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ART

ISSUE ISSUE Can Singaporeâ&#x20AC;&#x2122;s commercial art scene survive under pressure?

SUPERMARKET WARS: MORE IN STORE? THE BEST CO-LIVING APARTMENTS HOW MUCH DO CEOs GET PAID? DELIVEROO DINES IN UNICORNS AND THEIR OFFSPRING

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Installation by: Miguel Aquilizan, Jessica Dorizac, A Pilgrimage; Souls Retrieved, Ceremonies, Constructed, 2018, Installation view Image courtesy of The Drawing Room.

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SINGAPORE BUSINESS REVIEW | JUNE 2019

FROM THE EDITOR About Us

Singapore is used to hosting and building world class events such as the Formula 1 night race. But it is less accustomed to once famous and crowd drawing events cancelling , as was the case with Art Stage Singapore, which pulled the plug on its event just 8 days before it was due to start, as we write about in our cover story on page 32.

AUDITED CIRCULATION: 23,116 ONLINE READERSHIP: 215,000 monthly uniques through Google Analytics The Singapore Business Review is the highest circulating and best read business magazine in Singapore. Our online readership has an average of 215,000 unique viewers, according to Google Analytics. We won the Business Trade Media of the Year Award at the 2017 MPAS Awards. Do reach out to us if you would like us to tell your story to our readers via print & online advertising or events. PUBLISHER & EDITOR-IN-CHIEF Tim Charlton ASSOCIATE PUBLISHER Rochelle Romero PRODUCTION EDITOR Genelie Sta.Ana-De Leon GRAPHIC ARTIST Elizabeth Indoy ADVERTISING CONTACT Aileen Cruz aileen@charltonmediamail.com Vanessa Austria vanessa@charltonmediamail.com Karisse Coderes karisse@charltonmediamail.com ADMINISTRATION ACCOUNTS DEPARTMENT accounts@charltonmediamail.com

Perhaps this is a sanguine lesson that even though we may be literally “building it” with extra exhibition space at the IR’s, ensuring “they will come” is another harder matter entirely. The reasons for the cancellation are well documented in the story and may be unique to the art market. But the risk that Singapore may be building out lots of new exhibition space without enough thought and support for new crowd and tourist pulling events to fill them needs to be reckoned with. Certainly the Rugby 7’s at Kallang is a great drawcard but even then, the stadium remains but a half full. More integration between facilities and events needs to happen to ensure Singapore not only stays ahead in Southeast Asia, but for it to become a must visit more than once destination from those further afield in China and indeed, the world.

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As we look forward to the opening of the Jewel Changi and the 15,000 capacity indoor entertainment space as part of the Marina Bay Sands Extension, let’s hope that we can draw enough high quality acts to perform there to keep the tourist industry growing.

Tim Charlton

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SINGAPORE BUSINESS REVIEW | JUNE 2019

CONTENTS

FIRST 08 Bike-sharing firms hit a dead end

COVER STORY CAN NEW ART FAIRS HELP ESTABLISH SINGAPORE AS A COMMERCIAL ART HUB?

in Singapore as Mobike exits scene

10 Luxury co-working spaces on the rise 12 Deliveroo’s high-tech food market 12 Meet Grab’s new competitor in SG 14 Foreign worker crunch hits firms

ANALYSIS 28 NTUC FairPrice fires first salvo

in intensifying supermarket war

40 S-REITs maintain strength as DPU

set to grow 2% in 2020

50 Retail rents bottom out as gyms,

FINANCIAL INSIGHT UNICORNS DEPLOY FUNDING INTO CORPORATE VENTURE FUNDS IN RACE FOR SUPERAPP STATUS

SPECIAL REPORT CHECK OUT THESE HOT COLIVING SPACES

arcades move in

RANKINGS 42 Tech and sustainability to define

Singapore hotels

46 Serviced residences switch to hotels

SPACE WATCH THE WORKSPACES OF THE FUTURE ARE HERE

RANKINGS EDUCATION PROVIDERS UP THE ANTE AMIDST WEAK DEMAND

to lure overnight guests

MARKETING BRIEFING For the latest business news from Singapore visit the website

www.sbr.com.sg Published quarterly on the Second week of the Month by Charlton Media Group 101 Cecil St. #17-09 Tong Eng Building Singapore 069533

62 Singapore brands are leveraging IG

stories to create value and engagement

CO-PUBLISHED CORPORATE PROFILE

Healthcare inflation leads to new rules for insurance Why your health insurance is about to change and what you need to know about it

he way health insurance plans work in Singapore saw a big change on April 1. That was the Ministry of Health (MOH) deadline for insurers to come up with new Integrated Shield Plan (IP) riders where policyholders co-pay 5% of their total medical bill. This is a departure from the traditional “full rider” plan where patients pay nothing regardless of the bill size, and is intended to restrain healthcare inflation. MOH co-payment changes Healthcare inflation is a significant challenge for Singapore, and affects all Singaporeans. As reported in the Singapore Business Review, healthcare inflation is expected to hit 10% this year, compared to 1% for other goods and services. Part of this inflation comes from an increase in healthcare needs due to the ageing population, as well as the expansion of treatment options due to technological advances. However, a significant part has also come from an increase in healthcare utilisation among patients who have “full riders”, in which they pay nothing regardless of bill size. Such “full riders” lead to a “buffet syndrome” where there is over-consumption of healthcare services as well as over servicing by some doctors. This has, in turn, led to upward pressure on premiums and increased costs for consumers. The institution of mandatory co-payment by MOH is intended to combat this buffet syndrome, and restrain healthcare inflation. This is a necessary step to help patients become more involved in their own healthcare as well as the costs associated with treatment. How AIA Singapore is implementing the changes As an insurer, AIA Singapore has a social responsibility to maximise value for money on health expenditure, given that it is ultimately the customer who bears the cost of healthcare through premiums. We also need to ensure that our IP portfolio is financially sustainable so that we can keep our brand promise to help our customers live healthier, longer, better lives. In line with MOH’s direction, we have introduced AIA Max VitalHealth – a new rider for AIA HealthShield Gold Max – effective on 1 April 2019. This policy features a

5% co-payment component with a cap of S$3,000 per policy year if you are treated at any AIA Quality Healthcare Partners (AQHP) specialists or public hospital. The introduction of AIA Max VitalHealth complements our other measures to provide customers with quality affordable healthcare. In particular, AIA was the first insurer in Singapore to establish direct partnerships with the medical community with its AQHP programme. Our experience with the panel has been very positive, and we have been progressively working on ways to strengthen collaboration with our panel doctors. We have also recently expanded our services for pre-approval of claims, which provides customers with assurance that their claim will be paid before they undergo a procedure or hospitalisation. While pre-approval is still very nascent in Singapore, take-up for this service is increasing at an encouraging rate.

AIA Singapore takes a data driven approach to tackle the issue of overcharging. To assess if a charge is reasonable and customary, we will take reference from the MOH fee benchmarks where available. We will also compare the claim against our historical claims data to identify outliers, and consult with in-house medical experts. If we find that there appears to be overcharging, we will negotiate with the provider to bring down charges. This directly benefits customers who have to co-pay, as they will end up paying a smaller out-of-pocket amount.

Prevention better than cure While all IP insurers have made changes to their IP riders to comply with the MOH co-pay requirements, AIA Singapore has gone further to be the first insurer to offer complimentary Colonoscopy screening for Colorectal Cancer, and Mammograms for Breast Cancer, under AIA Max VitalHealth A - the new IP rider and Overcharging the existing AIA Max Essential A Saver rider. Overcharging by outlier providers is also In 2013, AIA Singapore launched AIA a significant contributor to healthcare Vitality, the first in market comprehensive inflation. Such outliers have a direct impact health and wellness programme designed to on healthcare costs, and also serve as a encourage policyholders to live healthier with signal to other providers to raise fees. To incentives and rewards for making healthy mitigate this, the MOH has established choices in their everyday lives. national fee benchmarks for procedure Helping our customers stay healthy is a fees. The benchmarks serve to guide private core part of our strategy, because this is the sector healthcare providers in charging right thing to do, and early detection will help appropriately, and enable patients and payers our customers to have a better prognosis and to make better informed decisions. enable them to seek treatment earlier.

“AIA Singapore has a social responsibility to maximise value for money on health expenditure.”

Healthcare inflation is expected to hit 10% this year.

SINGAPORE BUSINESS REVIEW | JUNE 2019

News from sbr.com.sg DAILY NEWS FROM SINGAPORE MOST READ RESIDENTIAL PROPERTY

FINANCIAL SERVICES

What killed Mandarin Gardens’ $2.9b en bloc deal? Despite an asking price of $2.9b, currently the highest land value in Singapore’s en bloc sale history, Mandarin Gardens’ en bloc sale was axed as its collective sale agreement (CSA) expired before meeting the 80% owner consensus requirement. Only 68.34% of subsidiary proprietors (SP) signed the CSA. What was to blame for the failure of what could have been the largest en bloc deal in Singapore’s history?

TRANSPORT & LOGISTICS

Hyflux troubles trickle down as nearly $4b corporate bonds mature by end-2019 The unending woes of Hyflux signals more challenging times ahead for the larger Singapore dollar bond market as close to $4b (US$3b) of SGD corporate bonds are set to mature by the end of 2019 and the number is tipped to hit around $13.53b (US$10b) by 2020, according to S&P.

Uber’s back: Asia Pacific HQ unveiled in Tanjong Pagar A year after exiting Singapore and selling its Southeast Asian operations to Grab, Uber is back in Singapore with a new Asia Pacific HQ in Tanjong Pagar. Spanning 2,000 sqm and employing about 165 people. It supports operations in ten languages, across 102 cities in nine Asia Pacific countries.

MOST READ COMMENTARY 3 things SMEs in Singapore need to know BY BASTIAAN TOESET Small to medium sized enterprises (SMEs) are the lifeblood of all economies across Asia Pacific, however, technological disruption of industries and the need to innovate and change business models are key challenges that need to be addressed. According to an IDC report, escalating costs of operations, the emergence of new business models, competition and changing customer demands are pressuring small businesses in the region.

Strengthening cybersecurity through digital defence BY ALBERT KUO

Keeping up with healthcare: How Singapore can remain an attractive expat

destination BY LORI STETZ, STELLA GEORGE,

Retailer’s exit from Singapore’s electricity market: No need for warning bells BY GAUTAM JINDAL Singapore’s perfect storm for Smart Wearables and IoT innovation BY PAWAN GANDHI

LET’S PUT ETHICS AT THE HEART OF EVERYTHING WE DO. LET’S MEASURE UP. Ethics is at the core of how CFA® charterholders work. This is more important than ever in the investment industry, where trust has eroded. An industry without trust is an industry without clients, so demand the highest ethical standards in your investment professionals. Demand the best. Demand a CFA charterholder. Get started at letsmeasureup.org

AGENDA PEOPLE | PLACES | SERVICES | OPPORTUNITIES

OPPORTUNITIES

DIRECT LINK Global deliveries, the Nordic way. For years now, delivery companies have bragged about having the biggest trucks, the fastest planes and the coolest ships. But a brave new world needs brave new solutions. For global e-tailers, finding the right way to the market matters more than which truck takes them there. So instead of owning a fleet of planes, trucks and ships ourselves, we’re experts in finding the best possible delivery solution for you. That’s our take on deliveries. No more, no less.

PLACES

GREAT WORLD Part of the Kuok Group of Companies, owners of internationally acclaimed Shangri-La Hotels and Resorts, we are ideally located minutes away from the Central Business District and Orchard Road, Singapore’s premier shopping belt. Standing at 34 stories high with 304 units, our residence ranges from one-bedroom apartments to four-bedroom penthouses. With world class facilities such as a near Olympicsize swimming pool and a 24-hour gymnasium, plus the conveniences of an adjoining shopping centre under one roof, Great World remains the accommodation of choice for singles, families and their furry pets too!

SERVICES

KRAMER Since 1981, Kramer Electronics has been a leading player and pioneer in the Pro AV industry. With customers in over 90 countries across six continents, Kramer offers an extensive and innovative pro AV portfolio of products and solutions for Corporate, Education, Houses of Worship, Government, Live Events, Healthcare, and more. For over three decades, Kramer has built its reputation on strong personal relationships with its customers and providing the highest level of service and support in the industry. ERRATUM

Singapore Business Review erred in the January-March 2019 issue where we captioned a photo of Liu Shaw Jiun and affiliated him with Deskera.

Liu Shaw Jiun of Daikin Airconditioning For the full corrected report, please visit (Singapore) Pte Ltd

OPPORTUNITIES

ABEAM ABeam Singapore is part of the ABeam global family that was established out of Deloitte Touche Tohmatsu in 1981 in Japan. Since changing our corporate name to ABeam Consulting in 2003, the group have grown leaps and bounce to reach 5000+ headcount in 2018 whilst operating in 15 countries with over 30 offices, and continuously growing. ABeam Singapore started our operations in 2005. From our infancy of 10+ consultants working mainly on Japanese MNCs roll-out projects, we have transformed into a 150-teamstrong organization, focusing on ERP implementation & rollouts ; Analytics & Big Data implementation ; Robotic Process Automation (RPA); Business Process Re-engineering and Change Management; across multiple industries, covering not only Singapore but the region. Our focus industries are EC&O, FSI, Hi-tech, Discreet Manufacturing and Telco.

Liu is the managing director of Daikin Airconditioning (Singapore).

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SINGAPORE BUSINESS REVIEW | JUNE 2019

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FIRST

With around 25,000 bikes in its fleet, Mobike holds the title as Singapore’s largest bike-sharing player

Bike-sharing firms hit a dead end in Singapore as Mobike exits scene

he faltering bike-sharing industry in Singapore was dealt another heavy blow when Mobike applied to surrender its licence to the Land Transport Authority (LTA), raising questions about the sustainability of the business model in a city where last-mile transport issues remain unresolved. With around 25,000 bikes in its fleet, the Chinese bike-sharing unicorn holds the title as Singapore’s largest bike-sharing player with operations in 180 cities worldwide including Italy, Britain, US and South Korea. Mobike has over 7.1 million active bikes and over 48.1 million active bike users as of April 2018, according to a prospectus from its parent company Meituan Dianping. The Chinese movie-ticketing company acquired Mobike for a reported US$2.7b in April 2018. However, financial difficulties in its home market may have prompted Mobike to rethink its global ambitions, said Yunming Wang, venture partner at Quest Ventures. An earlier report from TechCrunch revealed that Mobike reportedly laid off its entire Asia-Pacific operations team as part of its efforts to trim down its regional presence and focus on its Chinese operations. Losses from Tencent-backed Meituan 8

SINGAPORE BUSINESS REVIEW | JUNE 2019

Dianping widened to $687.22m (CNY3.4b) in the quarter ended December 31 from $444.67m (CNY2.2b) the previous year as revenue failed to keep up with steep costs, according to its financial statement. “I would say the poor unit economics, combined with high burn and tricky cash-flow issues, plus an uncertain, often oppressive, regulatory environment made the model untenable in Singapore. If Mobike intends to expand across Southeast Asia, I expect it will do so in more regulatory-lax domains, at the very least,” Justin Hall, partner at Golden Gate Ventures said. “When you begin to chase the dragon of increasing valuations, highspend/high-burn financial models, and unrealistic engagement numbers, I think you ultimately have a recipe for disaster.” Mobike’s woes are the latest in a string of difficulties faced by Chinese bike-sharing players in Singapore. The firm’s planned withdrawal follows the retreat of Alibababacked ofo whose licence was suspended in February 2019 after failing to comply with

regulatory norms, as well as oBike’s sudden exit in 2018 which is currently in liquidation to refund credit to its users. “The Singapore bike-sharing scene is now dead. Where there was untidiness on the streets, there was however lastmile convenience. With the industry all but dead, the streets are now tidy but the convenience is gone,” said Wang, referring to the indiscriminate parking of shared bikes in Singapore which could be traced as the source of ofo’s woes. The LTA earlier cracked down on haphazard bike parking by setting a QR code-based geofencingsolution where users can only park their bikes at a designated area by scanning a parking QR code. “For an industry that was widely hailed as one of modern China’s four great inventions - the others being high-speed rail, Alipay and e-commerce - this is a sad retreat and has important lessons for startups to learn,” he added. The asset-heavy nature of the bikesharing business may have also contributed to the system’s operational problems as a growing userbase means that players require a larger number of bikes to service them, according to Ramesh Raghavan, vicechairman at Business Angel Network of Southeast Asia (BANSEA). “The business model was based not on bike economics but probably more on deposit collection and using the interest to generate return and grow customer base at the fastest pace. At some point of time, they all thought they would become a bank as interest on deposit collected was sizeable but net usage of assets was very low,” he explained. To ensure sustainability against steep operating costs, Raghavan proposed consolidation and partnership given the business model’s high capex, which he claims does not make sense with low margin and low asset utilisation. For instance, the remaining players could take a leaf out of the car-sharing industry and share bikes across different operators through a common app and rationalise routes. “Bike sharing is less of a viable model in Singapore and more sensible in larger cities in China if you can reduce capex and increase rides per day. This also needs lot of work on finding the routes with maximum

“When you begin to chase the dragon of increasing valuations, I think you ultimately have a recipe for disaster.”

FIRST usage and limiting to that. It can’t be based on buying bikes for every new customer trying to use the app,” he said. Instead of seeking easy exit routes, Hall urged bike-sharing platforms to tie up with private and public platforms in order to cushion the associated costs of maintaining and moving the business forward. “[Startups should] optimise for positive unit-economics, push heavily into partnerships, both private and public, that could offset some of the costs associated with the business and perhaps, just maybe, focus on building a sustainable business instead of a fast-growing startup that might sell for a billion dollars,” he said. Where others see only challenges, however, some see opportunity like Anywheel, one of the few remaining players in Singapore’s faltering bike-sharing industry. Anywheel plans to upgrade its licence to a full one during the second application of licencing and expand its fleet size from the approved 1,000 bikes in line with its eventual goal of islandwide roll-out. The homegrown startup currently holds a sandbox licence as it has only been operational for more than six months when licencing applications opened in June 2018. “In a way, the exit of other operators do give us more opportunity. After all, the demand is there and less competition means bigger market share right?,” Htay Aung, founder at Anywheel told Singapore Business Review. When ofo’s license was suspended in February, Aung observed a slew of requests for Anywheel to deploy at the retreating firm’s areas. “ From the area that we deployed, the pick up rate has been higher than ever which gave us [the] confidence to go ahead. All these data, email and increase in pickup rate indicated there is a heavy demand in Singapore for sharing devices.” Similarly, SGBike, which has over 3,000 bikes in its fleet, still believes that the wheels haven’t fully come off of the bikesharing industry. After adding 200 bicycles to its fleet in 2017, SGBike is racing ahead to expand to more areas in the city. “Overall, I think different firms and companies have different focuses for different markets, and for SGBike as a local Singapore brand by Singaporeans, Singapore will still continue to be our primary market and has been so since our launch in August 2017,” said Benjamin Goh, marketing director at SGBike. Sandra Sendingan

SPECIAL REPORT

How much are CEOs in top Singapore-listed companies paid? Remuneration packages of CEOs in Singapore are fairly modest in comparison to their global counterparts, according to Kumar Subramanian, partner for talent rewards and performance, Southeast Asia at AON. “For perspective, the CEO of an S&P 500 company was paid, on an average, around US$14m a year. If you look at Singapore-listed companies, only two or three CEOs would probably make that sort of figure,” said Subramanian. For instance, the remuneration package of DBS CEO Piyush Gupta hit US$8.61m (S$11.68m) in 2018 which includes a US$884,592 (S$1.2m) salary; a US$3.31m (S$4.49m) cash bonus; and a US$4.50m (S$6.11m) share plan after the bank saw a record earnings year, DBS said in its annual report. Gupta’s pay is higher than that the 2018 remuneration of OCBC CEO Samuel Tsien US$7.89m (S$10.70m) as well as that of UOB CEO Wee Ee Cheong which hit US$7.78m (S$10.56m). In contrast, CEOs in the largest companies in America made an average of US$18.9m in 2017, according to a study by the Economic Policy Institute. In an interview with Singapore Business Review, Subramanian discusses how CEOs in Singapore are paid, and the sectors that reward their senior executives more than their peers outside of their industry. SBR: How much are CEOs from Singaporelisted companies paid? KS: If you look at the CEOs of top 30 Singapore-listed companies, their compensation generally ranges between $4m and $5m. This compensation includes the guaranteed salary which includes a base salary and, in a few instances, 13th-month bonus, which is essentially an extra one month guaranteed salary for that specific year. This is applicable only if the 13th-month bonus is practised throughout the organisation. Other forms of guaranteed compensation include various allowances, [AP style] that are paid in the form of cash. In addition, there are long-term incentives. The incentive is a contingent award of shares. These shares will typically vest over a period of three or four years. To monetise the award, the CEO needs to stay in the company as an active employee and achieve certain performance conditions that will be attached to the vesting of the awards. How have the salaries of CEOs changed over the past years? Over the last three to four years, there has been a nominal increase in the total

Kumar Subramanian

compensation of the senior executives of the top 30 STI-listed companies. The base salary increases have been quite modest, at less than 2% per annum. A significant part of the increase, therefore, is a result of performancebased compensation. How do CEO salaries differ across companies or industries in Singapore? CEOs in the financial services sector get paid more than their peers outside of their industry, followed by the CEOs in the property development sector, and then broadly others. There are a few factors that drive the pay premium. Number one is the globalisation of the talent pool. In Singapore, there are a number of global financial services firms that operate locally, and their compensation would be aligned with global standards. In addition, the mobility of senior management talent pool for financial services is increasingly getting globalised. You would not be surprised to see a leader who has run a fairly large business for a global financial services firm in Europe or in the US move to Singapore. How do Singapore-based CEOs’ salaries shape up compared to other countries? The CEO of an S&P 500 company, for instance, is paid, on an average around US$14m a year. If you look at Singapore-listed companies, very few CEOs would probably make that figure. But you can’t necessarily compare the salaries in absolute numbers and deduce any significant conclusions from that. It would be important to take the size, industry, performance and various other factors into consideration. Arianna Danganan SINGAPORE BUSINESS REVIEW | JUNE 2019

FIRST ensuring that it complements the space’s impressive visual design and workspace performance. “Just providing reception and cleaning services for us is not really meeting the entire needs of our customers. We go beyond that,” said Lee. The Work Project’s members also gain access to hosting spaces such as Omotesando Coffee, the Mark C suite lounge.

