment to customers worldwide. Prior to this, he served as director of New Products for APC and was involved in the integration of that company’s acquisition of Silcon Power Electronics, a Danish manufacturer of 3-phase UPS systems. He also held positions at APC as director of product management for the Consumer Networks Solution Group and Country general manager for India and South Asia.
Catalyst Power
Catalyst Power, headquartered in Carlsbad, Calif. creates a new standard in on-site distributed energy solutions for businesses that want to gain independent control of their energy with distributed power. Catalyst Powers’ innovative approach provides today’s solution to the energy crisis through bundling hardware, software and service into one cohesive energy offering for applications such as call centers, banks, financial services, printers, restaurants and manufacturers.
International children: catalysts for change
DOUNIA DORANI MOVED WITH her parents to Saudi Arabia at the age of 1, when her father was assigned as Charge d’affaires at the Djibouti Mission. Born in Djibouti, she was too little to know anything about her country of origin before being immersed into the Saudi Arabian culture. Her father’s job had propelled her into becoming an international child–the embodiment of the vision of his work, as well as of other international civil servants.
“We came to the United States with two suitcases. I was only two”, recalled 21-year-old Dounia. One of her earliest impressions of the United States was seeing people of different skin colours. “In our country we had seen dark-skin and black people, but we had never seen Asians or whites. It was a culture shock”, she said. “We came from a small country where everyone knew each other. Here there are so many people–some would approach us with a humble tone; others would approach us with a very nasty tone. We weren’t used to that.”
Dounia’s younger brother, Seif, was born in Djibouti as well, and the youngest, Anas, in New York City. Typical of international children, they always have an unconventional answer to the basic question, “Where were you born?”, and to the next natural question, “Why were you born there?” However, the fundamental and sometimes lifelong question they often ask themselves is, “Outside of my immediate family and those families like mine, where do I fit?”
I know the internal tension that these questions posed on children of international civil servants like me. I am of the first generation of globally mobile children who came into being as a result of the creation of the United Nations and the successes of the independence movements worldwide and the civil rights movement in the United States. I was born in a maternity centre in Monrovia, Liberia, to American parents, who worked with the United States foreign service. Unlike other women who returned to their country for the birth of their children, my mother trusted the Liberians, even when the delivery became complicated.
Although my United States citizenship was guaranteed at birth, my identity was always the sum of experiences I have had, without any overriding American cultural screens to decipher the tangible and intangible information I was receiving. On the other hand, my parents had the opportunity to become fully informed adults in one culture before choosing to embark in the foreign service lifestyle. In this regard, my upbringing was very similar to Dounia’s, although we are a generation apart and have different countries of origin.
Heavy-duty NOx/PM catalysts could add 20% to cost of diesel engine - Around The World Of Diesel - nitrogen oxides - Neville Jackson speech
Heavy-Duty NOx/PM Catalysts Could Add 20% To cost of Diesel Engine: According to Ricardo technical director Neville Jackson, the total cost of exhaust gas recirculation (EGR) plus nitrogen oxides (NOx) trap (LNT) plus a diesel particulate filter (DPF) “means 19-20% more cost” for a heavy-duty diesel, while selective catalytic reduction (SCR) plus DPF would add about 8% more cost.
Speaking to Society of Automotive Engineers conference in Pittsburgh last month, Jackson said that a diesel oxidation catalyst (DOC), plus DPF, plus LNG would add about 7% to the cost of a light-duty diesel, although adding a LNT to a gasoline direct-injection (GDI) car also would add more cost. Full variable-valve timing (VVT) would add another 10-20% to improve fuel economy on a gasoline engine, while a downsized, boosted, stratified GDI would add another 40% cost. Even so, the emissions-controlled diesel would be more expensive (although still more fuel-efficient) than the fuel-economy-enhanced gasoline engine, he said. This higher initial cost of diesel means that “I don’t expect diesel [car] share to keep going up and up,” he said. Even with higher fuel economy of diesels and GDIs, “I don’t think European automakers will meet the 140 grams [per kilometer] C[O.sub.2] target” by 2008. “Automakers are trying to get to 140 grams but if customers don’t buy them, then it’s the same issue as in the U.S.–selling smaller cars at a loss to offset the larger vehicles” with poorer fuel economy.
Dynamic duo: two catalysts build valuable carbon chains
By combining the power of two well-known reactions, chemists have devised a way to alter the length of carbon chains. The process might someday convert less-valuable carbon chains into a transportation fuel, the researchers say.
