MODUS Asia Edition | Q2 2016

MODUS ASIA Q2 2016 RICS.ORG/MODUS

rics.org/modus

ASK THE BIG QUESTIONS

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Q2 2016

IN THIS ISSUE RICS Awards, Hong Kong 14 / Make it big in infrastructure 27 / New tech, old buildings 34

Contents MODUS ASIA Q2 2016 RICS.ORG/MODUS

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11 PRESIDENT’S COLUMN Our profession needs to do more than merely comply with laws and regulations, suggests Martin J Brühl FRICS

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08 THINKING: PAUL SPAVEN FRICS How RICS is working to clean up the practice of “double-dipping”

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06 DIFFERENCE OF OPINION Are Asian investors using the right strategy when spending their money on overseas assets? We hear two points of view 07-13 NEWS IN BRIEF Essential industry news, advice and information for RICS members

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RONAN HAYES MRICS, QUEENSFERRY CROSSING INFRASTRUCTURE, P27

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MAGA S MAGAZ “Surveyors should not be intimidated by theDUSscale of infrastructure Z DU projects: the methods are the same as for any other job … It is a step up in terms of precision, but the first principles don’t change”

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14 FIVE STARS Marking the fifth anniversary of the RICS Awards, Hong Kong, with this year’s winners

44-45 CAREERS Keeping on top of your emails; CBRE Hong Kong’s Ada Fung MRICS

20 SPACE CRAFT Redefining the role of public realm in our urban environment

46 BUSINESS Do you need to be more client facing?

27 HOW TO GET AHEAD IN INFRASTRUCTURE Want to gain that big-project experience?

We ask five experts what it takes 34 NEW FOR OLD Advances in technology are helping surveyors peel back the layers of history 38 A SIGN OF THE TIMES Confronting the effects of climate change 42 LITTLE RED BOOKINGS China’s travel-conscious middle class pave way for investment in Asia’s hotels market

47 LEGAL 101 Have Hong Kong’s laws kept pace with the explosion in crowdfunding?

48 PROFESSIONAL DEVELOPMENT Keeping vigilant for conflicts of interest 50 MIND MAP Dr Marie Puybaraud, global head of corporate research at JLL, on the millennials’ workplace PLUS 49 Events + Surveyed

Views expressed in Modus are those of the named author and are not necessarily those of RICS or the publisher. The contents of this magazine are fully protected by copyright and may not be reproduced in any form without the prior permission of the publisher. All information correct at time of going to press. All rights reserved. The publisher cannot accept liability for errors or omissions. RICS does not accept responsibility for loss, injury or damage or costs that result from, or are connected in any way to, the use of products or services advertised. All editions of Modus are printed on paper sourced from sustainable, properly managed forests. This magazine can be recycled for use in newspapers and packaging. Please dispose of it at your local collection point. The polywrap is made from biodegradable material and can be recycled.

Q2 2016_MODUS A SI A 03

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Leading the way Leaders of the profession know that Continuing Professional Development (CPD) is essential to keeping skills and knowledge up to date and relevant. In joining the profession we have all committed to maintaining and enhancing our competence, knowledge and skills during the course of our careers.

This commitment to continued learning and professionalism is a vital component in building our collective reputation with clients, regulators, governments and many other stakeholders.

As an RICS member, you probably exceed the expected 20-hour minimum learning required each annual year.

We recommend setting aside a small amount of time to record your professional development for the year, while continuing to promote the benefits of the profession to your fellow RICS members, staff and colleagues.

The RICS designation represents leaders in the field from all over the world, and participating in CPD is an integral part in enhancing and protecting the reputation of our profession for many decades to come.

rics.org/cpd

Feedback USEFUL RICS NUMBERS CONTACT CENTRE +852 2537 7117 Enquiries / APC guidance / Subscriptions / Events / Training / Bookshop REGULATION HELPLINE +852 2116 9713 CONFIDENTIAL HELPLINE +44 (0)20 7334 3867 DISPUTE RESOLUTION SERVICES +44 (0)20 7334 3806 UK SWITCHBOARD +44 (0)20 7222 7000

BUILDING A CASE Sir, the latest Building Surveying Journal contained an article on how RICS is highlighting the role of its members in conservation.