The Work Project

Luxury co-working spaces on the rise

tepping into The Work Project’s co-working spaces, the experience is more akin to checking into a high-end hotel rather than clocking into a bustling open-space office. Gone are the bean bags and game rooms, trappings meant to attract young entrepreneurs. Instead, members are given access to luxurious office spaces with an art gallery and vertical garden. Established in 2016, The Work Project is the fourth largest co-working operator in Singapore, with five luxury premium spaces in the island, and one location in Hong Kong. In Capital Tower alone, the operator oversees 50,000 sqft of space across three different levels, featuring 800 work stations and an in-house premium catering service. Roughly 20% of this expansive area is dedicated to training workshop and conference facilities, popular amongst corporates that want to hold training sessions and regional gatherings, according to The Work Project founder and CEO Junny Lee. Design, performance and service “What you can typically find in the market is co-working spaces with some nice furniture, and it pretty much just ends there,” said Lee. “But I think luxury is so much more than just a couple of small design aspects.” The Work Project considers luxury on 10

SINGAPORE BUSINESS REVIEW | JUNE 2019

three fronts, according to the founder, which justifies the premium price for more established entrepreneurs and corporates. First is in the space’s design, which did not scrimp on materials — be it from luxury fabrics used in top hotels and sourced from different parts of the world, to top-of-theline furniture from makers such as Ralph Lauren. The second aspect of luxury which the operator focuses on is in the space’s performance. “It’s what often happens with co-working spaces, you find nice design details but when it actually comes to the workspace itself, the performance is not so good,” said Lee. “Performance is really important because we want our member companies to do the most productive work and to be as successful as they can possibly be,” he added, citing the operator’s use of workstation desks and tables from esteemed Italian and Swiss brands. MARK at The Work Project Capital Tower was designed in collaboration with Hassell Studio. The operator’s third pillar for luxury is in service and hospitality,

Rapid expansion and demand With The Work Project aiming to progressively expand to Tokyo, Sydney and Melbourne in addition to the 100,000sqft of space it launched in the past month, luxury co-working operators are only set to continue expanding throughout the rest of Asia. “We believe that flexible workspace is now fully established as an occupier sector, serving an important market niche. We see particular growth potential at the premium end of the flexible workspace market, especially for those operators focusing on provision of amenities and hospitalityrelated services,” property consultancy firm Colliers International said in a report. Premium hospitality-led co-working space operator, The Great Room, is banking on this opportunity as it confirmed its fourth Singapore location spanning 15,000 sqft in Raffles Hotel. “Although we are a young company, we have been very encouraged by the strong pipeline of demand for our premium coworking spaces,” said Jaelle Ang, co-founder and CEO of The Great Room, which launched in 2016 and now has five locations in Singapore, Hong Kong and Bangkok in Thailand. “When we started, we identified this segment of businesses who need enterprise-level infrastructure with the soul and energy of a startup; it was thought of as a niche segment. But unsurprisingly, many businesses want it all. For the key Asian financial centres like Singapore and Hong Kong, the premium segment we are in is the largest opportunity, fastest growing and has the highest margins within flexible working.” Membership at The Great Room’s existing Singapore locations start at $2,500 a month, 20% higher than the current price of WeWork’s desks, which is currently one of the largest players in the co-working market. The Great Room at Raffles is expected to be more pricey as it targets ‘grown-ups’, or

“Membership at The Great Room’s existing Singapore locations start at $2,500 a month, 20% higher than the current price of WeWork’s desks.”

FIRST established companies and corporates, said Ang. She notes that demand for flexible coworking spaces is accelerating as companies explore different ways of optimising space per worker and keeping 20% to 30% of their total real estate requirement as flex rather than all core with long, locked-in leases. The move is further reinforced by 2019 GAAP accounting rules that demand increased transparency and efficiency related to real estate costs. To date, The Great Room reports that they already have early commitments and would expect to hit 50% occupancy when they open in mid-2019. Booming demand In Singapore, IWG, which manages the Spaces and Regus brands, remains the largest flexible workspace operator with 23.5% market share and an estimated portfolio size of 65,000sqft. New York-based WeWork, which earlier acquired Spacemob in August 2017 to boost its regional presence, trails behind the London-listed giant along with JustGroup who each hold around 12% and a portfolio over 330,000sqft. Meanwhile, The

The Great Room

Great Room is the seventh largest Singapore operator with an estimated portfolio size of 76,000sqft. Ang predicts the demand that the demand for flexible working space as a percentage of commercial office space to grow about 10 fold in the next 10 years from the current 2-3% to 30% by 2030. They plan to tap on this opportunity by exploring

next locations in tandem with the firm’s increasing memberships. “In Singapore, we are in talks for further expansion as our current three locations are already at run-rate occupancy. Many of our enterprise members have multi-city memberships with us and our goal is to have sites in the key Asian cities,” Ang said.

Here’s a peek at ENGIE Factory APAC’s 3,500-sqft headquarters in Pasir Panjang The entrance to the office is powered by facial recognition technology. It also features a social area, where people can make their own barista coffee, listen to music, and eat fresh fruit. Located at Golden-Agri Plaza along Pasir Panjang Road, ENGIE Factory Asia-Pacific’s regional headquarters offers a working space for startups, entrepreneurs and like-minded people to work on ground-breaking ideas and products with the support of experts and executives at ENGIE. ENGIE Factory Asia-Pacific is ENGIE’s strategic venture arm committed to working with startups to develop an increasingly decarbonised, decentralised, digitalised world. The 3,500-sqft space joined several of ENGIE’s operational business units, including ENGIE Services, ENGIE property services, ENGIE Lab and ENGIE Axima. Key features “It’s a workplace that centres around people and technology,” ENGIE Factory Asia-Pacific’s managing director Quentin Vaquette told Singapore Business Review. “When walking up the glass door, a facial recognition system welcomes you in the blink of an eye. Once inside, you will enter into our social area, where everyone makes their own barista coffee at our espresso machine, listens to music, eats our fresh fruit and sits to think for a whilst in one of our sofa corners. Our 5-metre-high windows provide a healthy amount of light in, against a backdrop of greenery outside and coloured walls inside. Beyond the social area, the space features long tables that allow teams to form and change

Work stations

Common area

Floor-to-ceiling windows

Collaborative spaces

every day depending on their needs. Mobile whiteboards, fixed whiteboards and writeable walls also make it possible to discuss ideas easily, whilst TVs and video-conferencing capabilities in the office meeting rooms enable teams to work remotely. “We worked with a great team of designers to help us execute our vision, and at the core of our vision are people. The space is designed to bring together everyone in a way

that fosters discussion, exchange around the whiteboard and introductions around a coffee machine. Our own Factory team thought about detail carefully to ensure that it helps achieve our objectives. I personally believe that you can’t outsource that.” ENGIE Factory Asia-Pacific’s activities span across the region, giving startups the opportunity to collaborate with ENGIE teams in Southeast Asia and Australia. SINGAPORE BUSINESS REVIEW | JUNE 2019

FIRST INFOGRAPHIC

BONUS EXPECTATION SURVEY

Deliveroo’s hightech food market

en kitchens, nine restaurants, and all-digital is the experience that Deliveroo is serving up at Deliveroo Food Market located at ALICE@ MEDIAPOLIS. The site has a 40-seater dine-in space powered by a futuristic fully-automated ordering experience in collaboration with US-based technology automation company eatsa. Some of the restaurants that are offering their cuisine in the Editions site include Bonchon Chicken, Omakase Burger and Blu Kouzina. Customers first place their orders at the kiosks onsite. Self-serve kiosks and automated digital cubbies from eatsa drive the order and pick up process. Once their food is ready, it will be placed in one of twelve available digital cubbies for pickup. Customers will then receive a notification on a digital status board to pick up their food and have the choice to eat it onsite or for takeaway. Aiding virtual brands Deliveroo Editions is the food company’s take on delivery-only kitchens, enabling restaurants to trial virtual brands at the site, appearing as a separate brand entirely on the app and allowing restaurants to gain an understanding of what customers prefer and to tweak them accordingly before introducing them in their physical spaces Deliveroo’s Food Market builds on this concept by adding the dine-in space for

Deliveroo at ALICE@MEDIAPOLIS

customers. Learning from its previous two sites in the island-nation, the new site also has dedicated areas for kitchens, rider pickup and waiting points for better efficiency. Riders can also rest and recharge in the site’s waiting area, which is equipped with charging points. The future of food “Food Market in Singapore represents the latest innovation from Editions and will help bring customers greater choice and boost restaurant revenues. We are on a mission to become the definitive food company, and our Singapore Food Market marks another step forward in the future of food,” Deliveroo general manager for Global Editions Yannis Alivizatos said. “As a company, we are all about food and believe in investing in the latest technology to provide the best experience for all customers, whether they choose to dine in or have food delivered to their doorsteps,” Deliveroo Singapore general manager Siddharth Shanker added. Deliveroo plans to have 5,000 restaurant partners and 2,000 riders by the end of 2019.

MOBILE APP WATCH

Access any JustCo co-working space with new app

Source: Visa

SINGAPORE BUSINESS REVIEW | JUNE 2019

Coworking space provider JustCo has developed its own app, which will serve as a platform to facilitate collaborations and encourage closer interactions across the regional JustCo community, an announcement revealed. The JustCo App will reportedly act as a personal virtual passport for JustCo members, where they can access any centre, book resources conveniently, sign-up for exclusive events, receive community news, submit and track service requests all within one platform. “Our focus is serving and anticipating our community needs,” JustCo’s COO and cofounder Liu Lu said in a statement. “The JustCo App is not only a communication tool that facilitates our creation delivery of good services and interesting events. It will be a key enabler to build and support stronger bonds that supersedes physical distance and boundaries.”

JustCo app

FIRST

Meet Grab’s new competitor in SG

fter Vietnamese ride-hailing firm FastGo announced its debut in Singapore in April, 500 drivers immediately signed up, 12 hours after registration. “It is a good signal for FastGo in the Singapore market,” FastGo CEO Max Nguyen said. In an exclusive interview, Nguyen talked about the company’s launch in Singapore, its expansion plans in Southeast Asia, and its strategy to go against big players already present in the city. What is your main strategy for expansion? FastGo’s strategy is to bring good services and benefits to the driver-partners. Being different from Grab and Go-Jek, which collect at least 20% of commission fee from the driver-partners, FastGo only applies a fixed amount of daily fee to the drivers. In detail, in Singapore, FastGo will charge less than US$5 if the driver’s income is over US$30 a day. For the customers, there is no surge-pricing during peak hours or bad weather. Our prices are always stable. How will your fixed daily subscription fee work in Singapore? The fixed daily subscription fee worked well in Vietnam. It attracts a large number of driver-partners. Till now, FastGo has more than 50,000 driver-partners around all the markets. FastGo is confident that Singapore will respond positively to the fixed daily subscription fee of FastGo. Our fee policy will bring benefits to both the driverpartners and the customers. How is FastGo going to distinguish its services from Grab and other ride-hailing services in Singapore? Firstly, we will focus on drivers, make our drivers happy with our policy. Second is our customer, FastGo’s price will always be cheaper than others. We plan to be one of the top three ride-hailing applications in Southeast Asia. What challenges are you expecting with the Singapore expansion? Singapore market is easy to enter but it’s really hard to have a substantial market share. One reason might be Singapore has an excellent public transport system and a taxi system that doesn’t charge high fares. If we only focus on the local market, we cannot compete with global players.

CAN SINGAPOREAN STARTUPS CASH IN ON ASIA’S GROWING FAMILY OFFICE SEGMENT? The rapid rise of millennial magnates in Asia with larger risk appetites and a propensity towards private equity investment is a match made in heaven for the region’s cash-short startups seeking the necessary financing fuel to unlock their next stage of growth. Reuters estimates that there are roughly 500 family offices in Asia that work discreetly to manage a family’s private wealth affairs, including investment, succession planning, philanthropy and taxation. Raffles Family Office, which has operations in Singapore and Hong Kong, is one such player that has chosen to allocate a small portion of its $1.5b AUM into the startup space, with particular inclination towards healthcare tech, fintech and cybersecurity. “There is definitely huge momentum into the startup space as part of the wealth management strategy,” Kendrick Lee, managing partner at Raffles Family Office, said. “We too acknowledge that such investments into startups could return more than 100% of the entire portfolio; therefore, we cannot ignore such an investment.” One such startup that benefitted from this growing trend is Singapore-based event platform Delegate, which successfully raised US$1m for its pre-Series A round from an undisclosed family office earlier this year. “We chose to raise funds from a family office as the quantum that we’re looking to raise was deemed too small by some VCs - those who were looking at investing at Series A and above; or too large for VCs that invest at seed stage,” its founder, Jacqueline Ye said. A new generation of millionaires Industry players attribute the growing prominence of such investments to the ongoing transition of wealth to a generation that has displayed a greater willingness and risk appetite beyond high-dividend stocks and fixed-income products. “The first generation of one of our clients is very traditional since they made their money from real estate. The second generation, being in the tech era and environment, understands the need to be relevant in the startup space. Immediately, the family carved out a small budget for the second generation to invest in startups,” said Lee. The potential of startups offering significant returns was not lost on the broader industry as law firm WongPartnership observed the spike in demand for advisory services in the startup space and launched a startup/venture capital practise in 2018 to consolidate its expertise in the area, said Sin Wei Ong, partner and co-head of the newly created segment. “Family offices are increasingly viewing startups as having the potential for outsized returns. The key drivers for investments into start-ups tend to be the younger generation of

Delegate CEO Jacqueline Ye

the family, who better understand the start-up mentality and want to diversify beyond the usual target businesses,” he noted. Unlike traditional VCs which subscribe to the usual 2/20 model, family offices could offer startups a longer timeframe to work around as they do not have to worry about a fund life, divestment horizon and required returns, e27 said in a report. Depending on the terms of the deal, family offices can opt to exit in a year or five to ten years which may differ with the priorities of VC funds that have to maintain steady cashflow. Part of the reason that family offices could afford to be a more patient source of capital lies in the fact that startups are not the only possible goldmines for the wealth managers of the region’s super-rich. Although alternative investments like real estate, private equity funds, hedge funds and REITs have been gaining traction, equities, bonds, cash and commodities still form a key part of the investment mix, according to a report from UBS and Campden show. However, there is no denying that the rapid pace of wealth creation in Asia creates only more opportunities for collaboration between the region’s wealthy families and startups seeking diverse ways to unlock capital, which all works to the benefit of the startup ecosystem. Asia-Pacific accounted for 38% of the global millionaire population in 2017, according to the UBS report. “[T]he comfort of the new tech billionaires or younger scions of traditionally wealthy families with the risks and rewards associated with start-up investing and their willingness to get involved point to this being a long term play,” concluded Kyle Lee, partner and co-head at start-up/venture capital practice at WongPartnership.

SINGAPORE BUSINESS REVIEW | JUNE 2019

FIRST AMBASSADOR BRIEFING

OVER 4,500 US COMPANIES CALL SINGAPORE HOME

Stephanie Syptak-Ramnath

At a time when Singapore was little more than a barren Southeast Asian island, the United States was amongst the first countries to invest in the nation’s budding manufacturing industry. Since then, the US has emerged as Singapore’s largest source of foreign direct investment, with US companies accounting for more than 20% of all FDI in the nation. US companies also invest more in Singapore than in all other Asian companies combined. Today, the two countries have moved past trade partnerships and are working together to foster security, innovation, and growth. Singapore Business Review spoke with Stephanie Syptak-Ramnath, Chargé d’Affaires, a.i., US Embassy in Singapore, to uncover the benefits that US trade and investment brings to Singapore and the future of the partnership between both nations. What is the current state of economic relations between Singapore and the United States? The United States is by far the largest single country investor in Singapore, with direct investments in Singapore worth over US$244b. In the manufacturing sector, US FDI in Singapore is almost 50% more than all Asian investment in that industry. Turning to financial and insurance services, US investment is 60% larger than that of the EU, which is the second largest investor in that sector. The number of US companies in Singapore continues to increase at an encouraging rate. In the past three years, the number of American companies registered in Singapore has grown by almost 20% from 3,800 to 4,500. Moreover, our companies don’t only bring investments, they also bring jobs, training, mentorship, and corporate excellence to all that they do. From consulting to finance, US multinationals alone employ nearly 200,000 employees in Singapore. Our robust trade relationship with Singapore also supports over 250,000 jobs in the United States and approximately 36,000 Americans are employed by Singaporean companies. Any trade and investment events that Singapore companies can get involved in? The US-ASEAN Smart Cities Partnership (USACP) is a responsive, multi-year commitment that will benefit the ASEAN Smart Cities Network (ASCN), which started in Singapore during its Chairmanship year of ASEAN, by addressing smart city challenges across a range of sectors, especially in the areas of infrastructure, energy, and information and communications technology. US Embassy Singapore’s Commercial Service Section and American companies will also be active with the following trade shows in Singapore: ConnecTechAsia (18-20 June), ITB Asia 2019 (16-18 October), Singapore FinTech Festival (11-15 November). 14

SINGAPORE BUSINESS REVIEW | JUNE 2019

Foreign worker crunch hits firms

he foreign workers in Singapore’s services sector face the heightened risk of losing their jobs after finance minister Heng Swee Keat announced in his budget address that the government will be reducing the dependency ratio ceiling (DRC) for the services sector from the current 40% to 38% by January 1, 2020 and to 35% in January 1, 2021. The S Pass sub-DRC for the services sector has also been tightened from the current 15% to 13% on Jan 1, 2020, and to 10% from Jan 1, 2021. According to a Bloomberg analysis, when the DRC was at 45% in 2013, a business with 20 full-time locals could employ 16 foreigners. In 2015, the ratio was reduced to 40%, so for the same 20 locals, three foreigners had to be cut. With the recent move to further lower the ratio to 35% by January 2021, two more foreigners need to be let go whilst keeping the same 20 locals in employment, and adding more locals to make up for the difference. What it means for businesses The move didn’t come as a surprise to analysts, which have observed that the government’s call for a firmer foreign worker policy is motivated by economic restructuring amidst a moderating GDP growth. The rapidly ageing city has long tried to plug its thinning workforce with foreign employees who in turn were eager to seek career and social mobility opportunities in sleek Singapore. The total foreign workforce has inched up steadily from 1.32 million in 2013 to 1.37 million in June 2018, data from the Ministry of Manpower show. The services sector has been the key driver of net employment adds over the last three years, according to Jefferies Singapore. S-Pass and work permit holders have risen 3% annually over the period versus 0.6% annual growth for the total labour force. The stricter rules of foreign workers would also deal a blow to labourintensive service companies like Sheng Siong, Jumbo, Raffles Medical, SMG, HMI, ComfortDelGro, Singapore Post, and SATS where labour cost

Lucky Plaza

is a major expense, accounting for around 20-50% of their total revenue, according to UOB Kay Hian. “[The] tightening of foreign manpower policy will increase labour costs,” the firm said. “our back of the envelope calculation indicates that labour costs for the companies under our coverage could increase by 0.4% in 2020 and 0.6% in 2021. This is based on the key assumption that the total expenses of a local worker is around 20% more than a foreign worker.” With this in mind, Singapore is actively expanding the use of technology to plug the chronic talent shortage as Minister Heng also announced the planned extension of the Automation Support Package (ASP) by two years in an effort to help firms deploy robotics and IoT technologies amongst other initiatives to upskill the local workforce. In this scenario, however, foreign workers like Jean lose out as they remain in limbo about how longer they can still stay in Singapore. After applying for permanent residency twice and being rejected on both counts, she expresses hope that the government can start to value the contributions of foreign workers like herself to Singapore’s prosperity. “I am very grateful to Singapore as the host country but I hope that they will do more for the foreign workers who help build Singapore. We are not just workers but we are humans who have families to support. What will become of us after the host country cuts our jobs after we have served for 10 to 20 years? We can go home, but then who will hire us when we are already in our late 30s and 40s?”

