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How the gov’t plans to make Singapore ‘fairer and greener’
Singapore is redoubling its efforts to build a more connected, innovative, and resilient economy
Finance Minister Lawrence Wong gave opening remarks during the Singapore Regional Business Forum on 22 March. He discussed several imperatives that aimed to make the country “fairer, greener, and more inclusive.”
Connectivity, innovation
Wong said Singapore is redoubling its efforts to build a more connected, innovative, and resilient economy. He enumerated several long-term projects that will contribute to these objectives, such as enhancing physical infrastructure like Tuas Mega Port and Changi Airport Terminal 5, as well as digital infrastructures like the broadband network and new technologies like 6G. Wong added their strong connectivity made the country a hub for business, finance, trade, and even data flows. He also mentioned strengthening the support for small to medium enterprises (SMEs) by allocating some of the 2022 Budget for their innovation. He noted this will create more opportunities for SMEs to partner with research centres.
Resilience
Wong gave his suggestions to make the country’s economy more resilient: • Ensure sound and stable finances. He said Singapore was fortunate to have accumulated reserves due to their
“forefathers upholding the attitude of fiscal discipline.” Today, he said the reserves were being used as a steady source of annual government income, as well as a critical buffer, as seen during the COVID-19 crisis which they have already drawn $40b for. • Invest in people. Wong said the government has been heavily investing in education with projects like the KidSTART and SkillsFuture, which is part of the $1b yearly allocations for education. He added that working with businesses and employers are also important. • Strengthen social impact. The finance minister highlighted initiatives tackling workplace inequality and uplifting lowwage workers.
Wong concluded that the country has successfully tackled multiple crises in previous years and decades, especially during the pandemic of the past two years, and have been achieving good results. In the process, he said the finance sector has built strong partnerships between the government, trade associations and chambers, businesses and unions.
7 in 10 businesses mull creating more green jobs in the next 12 months
The majority of businesses in Singapore plan to create more green jobs in the next 12 months in support of the government’s efforts to grow its green economy, a survey by Schneider Electric showed.
These green jobs would likely be in industries such as energy, construction and buildings, manufacturing, and transportation, according to the “Singapore Green Pulse” survey.
Apart from creating green jobs, 80% of businesses surveyed are also showing support towards green finance, another enabler for the green economy, with 73% even saying their companies are already well-placed to attract green finance investment.
Another measure businesses showed favour for was the increasing of carbon taxes in Singapore to fund decarbonisation efforts locally, with eight in 10 expressing support.
Overall, the majority of business leaders—nine in 10—are supportive of the government’s plans to advance the green transition.
“The findings indicate strong support for Singapore’s green ambitions and increasing momentum among local companies to advance their sustainability agendas,” said Yoon Young Kim, cluster president of Schneider Electric Singapore.
The strong support for the green transition from businesses could be because 78% of them believe that they can benefit from the growth of the green economy in Singapore.
Many businesses (81%) also believe a strong ESG and sustainability strategy offers competitive advantages, whilst 73% see money being spent on such efforts as an investment in future growth.
The risk of outdoor transmission is significantly lower, but indoors mask wearing is still mandatory
INDUSTRY: METAVERSE REAL ESTATE What you should know about virtual real estate in the metaverse
A total of 268,645 parcels are up for grabs across the 4 metaverse platforms.
according to Bajpai, a new dimension is created in terms of the workplace. Establishments built in the metaverse can mirror those in real life, which also gives room to gatherings with avatars and holograms.
He cited brand presence through e-commerce as another area of expansion for businesses. This would bridge the gap between online and physical goods. Non-fungible tokens (NFTs) art can be used to advertise products and goods, which can either be bought as a physical product outside the network or as a digital asset in the metaverse.
As the metaverse evolves, new ideas and software come into play
Real estate developers seem to have found their next target location: the metaverse—a space which has proven itself to be profitable with parcels netting an average price of $16,258 (US$12,000).
With its attractiveness in the market, the metaverse also comes with challenges, Abhishek Bajpai, Colliers’ managing director, warned developers during his talk at the Real Estate Asia Summit 2022.
As the metaverse evolves, new ideas and software come into play, some of these risks will stall immediately, while new ones will potentially come up,” said Bajpai.
A problem unique to the metaverse space is how the creation of virtual worlds and assets can affect established ones.
Currently, there are four virtual worlds, also called operating spaces, that exist—The Sandbox, Decentraland, Cryptovoxels, and Somnium Space. Collectively, they yield a total of 268,645 digital assets, also known as parcels.
With the creation of new worlds and functions specific to these creations, the value of the digital assets or parcels can swing wildly depending on these factors.
The use of cryptocurrency as
Abhishek Bajpai
The more that we, as real estate experts, focus on understanding the value of the metaverse, the more we’ll be in a position to lead this discussion
the main method of payment also echoes the same subset of problems due to the unit having the same volatile characteristics, according to Bajpai. Unlike transactions done in the physical world, the frequency of change in cryptocurrency’s value, compounded with the nature of the digital land, can see prices for these parcels slide up and down.