The article referred to SPAB, Council on Training in Architectural Conservation, RIBA, Church Buildings Council, quinquennial inspections and RICS Certified Historic Building Professionals but I wonder if there could have been just one mention of the chartered building surveyor, who I assume would be the type of chartered surveyor likely to be involved in building conservation.

The reason I raise this matter is that, in my opinion, the public perception of the chartered building surveyor has declined over the past 30 years. This has been corroborated by recent personal experience and also the fact that I am advised that the designation “Chartered Association of Building Engineers” often attracts clients who are more impressed by the title “engineer” than “surveyor”.

I note in 2015 the RICS ran a programme to raise the profile of the global nature of the heritage sector through RICS Certified Historic Building Professionals. May I suggest a similar initiative to raise the public perception, prestige and profile of the chartered building surveyor, which would be of great benefit to the younger generation of the discipline.

John M Dunkin FRICS

Join the debate If you have any comments on any of the stories on Modus Asia, the editorial board welcomes you to send them in – in Chinese or English. We will publish them in their original format with an English translation.

Get in touch at editor@ricsmodus.com 如对亚洲版 Modus 的内容有任何回应， 欢迎以中文或英文电邮至编辑委员会。 阁下之意见将以原文（辅以英译本）刊登。 电邮地址为 editor@ricsmodus.com。

ARE YOU EXPERIENCED? Sir, Reading the latest Secret Surveyor column (p10, Modus Asia Q1 2016), I could not help but feel a bit disgruntled at the author’s comments.

Having recently gained my AssocRICS qualification, I am now looking to move into the commercial sector of the industry.

Understandably, I find myself caught in that catch-22 of having little experience, but no means of gaining any without joining the industry. What I wouldn’t give for three years’ experience, let alone 30.

Nonetheless, by no means do I feel “hard done by”. My situation is simply a result of my circumstances, and every cloud has a silver lining: to an employer, I am a blank canvas.

The author and I are in a similar situation, in t hat we must simply make the most of our situation and what we have to offer. Perhaps the author is expecting too much to be able to leap-frog those with less experience than her.

Max Girdler AssocRICS, Moginie James, Cardiff, UK

SELF HELP Sir, To the last Secret Surveyor (p10, Modus Asia Q1 2016), I have one piece of advice: become self-employed and run your own sole practice.

You are then in control of who you work for and the work you do.

I am a chartered land surveyor with one employee, and registered for tax, PAYE and VAT. I have run my business like this for the last 22 years and have never been happier, even when recessions have squeezed my finances to breaking point. I drive a very nice van rather than a flash car, because you can get the VAT back,and claim all the running costs against tax. I work from home, which keeps my operating costs to a minimum and the daily commute is really easy.

I have seen a steady growth in self-employed surveyors over the years. Some larger surveying firms have developed a database of selfemployed consultant surveyors, who they call upon when they need additional staff for specific jobs, and I know they find this to be a very flexible way to operate. There is no stigma to being a freelance surveyor, and the sense of freedom can be very liberating, but you also have to be aware of the responsibilities as it can be very lonely being in sole charge of your destiny.

Martin Rickman MRICS, Peterborough, UK

MODUS ONLINE

Read the latest and all previous issues of Modus Asia at rics.org/modus.

To unsubscribe your hard copy and receive a digital edition only, email your name and/or membership number to ricsasia@rics.org with the subject line “Unsubscribe Modus Asia”.