Management Excellence Awards 2018

INNOVATOR OF THE YEAR - LIFE INSURANCE

AIA Singapore offers an award winning after sales insurance solution: POS EZ AIA Singapore Team recently won Innovator of the Year - Life Insurance at the SBR Management Excellence Awards 2018 for their new digital platform POS EZ. SBR Management Excellence Awards 2018. This prestigious industry award is recognition of the country’s most outstanding business leaders and teams whose initiatives have brought tangible business gains for their company’s operations.

empowerment and convenience to our AIA Financial Services Consultants, Insurance Representatives and customers.” POS EZ together with AIA Singapore’s other digitalisation initiatives, empower the company to become the best digitally enabled Insurer where our focus has always Integrated digital ecosystem been putting their needs at the heart of The AIA Singapore’s team focused on everything we do, enabling convenience and elevating service standards and enhancing an excellent service experience.” customer experience through improved POS EZ has performed well since it was digital after-sales service. This resulted in launched in April and Melita outlines the key the creation of POS EZ. Melita Teo, Chief milestones on the transformation journey so Operations Officer of AIA Singapore, tells us far. “With the human centred design interface about the motivation for creating the award and the remote authentication capability, the winning POS EZ platform and what this convenience of digital submission via POS EZ initiative means to AIA Singapore. has been very pronounced and well-received “The motivation behind POS EZ was our by our AIA Financial Services Consultants, desire to provide servicing in a seamless, Insurance Representatives.” convenient and fast way, and empowering our “In the few months since launch, we have AIA Financial Services Consultants, Insurance received more than 50,000 submissions via Representatives and policyholders to selfPOS EZ and half of those submissions have help through digitalisation and automation. been processed instantly (via our Straight AIA Financial Services Consultants, Insurance Thru Processing (STP) engine) without any Representatives and policyholders can now human intervention. For the other half, the Tan Kang Wee of AIA Singapore at the spend more time discussing and reviewing processing touch-time has been reduced 2018 Management Excellence Awards their protection and financial needs. Being by 30%, benefiting from POS EZ’s built-in a market leader, we want to be at the validations,” she says. hilst a simple change in address forefront of leveraging technology to meet would have traditionally taken the high expectations of our policyholders and Keeping the human touch customer two forms, a face-toprovide service excellence,” says Melita. “By not encumbering our AIA Financial face meeting, and three working days for Services Consultants and Insurance processing, AIA Singapore has cut this down Digitally enabled insurance Representatives to follow up on routine to a matter of minutes. The firm’s POS EZ Melita says that POS EZ is now a vital and admin requirements, they can now have online platform enables AIA Singapore’s component for AIA Singapore to fulfill their deeper conversations and engagements insurance representatives to facilitate a overall goal as a company. “Policy servicing with their customers. Conversations can multitude of customer requests round the is one of the most important elements, and now focus more on their customers’ financial clock without any geographical restrictions. the longest period of interaction between health and personal well-being, thereby This is made possible by providing customers AIA Singapore and our policyholders, from building deeper, long-term relationships,” with remote authentication capabilities - a the moment the policy coverage begins to the says Melita. first in Singapore. time of claims or policy maturity,” explains Building on POS EZ as a benchmark of The remote authentication function allows Melita adding, “Before AIA Singapore success, Melita outlines AIA Singapore’s customers to authenticate their requests introduced POS EZ, all servicing relating future vision, “AIA Singapore has a via a two-factor authentication (2FA) using transactions are usually done on paper and comprehensive Customer Experience and a personal OneKey device that is already required a physical signature. Most insurers Distribution Experience Transformation employed for transactions in more than focus mainly on automating the sales roadmap, and we will continue to build 50 Singapore government agencies. This experience, and servicing is usually put on the human centered digital assets to empower feature provides an extra layer of system back burner. At AIA Singapore, we especially our customers to lead Healthier, Longer and and physical security for all authentication designed POS EZ to offer a high level of Better Lives!” requests. For this award-winning solution, AIA “In the few months since launch, we have received more Singapore Team recently cinched the Innovator of the Year - Life Insurance at the than 50,000 submissions via POS EZ.”

SINGAPORE BUSINESS REVIEW | JUNE 2019

STARTUPS

White-collar hiring platform Snaphunt nabs $1.36m seed fund

ingapore-based AI hiring marketplace Snaphunt raised $1.36m in seed funding led by international data tech-focused VC firm BEENEXT. Snaphunt essentially acts like a recruitment agency but without a human recruiter, as it uses artificial intelligence solutions that match the jobs available to job seeker’s profile. Employers can further interview candidates easily and conveniently using pre-recorded interviews on Snaphunt’s platform. The platform can save at least 30% of time spent on

hiring, reduce hiring effort by more than 50% and lower hiring costs by as much as 99%, as compared to using recruitment agencies. “We will be spending this investment on making some key hires and aggressively expanding our footprint in Singapore before extending it to other Southeast Asian countries later this year,” said Tulika Tripathi, founder, Snaphunt. Tripathi said that they spent almost two years in bootstrapping the business to build a product, as well as another year and a half for research and development Another six months was spent in running a beta test before taking it commercially live. Snaphunt focused on white-collar hiring because there have been new specialist roles popping up in the last 3-4 years, noted Tripathi, adding that finding such roles for employers would be difficult as there were no set footprints on how to search for such talent. “So it really comes down to understanding competencies, understanding underlying skills to be able to find people for this role,” she noted.

Fintech startup Rely fuels SEA expansion

ely, a Singapore-based fintech company that offers a ‘Buy Now Pay Later’ service, has raised a seven-figure pre-Series A funding led by Goldbell Financial Services. Joining the growing list of startups raising funds from family offices in Singapore, a significant amount of funding was also secured from Octava foundation, a family office based in Singapore, and strategic investors from the financial and technology sector. Founded in 2017, Rely uses its proprietary decision engine, which uses artificial intelligence and machine learning, to help determine shoppers’ repayment capabilities for each

SINGAPORE BUSINESS REVIEW | JUNE 2019

transaction. With Rely, shoppers can use the ‘Buy Now Pay Later’ service upon checkout and enjoy their products without having to pay the full sum upfront. Goldbell Financial Services (GBFS) is the financial services arm of Goldbell Group, a financial institution in Singapore. When founders of the fintech startup Rely started their first funding round, they realised that it was essential to have investors who understood the fintech industry and what they were doing in relation to the current industry. This is why its CEO and co-founder Hizam Ismail thought that they were fortunate enough to be introduced to various investment networks, such as AngelCentral. “Fundraising is always a challenge for any startup as it can be a long and difficult process. Through our experience during this funding round, we found that a good way to get started would be to learn from industry veterans who have done this before,” he said.

Moovaz bags undisclosed fund to make relocation easier

Moving from one country to another can be really stressful because this involves transporting a lot of goods - from luggage to furniture. One Singaporean startup wants to help make that process less of a headache. Moovaz is an online international relocation platform that aids in either home or office relocations. It offers transport services, accommodations and telecommunication services and can even help clients with cleaning, plumbing, and repair services of the new space. “The challenge would be that you know the nature is changing. The sort of people that are moving now are younger. So the nature of moves are changing, but the industry itself is growing. So that’s an opportunity for us,” Junxian Lee, chief executive officer at Moovaz. It also allows users to input the origin of move, the destination and how much stuff is being relocated. The company then aggregates services which the person can use from their database. It also involves a survey where users can specify items like cabinets, appliances, furniture and other custom items. After the delivery details are finalised, a Moovaz employee will contact the person and guide them through the relocation process. In February, Moovaz secured an undisclosed amount of investment from Hustle Fund, a venture fund investing in early-stage startups in the US, Canada and Southeast Asia, according to a company statement. The new funding comes around six months after Moovaz’s seed round, in which it raised US$1m from a group of investors, including key personnel from Ong Beng Seng’s family office fund, Mojo Partners as well as senior operating executives from undisclosed American and Chinese unicorns. Australian expansion In the recent funding round of logistics startup Moovaz, Lee admitted that it was quite challenging talking to venture capitals about it as logistics technology companies may not be seen as attractive. The funds they received will be used as a lift-off for their international expansion, starting with Australia Lee cited a number of reasons as to why they chose Australia. First, the country’s market size complements how relatively young the company is. “We have to be very careful with the resources we have. So operationally, we might not be best equipped to handle like a very, very large number of moves. We can potentially handle a smaller number of larger margin moves so as a strategic decision, Australia can make sense,” Lee said.

EXECUTIVE EDUCATION FEATURE

SMU-ExD’s unparalleled customer-centric approach to education The development of tomorrow’s workforce involves embracing both the critical human component as well as the necessary digital tools to help see them through the fourth industrial revolution.

lobal and Local fuse perfectly at the core of Singapore Management University (SMU)’s educational approach which blends age-old principles that made Asia an economic powerhouse with emerging trends and technologies in the international arena. Backed by 350 faculty and a pool of industry experts and trainers, SMU remains one of the most sought after institutions for equipping today and tomorrow’s leaders. With longer lives and more job switches resulting in a greater demand for education, today’s universities are expected to cater to more non-traditional students who also come from diverse age groups and have various learning needs. Dr. Katharina Lange, Executive Director, Executive Development (ExD), SMU, says that this is a happy issue, one that directs schools to provide more specific, experiential learning that leverages students’ work and life experience. In addition to demographic shifts, the education industry also faces sweeping digital transformation that changes the

Dr Katharina Lange Executive Director SMU-Executive Development

way humans teach and learn. Across all Meanwhile, Public Programmes look at the industries, the word customer-centricity has professional capabilities of individuals and become a household word, and SMU-ExD has identify areas that may be enhanced, such as adopted the same concept in repackaging their ability to collaborate with others and its programmes. With customer-centricity in transform their organisations. These Public place, universities are able to listen to what Programmes include Advanced Negotiation learners really need. “The learner relationship Strategies, Excel Leadership Programme, is central to anything we do. Impactful course Digital Culture Corporate Transformation design is the result from listening to clients Workshop, Executive Skills for Board and customizing Members in Challenging skilfully.” Dr. Lange Times, International SMU REMAINS ONE added. Corporate Coaching, OF THE MOST SOUGHT SMU-ExD The Lead Programme AFTER INSTITUTIONS FOR on Effective Teams, and works closely with corporations to Women and Leadership EQUIPPING TODAY AND develop executives’ TOMORROW’S LEADERS. Programme, amongst strategic and others. leadership agility SMU-ExD places and sharpen their business acumen through primary importance on agility, resilience and research-based insights. Dr. Lange adds systems thinking as key future skills that will that their role is that of the “intelligent usher in new business models and greater switch”, which means translating actual industry disruption. To bring these about, business imperatives into impactful learning responsible leaders will also need strategic designs. Being a research-heavy university, thinking, empathy and problem solving SMU is able to share key insights to help capabilities that SMU-ExD educators and organisations. One of its recent publications participants demonstrate very well. tackles Cultural Transformation in the Digital A number of SMU-ExD’s participants come Age. from large, multinational corporations with Divided into two major categories called headquarters in Asia and around the globe. Public Programmes and Customised SMU-ExD effectively addresses its diverse Corporate Programmes, SMU-ExD’s student body by combining Asian traditions offerings deliver returns beyond what with Western perspectives and methods and individuals and organisations have invested. integrating these into global partnerships It continues to create technology-enabled and collaborations to develop solutions that learning ecosystems reflecting the demands exceed the global benchmark. The university not only of the contemporary workplace, has partnered with Corporate Learning but also of the future working environment. Alliance and is currently a board member Traditional classroom interaction is blended at UNICON - the consortium for universitywell with interdisciplinary, experiential, and based executive education. virtual learning formats. “The learning intervention for adult The Customised Corporate Programmes learners needs to be immediately relevant, are custom-fit to address specific answers the “Why” first and embeds any organisational and business issues, knowing content into a corporate context. Executives that every learner is different and every learn best with a problem-based approach. organisation faces different challenges. At They don’t want to meander around theory – SMU-ExD, the learning journey starts with a they need tools they can apply immediately capability assessment administered before a to their problems. As part of SMU, we learning intervention, which helps in tracking support the university’s mission to create the progress the individual or organisation meaningful impact – through impactful makes. Along the way, students are enabled programmes for a very impactful target to unlearn old habits and put on new ideas and group,” says Katharina. “We give you a clear principles that will help drive transformation. return on your investment.” SINGAPORE BUSINESS REVIEW | JUNE 2019

CO-PUBLISHED CORPORATE PROFILE

Live life on your own terms with Tokio Marine Life Insurance Singapore’s suite of wealth and protection plans

okio Marine Life Insurance Singapore (TMLS) has decades of expertise in the industry, and its products are designed to address evolving needs of the growing mass affluent market. “Our reputation as a leading life insurer has been gained through our strong historical investment returns, disciplined underwriting and careful expense management. From financial security to investment to legacy planning, our priority is to meet the key financial needs of individuals through a comprehensive suite of insurance plans,” says Bevan Cheong, Chief Transformation Officer at TMLS. A recent survey by Tokio Marine Asia (TMA) shows that Millennials are reluctant to invest time and money in something which yields no immediate and tangible benefit. “What we found was that lack of understanding is a key reason for millennials who have not started their financial planning,” notes Cheong. Hence, to address the needs of this market which makes up a significant percentage of the growing mass affluent group, TMLS is committed to help drive awareness on the role insurance plans play in personal financial planning and also to developing products that cater to their changing priorities. “We are focused on the development of products that incorporate elements of flexibility and liquidity to cater to different life stages of an individual and the need to access to cash,” Cheong said. TM Atlas: Empowering consumers Complementing TMLS’ suite of wealth accumulation and protection solutions, the TM Atlas investment-linked policy (ILP) comprising of TM Atlas Classic and TM Atlas Wealth are limited-premium, whole of life ILPs that give customers the flexibility to customise their plan according to their needs. “We found from the TMA study on millennials that, triggered by their lifestages, consumers are taking a more active

role in reviewing their plans to help juggle multiple priorities. For example, the father of a young family may want to pursue a Masters’ degree; he would need additional funds, which he could withdraw from his TM Atlas policy.” Cheong added. As such, TM Atlas was designed to offer clients options for flexibility where it concerns liquidity and their wealth accumulation goals. TM Atlas accelerates customers’ wealth through attractive yearly bonus units, helping them enjoy multiple degrees of liquidity such as partial withdrawals without penalty to provide for current needs or important milestones like purchasing their first property. TM Atlas series offers an initial bonus of up to 22% and 19.5% per annum of annualised regular premium paid over the first five years; and a yearly bonus thereafter of up to 0.5% and 0.3% per annum of the accumulated units account value, for TM Atlas Classic and TM Atlas Wealth respectively. TMLS is committed to developing flexible “Customers can continue to invest even products that cater not only to millennials after the premium payment term has ended. but also to other consumers. Other flexibilities include the option to choose their preferred fund opportunities accidents outside the zone of cover for up as well as the currency to invest in,” Cheong to 90 consecutive days. For prospective says. parents, newborns are covered from date of their birth and medical underwriting is not Safeguarding health required. Despite wanting to focus on their aspirations, millennials in Singapore also Meeting consumers’ financial planning needs expressed a lack of confidence in managing Living life on your own terms is TMLS’ unexpected costs due to diagnosis of a commitment to providing best in class critical illness and/or heavy injury due to products, catering to the needs of every accidents. stage of their customers’ life. “We also hope Addressing this need and catering to the with our outreach efforts, we can help bridge globally mobile, TMLS, together with the the gap on the lack of understanding towards Henner Group offers Care & Health plans insurance amongst millennials.” Cheong says. that cover both pre- and post hospitalisation charges and any pre-existing medical CONTACT conditions following acceptance of the condition by the insurer. Company Name: Tokio Marine Life Insurance It also covers treatment for cancer, Singapore Ltd. chronic conditions and critical conditions. Address: 20 McCallum Street, #07-01 Tokio It insures against unforeseen illnesses or Marine Centre Singapore 069046

“What we found was that lack of understanding is a key reason for millennials who have not started their financial planning.” 18

SINGAPORE BUSINESS REVIEW | JUNE 2019

Telephone number: +65 6592 6100 Website:www.tokiomarine.com

FINANCIAL INSIGHT: VENTURE CAPITAL

Unicorns deploy funding into corporate venture funds in race for superapp status

hen ride-hailing giant Grab considered how best to achieve its superapp ambitions, it set up Grab Ventures, a Corporate Venture Capital fund, to nurture startups in Southeast Asia through its seed accelerator programme, Velocity. In November 2018, Grab unveiled the first batch of startups which includes Indian online ticketing platform BookMyShow; Indonesian beauty appointment booking portal Minutes; German on-demand home cleaning platform Helpling; Indonesian on-demand marketplace for home renovation services Sejasa; and Singaporean edtech startup Tueetor. Grab’s major rival, Go-Jek, earlier established its own CVC fund, Go-Ventures, to gain early access to technologies and innovations that could add value to its existing operations. Analysts expect the CVC trend to become a key industry theme in Southeast Asia, as the entry of more players creates only more opportunities for collaboration amongst firms seeking to leverage a unicorn’s formidable capabilities and a unicorn to quickly assimilate startups that pose a threat to their operations. Overseas CVC funds are also becoming more active in fast-growing regions as investment opportunities in their domestic markets dry up, setting up the stage for stiffer competition and higher VC funding in 2019.

Khor Qianyi

Kiren Tanna

DEAL #1: GO-JEK HAS ITS OWN CVC FUND, GO-VENTURES

SINGAPORE BUSINESS REVIEW | JUNE 2019

Unicorns hoard funding Overall, VC investment activity into Singapore-based companies has increased, from US$1.34b in 2014 to US$4.92b in 2018, according to the Singapore Venture Capital & Private Equity Association (SVCA). A significant proportion of investment activity in Singapore last year was funnelled into unicorns in Singapore, such as Grab, which received US$2.6b in funding and attracted two rounds of massive capital injections from Softbank Capital, Didi Chuxing and Alibaba Group, according to SVCA. “The Singapore VC scene is dominated by technological companies with the vast bulk of funds flowing to large firms with a dominant presence in the region,” a spokesperson from the association told Singapore Business Review. Megadeals involving Grab with a total value of $7b pushed the aggregate value of VC deals in Singapore to increase by 500% as of the first quarter of 2019 to $8.697b from 2018, according to data from PitchBook. This influx of large investments in unicorns led by Grab has accelerated activity in their CVCs, which when taken together with other alternative sources, as well as traditional sources like local VC funds, helped push total VC funding in the region to more than US$11b in

DEAL #2: GRAB AND THE FIRST BATCH OF STARTUPS PARTICIPATING IN ITS VELOCITY PROGRAMME

FINANCIAL INSIGHT: VENTURE CAPITAL Hall, partner at Golden Gate Ventures, in a development signalling possible roadblocks to the unicorns’ global ambitions. “The previous wave of startups came from horizontal platform players like Go-Jek and Grab whilst the next wave of unicorns will be specialised vertical players which will become leaders dominating their own specific verticals,” said Tan, citing the US$60m Series B round by Carro, a company that offers an array of automotive services ranging from a used-car marketplace to aftersales and financing. “One of the interesting things that we’ll see over the next few years and possibly quite soon is that some countries may not feel that comfortable having a foreign almost-monopoly player or an oligopolistic situation with a couple of players dominating the cashless transactions in their country,” Hugh Mason, co-founder and CEO of seed accelerator JFDI.Asia said in an earlier interview. “There comes a point when as a country, all the cash is going through a foreign system that knows more about its citizens than they do as a government.”

VC deal flow of companies based

Source: PitchBook

2018, noted Tan Yinglan, Founding Managing Partner at Insignia Ventures Partners. Tan expects a new batch of companies valued at US$100m to emerge soon, as growth funds ramp up their investments in the region whilst global VC funds partner with active local VCs in backing earlier-stage companies. “This is a positive direction for the ecosystem here,” he reckoned, citing how the influx of funding towards larger Series A and Series B funding is creating a fresh batch of market leaders in key verticals like Fintech and logistics and closing the funding gap between Series B and Series C. Southeast Asia’s nine unicorns – which include Grab, Lazada, Razer and Sea Group and Go-Jek – raised US$16b out of the total US$24b funding from 2015 to the first half of 2018. “This trend will likely continue and extend towards companies in the US$100m club,” said Tan. “These companies raise on the back of potential growth in the region and entrench their leading positions through market or product segment expansion,” he added. VC funding should continue to expand in 2019 with increased focus on Series B and Series C deals, with venture arms of unicorn companies like Grab, Go-Jek, as well as SEA and Lazada all becoming active in the early-stage ventures, according to Kiren Tanna, co-founder and MD of ZEN Rooms. Superapp challengers? There has also been increased activity of overseas CVCs targeting specialised startups that have gone beyond the Grab and Go-Jek route, and 2018 saw “meaningful increases” in attention and capital commitments to Southeast Asia, especially from Korea, China, and even the US. “That is a positive indication of long-term sentiment.” Korean funds and firms, in particular, are looking at Southeast Asia to deploy capital to “participate in the growth story” and the trend will likely continue until 2020, said Tanna, pointing to Korea Investment Partners’ $120m fund with Golden Equator and Yanolja’s first cross-border investment in acquisition of stake in ZEN Rooms. One sector that has also seen increased deals is logistics, which is quickly becoming one of the fastest growing verticals by VC financing in Southeast Asia, noted Justin

Chik Wai Chiew

Justin Hall

Regional powerhouse Singapore stands at the forefront of increasing VC interest into Southeast Asia given its positive reputation as a location where companies can set up their regional headquarters. Analysts observed how foreign companies with sizeable war chests are increasingly making an intentional decision to expand into the region either directly or by teaming up with strategic partners, which was the case when Hong Kong-listed Ping An Good Doctor formed a joint venture with Grab to deliver healthcare services to the region. “Singapore remains the headquarters of many VC funds in the region due to its friendly regulatory regime and international reputation, but regional operational presence is still key. A successful VC in Singapore is one which has ‘boots-on-the-ground’ in each local market,” said Tan. “It is essential for VC firms to build capabilities

VC Exit Activity ($M) of Company by Exit Type

Source: PitchBook

SINGAPORE BUSINESS REVIEW | JUNE 2019

FINANCIAL INSIGHT: VENTURE CAPITAL which allow it to mobilise local networks and resources to help regional startups tackle obstacles in their home market.” According to Chik Wai Chiew, Executive Director and CEO of Heritas Capital Management Pte Ltd, “the challenge is when seeking to scale, VCs in Singapore has to tap on the right regional partners to help the start-ups with localisation and market access.” Outlook For 2019, the SVCA said that regulatory changes, such as recent extensions for tax incentives and new investment flexibility for structuring of funds (for instance, the new Variable Capital Company (VCC) legal structure) may further encourage investment into Southeast Asia and for VC fund managers to operate out of Singapore. However, Khor Qianyi, Senior Analyst and Head of ESG at Quest Ventures, warned that uncertainty around the new regulations, specifically the VCC, which was meant to increase VC activity in Singapore, poses a challenge for VC firms along with the lack of later-stage funding from Series B onwards. Tan observed the widening disparity between startups with VC backing. “We are seeing smart money chasing top deals where mega rounds are getting larger. ‘A’ level startup with all-star founders are raising huge early stage fundraising rounds whilst growth stage market leaders are loading up on capital to entrench winning positions,” he said. “Whilst ‘B’ level startups attract funding from VCs which missed out on the ‘A’ level startups, the remaining startups find it hard to raise their next funding.” “The industry, including technology media, needs to

VC Deal Flow ($M) of Company’s based by Industry Sector

Source: PitchBook

Tan Yinglan

move away from associating large deals with large market implications,” according to Qianyi. “Whilst small deals do not sound exciting, it is important to track them when they are still starting up. As Jack Ma said, ‘Small guys become big guys.’” Tan likewise warned that a “capital winter” could be in the cards if macroeconomic indicators worsen and capital markets stumble. “When that happens, companies which had been raising on vanity metrics could see funding dry up very quickly, as was the case with bike-sharing companies in China,” he said. “Companies will be judged by their fundamentals, and exceptional startups with solid metrics will continue to do well in their fundraising. Fundraising for the startup industry as a whole would get harder.”