As oil supplies shrink, chemical processes that turn coal or biomass such as corn into liquid hydrocarbons will become more important, says chemist Maurice Brookhart of the University of North Carolina at Chapel Hill. Of particular interest are linear alkanes, chains in which single bonds connect carbon atoms and hydrogen atoms fill out the molecules. Diesel engines, for example, run most efficiently on alkanes with 9 to 20 carbons per molecule.
The reaction that converts coal and biomass to alkanes, however, produces carbon chains of many lengths. Included in the mix are alkanes with four to seven carbons, lengths that can’t be used as fuel, says Brookhart.
Brookhart, Alan S. Goldman of Rutgers University in Piscataway, N.J., and their research teams used two catalysts to promote reactions that together reclaimed the short alkanes. The first reaction removes two hydrogen atoms from an alkane, creating a double bond between two of the molecule’s carbons. The second reaction induces two molecules to exchange chain portions from either side of the double-bonded carbons. Then, the first reaction’s catalyst returns the hydrogen atoms, eliminating the double bond.
The reactions convert a starting short alkane into products with two lengths. For example, two 6-carbon-long alkanes-hexanes-would become a 10-carbon alkane–decane–and a 2-carbon alkane-ethane. “Then, you are in great shape: You’ve got the diesel fuel, and you’ve got the ethane;’ a gas that can be used as heating fuel, says Goldman. The team describes its work in the April 14 Science.
“It’s a spectacularly clever use of those two reactions” says John F. Hartwig of Yale University.
But the process is far from ready for industrial applications, Brookhart notes. For example, the number of reactions that each catalyst molecule can perform before becoming unstable must increase from about 1,000 to several million.
The reactions’ selectivity isn’t optimal either, Brookhart says. The catalysts also convert alkanes of desired lengths into other lengths. “What we would really like is, from hexane, to get only ethane and decane;’ says Brookhart. However, he notes that with the current procedure, chemists could put the unwanted alkanes “back in the pot” to cycle through the reactions again.
Focusing on the flight, not the plight of black men
THE RETENTION OF BLACK MEN AT THE COLLEGIATE LEVEL, WITHIN THE GENERAL CONTEXT OF THE “plight” of Black males, has been generating significant scholarly and public interest recently, with stories on the subject appearing in The New York Times, The Washington Post and Diverse, to name a few. Last year, I attended several regional and national conferences addressing the topic. I believe that every crisis creates an opportunity. And some colleges and universities are implementing strategic initiatives designed to improve the status of Black men in higher education.
From the “War on Drugs” to “No Child Left Behind,” Black men, young and old, are often placed in a defensive posture. Many Blacks and other minorities have been able to enjoy the individual fruits of their labor, but far too many have been left behind. From Frederick Douglass to the Rex,. Dr. Martin Luther King Jr., Blacks have always had to appeal to America’s moral consciousness. One of the goals of the Million Man March held more than l0 years ago was to bring about atonement and spiritual regeneration, yet there is still a need for spiritual healing among Black men.
“Why is it so hard for me to get a job, but so easy to sell drugs?” was the rhetorical question posed by University of Pennsylvania sociologist Elijah Anderson during the conference “Poor, Young, Black and Male: A Case for National Action?” We are all painfully aware of the statistics–there are more Black males in prison (840,000) than in college (635,000) in this country. So why do we build more prisons instead of programs to incorporate ex-offenders back into society? Where do we draw the line between personal integrity and societal responsibility while acknowledging the lingering effects of institutionalized racism? Mentoring and successful role modeling for young men are critical. One possible remedy is to reestablish the after-school and summer job programs that have become virtually extinct over the past few decades. Another possibility is to place more emphasis on academic enrichment programs in inner city and rural communities.
Although the situation with Black males is, in many regards, dire, we do have reasons to be optimistic. Approximately 600 Black men graduated from the all-male Morehouse College last year. And there are several programs aimed at working with Black male students, including Morgan State University’s Morgan Mile, Clemson University’s Call Me MISTER program and the REACH Mentoring Pilot Program here at Wright State University. Also worthy of recognition is the City University of New York’s African American Male Initiative, which is currently facing legal challenges. As a society, we seriously have to think about where and how we spend our resources when it comes to Black males. It appears there are two options–prison or outreach programs.