FOR SUNDAY Editor Oliver Parsons / Art Director Christie Ferdinando / Deputy Editor Andy Plowman / Contributing Editor Alex Frew McMillan / Senior Designer Jess Campe / Creative Director Matt Beaven / Account Director Karen Jenner / Advertisement Sales Director Emma Kennedy / Head of Display Advertising Marlene Stewart / Asia Advertising ROF Media, Bryan Chan, +852 3150 8912, byan@rofmedia.com / Production Manager Michael Wood / Managing Director Toby Smeeton / Repro F1 Colour / Printers ROF Media / Cover Image Rutger Paulusse / Published by Sunday, 207 Union Street, London SE1 0LN wearesunday.com / For RICS James Murphy and Kate Symons [UK] / Jeanie Chan [Asia]

Q2 2016_MODUS A SI A 05

Intelligence

News / Reviews / Opinions / Reactions

DIFFERENCE OF OPINION

What strategies should Asian outward investors adopt to achieve the best rate of return? Discuss.

ALTHOUGH THERE HAS BEEN A RAPID GROWTH IN REAL ESTATE INVESTMENT IN and from the Asia-Pacific region in recent years, Asian institutional investors face various challenges. There is intense market competition, a shortage of prime assets for sale in gateway cities, regulatory hurdles, and a shortfall in internal capabilities at the institutions themselves.

Several Asian nations have relaxed their regulations on outward investment. As a result, a large number of investors are making their first overseas acquisitions – with limited experience. As a result, they tend to adopt a similar approach to their domestic market when evaluating opportunities.

SIGRID ZIALCITA MANAGING DIRECTOR, ASIA-PACIFIC Prime offices in global gateway cities are typically first RESEARCH, CUSHMAN & WAKEFIELD choice and regarded as low risk. While this is an effective strategy, there is a high level of competition for such assets.

ASIAN OUTWARD INVESTMENT HAS DRAMATICALLY INCREASED Asian investors could benefit from being more flexible and in recent years, transforming the region from a net destination dynamic in their targets. They could move up the risk curve, for inbound capital to a net source of outbound capital. Asian investors have broadening their market coverage. One option might be moved in the right direction by increasing exposure to real estate in the logistics, which capitalises on ongoing structural changes in immediate aftermath of the financial crisis. Having acquired the expertise, the global economy and the growth of e-commerce. they are now diversifying by moving aggressively into core markets globally.

Newcomers may be tempted to rush into direct real-estate However, Asia-Pacific investors still lag their counterparts in Europe and investments without properly forming strategies for how to the US when it comes to allocations to the sector, at an estimated 2% manage those assets, paying little attention to management compared with 5%-7% globally. One of the reasons for this is the relatively issues such as leases and the need for capital enhancements. strong appetite for core investments. The corollary is that investors from But they could explore other options, such as open- and the region have limited exposure higher up the yield curve, such as in builtclosed-ended funds. They should also consider real estate to-core projects or niche sectors such as student accommodation. investment trusts (REITs).

There is a compelling case for moving beyond trophy assets into other Given these challenges, it is vital for investors to find the markets to enhance yields. A number of these alternative markets are thriving. right external advisers and local partners.

They offer stability and long-term insurance against uncertainty or risks at home. Attractive opportunities in such markets are emerging due to early mover advantages or, in some cases, lack of understanding of fundamentals, Quest for trophies or play the field? which is causing assets to be undervalued.

Join the debate at rics.org/linkedin, Still, these markets are often a challenging option for Asian investors, many or email editor@ricsmodus.com of whom still tend to prefer gateway cities, perceiving them as less risky, especially during the initial stages of investing abroad. As such, the risk of moving into secondary locations often outweighs the increase in yields – a situation that is likely to hold true for at least the next year or two.

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INTERVIEW ALEX FREW MCMILLAN ILLUSTRATION MARCUS BUTT

HENRY CHIN HEAD OF RESEARCH, CBRE ASIA-PACIFIC

Intelligence AIR SUPPLY

2.4%

What proportion of residential stock is available via Airbnb in these global tourist destinations?

1.7%

1.6%

1.4%

0.9%

Source: Savills Hotel Investment Report Q4 2015

Paris

Amsterdam

San Francisco

®

London

SHENZHEN METRO DEAL DERAILS CHINA VANKE HOSTILE TAKEOVER

3 month

0.5 welcomes RICS Japan Council 12 month two new members

Professor Yuichiro 8Kawaguchi 5 year MRICS has been appointed as 43 Chair of the RICS Japan Council, 10 year following the departure of Paul 198 Watkinson FRICS. The professor 50 year % change is director of the Institute of 5188 Studies International Real Estate at Waseda University, and chair of the Japanese Association of Real Estate Financial Engineering.