HONG KONG VIEW

VC fundraising hits US$2.28b in 2018 thanks to boost from homegrown tech startups The number of venture capital (VC), and technology deals in Hong Kong remained unchanged in 2018 at 42 deals in total, but their combined value jumped 81%, powered by what analysts noted as a “breakout” class of homegrown startups, primarily in the technology space. VC and technology investments in Hong Kong hit US$2.287b in 2018 from US$1.262b in 2017, according to data from the Hong Kong Venture Capital and Private Equity Association (HKVCA). Of the VC and technology transactions in 2018, the biggest by far was the US$1.2b investment in facialrecognition technology company SenseTime by high-profile investors including Alibaba Investment, Temasek, Hopu Capital, Silver Lake and Tiger Global. The second-largest deal was the US$300m investment in Tink Labs by an undisclosed group of investment funds and strategic investors in a deal that values the developer of smartphones for hotel room guests at about US$1.5b. Online logistics platform GoGoVan attracted US$250m from InnoVision Capital, Hongrun Capital and the Russia-China Investment Fund, amongst other investors, in what marked as the thirdbiggest VC and technology transaction in 2018. The technology, media and telecom sector accounted for a dominant 89% of all VC and technology deals by volume in 2018, according to HKVCA, with the healthcare, consumer & retail and business services splitting the

SINGAPORE BUSINESS REVIEW | JUNE 2019

The biggest deal was the US$1.2b investment in facial recognition tech company SenseTime.

remainder at 6%, 3% and 2%, respectively. The technology sector will continue to to draw in VC funds looking to compete for higher-quality targets in 2019. “You are starting to see a very interesting development in the emergence of breakout companies coming out of HK. I would say these are still isolated incidents; they haven’t created a cluster effect yet. But I think quite soon in other entrepreneurial clusters you will start to see some breakout examples,” said Denis Tse, chair, research committee of HKVCA. “AI is going to be one of the key focus areas in the HK market going forward,” said Alyssa Aaron, director of investments at Nest Ventures. “In the wake of the Chinese government’s ambition to be a world leader in AI by 2030, investors are pouring billions into AI startups similar to SenseTime.”

Deal #1: Facial recognition unicorn SenseTime scored a billion-dollar investment from alibaba

Deal #2: Tink Labs, which develops smartphones for hotel guests, is valued at about US$1.5b

SINGAPORE BUSINESS REVIEW | JUNE 2019

ANALYSIS: DATA CENTRES

The 150MW data centre at Tanjong Kling will be Facebook’s first data centre in the region

Hyperscale data centres on track as Big Techs move in This translates to around 95MW per year on average although this tapers off slightly to just 58MW annually without the Facebook development.

ver 2015-2018, an average of 35MW of supply was added to the data centre market per annum in Singapore, according to a report by CGS-CIMB. The average supply for 2019-2022F is expected to be about 50MW per year. CGS-CIMB analyst Lock Mun Yee and Ervin Seow said that they expect over 380MW of new data centre capacity to come onstream over 20192022F, which translates to around 95MW per year on average. Larger developments in Singapore are sites owned by end-users such as Google and Facebook, whilst the rest appear to be data centres in the colocation space. “The 150MW data centre at Tanjong Kling will be Facebook’s first data centre in the region. Facebook does not have a substantial cloud business like Amazon and Google and so we do not expect its new data centre to displace demand from other colocation providers like Keppel DC REIT,” they said. Without the Facebook development, average incoming supply would be approximately 58MW per year over 2019-2022F. 24

SINGAPORE BUSINESS REVIEW | JUNE 2019

Data stored in data centres is expected to grow at a 34% compound annual growth rate to reach 1.3 zetabytes by 2021.

Google has historically built and owned its data centres due to a sizeable cash balance on its books. According to the Cisco Global Cloud Index, data stored in data centres is expected to grow at a 34% compound annual growth rate (CAGR) to reach 1.3 zetabytes by 2021F. Much of this data migration towards data centre storage can be attributed to the rapid adoption of cloud computing services. This trend is also corroborated by data from Synergy Research showing that hyperscale operator capex has been catching up with telcos, which

were traditionally the largest users of data centres. In 2018, the aggregate capex of the top 5 hyperscale spenders, comprising Google, Amazon, Microsoft, Facebook and Apple, was almost identical to the capex of the top 5 telco spenders China Mobile, AT&T, Verizon, NTT and Deutsche Telekom. “Within the cloud service providers, we note that large scale providers have gained market share over the past four quarters at the expense of small and medium-sized cloud operators, who have collectively lost 5% pts of market share over the same period,” Lock and Seow said. As the use of public cloud becomes increasingly prevalent, the analysts also expect a shift in data centre demand from the colocation space of individual corporates to the cloud space of cloud service providers. According to research from BroadGroup Consulting cited by CIMB, demand for data centre facilities is expected to follow global trends and be driven by large hyperscale providers which could potentially take up around 40% of Singapore’s colocation space. “It expects the bulk of the remaining 60% space to be taken up by telcos, multinational organisations, and banking and fintech services companies,” the analysts noted. “As hyperscale providers increasingly take up greater space, we think that other data centre tenants could face a supply crunch for large space and this also could push rents up,” Lock and Seow said, with CIMB noting that BroadGroup expects new demand to average approximately 50MW per annum in Singapore.

Data centre supply and demand trends (2015-2022)

Source: CIMB

Management Excellence Awards 2018

EXECUTIVE OF THE YEAR - COMPUTER SOFTWARE

How a dynamic executive drives a tech giant’s Asean business through teamwork and balance His multifaceted strategy involves achieving not only financial strength but also market, customer, and employee objectives through collaboration and inclusiveness.

hen Damien Wong joined Red Hat over seven years ago, he faced the task of revitalising the regional Asean business and motivating a demoralised team of less than 20 associates. “I had to overcome the team’s initial skepticism as to whether I would be able to help them or even survive long enough in the role to make a difference. I had to understand the strengths of each of the associates, manage out those who were overly negative, help with operational issues and meet with customers and partners, and get everyone onboard with a simple but holistic strategy,” he recalls. The atmosphere turned positive when Red Hat started winning new deals, which gave the team members a sense of accomplishment and greater confidence in the firm. Thus far, the brightest gem in Wong’s management is his success in utilising a “balanced scorecard” approach as the foundation of Red Hat’s ASEAN

2.0 Strategy for the fiscal years (FY) 2016–2018. This multifaceted strategy involves achieving not only financial strength but also market, customer, and employee objectives through collaboration and inclusiveness. Evidently, this approach has powered Red Hat’s rise to the apex of its industry in Southeast Asia. Strong team engagement Red Hat Inc., the world’s top provider of open-source enterprise software, has fortified its presence in the Asia-Pacific market by offering valuable products as well as first-rate support services and training programmes. In crafting Red Hat’s ASEAN 2.0 Strategy, Wong and his colleagues jointly identified Lag Indicators, such as doubling the company’s bookings (financial goal), driving the portfolio (market goal), delighting their customers (customer goal), and developing a rockstar team (employee goal). Furthermore, a set of Lead Indicators for each Lag Indicator, as well as Initiatives to support the Lead Indicators, were formulated. The Initiatives included successful customer projects and a reward programme to incentivise clients. The results were monitored and reported quarterly, thus creating a streamlined path to growth. The precepts of modern leadership Recognised as Executive of the Year in the Computer Software category of the SBR Management Excellence Awards 2018, Wong cites The Open Organization, a book by Red Hat’s CEO James Whitehurst, as an inspiration for his leadership style. The book defines the “configure–enable– engage” approach, which represents a shift from the traditional “plan–prescribe– execute” mode. Wong says that he identifies closely with these principles. Indeed, his own experience at Red Hat shows that igniting passion within a team is crucial in ensuring superior performance. Specifically, configuring entails “putting

Damien Wong, Vice President and General Manager for Asian Growth and Emerging Markets (GEMS)

the right people in the right places” whilst considering unpredictable disruptions that may affect long-term targets. In this sense, adaptability and agility are essential. Since top–down prescription is no longer effective in a fast-changing technology ecosystem, enabling is also necessary. This means “empowering the right people and trusting them to do the right things for the team.” Finally, instead of rigid implementation of plans, engagement calls for openness to diverse ideas across the organisation. This approach helps the team to foresee disruptions and respond accordingly based on a shared vision. These innovative steps are tied together by a “specific, measurable, achievable, realistic, and timebound” (SMART) method of evaluating results. Challenges as learning experiences Wong states that admitting mistakes and failures is an important trait of a true leader. “What doesn’t kill you makes you stronger! The secret to success is to pick yourself up each time you fall, keeping in mind how you can do better the next time around. So long as it does not have catastrophic consequences, such failures allow us to improve in an iterative fashion, becoming better by internalising what we have learnt,” he affirms. Under his leadership and despite the challenges posed by market uncertainties, Red Hat has expanded its portfolio of solution offerings whilst doubling the size of its workforce. These milestones within a relatively short period have been possible through sustained effort and constructive cooperation in a manner that appreciates every individual’s role, as reflected in Wong’s gratitude for his teammates’ contributions. Moving forward, he intends to continue nurturing “freedom, courage, commitment, and accountability” in a robust company culture.

“True leadership is about helping others to do the right things right, even when they have a choice not to follow you.” SINGAPORE BUSINESS REVIEW | JUNE 2019

SPECIAL REPORT: CO-LIVING SPACES

Co-living spaces promises a ‘community’ for newcomers in Singapore.

Check out these trendy co-living spaces

Tenants can ditch their weekly cleaning and utility bills through the help of reliable community managers.

ith monthly rents ranging $800-$2,200 per month, coliving spaces provide an alternative housing option for Singaporeans who have long been burdened by the costly housing market in the city. These spaces allow tenants to share rooms and apartments to build relationships and interactions amongst its tenants as they live with people with the same hobbies and interests. “On the offset, co-living spaces like “privatised” communal hostels, and hover somewhere slightly below the traditional full package offered by private home rentals and service apartments,” explained Hector Tan, head of marketing and communications, Huttons Asia “Some people may still prefer having the full privacy of common living areas that private apartments offer. There is that level of assuredness and freedom. Whereas in co-living spaces, one may have to share common living areas with other tenants.” For Ong Choon Fah, CEO of Edmund Tie & Company (ET&Co), “co-living concept and lifestyle offers an appealing alternative to millennials and professionals, thus the outlook for coliving concept appears positive.” This was also echoed by Rohit Hemnani, COO & head of alternatives, capital markets at JLL Asia Pacific. “In the near term, millennial expats are likely to be the main occupiers, although the list of users could be expanded to include other groups such as foreign students, or even seniors, as the concept could appeal to a broader age spectrum beyond expat or local millennials,” Hemnani said. “Co-living is becoming a trend as the younger generation cherish memories and experiences as assets rather than physical ones,” Wendy Yap, owner of CP Residences said. Singapore Business Review compiled a list of the hottest co-living spaces in the city. Luz Wendy Noble 26

SINGAPORE BUSINESS REVIEW | JUNE 2019

CP Residences

Locations of apartments: Orchard Road Rate: $1,300 per month Minimum stay: 3 months CP Residences mainly attracted startup expats, intern students, medical clients, and some locals with the need for temporary occupancy. Yan said that they pride themselves in becoming a friend to their clients. With 50-60 rooms leased in Singapore, their units are with fully inclusive services, including utilities, WIFI, weekly cleaning, laundry/ironing, ad hoc & bi-monthly community gettogethers, taxes, admin paperwork such as tenancy, and processing recurring payments by various payment methods. Aside from Singapore, CP Residences also operates co-living spaces in Hong Kong and Vietnam.

SPECIAL REPORT: CO-LIVING SPACES 2.

Easycity

Locations of apartments: Paya Lebar, Pasir Panjang, Geylang Rate: $800-1,800 per month Minimum stay: 3 months Easycity claims to be one of the first proptech startups to focus on designing, building, and operating co-living spaces in Singapore. Their property acquisition manager chose apartments located at city-fringe areas which are just few minutes away from CBD, making it convenient for commuting and close to places of interests. “Our members are a mix of expats, entrepreneurs and students, a large percentage of them are from the European Union,” Easycity founder Wesley Wen noted. “They are attracted by our spacious and modern spaces, convenient locations, excellent customer services, and word of mouth amongst their friends and co-workers.” Their apartments have living spaces, a balcony or roof terraces. They also have a fully equipped kitchen, which is supported by maintenance and housekeeping services, a swimming pool, and a gym, amongst others.

3. Hmlet Locations of apartments: Paya Lebar, Pasir Panjang, Geylang Rate: Starts at $1,500 (for master rooms in the East) per month Minimum stay: 3 months By June 2019, Hmlet will have more than 1,000 rooms opened for tenancy in their 10 locations in Singapore, Designation for Kamalski revealed. With common spaces such as a lounge, a pool or a rooftop, the CEO also revealed that they organise events to enable their members, who are mostly expats, to start their own social initiatives, from a simple Sunday brunch to birthday parties. “Members never have to think about the little things like utility bills, weekly cleaning, or furniture. For most of them, it’s their first time moving to Singapore or Asia with little to zero connections to anyone they know,” Kamalski said. “Having said that, we are seeing a growing number of locals joining our community in the last year.”

4. Login Locations of apartments: Queenstown/Redhill, Novena, East Rates: $1,200-2,200 per month Minimum of stay: 3 months Login takes pride in offering affordable spaces, which are a good 5-8 minutes of walking away from MRT stations. Their services include weekly housekeeping and a community manager support that undertakes all tenant management issues within the spaces. They also take pride in their fully-furnished units so tenants won’t need to buy their own furniture. According to Kemmy Sim, head of operations at Login, their apartments have been home to Asian and European expats in their 20s and 30s, as well as Singapore millenials. “The Singaporeans we have in our mix are either couples waiting for their BTO to be ready or those who have spent time abroad studying, have enjoyed that independence and freedom, and now returned to Singapore to work,” Sim noted.

The Shophouse Series

Location of apartments: Geylang Rates: $2,200 onwards per month Minimum stay of months: 3 months The Shophouse Series looks to offer the experience of living in a heritage home to its tenants. With approximately 750 sqft of space and an ensuite bathroom, every shophouse has a spacious fully-equipped shared kitchen and living room area on the ground floor. “Our rates are also all-inclusive of utilities, Wi-Fi, electricity, and a membership fee for monthly community events that we curate and organise according to our tenant mix at the time,” the co-living operator said. They noted that their tenant mix includes expats from the age of 23 to 45 years old. Aside from them, the Shophouse Series has also hosted artists from Southeast Asia for Singapore Art Week/Art After Dark at Gilman Barracks, as well as football coaches who are in Singapore for training

SINGAPORE BUSINESS REVIEW | JUNE 2019

ANALYSIS: RETAIL

FairPrice’s price freeze marks the shift towards ELP strategies

Not to be left behind, Sheng Siong still offers the best deals for fresh produce

NTUC FairPrice fires first salvo in intensifying supermarket war The price freeze of 100 FairPrice housebrand products until 30 June 2020 marked the start of a price competition amongst housebrands seeking to provide customers the best bang for their buck.

hen market leader FairPrice announced in March, it would price freeze a basket of 100 FairPrice housebrand products until 30 Jun 2020, it kicked off a price competition amongst housebrands. In addition, more than 50 housebrand products that are deemed “everyday essentials” saw their prices drop by as much as 30%, to ensure all 100 of the selected housebrand products are priced at least 20% cheaper than comparable brands, noted Sze Jia Min,

Nick Miles

Giant, Cold Storage and Redmart’s basket of housebrands yield the most savings

Source: Maybank Kim Eng

SINGAPORE BUSINESS REVIEW | JUNE 2019

Maybank Kim Eng analyst, in a report. Nick Miles, head of Asia-Pacific at IGD, told Singapore Business Review that over the last few years, retailers around the world have been moving away from promotional-led strategies towards everyday low price (EDLP), as well as looking to grow the penetration of private label. “Private label products play a key role for retailers globally. They assist in driving competitive differentiation, offer shoppers more choice and help improve retailers’ operating margins. These savings can then be reinvested in lowering prices further and improving operations,” he explained. With about 6% of Sheng Siong’s sales coming from housebrands, the impact of FairPrice’s price freeze won’t be material. “Private label penetration in Singapore remains relatively low compared to other markets. In the UK, for example, private label accounts for around 40% of supermarket sales,” Miles illustrated. He noted, however, that FairPrice’s new initiative will help raise awareness of its private label ranges across everyday items, as well as provide improved value for shoppers. “Overall the activity remains relatively targeted, with 50 products having their prices dropped by up to 30% – the largest FairPrice stores will stock 30,000 to 40,000 products,” he said.

ANALYSIS: RETAIL Excluding the Body Wash item, the cost savings are the highest for Giant’s housebrands.

Source: Maybank Kim Eng

On the other hand, as Sze notes, should FairPrice choose to lower prices for fresh produce as well, then a possible supermarket price war could erupt. The only time when a price war happened amongst Singapore retailers was between FairPrice and SSG in the third quarter of 2011, shortly after Sheng Siong’s listing. Whether this latest housbrands salvo is just a skirmish or a new full blown war is yet to be seen, but the real winners will be Singaporean shoppers. NTUC FairPrice vs. Sheng Siong: which is cheaper? Maybank Kim Eng Securities surveyed supermarket products amongst Singapore’s biggest players and found which stores provide customers the best bang for their buck. They wanted to find out which stores really offered the best value, and surprisingly found that different chains were stronger in certain categories, with no one chain being cheapest in all. So, to what lengths did they go to check out which supermarkets offered best value to hardworking Singaporeans, and which is more worthy of your dollar? To find out, Maybank Kim Eng’s Sze Jia Min and her team made trips to four supermarkets (Sheng Siong at Junction 9, Cold Storage and NTUC FairPrice at Northpoint City, Giant Hypermarket at Sembawang Shopping Centre) on 24 March 2019 to check out the prices. The survey showed that whilst there were cost savings of at least 8% if customers switched to buying housebrands, rather than branded products at the same store, they could save more by shopping at Dairy Farm International’s brands Giant and Cold Storage, and at RedMart. This is because they have housebrands for the essential item body wash, which was cheaper by 63.9% and 42.2%, respectively. Excluding the body wash item, FairPrice had the greatest cost savings and is 2.6% cheaper than Sheng Siong’s basket. Meanwhile, Sheng Siong offered the best deals for fresh produce, with their goods found to be 0.3%-10.8% cheaper than its peers. For non-fresh items (excluding body wash), RedMart led in terms of cost savings, but FairPrice had the cheapest basket, offering the most attractive value in essential items such as instant noodles, liquid detergent and toilet rolls.