Attending the various conferences motivated me to design a course on Black male images, from the Middle Passage to the present. I’ll be teaching the course at Wright State alongside Dr. Martin Gooden, an assistant professor of psychology on campus. This class will take an interdisciplinary approach to the study of Black males in society, emphasizing sociopolitical and psychological perspectives. Thematically, it encompasses self-definition or identity, historical consciousness and community service. It is imperative that young Black males connect philosophically with intellectual traditions that help clarify their perspectives, increasing the likelihood that more of them will matriculate through college with positive experiences.
We need to begin a new dialogue about the flight of Black men, instead of focusing exclusively on their plight. I am referring to the astronauts, businessmen, scientists and physicians who take flight both figuratively and literally. Also on the horizon is U.S. Sen. Barack Obama, who recently announced his candidacy for the President of the United States. And there are the exceptional young men who run afoul of the law but retain enough dignity and humanity to return to college or the work force.
We have to be vigilant and visionary not to lose any generation. I would conclude by calling for a community-based, intergenerational national forum to create a blueprint for addressing Black male student retention and recruitment. With the attack on affirmative action and a shortage of grassroots programming, the goal is to empower young Black males, enabling them to become positive catalysts for societal change.
Posttraumatic growth and thriving with heart-centered therapies
Abstract: The predominant themes in the paper by Stiles (2007) are: whether the dissociative states experienced during childhood sexual abuse influence the adult woman survivor’s spiritual development (defined as the process by which one actively engages in the search for purpose and meaning in one’s life), and whether the experiences were ultimately of value. Stiles also refers to “the human psyche’s capacity to expand through dissociative experience.” In particular, she suggests early dissociative patterns may contribute to: a tendency to experience boundarylessness; merging with something beyond the self; awareness of the existence of states of nonordinary reality; and acceptance of a state of out-of-control overwhelm as near-death, i.e., “being near death is akin to being near God.”
A proclivity to experience dissociative states, resulting from childhood sexual abuse, does contribute to the adult woman survivor’s spiritual development; however, it also adds the challenge to integrate dissociated parts that have grown into autonomous subpersonalities in order to avoid either unconscious emotionality or disconnection from emotion and the body. Thus, what begins as seeking psychic refuge through dissociation ideally evolves into allowing the dissolving of one’s psychic self. This article will discuss these themes utilizing several theoretical perspectives: (1) the Coactivation Model of healthy coping (Larsen et al., 2003); (2) “posttraumatic growth” or “resilience”; (3) current research into purpose in life, and wisdom; and (4) the neuropsychology of mystical experience.
Gottman, Katz, and Hooven (1996) observed that one of the most valuable contributions parents make to the development of their children is to “coach” them to recognize, name, and communicate their fears, frustrations, anger, and pain. Successful coping depends not only on “grappling with the stressor, but also on coming to grips with and gaining insight into it” (Larsen et al, 2003, p. 221). In fact, for individuals with terminal illness, confronting and overcoming negative emotions may actually extend life itself. Spiegel et al. (1989) found that breast cancer patients randomly assigned to a support group where they were encouraged to express their feelings about their illness survived on average 37 months, twice as long as control patients survived.
When an individual encounters adversity, be it accidental or malicious, sudden or lingering, there are at least four potential consequences (O’ Leafy & Ickovics, 1995). One possibility is a downward slide in which the initial detrimental effect is compounded and the person eventually succumbs, defeated. A second possibility is that the individual survives but is diminished or impaired permanently. A third potential outcome is that the individual returns to the pre-adversity level of functioning, that is to say he or she recovers. The fourth possibility is that the person may surpass the previous level of functioning, and he or she thrives. The thriving outcome has been studied extensively, and is generally called traumatic growth. The following graphic representation (Illustration 1) is taken from Carver (1998), who adapted it in turn from O’Leary & Ickovics (1995).
Extreme transliminality may have negative as well as positive outcomes, however; excessive transliminality may allow unrestricted subliminal material into consciousness, or too much material too soon. An example is mania, with its flight of ideas, overly optimistic elation, and delusions of grandeur. Another is depression, in which highly unpleasant memories and morbid delusions rise up again and again. This also accounts for the intrusive thoughts or flashbacks common to those who suffer from PTSD.
Reporting on research by Richard Davidson at the University of Wisconsin, Madison, Begley (2007) discusses several interesting changes in brain activity for individuals experiencing meditation. Using fMRI imaging to detect which regions of the brain became active during meditation, Davidson found that brains became activitated in regions that monitor one’s emotions, plan movements, and generate positive feelings such as happiness, i.e., the region of the brain he calls “the chief operating officer of the brain.” This part of the cortex is known to powerfully inhibit the center of impulsive emotions and instinctual urges, the amygdala, and plays an important role in maternal/infant and social bonding. Other regions became quieter during meditation, those that keep track of what is self and what is other, explaining the experience of boundarylessness, loosened identifications and fluid ego boundaries. In its simplest terms, the trained meditator has gradually learned to empty the mind.