Professor Kawaguchi will advise on local market needs and promote the adoption of RICS global professional standards and qualifications, allowing RICS to bring best practices and confidence to the market.

Neil Hitchen MRICS, JLL’s international director and head of Japan markets, has also joined as the seventh member of the RICS Japan Council.

Successful debut for Asia Construction Conference

INFOGRAPHIC IAN DUTNALL

New York

CHINA

NEWS IN BRIEF rics.org/modus

Barcelona

0.5%

Close to 200 delegates from across the built environment sector attended RICS’ inaugural Asia Construction Conference, held in Hong Kong this January.

Delegates gained insight into topics such as the escalation of construction costs caused by the rapid growth in infrastructure, green building techniques, and sector-wide BIM applications.

The conference also considered the challenges and opportunities presented by the construction of Hong Kong International Airport’s third runway.

The conference also drew support from the Hong Kong SAR Government, which saw a number of senior officials deliberating on the city’s challenges and opportunities in delivering capital works.

CARRIAGE RETURNS China Vanke will take on Shenzhen Metro’s real estate assets in return for a 20% stake – diluting Baoneng’s holdings

China Vanke, one of the country’s largest developers, appears to have successfully fought off a hostile takeover by its largest shareholder through a deal with subway operator Shenzhen Metro.

Through the agreement, Vanke will spend as much as RMB60bn ($9.3bn) on acquiring Shenzhen Metro’s real estate holdings, sited mainly above subway stations.

Vanke plans to issue new shares and offer them to Shenzhen Metro, which would give the rail operator roughly a 20% stake in the developer if all shares are issued.

The deal would dilute a 24.3% stake that insurance company Baoneng Group has built up in

ON RECORD

Vanke, making it the largest shareholder in the developer. In a press conference announcing a 13% increase in profit last year, Vanke declined to say if it had discussed this move with Baoneng.

Hostile takeovers are extremely rare in China, particularly with property developers, which are normally majority-owned by their tycoon founders. But Vanke’s management owns only around 5% of shares in the developer, which was founded by the Shenzhen government. The government subsequently sold its stake in the developer and the Shenzhen Metro deal takes it full circle, as the subway operator is owned by the Shenzhen municipal government.

Trading in China Vanke’s shares on the Shenzhen stock exchange has been suspended since 18 December, and will remain so until 18 June. Its Hong Kong shares, however, jumped 14% after the Shenzhen Metro announcement.

Shenzhen Metro owns a potential 4.5m m2 in gross floor area in the city if all its sites were fully built out.

WHO’S SAID WHAT… AND WHY THEY’VE SAID IT

The policy is expected to boost housing demand by 90 million m2 every year NICHOLAS HOLT MRICS Knight Frank The easing of China’s decades-old one-child policy is expected to provide tremendous stimulus to the country’s housing market.

A single office complex in Toronto killed 500 birds in six hours MICHAEL MESURE Founder, Fatal Light Awareness Program (FLAP) Studies suggest the number of birds killed by collisions with buildings in North America alone is between 300 million to 1 billion. Large cities can be serious migratory hazards.

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“Skimping on proper technical due diligence is our industry’s ‘dirty little secret’ – the great taboo that people are not so keen to talk about”

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orking as an adviser to outward investors from Asia into the UK and continental Europe, I see the clear need to ensure that my clients are receiving the best independent advice, free from conflicts of interest. The practice of “double dipping ,” whereby one consulting firm represents both the vendor and purchaser, is currently under the microscope. There will be many other examples of conflict of interest that need to be examined, too.

To that end, RICS has now formed an advisory working group to develop new guidelines on conflicts of interest. Its members are currently examining feedback from a consultation initiated last year. They aim to have firm guidelines in place by 2017. Our behaviour as chartered surveyors must be ethical, and seen to be as such. There is a crucial need to communicate clearly with our clients and the world in general in a way that engenders trust in the profession.