The only time a price war happened was in Q3 2011 between FairPrice and SSG, shortly after Sheng Siong’s listing

ANALYSIS

Supermarkets lock horns for coveted HDB estate spaces Smaller supermarket players such as Hao Mart are facing off against giants like Sheng Siong in a race to set up shop in new Housing and Development Board (HDB) supermarket spaces. Hao Mart, which has opened more than 35 small outlets in Singapore, said it is looking at more HDB openings. According to Hao Halal Hub’s vice president Ronnie Faizal Tan, smaller players are looking to HDB areas in an attempt to avoid the hefty rental prices in shopping malls, which come attached to setting up shops and compliance rules like monthly advertising and discounts. Hao Halal Hub is a new banner under Hao Mart, set up in 2018 to capture the market share of the Muslim community. “Shops other than F&B restaurants are closing down or moving away from shopping malls mainly because of the growth of the e-commerce,” Tan told Singapore Business Review. “Moving to the HDB is a better choice to be closer and bringing convenience to the customers.” DBS analyst Alfie Yeo notes that the near-term outlook for new supermarket supply in HDB estates looks good, with five outlets up for tender in the next six months. Meanwhile, CGS-CIMB analyst Cezzane See said in a research note that for 2019-2022, they are projecting at least another 15 tenders for HDB retail spaces. “Another factor is the size of the sites being released by the government. In many instances, the sites released are too small to support a supermarket. As such, minimarkets fill the gap until the estate is mature enough,” Johann Hall, IGD Asia’s senior retail analyst said. This sentiment was echoed by Deepika Chandrasekar, research associate at Euromonitor International, who added that with the recent release of HDB shops for retendering, the supermarket battle can possibly intensify between major players like FairPrice, Sheng Siong, and Prime. Typically, as a new housing area is being rolled out the customer demand is low and smaller mini marts taking top space serve the limited number of residents. However, currently, the major supermarket chains are not as willing to wait until an estate matures to enter and are preferring to lease space even when demand is low. “Typically, it takes about two to three years before enough residents move into these estates and it becomes a bustling community. In the interim period, it is common for minimarkets to open stores. Bigger chains set up only after there are sufficient shoppers to support a supermarket,” he said. Following HDB’s implementation of a new tender method for supermarket owners to bid, Tan added that it would be no surprise if supermarket owners will be competing in the bidding process aggressively to command and protect their turf. In its financial statement, Sheng Siong said that it would continue to look for retail space in new and existing HDB housing estates. According to Maybank Kim Eng, three of these six HDB shops were recently awarded to another supermarket operator, and Sheng Siong is still looking at bidding for the other three.

SINGAPORE BUSINESS REVIEW | JUNE 2019

ANALYSIS: RETAIL Who dominates? So, which is the cheapest in each category, and how do they compare? Housebrands: And the winner is … FairPrice. FairPrice sells a standard basket of housebrand alternatives picked by Maybank Kim Eng for a total of $74.54 compared to RedMart’s $80.21 price tag. The next best deal for housebrands can be found at Sheng Siong, with a receipt totalling an estimated $77.50. Fresh items: And the winner is … Sheng Siong. Customers with a basket consisting of only fresh items could save 11.2% if they switched from buying their fresh produce at RedMart to Sheng Siong, based on the Maybank Kim Eng basket. This translates to an estimated $600 in savings per year, based on a monthly $500 shopping budget. Following closely with the next bang for your buck is Giant, with a bill amounting to $27.97. Non-fresh products: And the winner is … FairPrice. Shopping at FairPrice for non-fresh items may save customers 7.3% compared to Cold Storage as a basket of non-fresh goods (excluding body wash) would total $46.34. Buying from Cold Storage could rack up a bill of $49.83, followed by Sheng Shiong with a $49.64 total. The overall finding of the survey is that, in a basket of items representative of most consumers’ frequent purchases, the price difference between the top two market leaders is indiscernible. However, for Singaporean customers who really want to find the best deals, it pays to shop around, going to Sheng Siong for your fresh produce needs and FairPrice for your non-branded groceries. Arianna Danganan

Basket consisting of fresh items

Source: Maybank Kim Eng

Excluding the body wash item, the cost savings are the highest for Giant’s housebrands. On a basket level basis, FairPrice is only slightly cheaper by 0.5% compared to SSG

Source: Maybank Kim Eng

ANALYSIS

Here’s why Sheng Siong can’t bank on new stores for revenue growth anymore Even though Sheng Siong Group’s earnings tend to fare better than consumer-discretionary stocks, the risk of souring consumer sentiment poses a downside risk to its comfortable position, according to Maybank Kim Eng, especially when consumers are tightening their purses against slow-to-stagnant wage growth. Sheng Siong opened a record high of 10 new stores (those opened in the last and current financial years) in FY2018. The last time it opened close to that many stores was in FY2012, with eight new stores, noted Maybank KE analyst Sze Jia Min. “However, unlike in FY2012, these 10 new stores, particularly those opened in the second half of FY2018, were opened against a backdrop of deteriorating GDP growth as well as changing consumer dining habits. Hence, we are more conservative than the Street and management in our estimates of new-store sales contributions,” Sze said. Sheng Siong’s management also said that its new stores that opened in FY2018 are not growing as fast as their historical run rates, the analyst noted. As new stores usually contribute strong revenue growth in their first 3-4 years, Maybank KE expects Sheng Siong’s 10 new stores to contribute 7.2% or the bulk of FY2019E total revenue growth of 8.4%. “We understand from management that whilst only

SINGAPORE BUSINESS REVIEW | JUNE 2019

Sheng Siong’s 10 new stores will contribute 7.2% or the bulk of FY2019E total revenue growth of 8.4%.

five new commercial units will be available for online bidding in 1H2019, six HDB shops that were won by competitors via online bidding in 2017-2018 are now vacant,” Sze said. Of these six, three were recently awarded to another supermarket operator. Sheng Siong is looking at bidding for the other three. “We assume in our forecasts that it will open four new stores in FY2019E,” Sze added. “In addition, we expect the new stores’ contribution from stores open in FY2019E to be weaker by historical standards, taking into account more cautious consumer spending, mitigated by downtrading.” Moreover, a study by the brokerage firm showed that there is a possible long-term trend of consumers choosing cooked-food deliveries available at the push of a button, which may affect the frequency of their supermarket visits. Singapore consumers under age 40 are also the most receptive to cooked-food deliveries, the study found. “This may pose a challenge to Sheng Siong, as it expands to locations with a greater concentration of younger families. Management confirmed during its latest results briefing that sales at its new stores located in residential areas mainly occupied by younger people are growing more slowly than the historical average for its new stores,” Sze commented.

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The number of participating galleries at Art Stage fell to 84 in 2018 from 170 in 2016

Can new art fairs help establish Singapore as a commercial art hub?

Industry players are pinning their hopes on Art SG to give the commercial art scene a new lease in life.

n January, the Singapore art scene received a shock to the system. Eight days before it was due to start, Art Stage Singapore, the city state’s premier annual art fair and the anchor event of Singapore Art Week, was abruptly cancelled. Citing the “very difficult market situation in Singapore as well as unequal competition,” Art Stage’s President Lorenzo Rudolf pulled the plug, noting that whilst the fair had brought over 500 galleries to Singapore over the previous eight years, relatively few returned due to the lack of local sales. An archetypal Singapore can-do spirit immediately swung into motion, including a Facebook page set up by Plural Art Mag that helped galleries find alternative exhibition spaces, whilst non-profit entity Art Outreach, with the support of various government agencies and the Marina Bay Sands (MBS), set up a pop-up event — at the MBS’s exhibition space now abandoned by the fair — which brought together 14 galleries that had intended to show at Art Stage. Art market participants noted that the community’s ability to respond on short notice attests to the strength of the visual arts ecosystem. However, with the dust now settled, many in the art sector say the withdrawal of Art Stage after eight years raises fundamental questions that need to be addressed. “The negative signal of Art Stage’s 32

SINGAPORE BUSINESS REVIEW | JUNE 2019

It’s not easy for a gallery here to fork out $50,000 for a booth at an art fair. The price points for the artwork are often not high enough to justify such expense.

sudden departure turned into euphoria for a successful Art Week without Art Stage, but the question remains as to what’s next,” says Richard Koh, of Richard Koh Fine Art. Fair economics The Singapore art market has been a tough nut to crack for art fairs. After a strong start, Art Stage saw the number of participating galleries steadily dwindle from a high of 170 in 2016 to just 84 in 2018. Before the plug was pulled, only 45 galleries had reportedly registered for this year’s edition. Other fairs like the Singapore Contemporary Art Show, the Milan Image Art & Design Fair, and the Singapore Art Fair, have come and gone, whereas having run two editions a year for four years, the Affordable Art Fair Singapore cut back to one in 2018. “The underlying economic reality is that it’s not easy for a gallery here to fork out $50,000 for a booth at an art fair. The price points for the artworks are often not high enough to justify such expense,” says Jasdeep Sandhu, founder of Gajah Gallery, which participated in the first eight Art Stage fairs, but had not planned to participate in this year. Art Stage Singapore, which has now been placed under provisional liquidation, was charging S$67,500 for a 90sqm booth and $26,250 for a 35 sq. m booth, according to

ASIAN ART REPORT the fair’s application form. By comparison, the inaugural boutique fair S.E.A. Focus, which was organised by STPI - Creative Workshop & Gallery and supported by several government agencies, offered 35-sqm booth for only about $6,300. Sandhu points out that with more affordable booths, S.E.A. Focus addressed one of the major issues the Singapore art market currently faces as, “the price of art in Southeast Asia is not high enough to sustain an expensive fair,” but adds the boutique fair may need to consider a new location and a slightly larger format if it is to return in 2020. The new boutique fair, which was located at Gillman Barracks in the hope of attracting visitors to the somewhat isolated art enclave, had more than 10,500 visitors over the five days, a far cry from the 26,500 visitors that attended Art Stage Singapore last year but comparing quite favourably with the 12,000 visitors that attended the wellestablished Affordable Art Fair in 2018. “There wasn’t a big crowd, but there was quality attendance, I mean people that ask good questions and are truly interested in the art,” says Guillaume Levy-Lambert, co-founder of Art Porters Gallery, which nearly sold out works offered at the stand, which ranged from $880 to $10,000. “We also take the view that participating in a fair is a long-term outreach. It takes time to grow a collector base; it’s not just about sales, but also about the connections you make that will develop over time,” Levy-Lambert adds.

Yeo Kaa, ALONE BUT NOT LONELY, 2018, Installation view

We used to have a thriving independent scene in the 1990s and the first half of the 2000s, but most went under because of a lack of funding.

New entrant Art market professionals are now pinning their hopes on Art SG to burnish Singapore’s profile as a regional art hub. The new fair is due to launch on November 1 at MBS and is run by several of the people who developed Art HK before it was sold to Art Basel in 2013. One of the cofounders, Magnus Renfrew, is also running the new Taipei Dangdai fair that took place in January. Renfrew says Art SG will be “realistic in terms of scale,” starting with about 80 booths, and points out it is positioned to create a hub fair for Southeast Asia: “We’re not trying to replicate Art Basel in Hong Kong. But right across Asia now, there are opportunities for regional fairs. I believe galleries from across Asia and beyond would like to have a high-quality and selectively-determined art fair in Singapore that can provide them with the opportunity to connect with

Dream of Beyond Part 2, Maitree Siriboon, 2010, as part of public art showcase LOCK ROUTE. Image courtesy of the National Arts Council

new collectors from the region as well as their existing collectors.” Having recently participated in the Taipei Dangdai fair, Sandhu says he is confident that Art SG organizers have the “experience and capacity” to attract a strong roster of galleries. However, he stresses that to be successful the new fair will need to bring in collectors from across the region. Jeffrey Say, Programme Leader of MA Asian Art Histories at LASALLE College of the Arts, says Art SG will need to learn from the lessons of art fairs that have not been able to sustain themselves: “It needs to do market research to be acquainted with the demands of the Singapore market. It needs to do its best to attract blue-chip international galleries, but it will also need to maintain good relations with the local galleries. Whilst the focus on Asia or Southeast Asia is well-intentioned, you won’t attract international buyers. It needs to have strong programming, and fringe activities.” Say also notes that although art fairs may be an important part of the art ecosystem, they are just one component of it: “We need more ground-up initiatives, and more private benefactors and philanthropists to come forward to support these initiatives. We need an independent art scene and art fringe, and not only state-sponsored activities. We used to have a thriving independent scene in the 1990s and the first half of the 2000s, but most went under because of a lack of funding. And, of course, there is an urgent need to educate and nurture an art audience because even if you have the best shows, if you have no audience, all your effort would have been in vain.” In a state of flux The difficulties faced by fairs are indicative of the state of the wider commercial art sector, which has been in flux in recent years. The top-down experiment of developing the art district at Gillman Barracks has had only mixed success. Seven years after its opening (2012), only five of the initial 13 galleries remain. Last November, Element Art Space, which had moved from Raffles Hotel Arcade to Gillman in 2017, closed its gallery there to focus on expanding its art advisory and consultancy services from a new location, noting in an email to gallery clients, “a clear need for services in South East Asia based upon SINGAPORE BUSINESS REVIEW | JUNE 2019

careful scholarship, utmost discretion and unbiased, objective advice.” In March, Pearl Lam Galleries was the latest to defect from the precinct, moving its permanent space to a new gallery in Dempsey Hill, Singapore’s more vibrant lifestyle and dining hub. Whilst it refused to comment on the reasons behind the move, it stated that it was intending “to embark on a new chapter that will bring a fresh approach to its engagement with the art market.” One major sustainability issue for art galleries in Singapore is the high overhead costs (rental and staff) when compared to the average price of local art in the region. Sandhu points out, “The overhead cost in relation to the average price of the art being sold in the region is still a bit disproportionate,” adding “That said, whilst 15 years ago that problem was acute, we’ve made a lots of progress. Back then Singapore artists were selling for around $1,500-3,000, today there is a good number of artists selling above $30,000. Whilst $3,000 to $5,000 is a common price for a young artist, it’s not enough to sustain him, but it has progressed a lot.” Another issue often raised by gallery owners is the still-small size of the collector base, even though it has grown and includes many with high disposable incomes as Levy-Lambert notes: “It’s true that it’s a small collector base, but people have spending power, and even in a new market there are always opportunities.” However, he also points out, “it’s not easy, and as a commercial gallery, you really need to work at it to bring foot traffic in. It’s still very much a pioneer effort because there isn’t a culture here to go ‘crawl some galleries’ over the weekend. Outside of opening night — when people come not always for the right reasons — it’s still very hard to get people in.” Likewise, Marie-Pierre Mol, co-founder of Intersections

Bridging Realms Credit Game of Life, Justin Lee

SINGAPORE BUSINESS REVIEW | JUNE 2019

The overhead cost in relation to the average price of the art being sold in the region is still a bit disproportionate

Gallery says, “I don’t think that the collector base is too small, but that the local actors have to learn to deal properly with the local collectors. I don’t have miracle solutions but believe that it will require patience, focus and perseverance.” Sandhu is optimistic for the medium term outlook: “I think we are at a point of the cycle where things are starting to stabilise. Most of the galleries that are here now will probably still be here in the next three years. It’s important to remember that there are nine to 12 pretty serious galleries in Singapore when we only have a population of 5 million. By comparison, I would say Indonesia and Malaysia have maybe two to three very serious galleries each, so the ratio of professional galleries to the local collector base is actually very high here.” Gallerist Richard Koh is also feeling positive and recently opened a permanent space in Gillman Barracks. “I see the market recalibrating because the client base in changing. More people from the region are collecting based on interest and passion, when in the early days it was all about investing in the art. I also see more younger people starting to collect,” he says. Sonia Kolesnikov-Jessop

Landscapes, Legacies: Visualizing Alam Minangkabau, Group Exhibition, Installation View

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The workspaces of the future are here The Work Project, Cisco and SIA are reimagining how offices are designed.

he availability of leading-edge office spaces in Singapore validates the city state’s reputation as a global business centre. At present, “innovation” is the catchword as companies build offices that reflect their brand identities, whilst ensuring the comfort, safety, and productivity of tech-savvy employees. Whether standalone, private or co-working spaces, these new spaces highlight not only the utilitarian aspect of commerce but also the human-centred elements of creativity and collaboration. The Work Project: Reinventing shared spaces Co-working has remarkably changed the way organisations and individuals use office spaces. Junny Lee, founder of The Work Project, says that the co-working space operator provides a “full suite of amenitised workspaces [that] cater to all segments of today’s knowledge economy – for companies both small and large.” Features include bespoke configurations, hot and fixed desk options, as well as enhanced privacy and security. New spaces, which are conducive not only to work but also to social connectivity, have been 38

SINGAPORE BUSINESS REVIEW | JUNE 2019

The 50,000sqft Work Project features bespoke configuration and a membersonly business club.

opened at Asia Square and Capital Tower. Furthermore, a membersonly business club called MARK has been launched, allowing the use of functional private rooms, dedicated boardrooms, and distinctive spaces for events and celebrations. Complementary food, beverage, and cocktails are prepared by luxury spirits company Proof & Co. The Work Project Capital Tower consists of 50,000-sqft of curated spaces with 360-degree landscape views. It also features advanced technology infrastructure and steelcase furniture. In addition, its Innovation Hub includes conference and workshop areas for as many as 120 people. Meanwhile, the 41,000-sqft Work Project Asia Square houses 80 offices with a capacity of over 500 desks. SIA’s KrisLab: Dedicated to ingenuity and versatility Singapore Airlines (SIA) pursues its forward-looking philosophy through the KrisLab digital innovation hub, a collaborative workspace where the airline staff can generate ground-breaking ideas and solutions with various external partners. In designing KrisLab at the SIA Sports Club, the main challenge was

apportioning 3,200-sqft of space to different functions. Students from LaSalle’s School of Spatial & Product Design used a modern partitioning system, mobile furniture, and lighting and acoustic materials to create a versatile laboratory and office. Through KrisLab and the Digital Innovation Blueprint, SIA supports Singapore’s open innovation ecosystem to catalyse digital opportunities that enhance the city’s development as a travel and aviation hub in the region. Some innovations showcased in KrisLab include KrisPay, the world’s first blockchainbased airline digital wallet; immersive in-flight entertainment headsets and an augmented reality colouring mobile application for customers; and virtual reality, artificial intelligence, and machine learning devices to maximise the capabilities of SIA staff. Cisco’s centre: An adaptable place for collaboration Cisco’s new co-innovation centre in Singapore enriches the technology leader’s innovation ecosystem by motivating partnerships with customers, startups, and the local government. The centre, which is located in Cisco’s 80,000sqft property at Mapletree Business City II, hosts physical and virtual laboratories where collaborators can conduct proof-of-concept development, experimentation, and testing. Customer innovation rooms offer spaces for co-creation and prototyping of new digital solutions. The open-plan design is inspired by creative “accidental collisions,” which results in products and services that lead to economic and social improvement. Irving Tan, SVP Chief of Operations, notes the importance of a place where “innovation no longer happens behind the closed doors of R&D labs, but in open ecosystems.” Employees can effortlessly use technology, such as Webex Boards or plasma screens, for their interactions. Customisable desks, shophouse-inspired furniture, and meeting pods are available, along with quiet rooms where employees can spend time to think and focus, as well as open spaces that encourage the sharing of ideas.

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ANALYSIS 1: S-REITS was driven by contributions from new acquisitions and Asset Enhancement Initiative (AEI) completions. Supply in the next three years remains tight, especially for business parks. Older and lower specification properties are still experiencing occupancy weakness as the flight to quality continues. Rental reversions generally remained negative as REITs continue to have lower pricing power as they focus on filling up vacancies. Over at the retail front, although tenant sales were generally positive for the REITs, tenant sales growth, lagged behind shopper traffic growth which indicates that consumers are still cautious about spending. Retail REITs will trail behind the outperforming office and hospitality segments

S-REITs maintain strength as DPU set to grow 2% in 2020 Gearing fell to 36.9% in Q4 with only 13% of debts tipped to mature in 2020, insulating the sector from interest rate hikes.

-REITs have outperformed FSSTI index, rising 7.4% in February, led by the large and selective mid-cap S-REITs. “We continue to like S-REITs as we expect their share prices to continue outperforming the broader market in the more benign interest rate environment,” CIMB said in a report. The firm maintains CDL Hospitality Trust (CDLHT) as its top pick for the subsector as it is a bellwether for Singapore’s hospitality stocks. “We project a stronger DPU growth of 2.5% in 2019F (vs. 0.4% in 2018), driven by the reopening of its repositioned Dhevanafushi Maldives Luxury Resort, completion of AEI in Orchard Hotel, a full year’s contribution from Hotel Cerretani Florence, Italy, and a recovery in the hotel industry in Singapore.” Positive trends Office spot rents continue to rise, filtering sentiments to the business parks segment. Most office S-REITs reported positive rental reversion, in tandem with the rising spot market, boosting average portfolio rents. There were stronger positive 40

SINGAPORE BUSINESS REVIEW | JUNE 2019

Share prices will continue to outperform the broader market in the more benign interest rate environment.

reversion for retail S-REITs as rental reversions were encouraging. SPH REIT delivered the strongest rental reversion of 9.7% in September to November, followed by Frasers Commercial Trust (6.9% in 4Q18) and Vivocity (4% in April to December 2018). Meanwhile, the hospitality REITs reported more encouraging RevPAR performance thanks to strong demand and easing competition. Industrial S-REITs’ DPU growth

Robust balance sheet S-REITs’ balance sheets remain healthy, with gearing ticking down QoQ to 36.9% in Q4. In addition to a small 10% and 13% of SREIT debts maturing in 2019F and 2020F, c.82% of total SREIT debts are on fixed rate basis. This should largely insulate S-REITs’ earnings from interest rate hikes. “We expect S-REITs to actively explore inorganic growth opportunities, both in Singapore and overseas, from both third parties as well as their respective sponsor’s pipeline,” CIMB said. The S-REIT sector has expanded by more than 200% over the past decade, data from SGX show. It ranks third largest in Asia and sixth globally with a market cap of US$53b, according to boutique real estate fund manager Q Investment Partners. From CGSCIMB - REIT: More room to run

S-REITs distribution per unit by sub-sector

Source: CIMB

HOSPITALITY INDUSTRY SURVEY

Grand Hyatt ballroom

Tech and sustainability to define Singapore hotels From contactless check-in counters to plant-derived plastic bottles, the hospitality sector in Singapore is steadily embracing tech and green initiatives.

arina Bay Sands Hotel retains the top spot in Singapore Business Review’s largest hotels survey with its 2,561 rooms. Coming in second is Hotel Boss with 1,500 rooms. Rounding up the top 5 are Swissôtel The Stamford, Mandarin Orchard Singapore, and Carlton Hotel Singapore with 1,261 rooms, 1,077 rooms, and 940 rooms, respectively. Ong Choon Fah, CEO of Edmund Tie & Company, noted that hotel room demand in Singapore in the last 12 months has largely been boosted by four factors: the historic meeting between US President Donald Trump and North Korean leader Kim Jong Un in June 2018; the release of “Crazy Rich Asians,” which showcased Singapore as a popular tourist destination; the 14% YoY increase in business travel and meetings, incentive travel, conventions and exhibitions (BTMICE) visitor arrivals as of the third quarter of 2018; and the sustained marketing efforts of the Singapore Tourism Board (STB) through its effective and strategic marketing partnerships. 42

SINGAPORE BUSINESS REVIEW | JUNE 2019

The new technology enhancement helps complete check-in in under a minute per guest.