1. tolerance of ambiguity, i.e., coactivation of positive and negative emotions, and of sympathetic and parasympathetic activations;
2. capability of finding purpose and meaning in life’s turbulence and using negative emotional experiences as catalysts for emotional growth;
3. willingness to loosen one’s ego identification through experiencing states of nonordinary reality, boundarylessness, merging, and acceptance that being near God may be akin to being near death.
Structural dissociation
There may be a connection between the neurological damage done by early abuse and “posttraumatic growth,” including receptivity to spiritual exploration. While it is premature to assert such a connection, we will identify some of the known neurological consequences of early child abuse. “The integrative failure that is characteristic of traumatized individuals may also relate to structural brain changes, notably in the hippocampus” (Nijenhuis, Van der Hart, & Steele, 2004). The hippocampus is a brain structure instrumental in the synthesis of experiences, providing a conscious structure, context and a time stamp to the experience in the process of memory encoding, storage and retrieval. Smaller hippocampal volumes were reported in female adult survivors of childhood sexual abuse (Bremner et al., 1997). That damage consists of a loss of neurons and synapses (a loss of up to l8%), and results in corruption of thought process and learning, particularly deficits of encoding short-term into long-term memory.
The traumatic experiences, etched in procedural memory but not converted into long-term memory, interfere with current working memory. Past threats are perceived to be present threats, suggested by intrusive thoughts, flashbacks, and hypervigilance. Not only does PTSD obscure the ability to distinguish between past and present lost, but the “repertoire of survival skills remains confined to those skills that were acquired up to the time of the trauma, and they lack the resilience to learn new strategies” (Scaer, 2005, p. 67). An aspect of this individual is frozen in the past, or perhaps more accurately that frozen dissociated part of the person is carried like deadweight in the ever-present–a “primitively organized alternative self”.
Taking the high road: as organizations drive toward their business objectives, OCEG chair Scott L. Mitchell says they must have the ability to navigate any obstacles that appear in their path
ODAY’S COMPANIES ARE TRANSPARENT. It’s not easy for them to keep information behind closed doors anymore. For one thing, people can instantly compare what companies are saying and doing now to what they were saying and doing a year ago, or five years ago, or 10 years ago. If something is running amok, it’s going to be found out much more quickly and written about much more broadly than in the past. In fact, organizations don’t need to worry about whether their misdeed makes the front page of the next day’s Wall Street Journal, they need to worry about whether they’re picked up by a blogger later that morning.
As a result, says Scott Mitchell, companies must make operations as clean as possible on two levels: what they’re actually doing and how they’re going about doing it. The slightest misstep can be broadcast in detail from Shanghai to Saskatoon in the blink of an eye. Mitchell is chair and chief executive officer (CEO) of both the nonprofit Open Compliance & Ethics Group (OCEG) and DoubleDrum Capital and sits on The Committee of Sponsoring Organizations of The Treadway Commission Task Force.
Indeed, issues of corporate responsibility and ethical behavior comprise a cause Mitchell holds near to his heart, as evidenced by his enthusiasm for these topics when Internal Auditor recently discussed with him the changes he sees coming in the internal audit space.
Q. You see structural change coming in the way corporations approach controls. What are the deficiencies with the process-based model that make a move to a goal-based model necessary?
As an organization drives toward its business objectives and puts in place a business model to achieve them, it needs to address the obstacles to their achievement. That’s of great concern to shareholders, and it’s one of the classic definitions of risk management. An organization also needs to know that there are boundaries to its conduct. One kind is legal, of course, but corporations also face their own voluntary boundaries–the values they espouse and what they stand for in the marketplace. Another kind of boundary to corporate activity is an organization’s contractual obligations. Fortunately, as a corporation drives toward its objectives, it can count on assistance from a number of processes. A lot of leading organizations are finding that their control processes have a tremendous amount of overlap and commonality to them–and when you think about your control processes as a whole, you gain efficiency and effectiveness. In fact, many organizations are finding that when they don’t try to figure out what “governance” is and where it starts and where it ends, when they take a step back and say, “What do the processes aim to do?” they realize much more impact on the business itself. In fact, the acronym that corporations should use–GRC, for governance, risk, and compliance–is finally coming into the mainstream. When all of the processes and all of the departments in the enterprise are helping it drive toward its objectives–while staying within its boundaries–you reap a lot more benefits.