In terms of technology, one of the barriers preventing the adoption of the metaverse is the use of virtual headsets and the lack of access to them. These headsets are essential to access the metaverse, with ease of use, price, and availability also cited as possible areas for improvement.
Sustainability is one of the biggest challenges, as accessing and being a part of the metaverse require energy. Logistics-wise, this would mean more power consumption from the consumer end, such as hardware used to enter the metaverse, to the need for more data centres and power.
Digital frontier
Whilst challenging, investing in the metaverse will be quite a triumph considering that it also presents a lot of opportunities.
The ownership of a simulated space carries its own benefits as,
Profit in the metaverse
Developers also will not need to worry about profit in the metaverse. According to Bajpai, an estimated $54b has been spent on digital goods in the virtual space, almost double when compared to the amount spent on buying music.
Bajpai also cited that Second Life, the first-ever version of the online world, recorded a $650m gross development product, with over $80m being paid to creators.
Meanwhile, 200 strategic partnerships have been established to date with The Sandbox alone.
Adding to that value of computerised goods is the current status of NFTs, which have a market cap of $41b.
Once bought, the online space becomes a digital asset owned by the buyer and ensured through blockchain technology.
“Now is the time to be a part of the conversation, rather than following it. The more that we, as real estate experts, focus on understanding the value of the metaverse, the more we’ll be in a position to lead this discussion as it goes forward,” said Bajpai.
Bajpai expects these pros and cons of the metaverse, however, to continue evolving. This is mainly due to how young the metaverse is currently, and how other worlds can pioneer specific functions.
Tech giants are eyeing more office space in 2022
The tech industry accounted for 40% of the demand for office space.
In what seems to be a surprising turn for the office property sector, the demand for office space shifted from the banking and finance sector to the tech industry, which accounted for 40% of the demand from 20% pre-pandemic. And as Cushman & Wakefield observed, it is the big tech companies that were at the forefront in seeking more office space since 2021.
Anshul Jain, managing director for India and South East Asia of Cushman & Wakefield, spoke with Singapore Business Review Editor-in-Chief Tim Charlton and touched upon the latest trends and outlook for real estate in Singapore and Asia in 2022 and beyond.
There were many firsts in the real estate industry in 2021. What trends can we look forward to in 2022? We’re seeing in Singapore, it’s A team, B team set up. Is it really back to the office or is it hybrid?
I think A teams, B teams, etc. will really be governed by what the government tells us to do. So within that ambit, I think, the hybrid work is here to stay. We think that 60% workingfrom-office will be where we’ll kind of settle down. Work from home is not a new global concept. In the US, European, and Australian markets, the three- to four-day working from office week was prevalent, and one- to two-day working from home was prevalent.
Now, in the rest of Asia, that trend is absolutely here to stay. But that does not necessarily mean that office demand will go down. On the contrary, office demands are actually going up. It’s moving into better-quality buildings and the construct of the designers is changing how the offices are designed. It’s more collaborative, it’s more teamwork – offices are going to be used more as a social space, as opposed to, working as for a personal space.
The other big trends for 2022 that we’re seeing clearly on the back of global sustainability push, and more corporations are going to demand better-quality buildings that are truly sustainable in nature. On the back of that, what we’re going to see is perhaps investments starting to flow in on retrofitting some of the old buildings, which are going to get obsolete, and won’t cater to the new ways of working or being sustainable enough. The other sectors such as data centres, industrial sectors in Singapore will perform exceptionally well. And I think, whilst the residential sector will cool down a bit, there’ll still be enough in there for increase, enough demand going forward in the residential real estate sector.
Are there any anecdotes that you can share with us about recent transactions or leasing deals or sales that you think people should be paying attention to?
Anshul Jain, Managing Director for India and South East Asia, Cushman & Wakefield
We expect the real estate market to be really active in 2022 and beyond
2021 was an interesting year, you know, we had almost $25b-worth invested in real estate in Singapore, five of which roughly was office, but the interesting part was almost fourand-a-half actually came in industrial. The big buildings sold from an office perspective included, the PIL Building, [and] 112 Robinson. The deals however took longer because debt financing took more time. People were cautious in 2021. But I think the market really supported the sale of the building, and there’s lots of capital right now. Going forward in 2022 and beyond, we’ll see a lot more of that. We expect the market to be really active.
What initiatives is your organisation working on at the moment?
We recognise the status of Singapore as a regional powerhouse, as a regional headquarter city for most of the multinationals. So for us, Singapore has two meanings: one is Singapore for Singapore, and the other is Singapore for Asia. What we’ve done so far is we’ve strengthened Singapore for Singapore very significantly. The next steps that we’re working on is to strengthen Singapore for Asia. We are also investing significantly in building local and regional teams, and building two brand new offices. A very exciting move is coming up for us, moving into CapitaSpring, one of the topmost floors. Building that signifies innovation signifies sustainability, and signifies leadership, which is the positioning we have in Asia.