“With international visitor arrivals reaching a record 18.5 million, together with limited hotel additions, has fuelled positive increase in trading performance across all hotel chain sales,” said Giuliano Esposito, senior vice president for strategy advisory and asset management in Asia at JLL Hotels and Hospitality. Visitor days, according to Colliers International executive director for valuation and advisory services Govinda Singh, also grew, bumping up 4.8% from the previous year, with length of stay increasing to 3.38 days in 2018 from 3.33 days the year before. “This is a good performance and indicates that Singapore hotels, and especially those in prime locations, are generally full during peak periods year-round,” Singh said, noting the 86% occupancy rates as of end 2018. Challenges up ahead Despite its heydays in 2018, Singapore hotels may have to face some cloudy moments in 2019. “General outlook for 2019 will continue to be slightly overcast, especially with financial conditions

tightening and global growth slowing down. Business confidence seem less robust,” said Cinn Tan, chief sales and marketing officer for Pan Pacific Hotels Group. Another big challenge is the labour crunch and the shortage it has been effecting amongst industry players, big or small. Zhang Jiahao, Manager for CBRE Hotels in AsiaPacific, said that this labour crunch is not only making it difficult for hotel owners and operators to deal with the shortage of manpower in their businesses, but also making it more costly for some customers. “This issue is likely to be exacerbated by the lower foreign worker quota in the services sector, announced in the recent Budget 2019.” Outlook for 2019 Esposito noted that RevPAR is expected to improve throughout 2019 and 2020, as about 50% of supply in the next two years will be concentrated in Sentosa and in the outskirts of the city and will be consolidated over time. “Singapore’s hotel sector is to embark on an upswing. The STB aims to boost international visitor arrivals to the range of 18.7 million to 19.2 million.” This sentiment is echoed by Zhang, noting that the STB’s continued efforts will help boost tourist arrivals as well as the performance of the country’s hotel and hospitality industry. Trend: tech and sustainability Singapore hotels have been increasing adoption of technology and sustainability in all facets of operations. A spokesperson from AccorHotels have acknowledged this, noting that two of the biggest trends facing the hotel industry are technology and sustainability. For instance, Singh explained that technology has been a big boost for the hospitality and hotel industry in Singapore not just in making the booking, checking in, and feedback process for the customers easier, but it’s also helping businesses cope with rising challenges, including the labour crunch that the whole

HOSPITALITY INDUSTRY SURVEY For its events, Grand Hyatt Singapore is launching spring water bottles that’s 82% plant derived to reduce plastic wastage.

Village Hotel Sentosa

country is experiencing. AccorHotels currently provides state-of-the-art and innovative facilities to its clients. In Swissôtel The Stamford, customers will observe the automation of utilities as soon as they walk in their room, eliminating the need for a key card to activate the lights; the heating, ventilation, and air conditioning; and other systems. This also helps in saving energy as it automatically turns off utilities once the client walks out of the room. Swissôtel The Stamford also rolled out automated check-in and check-out counters, along with an industry-first biometric facial recognition feature. “The new technology enhancement helps complete check-in in under a minute per guest.” the spokesperson said. In terms of sustanaibility, many hotels and their facilities are implementing steps and efforts to ensure environment-friendly efforts— from their food selection to the amenities and energy consumption. Grand Hyatt Singapore, for instance, has introduced plant-based options for their food and beverage and hospitality amenities as part of their sustainability commitment. “We have since introduced these options to our MICE menus much to the delight of event planners and organisers, who are increasingly conscious of providing healthy options whilst ensuring that their event is able to do good for our environment too,” said Lucas Glanville, chef and director of culinary operations for Grand Hyatt Singapore. “Grand Hyatt Singapore will continue to put our planet at the forefront of our decisions, and we will

follow the success of 2018 with more sustainable initiatives in 2019.” One of these initiatives include the launch of JUST WATER to all the hotel’s events from March 2019 onwards. JUST WATER is 100% sustainably-sourced spring water is packaged in paper-based bottles and is covered by a plant-based cap made from sugar cane, making the entire bottle 82% plant-derived. “Unlike conventional plastic bottles that gets thrown away after a couple of sips, event attendees will be encouraged to write their names in their bottle and to refill their bottle with our hydro taps throughout the event,” he said. Glanville noted that this will drastically reduce plastic wastage in their hotel and significantly lessen their use of bottles, which amount to over 400,000 pieces every year for the events they host. Other hotels that have made efforts

towards sustainability include Pan Pacific Hotel Group, with Tan noting that PARKROYAL on Kitchener Road will offer a drinking water filtration system in each of their guest rooms, which will help eliminate the use of bottled water when the renovation is completed in 2020. AccorHotel, meanwhile, has committed to reduce their food waste by 30%, reduce their energy and water consumption, and ensure that the hotel is giving back to the local communities. “In a country like Singapore, which imports so much of its food, it’s surprising to learn that many Singaporeans go hungry every day whilst as a nation we are wasting so much food,” the AccorHotel spokesperson said. “This is why we are looking at our whole food supply chain to find ways to not only reduce our own waste but to redistribute leftover food that is perfectly safe for consumption to those in need.” New hotels to watch out for in 2019 Some of the new hotels to watch out for include the reopening of Raffles Hotel, Capri by Fraser China Square, Dusit Thani Laguna Singapore, as well as YotelAir Singapore and Jewel in Changi Airport. In 2020, Marriot’s lifestyle brand Edition is also slated to enter the market. Tourists and locals alike may also look forward to the opening of three Far East Hotels in Sentosa—The Outpost Hotel, The Barracks Hotel, and the Village Hotel Sentosa.

Raffles Hotel

SINGAPORE BUSINESS REVIEW | JUNE 2019

HOSPITALITY INDUSTRY SURVEY NUMBER OF ROOMS 2018 2017 2561 2561

2018

HOTEL

2017

GENERAL MANAGER/HEAD OF HOTEL OPERATIONS

Marina Bay Sands Hotel

Hotel Boss

1500

Charles Goh

Swissôtel The Stamford

1261

Marcus Hanna

Mandarin Orchard Singapore

1077

Danny Wong

Carlton Hotel Singapore

940

Darren Ware

V Hotel Lavender

888

Edmund Yip

Shangri-La Hotel, Singapore

792

Bipan Kapur

Pan Pacific Singapore

790

Kurt Wehinger

Fairmont Singapore

769

Marcus Hanna

Grand Hyatt Singapore

677

Willi Martin

Orchard Hotel

656

Byron Chong

JW Marriott Hotel Singapore South Beach

634

Stephane Fabregoul

Furama Riverfront, Singapore

615

Kent Law

The Ritz-Carlton, Millenia Singapore

608

Peter Mainguy

Peninsula Excelsior Hotel

591

600

William Wong

Grand Mercure Singapore Roxy

576

Klaus Gottschalk

Marina Mandarin Singapore

575

Melvin Lim

Grand Copthorne Waterfront

574

Farid Alain Schoucair

Hotel Jen Tanglin Singapore

565

Vathsala Subramaniam

Genting Hotel Jurong

557

ibis Singapore on Bencoolen

538

PARKROYAL on Kitchener Road

532

Richard Ong

Mandarin Oriental Singapore

527

Christian Hassing

Holiday Inn Singapore Atrium

512

Tuncay Bockin

Royal Plaza on Scotts

511

Patrick Fiat

Conrad Centennial Singapore

512

Heinrich Grafe Julian Wipper

Jessica Uekermann

Hotel Jen Orchardgateway Singapore

499

Hotel Chancellor@Orchard

488

Francis Tan

Swissotel Merchant Court, Singapore

476

Rainer Tenius

Hotel Michael

464

461

Shangri-La’s Rasa Sentosa Resort & Spa, Singapore

454

Festive Hotel

447

Furama City Centre, Singapore

445

Jovian Hun

Holiday Inn Express Singapore Clarke Quay

442

Sandra Kloprogge

Park Hotel Alexandra

442

"**Andy Chua

Regent Singapore, A Four Seasons Hotel

440

Oscar Postma

Oasia Hotel Novena, Singapore

428

Chai Khye Yeien

Hilton Singapore Hotel

423

421

Peter Webster

Sheraton Towers Singapore Hotel

420

Steven Long

M Hotel Singapore

415

Jacqueline Ho

Concorde Hotel Singapore

407

Karl Muir

York Hotel Singapore

407

Jessie Tan

Days Hotels by Wyndham Singapore at Zhongshan Park

405

Tony Cousens

InterContinental Singapore

403

Michael Martin

Novotel Singapore Clarke Quay

403

Alan Burrows

The Fullerton Hotel Singapore

400

Cavaliere Giovanni Viterale

Singapore Marriott Tang Plaza Hotel

393

Jason Leung

Village Hotel Bugis Orchard Rendezvous Hotel, Singapore (formerly Orchard Parade Hotel) Village Hotel Changi

393

Gill Ishwinder

388

Brett Walker

380

Gill Ishwinder

34,647

36,342

49 50

TOTAL NUMBER OF ROOMS

*SENIOR VICE PRESIDENT OF NON-GAMING OPERATIONS, MARINA BAY SANDS" **EXECUTIVE ASSISTANT MANAGER, INTERIM"

"Ian Wilson

SINGAPORE BUSINESS REVIEW | JUNE 2019

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SERVICED RESIDENCES INDUSTRY SURVEY

Oakwood Premiere OUE

Serviced residences switch to hotels to lure overnight guests Operators are going into a higher proportion of smaller units offers compared to the usual three-bedroom apartments from a few years back.

reat World Serviced Apartments remains at the top of Singapore Business Review’s Serviced Residences Survey with the most number of rooms at 304 units for lease and stay. Coming in at second is Oakwood Premier OUE Singapore, with 268 units. “Being the only Oakwood Premier brand in Singapore, our serviced apartment is geared toward tailored experiences for C-suite executives and business owners, who appreciate our premium facilities and spacious rooms,” Roy Liang, General Manager for Oakwood Premier OUE Singapore, said. Rounding up the top five in SBR’s Services Residences Survey is Fraser Suites Singapore located in the exclusive River Valley precinct, with 255 units in third place, and Orchard Parksuites at fourth place with 223 units each in their operations. Meanwhile, Ascott Orchard Singapore and Treetops Executive Residences, with 220 units each, scored the fifth spot. According to Tay Hock Soon, senior director for hospitality management of Edmund Tie 46

SINGAPORE BUSINESS REVIEW | JUNE 2019

We expect more new openings to be outside of the city centre as more corporates and businesses are locating themselves in the suburban locations.

& Company, stock for serviced apartments in 2018 hit 5,700 units, with average occupancy rate of hotels improving for the second consecutive year, growing by 1.2 ppt to 86%. “This high occupancy rate suggests the hotel industry is operating at close to full capacity, which bodes well for serviced apartments, as both are considered to have similar product offerings,” he said. Challenges ahead Rentals remained largely flat despite the high increases in recent year, said Govinda Singh, executive director of valuation and Advisory Services for Colliers International, citing data from the Urban Redevelopment Authority that leasing transactions increased by a mere 0.6% in 2018. Another impending issue that has been affecting the industry from an internal operations and revenue perspective is the government of Singapore’s plan to reduce the quota of foreign workers in the city-state from 40% to 38% in 2020, and further to 35% in 2021. Singh noted that the drop in foreign workers’ demand for longer leases, likely caused by

and may be exacerbated by the impending lower foreign worker quota, is one of the main challenges that the industry faced in 2018. Corporations and companies around the world are also trying to cut costs and shifting their views on recruitment, financing, and reassignments, given different requirements and the overcast global economic outlook. “This continued in 2018 and will remain a problem in the foreseeable future. Singapore’s tight labour market and an even more stringent control on foreign workers has made it difficult for us to find quality staff,” said Henrietta Chong, the general manager of Great World Serviced Apartments. “Corporates are now focusing more on placing employees on short-term assignments reducing long-term [ones]. This is due to cost reduction policies adopted by many organisations. As a result, the length of stay has decreased to between one and three months, which used to be only classified as the transient period,” Zhang Jiahao, manager of CBRE Hotels in Asia Pacific said. This reduction in the length of stay has proven to be a challenge, as operators constantly have to source for new corporate contracts, due to a higher turnover of guests within one to three months, Zhang added. Rising trends Given these challenges, operators and owners of serviced apartments and residences have been trying to offer clients innovative services and packages, whilst shifting their business models. For instance, Zhang noted that newer serviced apartments are now including a higher proportion of reduced spaces like studio and onebedroom units in their inventory, as compared to the three-bedroom units or bigger that was normal a few years back. The decrease in corporate demand for leases, meanwhile, has given rise to clients seeking shorter stays, which are not necessarily travelling for business. Tay said that serviced apartments like Treetops Executive Residences have been

SERVICED RESIDENCES INDUSTRY SURVEY Singapore’s health insurance segment’s gross premiums increased by 11% to a total of S$322.9m amidst persistent healthcare inflation in the country. Treetops Executive Residences

working to accomodate the increase in personal leases, focused on tenants seeking short-term stays. Given this demand in shorter stays, serviced apartments have also been securing hotel licences - allowing them to offer their services with minimum stays more appropriate for leisure travellers, as compared to a serviced apartment licence where the minimum stay is at least a week. Zhang noted that operators such as Ascott and Pan Pacific have serviced apartment properties with a hotel licence. Meanwhile, Oakwood Premier OUE Singapore recently secured a hotel licence, allowing the property to be open for daily stays. “This is our gateway to forage into the [business-to-consumer] travel industry and opens up opportunities to attract short stay visitors or local staycationers,” Liang said. Zhang also noted the rise of serviced apartments outside of the city centre as companies look away from the expensive real estate of downtown Singapore. “We expect more new openings to be outside of the city centre as more corporates and businesses are locating themselves in the suburban locations—including Fusionpolis, Biopolis, Mapletree Business City, and other areas which are being developed into regional hubs such as Paya Lebar, Jurong Lake, and Woodlands,” Zhang added. Hotel-like services, amenities Aside from acquiring hotel licences, serviced residences have also started to offer hotel-like services and amenities. Oakwood Premier OUE

Singapore, for instance, is currently offering an in-house restaurant helmed by a culinary team. The property, according to Liang, has also partnered with nearby establishments to offer a variety of amenities to guests, including fitness organisations like Aquaspin and other personal training classes, whilst also offering tourism guide options for guests’ easy navigation of the Lion City. “Our leisure segment was relatively untapped last year due to the absence of a hotel licence but with the implementation this year, we expect a surge in lifestyle travellers, compared to business travellers traditionally,” he explained. There is also the trend of using automation and even robots in doing some parts of the service. “We now have robots sending linens to our room attendants on the floors and delivering extra towels or blankets to our residents. We are

still looking for ways on how to take further advantage of technology and think outside the box to ensure that our residents’ comfort and needs are not short-changed by our manpower issues,” Chong said. Looking ahead Amidst growing concern on market conditions and the global economic situation, analysts believe that Singapore will continue to be a top destination for travellers, whether business or lifestyle, looking for longterm or short-term stays. For 2019, Tay expects approximately 880 units to be completed, mainly from the larger serviced apartment providers such as Frasers (Fraser Residence Orchard Singapore with 115 units), Ascott (co-living life at Funan Singapore with 279 units), and Citadines Rochor with 320 units opening in 2020. Henrietta Chong, the general manager of Great World Serviced Apartments, thinks that 2019 will remain a tough year. “Although we have our loyal customers, we cannot be resting on our laurels. A consolidated effort, comprising our operations staff to our sales personnel, through to our Department Heads, will be working together, finding new ways to capture the interest of new customers whilst ensuring our existing ones are well taken care of,” the official said. “We hope to capitalise on the information technology wave to remain at the forefront of the industry.”

Great World Serviced Apartments

SINGAPORE BUSINESS REVIEW | JUNE 2019

SERVICED RESIDENCES INDUSTRY SURVEY 2018

HOTEL

2017

Great World Serviced Apartments

NUMBER OF ROOMS 2018 2017 304

304

GENERAL MANAGER/HEAD OF HOTEL OPERATIONS GWC Serviced Apartments Pte Ltd

7 NIGHTS

Oakwood

NO MINIMUM STAY REQUIRED

Oakwood Premiere OUE Singapore

268

Fraser Suites Singapore

255

Frasers Hospitality

6 NIGHTS

Orchard Parksuites

223

Far East Hospitality

6 NIGHTS

Edmund Tie & Company Hospitality Management Services Pte Ltd

6 NIGHTS

Treetops Executive Residences

220

Ascott Orchard Singapore

220

The Ascott Limited

1 NIGHT

Orchard Scotts Residences

204

Far East Hospitality

6 NIGHTS

Somerset Liang Court Singapore

197

The Ascott Limited

7 NIGHTS

Orchard Grand Court Singapore

186

Orchard Grand Court

7 NIGHTS

Wilby Bukit Timah

181

180

Wilby Estate International

3 MONTHS

Pan Pacific Serviced Suites Beach Road

180

Pan Pacific Hotels Group

2 NIGHTS

Fraser Place Robertson Walk, Singapore

164

Frasers Hospitality

6 NIGHTS

Citadines Mount Sophia Singapore

154

The Ascott Limited

7 NIGHTS

Park Avenue Hotels and Suites (United Engineers)

7 NIGHTS

Park Avenue Clemenceau

150

Ascott Raffles Place Singapore

146

The Ascott Limited

1 NIGHT

Oasia Residence, Singapore

140

Far East Hospitality

6 NIGHTS

Far East Plaza Residences

139

Far East Hospitality

6 NIGHTS

Wilby Central

138

Wilby Estate International

7 NIGHTS

Village Residence Clarke Quay

127

Far East Hospitality

6 NIGHTS

Central Square

127

BridgeStreet Global Hospitality

7 NIGHTS

Shangri-La Serviced Apartments

127

Shangri-La Hotel Limited

6 NIGHTS

Pan Pacific Serviced Suites Orchard, Singapore

126

Pan Pacific Hotels Group

6 NIGHTS

International Service Apartments

115

E. Millennium Investments and Fontainebleau (ISA)

1 MONTH

25.5

Fortville

109

Forthavens Pte Ltd

7 NIGHTS/DAYS 7 NIGHTS

109

Lanson Place Hospitality Management

Somerset Bencoolen Singapore

107

The Ascott Limited

7 NIGHTS

Oakwood Studios Singapore

Oakwood

7 NIGHTS

PARKROYAL Serviced Suites, Singapore

Pan Pacific Hotels Group

6 NIGHTS

<90

LMB Housing Services Group of Companies

1 MONTH 6 NIGHTS

25,5

Winsland Serviced Suites by Lanson Place

27 28 29 30

LMB Housing Services

Regency House

Far East Hospitality

8 on Claymore Serviced Residences

Royal Plaza

7 DAYS

The Club Residences by Capella Singapore

Capella Hotel Singapore

7 NIGHTS

Village Residence Hougang

Far East Hospitality

6 NIGHTS

Orange Grove Serviced Residences (formerly Darby Park Executive Suites)

Sime Darby Hospitality

6 NIGHTS

Fraser Residence Orchard, Singapore

115

Frasers Hospitality

3 MONTHS

Village Residence Robertson Quay

Far East Hospitality

6 NIGHTS

Shangri-La Residences

Shangri-La Hotel Limited

3 MONTHS

Village Residence West Coast

Far East Hospitality

6 NIGHTS

Citadines Fusionopolis Singapore

The Ascott Limited

7 NIGHTS

" Edmund Tie & Company Hospitality Management Services Pte Ltd"

7 NIGHTS

Alocassia Serviced Apartments

The Forest by Wangz

WANGZ Hospitality

6 NIGHTS

Park Avenue Hotels and Suites (United Engineers)

7 NIGHTS

Park Avenue Robertson TOTAL NUMBER OF ROOMS

36,342

FORMER 28TH PLACER REDWOOD WEST RESIDENCES HAS ALREADY CEASED OPERATIONS FORMER 23RD PLACER PARK AVENUE ROCHESTER AND FORMER 35TH PLACER PARK AVENUE CHANGI ARE REGISTERED AS HOTELS

2017

SINGAPORE BUSINESS REVIEW | JUNE 2019

SERVICE RESIDENCES FEATURE

Live in luxury away from home at Fraser Hospitality’s exquisite serviced residences With its commitment to quality and unmatched attention to detail, Frasers Hospitality sets the gold standard for long-stay accommodation arrangements across the globe.

or over 20 years, Fraser Hospitality has been at the forefront of offering memorable experiences to guests through its Gold-Standard serviced, hotel residences and boutique lifestyle hotels across Asia, Australia, Europe, the Middle East and Africa. As a member of the Frasers Property Group, Fraser Hospitality continues to make its mark on the international hospitality scene with its strong vision for growth and exceptional service offerings. It has three award-winning branded serviced residences offerings – the GoldStandard Fraser Suites, Fraser Place and Fraser Residence; Modena by Fraser, a modern, eco-lifestyle brand emphasising on simplicity, sustainability and holistic wellness; and Capri by Fraser, a design-led hotel residence aimed at the millennial traveller seeking connectivity and social interaction. Meeting the needs of its customers is at the forefront of Fraser Hospitality’s services, amenities and facilities. This

commitment to peerless service shows through its wide range of lifestyle offerings like the Kids Club, the business-cumrecharge concept The Retreat and themed launderettes at all Capri by Fraser hotel residences. The gold standard of hospitality “It is this Fraser Difference that draws our clients’ support to engage and re-engage Fraser Hospitality’s properties around the globe,” Ms Clara Beng, general manager at Frasers Hospitality notes. “Most of our properties are centrallylocated with cultural, dining, shopping options and commercial districts within easy reach. We provide an extensive range of leisure and lifestyle facilities and restaurants with a healthy menu option that provide residents with a plethora of lifestyle amenities right at their doorstep.” “We also offer family-friendly facilities and services. Children’s playrooms, babysitting services and social activities are available to help the entire family settle in. Our specially curated events such as monthly residents’ night and outings encourage interaction amongst residents and staff. Several properties are also equipped to welcome pets,” she adds.