Q. Why don’t more corporations do that now?
If I were to try to simplify the reasons, one is volatility and another is inflexibility. There are so many boundaries corporations face, and they change all the time. And they’re increasingly complex, especially when you layer in global competition and all the recent merger and acquisition activity. An average corporation faces about 70,000 pages of federal regulations regarding its operations, and at any point in time there are some 4,000 new rules in the pipeline. If it’s not a new U.S. Sarbanes-Oxley Act of 2002 issue, there are 3,999 others coming down the pike that it needs to deal with. What has happened historically is companies organize their control processes around the regulations that come out. Many organizations created Sarbanes-Oxley teams and departments, and solution providers started selling Sarbanes-Oxley solutions. Everybody started organizing around a narrow regulatory regime. So rather than look at each regulation as part of the fabric of GRC, companies ended up creating silos around each issue. There are all these different silos with different people using different processes and totally different vocabularies and approaches–and they’re probably not sharing any information with each other. Even though ethical behavior is an interdisciplinary problem–almost like a quality management problem–you rarely see a single executive in charge of GRC. It’s almost always a combination of executives.
Q. What are some of the key cross-disciplinary risks organizations face at the nexus of governance, compliance, and ethics?
The financial risks are pretty clear. Bribery, for example, cuts across a number of departments. It’s an ethics risk, a compliance risk, a sales and marketing issue, and, ultimately, if it’s not dealt with, it can turn into a huge governance issue. But those are easy to see. What about employment? What about fair wages? There are ethical issues there, because managers at individual outlets of a large retail organization, for example, often have wide latitude in determining wages. There’s also a compliance issue there because the U.S. Fair Labor Standards Act (FLSA) covers wages. In fact, ask a board member at a large retailer which is more dangerous, Sarbanes-Oxley or employment issues. The No. 1 area of litigation and the No. 1 area of successful class action lawsuits is employment. That’s a good example of my point. You can’t say that FLSA compliance is a legal compliance issue alone. When you try to separate it into its component parts, you focus too much on individual aspects of the problem. When the approach is integrated, the issues are easier to address.
Q. Can you offer an example of a company that has placed a greater emphasis on ethics, governance, and compliance issues as a result of changes around them?
A very large professional services firm recently changed the way it compensates business development partners, particularly in emerging growth countries. The organization used to be purely numbers driven, but now it also reviews contract compliance as a performance metric. Suppose a partner hit its number, say US $10 million. That was all that was reviewed before. Now the firm examines that number and asks how many of the 100 contracts that provided the US $10 million were not standard contracts. The suggestion isn’t if someone signs one he or she is breaking the law. But the organization has found that when there’s a greater incidence of partners signing nonstandard contracts, the revenue involved is at greater risk because those partners are more likely to default. By tying performance measures to existing risk and compliance measures, the firm has created a much clearer understanding of its real revenues. Now the development partners have incentives to be in line with the risk and compliance objectives of the business as well. The end result is there’s less revenue at risk.
Significance and Performance of Real Estate Markets in India
This paper reviews the real estate markets in India and assesses the risk-adjusted performance and portfolio diversification benefits for the real estate markets (office, retail and residential) of New Delhi and Mumbai (two largest cities in India) over the 1998: Q2-2005:Q4 period. The real estate markets were found to under-perform the stock market in India over 1998-2005, with most markets improving their performance in more recent years, although there was some loss of portfolio diversification benefits for office and residential real estate with stocks. Deregulation of the capital markets and international investment in India is also likely to have a significant impact on future FDI levels and the growth of real estate funds for real estate investment in India.
In recent years, global real estate securities funds have been seeking real estate investment opportunities in the emerging real estate markets, particularly in Asia. This investor interest has sparked the establishment of over 59 global real estate securities funds with over $14 billion in assets under management, including the ING Clarion Global Real Estate Income Fund ($2.7 billion), the Nikko AMP Global REIT Fund ($1.3 billion), and the ABN AMRO Global Property Securities Fund ($1.3 billion) (EPRA, 2005a). Importantly, Asia accounts for 27.5% of these fund assets under management, compared to Europe (25.1%) and the United States (45.4%), including ten funds with in excess of 40% of assets in Asia (e.g., Nikko AMP Global REIT Fund, Fidelity International Real Estate Fund, and Cohen & Steers International Realty Fund) (EPRA, 2005a).