INDUSTRY INSIGHT: TELECOMMUNICATIONS How the Philippines’ ‘underserved’ data centre market can evolve toward growth
Evolution Data Centres expect more non-telco-run data centre companies to enter the market.
Singapore and Hong Kong have served as the hubs for data centres across Asia in the past few years; but now, cloud operators have started moving into other markets—a decentralisation trend that the industry will continue to see.
With a huge young population and a rich renewables potential, the Philippines sits at the cusp of becoming a major market for data centres. The country, however, remains underserved in this industry with most operators still emerging out of telecommunications firms, according to Evolution Data Centres CEO and Co-founder Darren Webb.
Webb, who has been in the telecommunications industry for two decades, told Singapore Business Review that data centres have historically evolved out of telcos into a pure data centre environment.
“What we’re seeing now is more entrants coming into the market. I would say, today, [the Philippines is] moving from an underserved market into that growth curve. And you’ll see a number of foreign operators come in that are specialist data centre companies, not telcos, in fact we have already seen a number of recent announcements.”
At present, amongst the key operators of data centres in the country are telco giants PLDT and Globe. They have their own data centre environment and that’s been the main option for cloud adoptions,” Webb said.
But Webb noted that the entry of Dito Telecommunity as the third telco player in the country gives a good sign for growth.
The Philippines has one of the highest number of social media users that spend an average of nearly 11 hours a day on the internet, which could further drive the need for data centres. This is on top of around 30 million people who have no access yet to smartphones and other devices that remain untapped.
Webb also observed that more investments are coming in for subsea cable installations, telecom towers, dark fibre deployments and 5G infrastructure, putting the Philippines well on its way to becoming one of the next major data markets in Southeast Asia.
Aside from the market size and funding, the country’s rich potential in renewables makes the Philippines a good site for data centres since data centres consume a high amount of energy. But whilst this is the case, Webb cautioned that the Philippines also poses challenges to data centres.
“The Philippines is a really interesting market—what God has given [it], God has also taken away to
The Philippines has one of the highest number of social media users that spend an average of nearly 11 hours a day on the internet
Key operators of data centres in the Philippines are telco giants PLDT and Globe
We have to be, as an industry, more considerate of the environment
a certain degree,” he said. “If you look at it from a geological point of view, the Philippines has benefits and has some challenges that come from that.” He cited the abundance of geothermal power stems from the high level of volcanic activity, not to mention, several flood zones across the country, and is also susceptible to typhoons. In this light, data centre operators need to be selective in terms of the location at which they will set up their sites.
Other emerging markets
For similar reasons, Webb said Indonesia, Thailand, and Vietnam are also seen as emerging markets. Like the Philippines, the said countries have a big “data-hungry” population that continues to grow and remains underserved from a data centre point of view.
As CEO of Evolution, Webb said the company wants to be amongst the early entrants into those markets.
Webb shared that around five years ago, cloud companies in the US were reluctant to enter markets in the region, such as Indonesia, due to the lack of familiarity and the perception that it would be difficult to do business as a foreign entity. But today, operators have entered the markets, particularly Indonesia, to capture demand as it started to peak.
“Big cloud operators from the east and the west are all there in a very big way, which goes to show that when demand starts to peak, all the cloud operators wish to come into that market because they want to serve their customers locally,” the Evolution CEO said.
Greener data centres
Webb said Evolution is cognisant that identifying as “green” gives the company an “almost impossible” target considering the amount of materials used to build and energy the data centres consume. Hence, Evolution strives for “greener.”
“You know that the average statistics suggest that between seven and 10% of the global energy requirements go into data centres,” Webb explained.
“But, we also need to remember that data centres are needed as they underpin the digital transformation, supporting our e-banking, e-commerce, gaming, video streaming that are so common in our daily lives,” he said.
For instance, Webb said a sudden shut-down in the operation of data centres in the Philippines would likely lead to an uproar as social media becomes accessible and remote work is disrupted. But whilst this is the case, the industry should be aware that data centres consume a high amount of energy and that it needs to be sensitive to the environment it works in.
Sourcing energy for data centres
To offset the impact of operating data centres on the environment, Evolution looks to utilise existing plots, often on industrial parks, rather than in greenfield areas that will require the cutting of trees.
“I think we have to be, as an industry, more considerate of the environment. When we source energy, we want to buy it locally because that then requires extra regeneration, extra investment in the renewable energy space, and it becomes self-fulfilling,” he said.
He added that it is likely that this move could also put pressure on the grid to start using non-coal based energy.
“We have one planet, And we need to start being a bit more considerate for the future generations. and that’s where we want to be in terms of Evolution,” he said.
To offset the impact of operating data centres on the environment, Evolution looks to utilise existing plots