Expansion and innovation In 2018, the company has seen rapid expansion across regions and brands. Fraser Suites Riyadh, Fraser Suites Abuja and Fraser Suites Muscat marked our entry into three new markets in Middle East and Africa. Over in Europe, Hotel du Vin family welcomed a new property in Stratford-uponAvon and the refurbished Avon Gorge in Bristol. In Asia, Fraser Suites Dalian opened in May whilst properties in Buriram, Thailand and Puteri Harbour, Malaysia are underway. In Singapore, Fraser Hospitality has just opened the doors of its new property, Fraser Residence Orchard, Singapore. “Most recently, we announced the entry of Capri by Fraser into the Ginza district of Tokyo,” she notes. As a result of this commitment to excellence, Fraser Hospitality’s properties have maintained strong occupancies, most with an average of 85% over the past year. Its corporate client base has been retained across the group with 80% of its residents from Fortune 500 and Forbes-listed companies. Amongst its many awards is consistent recognition by the World Travel Awards, TripAdvisor, and the World Luxury Hotel Awards.

“Its corporate client base has been retained with 80% of its residents from Fortune 500 and Forbes-listed companies.“

Fraser Suites Singapore

Fraser Residence Orchard, Singapore

SINGAPORE BUSINESS REVIEW | JUNE 2019

ANALYSIS: RETAIL

Orchard Road will be revitalised as a lifestyle destination

Retail rents bottom out as gyms, arcades move in

The rental decline narrowed to 1% in 2018 from the 4.7% and 8.3% decreases in 2017 and 2016, respectively.

he retail rental market in Singapore has shown signs of better days as recorded in the latter days of 2018. Based on the Urban Redevelopment Authority’s (URA) data, overall Central Region retail rents showed a marginal uptick of about 1.2% QoQ for Q4 2018. This means H2 was flat compared to H1 2018, and rents fell by just 1% for the full year 2018. The rate of decline slowed down considerably from the 4.7% and 8.3% declines for 2017 and 2016, respectively. Considering this progression, will this be the signal the bottoming of the long-running decline that Singapore has witnessed starting in Q1 2015? According to Colliers International, Orchard Road ground-floor rents in the Lion City saw an uptick of 1.4% YoY to SGD41.20 (USD30.18) psf pm in H2 2018, whilst regional centres saw a marginal uptick of 0.4% YoY to $33.60 (US$24.62) psf pm, marking recovery in ground-floor rents. “We expect ground-floor rents to lead the gradual recovery, but overall retail rents should continue flattening out in 2019-2020 before picking up sustainably on more favourable 50

SINGAPORE BUSINESS REVIEW | JUNE 2019

Overall retail rents should continue flattening out in 2019-2020 before picking up sustainably on more favourable supply-demand dynamics.

supply-demand dynamics,” Colliers International said in their report. “We advise landlords to be flexible and practical about setting rents in order to support occupancy.” What’s new in retail? Tenant profile mixes were heading towards more big-format activitybased retail concepts, such as game arcades, billiard rooms and gyms, taking up anchor tenancies in malls. More online retailers also went

physical, such as Taobao which opened its first physical store in Singapore in NomadX at Plaza Singapura. Online grocer honestbee opened habitat, billed as “the world’s first tech-enabled grocery and dining concept”. Meanwhile, luxury brands continued to embrace duplexes, or dual-level shops. Italian lifestyle brand Moncler opened a flagship duplex at The Shoppes, its largest APAC store. Global luxury brands continue to embrace the concept of duplexes, or dual-level shops, and expansion into children’s wear. Marina Bay Sands Shoppes now hosts 17 duplexes - the largest collection of duplexes under one roof in Singapore. In January 2019, Italian apparel manufacturer and lifestyle brand Moncler opened a flagship duplex at The Shoppes, its largest store in the Asia-Pacific region. Retail stock will increase by 2.36 million sqft over 2018-2019 due to several large projects, in particular Jewel Changi Airport (~576,000 sqft), Paya Lebar Quarter (PLQ) Mall (~340,000 sqft) and Funan Mall redevelopment (~325,000 sqft). The supply in 2019 is 90.4% more than the annual net supply of 1million sqft in 2018, according to a report from Savills Research, although this should ease to less than 500,000 sqft per annum from 2020 to 2023. By 2020, the main retail supply will come from auxiliary retail components in residential developments. From Colliers: Singapore retail and industrial property sectors find their footing; rosier outlook for selected segments in 2019

Singapore retail supply, absorption, & vacancy (2011-2022)

Source: Colliers

MBA FEATURE

SMU EMBA and MBA: Grooming global citizens Digital-readiness and global citizenship qualities exist in every EMBA and MBA graduate of SMU.

hen SMU revamped its MBA programme in 2018, the changes reflected some of the most important trends in the workplace of today and tomorrow. With the speed of digitalisation driving globalisation, new management philosophies and escalating demands from consumers, MBA and EMBA graduates need to be upskilled more than ever. Data analytics is now the name of the game, and SMU took on the challenge by offering data science as a foundation course, in addition to a myriad of new offerings. “We believe that leaders in modern day organisations should develop an astute sense of digitalisation, including how it can transform the organisation, and how organisations can benefit from digital transformation,” said Dr. Ser-Keng Ang, Academic Director of the SMU MBA programme. “The individual’s job scope is constantly in flux today, the relevant knowledge that candidates need 3 months after they graduate may be different compared to what they learned when they were in the programme,” said Professor Shantanu

Bhattacharya, Academic Director of the SMU EMBA programme. Hence, SMU has committed to providing ‘lifelong ROI’ to its EMBA and MBA candidates by offering the opportunity to continue taking courses even after graduation. “This allows us to engage and provide our graduates with opportunities for continuous learning, rather than the short-term relationship we see in other EMBA and MBA programmes offered today.” Future-ready MBA graduates As part of the curriculum revamp, SMU developed a core course on “Leading Digital Transformation” to help candidates understand the impact of digitalisation and how they can effect transformation within their organisation. The MBA programme also offers a suite of analytics courses, from marketing to operations to finance, to provide candidates with the technical skills to handle big data. Coupled with SMU’s drive for digitalreadiness, SMU MBA candidates are also exposed to a broad range of business and management topics. The opportunity to explore a broad spectrum of content equips the candidate with the knowledge to move up the career ladder or to pursue an alternative career if he or she chooses. “To me, the very DNA of an MBA is generalisation. The key benefit of

generalisation is the exposure you get to different areas and subject matter. This journey of exploration is not only key to gaining a holistic perspective of business and management, it also trains the MBA candidate to explore the unknown. This helps them to discover career options they might not have previously considered if not for the MBA programme, particularly with an internship,” Dr. Ang concludes. Globalised EMBA graduates For senior executives with more than 10 years of working experience, they can look to the highly successful SMU EMBA programme for further education. Ranked 22nd globally and 5th in alumni salary increase in the 2018 Financial Times Executive MBA rankings, the SMU EMBA draws the cream of the corporate crop, with over 60% of its candidates being director-level and C-suite executives across Asia, US, Europe and the Middle East. With a curriculum co-designed with inputs from 100 senior business leaders and senior executives in Asia, the SMU EMBA offers executives the opportunity to interact with a very senior cohort of business leaders who are shaping business and society not only in Singapore but across the globe. “As there is no one-size-fits-all approach to managing global business, leaders today need to know the different strategies that work in different environments,” said Bhattacharya.

“SMU took on the challenge by offering Data Science as a foundation course.”

Dr. Ang Ser Keng, Academic Director - SMU MBA

Professor Shantanu Bhattacharya, Academic Director - SMU EMBA

SINGAPORE BUSINESS REVIEW | JUNE 2019

MBA PROGRAMMES SURVEY keen but apprehensive to jump into part-time studies, and we do our best to cater class timings and deadlines to their needs,” said Heng.

Management Development Institute of Singapore

Education providers up the ante amidst weak demand As demand plateaus, MBA schools have ramped up their unique offerings to snag more students that place importance on return on investment.

ingapore’s MBA schools are diversifying from academically focused programmes to ones involving experience, travel and better alumni opportunities. As a result, the MBA student count in 2019 went up 6.5% to about 4,115 students from 3,531 in 2018. The numbers are being led by INSEAD with 1,018 students, the National University of Singapore at 685, Management Development Institute of Singapore having 548 students, PSB Academy with 295 and Nanyang Technological University at 285. The market for MBA providers in the country has been increasingly saturated over the last few years, with some offering an “MBA for all” approach to prerequisites and providers are faced with the challenges that have evolved through time.To attract local and foreign enrolees, schools have begun offering customised courses with themes that cater to emerging trends in business and technology. Many providers launched tracks in data science and specialisations that revolve around innovation and entrepreneurship. Meanwhile, 54

SINGAPORE BUSINESS REVIEW | JUNE 2019

Many providers launched tracks in data science and specialisations that revolve around innovation and entrepreneurship.

some of them have looked into the importance of being globally relevant, especially as Singapore is one of the countries with the most diverse populations. “PSB Academy has responded by diversifying our offering of MBA providers that range from academically focused to more practise-based programmes, and to look at value-adding by offering more opportunities for students and alumni to improve their professional networks and international exposure,” said Dr. John Heng, assistant head of academic affairs, School of Postgraduate Studies, PSB Academy. Meanwhile, Andrew Chew, marketing director, James Cook University, said that the curricula of MBA programmes need to be continually refreshed to keep pace with the rise of Industry 4.0. “Over the past few years, we’ve noticed that the demand for part-time Master’s programmes is still present in Singapore, but students tend to be selective and see postgraduate studies as a serious investment,” Heng said. Generally, professionals who are interested to go into taking MBA are

Value for money Educators note that students place primary importance on return on investment (ROI), and that price and value are considerations in signing up for pursuing MBA. “Students who do consider furthering their studies are starting to look for more value-added features to the qualification, beyond rankings and accreditations, such as practical activities, networking events, industry links, and international experiences like study tours,” Heng added. This was echoed by Prateek Nayak, regional head, Southeast Asia, Amity Global Institute, who said that applicants are now voting with their dollar. One of the many ways that schools attract students is the availability of scholarship options. “Amity still endeavours to fulfil its goals of furthering education opportunities for deserving students through generous scholarships, partnering with renowned university partners, and particularly through introducing valuable specialisms desired by the workplace. Our partnership with the University of London offers specialisms in Entrepreneurship and Innovation, Leadership, Law, Finance etc,” Nayak added. Meanwhile, INSEAD continues to bank on its distinctive positioning as a cross-cultural school based in Europe, Asia, and the Middle East. Minh Huy Lai, managing director, INSEAD MBA Programme, said that their students in 2018 came from more than 94 countries from all over the world. “One other unique criteria is also our language requirement – in addition to English and entry language, all students will need to demonstrate at least basic knowledge of a third language in order to graduate,” Minh added According to Rhys Johnson, associate professor and chief operating officer & provost, Kaplan Institute, their MBA student

MBA PROGRAMMES SURVEY In the midst of greater globalisation and connectivity, students are also looking at the network that they will be able to build.

Nanyang Technological University

numbers continue to grow through a relevant curriculum, accreditations and recognitions, various assessment methods, and a strong network of students and professionals.

study tour for the MBA student community based in MY and UK. The Nottingham in the City alumni networking event will also be back in 2019 in response to popular demand for the inaugural instalment Customer centricity last year,” Heng said. James Cook Johnson’s remarks shows that the University also thought of offering various trends being observed in a variety of joint degrees, including Singapore’s MBA space point to one Master of Information Technology – thing: customer-centricity. Students Master of Business Administration, see their education the same way they Master of International Tourism and look at the other high-value products Hospitality Management – Master of that they purchase, and the more Business Administration, and Master tailor-fit it is for them, the better. of Professional Accounting – Master Moreover, the average age of an of Business Administration. MBA student is getting younger, Meanwhile, INSEAD is offering moving from mid-30s to late 20s. faculty-led tracks and student-led Johnson said that more independent tracks, both 3-5-day programmes MBA providers are sprouting up in delivered outside of the campus, Singapore. He added that there is also to allow students to lead their an increasing consideration for MBA classes. This will enrich the student’s programmes with shorter durations. experience, in addition to the 90 In the midst of greater globalisation other electives to choose from. and connectivity, students are also looking at the network that they will be able to build. Many MBA providers pride themselves in courses that involve working with students from various cultures and other institutions. One of these is PSB Academy’s MBA in Global Business offered by Coventry University UK, the pioneer intake of which has 20 full-time and part-time students. “We are looking to bring in programmes with an industry and functional focus in 2019, and enhance current initiatives for our students’ benefit. Our University of Nottingham students for example, can look forward to more industry seminars as part of their curriculum INSEAD time, with a repeat of the 2018 China

Looking beyond At the end of day, there would be no use for the innovative courses and curriculum designs without a good number of students who will bring them to the workplace. For Amity Global Institute, a Master of Science in Data Science for Business offered by the University of Stirling, is a step towards connecting an MBA with the current trends in technology. “MSc course provides understanding of the industrial and scientific relevance of advanced analytics and their application in strategic and operational decision-making. The course addresses the acknowledged shortage of business leaders and managers with a detailed working knowledge of data analytics,” Nayak said. Meanwhile, Chew believes that companies need to be more flexible in accommodating staff to take day classes as it could also lead to benefits for the company in terms of staff retention and work performance. With all the developments in the MBA landscape, MBA providers must grab the opportunity to offer the best selection of their offered courses. “Other than quality in teaching and professional exposure, a programme that allows a student to balance work, personal and study commitments are paramount in their decision-making process, and we ensure that our policies and curriculum changes take this into our account as we evolve with changing industry and student demands,” Heng said.

SINGAPORE BUSINESS REVIEW | JUNE 2019

MBA PROGRAMMES SURVEY MBA PROGRAMME Bangor University (UK) MBA in Banking & Finance Bangor University (UK) MBA in International Marketing Coventry University MBA in Global Business *new Hull University Business School Executive MBA

PROVIDER/LOCAL PARTNER Management Development Institute of Singapore Management Development Institute of Singapore PSB Academy School of Postgraduate Studies, PSB Academy

Total Number of Students 2019 2018

HEAD OF SINGAPORE OFFICE/DEAN

136

Ignatius Teo

192

188

Ignatius Teo

Sam Choon Yin

INSEAD MBA

INSEAD

1,018

1,039

Ilian Mihov

James Cook University MBA

James Cook University Singapore

210*

160*

Prof. Chris Rudd

Manchester Global Master of Business Administration

Alliance Manchester Business School

176

124

Lim Bee Ing

Kaplan Higher Education

Rhys Johnson, Chief Operating Officer & Provost, Kaplan Singapore

Kaplan Higher Education

131

Rhys Johnson, Chief Operating Officer & Provost, Kaplan Singapore

65***

Robert Kennedy

30***

Robert Kennedy

100***

Robert Kennedy

90***

50***

Robert Kennedy

Sam Choon Yin

167

Veena Jadhav

Marie-Aimée Tourres

Northumbria University MBA (Mar, Sep)" Murdoch University MBA (Jan, May, Sep) Nanyang Executive MBA Nanyang Fellows MBA Nanyang MBA Nanyang Professional MBA Nottingham University Business School MBA S P Jain Executive MBA S P Jain Global Master of Business Administration

Nanyang Business School, Nanyang Technological University Nanyang Business School, Nanyang Technological University Nanyang Business School, Nanyang Technological University Nanyang Business School, Nanyang Technological University School of Postgraduate Studies, PSB Academy S P Jain School of Global Management, Singapore S P Jain School of Global Management, Singapore

"173 (MGB JAN 2019: 50 MARIEAIMÉE TOURRES

S P Jain Master of Global Business

S P Jain School of Global Management, Singapore

MGB Sept 2018: 123)

183

Strathclyde MBA

YMCA Education Centre

164

162

Sydney Business School, University of Wollongong MBA

School of Postgraduate Studies, PSB Academy

"Joe Heng "

Sam Choon Yin

S3 Asia MBA with Fudan University, Korea University & National University of Singapore The NUS Executive MBA (in Chinese) The NUS Executive MBA (in English) The NUS MBA The NUS MBA Double Degree with Peking University The NUS MBA Double Degree with HEC Paris The NUS MBA – PhD The NUS MBA – Yale Master of Advanced Management UCLA – NUS Executive MBA

National University of Singapore

Bernard Yeung

National University of Singapore National University of Singapore National University of Singapore National University of Singapore National University of Singapore National University of Singapore National University of Singapore National University of Singapore

140* 96* 297* 7* 13* 5* 3* 73*

140 96 297 7 13 5 3 73

Bernard Yeung Bernard Yeung Bernard Yeung Bernard Yeung Bernard Yeung Bernard Yeung Bernard Yeung Bernard Yeung

University of Birmingham MBA

SIM Global Education

120

100

Ho Soon Eng

University of Northampton - MBA

Amity Global Institute

187

141

Leon Choong

University of Sunderland (UK) MBA

Management Development Institute of Singapore

213

192

Ignatius Teo

University of Newcastle, Australia MBA

School of Postgraduate Studies, PSB Academy

Sam Choon Yin

University of Sunderland (Human Resource Management) (UK) MBA

Management Development Institute of Singapore

Ignatius Teo

University of Sunderland (Supply Chain Management) (UK) MBA

Management Development Institute of Singapore

Ignatius Teo

GENERAL FIGURES SHOW TOTAL NUMBER OF STUDENTS AS OF 31 JANUARY 2019 *DATA FOR NUS MBA PROGRAMMES HAVE BEEN RETAINED FROM THEIR 2018 FIGURES AS APPLICATION CYCLE IS STILL ONGOING

SINGAPORE BUSINESS REVIEW | JUNE 2019

MBA PROGRAMMES SURVEY TOTAL NUMBER OF STUDENTS Full Time Part Time 136

192

1,018 210*

Minimum Cost (SG$) Full Time "22000 (IB/LB contract fees)" "22000 (IB/LB contract fees)" 26,643.00

Duration Part Time

Full Time

Part Time

Number of Intakes Per Year

12 months

18 months

3 (FT)

12 months

18 months

3 (FT)

$26,643.00

16 months

20 months

28 months

32,356.80 "129,000 (EUR84,000)" " $37,878 including GST (International) $36,594 including GST (Domestic)"

10 months

$36,594 including GST (Domestic)

12 months

16 months

1.5-2 years

176

"68,168 (including GST)"

S$22,363.00 (with GST)

15 months

"2 per year

125

25,680.00 (with GST)

22,534.20 (with GST)

12 months

"3 per year

65***

100,000 (before GST)

14 months

30***

75,000 (before GST)

12 months

100***

62,000 (before GST)

12 months

90***

65,000

18 months

33,384

24 months

167

35,310

18 months

"71,343.11 (US$52,792)"

12 months

"63,649.59 (US$47,099)"

1-year

164

40,000 including GST

24 months

25,873.00

28 months

64,000.00

16 months

NA NA 197 7 13 5 3 NA

140 96 100 0 0 0 0 73

NA NA 62,000 44,000 44,000 62,000 44,000 0

120,000 100,000 62,000 44,000 NA NA NA 157,325

NA NA 17 months 24 months 20-24 months 17 months 24 months NA

24 months 15 months 24 months 36 months NA NA NA 15 months

1 1 1 1 2 1 1 1

120

33,512

24 months

83 – 2018 & 99 - 2019

55 – 2018 & 84 - 2019

23,540

16,050

1 year

115

"24500 / 23000 (IB/LB CONTRACT FEES)"

"22000 (LB CONTRACT FEES)"

12 MONTHS

18 MONTHS

"1 (FT) 3 (PT)"

28,890.00

16 MONTHS

"24500 / 23000 (IB/LB CONTRACT FEES)"

"22000 (LB CONTRACT FEES)"

12 MONTHS

18 MONTHS

1 (PT)

"24500 / 23000 (IB/LB CONTRACT FEES)"

"22000 (LB CONTRACT FEES)"

12 MONTHS

18 MONTHS

1 (PT)

**FIGURES RETAINED FROM 2018 DATA *** ESTIMATED FIGURES

SINGAPORE BUSINESS REVIEW | JUNE 2019

MBA PROVIDERS SURVEY TOTAL NUMBER OF STUDENTS

MBA PROVIDER

MBA PROGRAMME

HEAD OF SINGAPORE OFFICE/ DEAN

INSEAD

INSEAD MBA

Ilian Mihov

Full Time 1,018

Part Time NA GRAND TOTAL

Bernard Yeung

Bernard Yeung Bernard Yeung Bernard Yeung

NA NA 197

140 96 100

Bernard Yeung

Bernard Yeung Bernard Yeung

13 5

NA NA

Bernard Yeung

National University of Singapore Business School

S P Jain School of Global Management, Singapore

Bernard Yeung

73 GRAND TOTAL

S P Jain Global Master of Business Administration

Marie-Aimée Tourres

S P Jain Executive MBA

Prof Veena Jadhav, Asst. Dean (EMBA, Singapore)