This trend reflects studies highlighting the portfolio diversification benefits of including international real estate in mixed-asset portfolios (Wilson and Okunev, 1996; Steinert and Crowe, 2001; Bond, Karolyi, and Sanders, 2003; Conover, Friday, and Sirmans, 2003; and Hoesli, Lekander, and Witkiewicz, 2005). Importantly, international diversification has been shown to be more effective in the Asian real estate markets than in the European real estate markets (Bond et al., 2003), as well as there being long-term diversification opportunities by investing in real estate in several Asian countries (Garvey, Santry, and Stevenson, 2001). This has seen recent attention given to the dynamics of the real estate markets in specific Asian countries (e.g., Hong Kong) (Newell and Chau, 1996; Chau, MacGregor, and Schwann, 2001; Chau, Wong, and Newell, 2003; Schwann and Chau, 2003; and Newell, Chau, and Wong, 2004), the development of REITs in Asia (UBS, 2005; and Ooi, Newell, and Sing, 2006) and the rapidly expanding real estate investment opportunities in China (Tse, Chiang, and Raftery, 1998; Webb and Tse, 2000; Chu and Sing, 2004; and Newell, Chau, Wong, and McKinnell, 2005).
While China has attracted considerable international attention due to its rapid economic growth and real estate investment opportunities in major areas such as Beijing, Shanghai, Guangzhou, and Shenzhen (Newell et al., 2005), the other market in Asia that will attract significantly increased attention from international real estate investors in the near future is India. With a population of over 1 billion, real GDP growth is forecast at 6.9% p.a. over 2005-2015, recent introduction of economic liberalization policies, and relaxing of foreign investor guidelines for real estate investment in India, significant opportunities for real estate investment in India will emerge in the near future.
To date, most of the real estate focus on India has been on the impact of international outsourcing and offshoring to India; particularly in the areas of IT services and IT-based business processes (e.g., JLL, 2003a,b, 2005a,b,c), as well as real estate market reports by leading real estate companies such as Jones Lang LaSaIIe and Cushman & Wakefield (e.g., JLL, 2005d, 2006). No real estate research on India has yet been published in any of the leading real estate research journals. As such, this paper will review the real estate markets in India, and assess the risk-adjusted performance and portfolio diversification benefits of the office, retail and residential real estate markets in New Delhi and Mumbai (two largest cities in India) over 1998:Q2-2005:Q4, with the overall investment implications assessed for real estate investment in India.
Fundamental to India’s economic success in Asia and internationally has been strong economic growth (Exhibit 2), only exceeded by China amongst the Asian countries. Currently accounting for 6% of the world’s GDP (DB, 2005a), the GDP growth for India is 5.5% p.a. projected over 2006-2020 (DB, 2005b). This projection casts India as the fastest growing global economy over the next fifteen years, becoming the third largest economy in the world by 2020, with Indian GDP per capita to double by 2020. Thus, India is viewed as a key element in the “Chindia” and the “BRIC” economies,1 which are seen as key emerging markets playing an expanding role in the global economies.
he value of share trading on the Indian stock market (43% of total market cap.) is consistent with the more mature Asian markets; e.g., Hong Kong (44%), Singapore (45%), Japan (59%), but significantly less than that seen for other lessmature Asian stock markets; e.g., China (99%). The volatility of the Indian stock market (23.8% over 2004-2005) was above that seen for the more mature stock markets both in Asia [e.g., Hong Kong (15.1%), Singapore (11.5%)] and internationally [e.g., U.S. (10.3%), U.K. (9.5%)], and comparable to that seen for other emerging markets [e.g., China (20.4%), Brazil (25.0%), Russia (36.4%)].
While twenty sub-sector performance indices are available on the BSE, no real estate company subsector index is available. Unlike most other Asian countries (e.g., Japan, Singapore, Korea, Hong Kong, Thailand), there are currently no REITs in India. The guidelines and regulations for I-REITs are likely to be developed in the near future by the securities and Exchange Board of India and the Association of Mutual Funds of India, as a flow-on effect of the introduction of real estate funds with the deregulation of the capital markets in India in 2004.
Major listed real estate companies include Ansal Properties, Unitech, and India Bulls; being predominantly in the area of real estate development. This low level of exposure for real estate companies on the Indian stock market reflects commercial real estate typically being held by the large private corporations or houses such as Raheja and Hiranandani, and the significant role by large unlisted real estate developers in India such as DLF, Vatika, MGF, Vipul, Essel, Omaxe, Niho, and Parasvanath.