S P Jain Master of Global Business

Marie-Aimée Tourres

Nanyang Executive MBA

Robert Kennedy

65***

Nanyang Fellows MBA Nanyang MBA Nanyang Professional MBA

Robert Kennedy Robert Kennedy Robert Kennedy

30*** 100*** NA

NA NA 90*** GRAND TOTAL

Ignatius Teo

136

Ignatius Teo

192

Ignatius Teo

115

Ignatius Teo

NA 167 NA GRAND TOTAL

Nanyang Business School, Nanyang Technological University

Management Development Institute of Singapore

Bangor University (UK) MBA in Banking & Finance Bangor University (UK) MBA in International Marketing University of Sunderland (UK) MBA University of Sunderland (Human Resource Management) (UK) MBA - New University of Sunderland (Supply Chain Management) (UK) MBA - New

3 GRAND TOTAL

PSB Academy

Coventry University MBA in Global Business *new Hull University Business School Executive MBA Nottingham University Business School MBA Sydney Business School, University of Wollongong MBA University of Newcastle, Australia MBA

Sam Choon Yin

Sam Choon Yin Sam Choon Yin

NA NA

20 90

Sam Choon Yin

NA GRAND TOTAL

James Cook University Singapore

James Cook University MBA

Dale Anderson

210*

Amity Global Business School

University of Northampton, MBA

Easwaramoorthy Rangaswamy

GRAND TOTAL 84 GRAND TOTAL

YMCA Education Centre

Strathclyde MBA

"Joe Heng "

164 GRAND TOTAL

Kaplan Higher Education

Northumbria University MBA Murdoch University MBA

Rhys Johnson, Chief Operating Officer & Provost, Kaplan Singapore Rhys Johnson, Chief Operating Officer & Provost, Kaplan Singapore

125 GRAND TOTAL 120 GRAND TOTAL

SIM Global Education

University of Birmingham MBA

Ho Soon Eng

Manchester Global Master of Business Administration

Alliance Manchester Business School

Lim Bee Ing

176 GRAND TOTAL

*DATA FOR NUS MBA PROGRAMMES HAVE BEEN RETAINED FROM THEIR 2018 FIGURES AS APPLICATION CYCLE IS STILL ONGOING **FIGURES RETAINED FROM 2018 DATA *** ESTIMATED FIGURES

SINGAPORE BUSINESS REVIEW | JUNE 2019

MBA PROVIDERS SURVEY Minimum Cost (SG$)

TOTAL 1,018 1018

Full Time 129,000 (EUR84,000)

Duration Part Time NA

Full Time 10 Months

Part Time

Number of Intakes Per Year 2

64,000

140 96 297

NA NA 62,000

120,000 100,000 62,000

NA NA 17 months

24 months 15 months 24 months

1 1 1

44,000

24 months

36 months

13 5

44,000 62,000

NA NA

20-24 months 17 months

NA NA

2 1

44,000

24 months

15 months

73 685 56

16 months

157,325 "71,343.11 (US$52,792)"

167

12 months

35,310

3 18 months

"63,649.59 (US$47,099)"

65***

100,000 (before GST)

14 months

30*** 100*** 90*** 285***

75,000 (before GST) Tuition fee of S$ 62,000 (before GST) NA

NA NA 65,000 (before GST)

12 months 12 months NA

NA NA 18 months

1 1 1

12 months

18 months

3 (FT)

12 months

18 months

3 (FT)

12 months

18 months

"1 (FT) 3 (PT)"

12 months

18 months

1 (PT)

12 months

18 months

1 (PT)

16 months

20 months

28 months 24 months

4 4

28 momths

1 year

273

"22000 (IB/LB contract fees)" "22000 (IB/LB contract fees)" "24500 / 23000 (IB/LB contract fees)" "24500 / 23000 (IB/LB contract fees)" "24500 / 23000 (IB/LB contract fees)"

"22000 (LB contract fees)" "22000 (LB contract fees)" "22000 (LB contract fees)"

$26,643.00

20 90

NA NA

32,356.80 33,384

25,873.00

50 295

28,890.00

16 months

210

"37,236INCLUDING GST (INTERNATIONAL) 35,952 INCLUDING GST (DOMESTIC)"

35,952 INCLUDING GST (DOMESTIC)

12 MONTHS

16 MONTHS

210 183 183

23,540

16,050

1 YEAR

164

40,000 INCLUDING GST

24 MONTHS

22,363.00 (WITH GST)

15 MONTHS

2 PER YEAR (MAR-SEPT)

131

25,680.00 (WITH GST)

22,534.20 (WITH GST)

12 MONTHS

158 120 120

32,528 33512.4

24 MONTHS 24 MONTHS

3 PER YEAR (JAN, MAY, SEPT) 4 4

176

1.5-2 YEARS

136 192 213 3 4 548

164

"68,168 (INCLUDING GST)"

176

SINGAPORE BUSINESS REVIEW | JUNE 2019

COUNTRY REPORT: ISRAEL

How Kramer Asia reshapes businesses with its unparalleled expertise in AV and IT

For the last 37 years, Kramer has been known to deliver innovation and fresh approaches to the AV experience with a vast portfolio of products suited to every client’s needs.

hen Kramer Electronics Asia Pacific Margolin, the key factor for the customer’s was set up in 2006, the goal was success is not just technology, but education. to expand company presence The company also recently launched in the region. Thirteen years hence and Kramer Kronos, a secure and enterprisethe company has more than expanded class cloud-based room booking and its presence--through top-tier system scheduling platform. The platform integrators and industry footprints in many streamlines and automates the management users’ facilities, Kramer Asia is now the side of room booking. go-to solutions provider for audiovisual Fully integrated with Kramer Control, deployments. IT administrators can easily use a room’s With rapid developments in the industry, availability as a trigger for automatically Kramer Electronics’ 37 years in the global AV controlling room elements. Kramer Kronos industry is a testament to its commitment has 802.1x and Transport Layer Security to providing top of the line services to its (TLS) encryption on all communication to clients. The company has honed the craft and from the scheduling touch panels and of identifying where the AV demand comes the Kramer Kronos server. from and meeting the need before it even Customers can be sure that sensitive arises. booking and scheduling information is David Margolin, vice-president for completely secure. marketing, Kramer Electronics, said that it For the last 37 years, Kramer has been is important to introduce AV to IT users and known to deliver innovation and fresh help them understand that is not just simply approaches to the AV experience. The providing hardware or solution installations company has a vast portfolio of products, alone. For Kramer which has KRAMER ELECTRONICS’ 37 YEARS become a Electronics, IN THE GLOBAL AV INDUSTRY IS A challenge, the keyword is experience. TESTAMENT TO ITS COMMITMENT but has also “Kramer’s TO PROVIDING TOP OF THE LINE encouraged philosophy has innovation. SERVICES TO ITS CLIENTS. THE always been The company COMPANY HAS HONED THE to address AV recently CRAFT OF IDENTIFYING WHERE launched challenges from a customer THE AV DEMAND COMES FROM Kramer@ perspective. We AND MEETING THE NEED BEFORE Work, a set of listen to customers meeting space IT EVEN ARISES. and avoid forcing solutions them to pick covering basic proprietary technology which we and any huddle spaces to large and complex divisible other leading AV manufacture has. You could meeting spaces. According to Margolin, this see this in the selection of product options is an example of their goal to provide a userwhich comes from Kramer,” Margolin said. intuitive meeting experience that is easy, powerful, and engaging. Top of the line products Kramer Electronic’s latest innovation is Focus on user value the AV over IP product line. The solution “For the IT department which manages these supports various compression standards environments, Kramer provides a complete and latency. set of remote AV Management tools to make The company has also gone above and sure the AV is providing user value. On top beyond by launching Kramer Academy, a of this, we have developed the best of its result of two years of work in developing kind, VIA, which is a wireless presentation a more comprehensive AV and IT training and collaboration product line that is world and certification programme. According to awarded. We aim at reducing time to start 60

SINGAPORE BUSINESS REVIEW | JUNE 2019

David Margolin, vice-president for marketing, Kramer Electronics

meetings, providing rich and collaborative user experience which supports any device securely,” Margolin said. The Kramer edge Kramer’s edge over its competitors is the understanding of the needs and motivation of both the system integrator which installs AV technology, and also the needs of the IT departments which own and manage AV technology. “We have positioned ourselves as the bridge between these two audiences. On top of this, we have put an enormous effort in providing the technology which is future proof and that would cater challenges in an AV/IT converged world,” Margolin added. Customers who want to know the future of AV can trust Kramer Electronics in leading the way. Despite the huge and nonstop influx of new technologies, Kramer Electronics chooses not to be swayed and focuses on providing customers with topnotch experience through best-of-breed technologies.

Designed smarter Built smarter Delivered smarter Commissioned smarter Proud winners of the Asian Exporting Awards â&#x20AC;&#x201C; Energy & Power Specialising in Fast Power roll out projects & turnkey EPC projects in T&D in the Asia Pacific region Australia. Mongolia. Myanmar. Singapore. W rjeglobal.com

MARKETING BRIEFING

Singapore brands are leveraging IG stories to create value and engagement

Instagram stories account for nearly a fifth of brand impressions, which indicates its strong organic reach.

hen Singapore Airlines bagged the most coveted recognition in commercial aviation industry - Airline of the Year Award - during the Skytrax World Airline Awards in July 2018, it speaks volume not only of the Asian carrier’s commitment to excellence and customer comfort, but also of its popularity amongst global travellers who use their services. A significant part of Singapore Airlines’ popularity is due to their impeccable usage of the internet and social media, particularly Instagram, in promoting their products and services and engaging the millions of clients they serve. A quick look at the Stories - a series of 15-second clips or photos that usually expire in 24 hours but can also be saved and pinned indefinitely - of Singapore Airlines’ Instagram account shows the level of craftsmanship and storytelling that the carrier’s marketing and social media teams have been showing. Some of the Stories also employ the best features that the tool has to offer - from making a game where users can tap on the Stories to help a fictional character called “Bert” have the best sleep ever in his business class seat, by helping him turn his seat into a bed, providing him a blanket, dimming his window, and giving him a pillow and a sleeping mask. Not only did the Stories allow better engagement with the airlines’ clients, but the tool also served as an effective information campaign for the state-of-the-art and top-of-the-line services that they offer, which include a seat that reclines into a bed in Singapore Airlines’ Boeing 787-10 Dreamliner fleet. “For brands looking to enhance their brand awareness and create a more personalised touch, utilising Instagram Stories is a great way as it enables brands to increase engagement and organic visibility,” said Charles Tidswell, Vice President for JAPAC at Socialbakers.“Singaporean brands which have excelled in using Instagram Stories to engage their audiences are Singapore Airlines and Changi Airport.” Singapore Airlines have also utilised the “poll” feature of

Instagram Stories and have used it effectively not only in better engaging with their customers but also in marketing their growing in-flight offerings to their travellers, which in the case of their stories include a poll asking people what movies they should watch whilst in the flight. The carrier also utilised the swipe-up feature, which allows users to be prompted to a separate web page for more information about their products and offerings. This is on top of the icons and stickers that Singapore Airlines have made available to their clients, offering them a whole pack to use when they travel, including the airlines’ logo. “It comes as no surprise that Instagram is the perfect platform to showcase visual content,” Tidswell said.

The volume of brands posting Instagram Stories has increased four times over the course of 2018

Charles Tidswell

Benny Chow

Changi Airport makes good use of IG stories to brand the travel hub as a tourist attraction

SINGAPORE BUSINESS REVIEW | JUNE 2019

Creating valuable narratives Research by Socialbakers suggest that the volume of brands posting Instagram Stories has increased four times over the course of 2018, with short 15-second clips boasting over 400 million daily active users. Tidswell also shared that Instagram Stories is a great way for marketers to generate organic content on the platform with all the interactive features it entails, as compared to the usual Instagram posts that are “consumed passively”. “Instagram stories account for about 19% of brand impressions (total number of times your Story was viewed),” he said. “Whilst this may seem insignificant, this actually makes up a third of impressions earned - an impressive indicator of organic reach. If a brand’s focus is simple just publishing posts, close to a quarter of impressions will be lost if Instagram Stories is not utilised.” The time limitation of 15 seconds, according to Firefly Photography Chief Marketing Officer (CMO) Benny Chow, is also helping reshape how the marketing departments of companies and brands approach their marketing campaigns, spurring creativity in a new platform that offers more interaction than ever before. Chow cited the example of Changi Airport, which organises a lot of events and attractions within the vicinity, making it not only one of the most premier travelling hubs in Asia but increasingly becoming a tourist attraction. Brands and companies need to have an understanding on what makes a good story in a storytelling ecosystem as Instagram Stories can be an indispensable tool for brands and companies to generate transparent content that is delivered both efficiently and with the intended effect. “Content does not have to be perfect - but rather the content pushed out has to resonate with fans and followers alike,” he concluded.

EDUCATIONAL

Transforming learning through creativity and style

With its range of high-quality posters and flashcards, MGC is the partner of choice for thousands of parents and educators nationwide.

tep into a childcare centre and you will most likely come across My Greatest Child’s bright and engaging educational posters. These visual aids, which are designed to promote learning for children aged 0-12, are trusted by over 40,000 parents and educators across Singapore and Southeast Asia. The company’s materials can be seen not only in childcare centres, but also in primary schools, enrichment centres, and even hotels. “My Greatest Child started out selling children books on 1st October 2008 at a bazaar in Jurong with just a few tables on a part-time basis. It was only until 2010 that MGC decided to operate on a full-time basis and started its first ever pushcart at Suntec City. We focused mainly on retailing and have since opened 5 permanent bookstores and monthly bookfairs,” says Jimmy Chia, Director of My Greatest Child. Whilst My Greatest Child has been around the educational materials retail sector for over a decade, the company continues to welcome

feedback from parents and customers, which is vital when it comes to designing these award-winning visual aids. The posters are also subject to constant updates in order to ensure improvement and accuracy.

My Greatest Child team at the Made In Singapore Awards

for children to draw, write or doodle on the posters without worrying about being unable to reuse them. Innovative book retailing My Greatest Child has 16 unique designs of Observing the lack of locally-made educational educational posters, which are categorised into posters in bookstores, My Greatest Child decided to craft their own posters based on the animals learning, numeracy skills, shapes and colours, amongst others. It takes the company requirements of parents and schools. “Most of our children books are imported from 18 months to see the results of these creative concepts and ideas that render to effective the UK and all children titles are chosen based learning for children. In June 2016, Popular, on their popularity and demand. Suggestions the largest bookstore chain in Southeast and feedback collected from many parents Asia, picked up their educational posters and played a huge and vital role in our collection of titles,” Chia notes. What sets My Greatest Child’s displayed them in more than 30 retail outlets. Besides catering to the local market, the educational posters ahead of its competitors company has also branched out to neighboring is their top-grade quality. The company uses high-quality inkjet CMYK printing colours, which countries, with educators from Southeast Asian nations purchasing posters for their respective make these posters brighter and more vibrant. Additionally, they also have a wipe-clean surface childcare centres.

THE

FOOD

ASIAN

EXPORT AWARDS

2018

Decades of providing food for people’s health and wellness

Century Pacific exports Century Tuna to over 60 countries globally, including the key markets of Middle East, North America and Europe.

hen Century Pacific Food Incorporated (CPFI) won in the Asian Export Awards 2018 late last year, the recognition not only underlined the company’s stellar growth in reaching new markets and shores, but also emphasised the largest canned food company in the Philippines’ commitment to providing its customers with canned products that offer the best taste and the most health benefits for their wellness.

our tuna product, but because it is Century Tuna,” said Sherrylou Marzo, CPFI’s Export Sales and Marketing Manager. CPFI, as the largest canned food company in the Philippines, is currently engaged in the development, marketing, and distribution of processed fish, meat, dairy, and coconut under the company’s own brand, as well as others. But it’s in the canned meat and canned fish, particularly in tuna, that the company has made its mark and retains its market leadership locally. Making a global mark Century Tuna has been a dominant market leader Best known for their Century Tuna brand, the for over 30 years in the Philippines, with its focus company has truly made its mark not just in the on superior taste and health benefits - something Philippines but all over the world, particularly in that is in line with the company’s common banishing the notion that canned foods do not purpose of nourishing and delighting everyone, offer any health benefits. everyday, and everywhere. “One of the biggest drivers of change in the “To continue building on health equity, Century food and beverage industry has been the raised Tuna leveraged on the many health benefits that level of awareness in health-related matters, and are inherent in tuna and continued differentiating Century Tuna has ensured [that] we are known itself amongst the slew of health brands via to be the healthy brand, [and] not just because of the Superbod icon,” said Marzo, explaining that

Century Pacific Team at the Asian Export Awards 2018

the Superbod concept was developed to allow people to look at Century Tuna as not only a food product with health benefits, but as an integral part of a “healthy way of life.” Marzo noted that in the past 4 years, CPFI and Century Tuna embarked on various marketing and strategy narratives to push the health and wellness concept attached to the brand, including dramatic transformations of celebrities from a “regular Joe” to health and wellness icons, or what CPFI refers to as a certified Century Superbod. (this has proven to be a hit in the Philippines, according to Marzo). “To drive consumption, the Superbod Diet and Exercise programme was published online,” she said. “This made the now iconic Superbod ideal accessible to the public.”

CO-PUBLISHED CORPORATE PROFILE

Providing sustainable solutions against disasters Resilient nations should leverage technology in the face of disasters brought by climate change.

hen Japan was hit by the strongest earthquake ever recorded in the country’s history in March 2011, Tohoku University Professor Shunichi Koshimura was in Tokyo Station, waiting for a next bullet train toward his home town Sendai at the moment of the 9.1 magnitude quake. A tsunami warning was raised by the Japan Meteorological Agency three minutes after the earthquake was triggered, and an hour after the devastating earthquake, waves of up to 30 feet high hit the Japanese coast, sweeping away cars and infrastructures, including nuclear reactors and power plants in Fukushima, about 140 miles or 230 kilometres from Tokyo. Over 18,000 people were confirmed dead or missing, according to Japan’s Fire and Disaster Management Agency. “I was very nervous and very concerned about my family and friends and everything around myself. So I decided to get out of Tokyo Station and get a rental car and drive all the way to Sendai, spending 18 hours on the road,” he said. “The tsunami warning was issued, but I have no idea what’s really going on or how extensive the damage is.” Koshimura, who teaches civil engineering, particularly in coastal engineering, and has expertise in tsunami modelling using computer simulation, talked about his experience, insights, and motivation to Singapore Business Review about how his personal experience in 2011 led him to leverage the development of technology in providing more reliable tsunami inundation forecast information to his native country, Japan, and how these technologies can be transferred to other countries. Technology versus threats This heightened focus on leveraging technology to combat vulnerability and threats come at a time when countries, are also becoming more vulnerable to the effects of climate change and extreme weather events. According to the United Nations Office for Disaster Risk Reduction, economic losses caused by climate-related disasters have soared over the past two decades, with $2.25t. For the 2011 earthquake and tsunami alone, Japan is estimated to have lost over $300b or about 6% of the country’s total gross domestic product in 2010. This is not mentioning the

SINGAPORE BUSINESS REVIEW | JUNE 2019

thousands of lives lost from these natural disasters globally that could have been prevented if there were enough informationdriven, technology-based solutions in place. Post-disaster tech-based solutions Technology can be extremely helpful in all phases of a disaster, from preparation to dealing with the aftermath and helping people and affected areas in recovery and rehabilitation. This is the case for WOTA, a technology firm that is trying to leverage technology, artificial intelligence, and big data to optimise water treatment process. Water is one of the most important things that people need, not just in post-disaster situations, but also in everyday life. Speaking to Singapore Business Review on the sidelines of the Building Resilient Nations and Businesses event in Singapore, WOTA chief executive officer Riki Kitagawa cited the experience of the 2011 earthquake and tsunami in Japan, where water became a serious issue for survival and sustainability of life and businesses in the affected area. “One of the big issues is that all the water treatment plants along the coast were inundated with water, so [they’re] contaminated,” he said. “For over a year, until all of them recovered even temporarily, water was not being treated and it was being dumped in the ocean so there’s a lot of issues

about pollution on the coast. We help by providing clean water to disaster-affected areas by deploying these units. But at the same time, we treat the wastewater so we’re not draining that into the environment.” Technology plays a big part in WOTA’s operations and outreach, given that it allows the company to scale up at a more impactful range, whilst also providing a stark possibility of replicating the technology and know-how to other countries, particularly the most vulnerable who are also considered as developing nations. Kitagawa noted that countries like Indonesia and the Philippines, two of the most vulnerable countries to climate-related disasters, can implement WOTA’s technology without the costly price tag because the company doesn’t require too much overhead given that majority of the process is automated through artificial intelligence and sensor systems, although people have to know how to use the systems. “Having AI is not just for automating everything. It’s also providing a way for users to learn about water and its infrastructure and how it is treated,” he said. “Individuals should actually think more about water and how their lives relate to it, the technology behind it, and how it would enable them to become more resilient in times of disasters.”

“Japan is estimated to have lost over $300b or about 6% of the country’s total gross domestic product in 2010.”

Threats vs Technology: The panel discussion was hosted by the Government of Japan in Singapore. Photo courtesy: Reuters Plus

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