When purchasing an asset for investment on another continent, there is a temptation to rely on the foreign teams of your local advisers to guide you through the process. This has significant advantages in that you maintain close and loyal contact with your local agency, while receiving high-quality advice from those experienced in dealing with that specific type of asset and within the legal frameworks of the target country.

Where this can start to move away from best practice and into potential conflict of interest is in carrying out the technical and management due diligence. There is a conflict of interest if they are performed by the same firm as the one that is negotiating the deal.

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Property assets in Europe are often of the highest quality, both in terms of the standard of construction and a transparent ownership or leasing structure. But all investors and purchasers need to have their eyes wide open to make sure the advice they receive is unbiased.

Technical due diligence involves investigating and assessing the risks associated with building assets or development projects. Usually, it will include an enquiry into the building-services installations, as well as the potential for environmental contamination or flooding, and risks relating to lease obligations. It may be tempting to employ a team to conduct the technical due diligence, including the building surveyor, from the agency working on the deal. But that could create problems, and it will be a conflict of interest.

The investment agent or negotiator will, naturally, be seeking to finalise the deal and“get it over the line.”That means there is a temptation to place pressure on the technical due diligence team to paint the rosiest picture of the property’s condition to the client. After all, no transaction usually means no fee for investment agents – and so that pressure would be intense.

There is a grey area between providing the “one-stop shop” service to clients and exposing them to additional risk. Often these risks will be compounded by the client’s desire to achieve a swift deal. This can lead to skimping on proper technical due diligence. It’s our “industry’s dirty little secret”– the great taboo that people are not so keen to talk about.

One of our Hong Kong-based clients recently told me that Chinese investors, in particular, regard London property assets as being of the highest brand standard – akin to a Gucci handbag or a Cartier watch. This prestige can tempt clients to avoid the process of technical due diligence altogether.

The RICS Rules of Conduct require us all to act with integrity and avoid conflicts of interest, but grey areas remain. The working group is focused on achieving greater clarity, with revised RICS standards on conflicts of interest.

It will then be our duty to inform or, dare I say, educate clients.

THE FINAL CONSULTATION draft of the new rules will be published at rics.org/coiasia

ILLUSTRATION ANDREA MANZATI

PAUL SPAVEN FRICS PARTNER, TUFFIN FERRABY TAYLOR

Intelligence

NEWS IN BRIEF

WE LIKE

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rics.org/modus

RICS presents manifesto for responsible business Will Myles, regional managing director of RICS Asia Pacific, has called for responsible practices to become “business as usual” across the sector.

Speaking at Connection 2015, the supply-chain sustainability conference held in Hong Kong in December, Myles drew attention to the recent UNGC-RICS report, Advancing Responsible Business Practices in Land, Construction, Real Estate Use and Investment.

“RICS represents professionals from a broad spectrum of land, construction and real estate. With our reach, we can be a powerful driver for corporate sustainability,” he said. “Responsible action needs to become ‘business as usual’. We encourage all businesses to reference the principles [of the report].”

Myles also announced that RICS had become the initiating partner of the Global Alliance for Buildings and Construction (GABC), established by stakeholders of the building sector at the 21st Conference of Parties in Paris.

The alliance will work to provide clarity and assistance to countries seeking to deliver against climate commitments.

GET SET The material is inflated using an electric fan, before being sprayed with water. After a day of drying, it is ready to use

Concrete canvas shelters What’s that? Imagine using concrete from a roll. That is the inspiration behind concrete canvas: a flexible, concrete-impregnated fabric that hardens when wet to form a durable and waterproof concrete layer. When inflated into small dome-like structures, the technique could be ideal for the rapid deployment of semi-permanent shelters in places such as refugee camps or disaster zones.

How does it work? The “building in a bag” arrives folded in a wooden crate, and once in position, an electric fan is used to inflate the plastic inner until it can support itself. Water is then sprayed on, and after only a day of drying, a 270ft2 (25m2) structure is ready to use. Whereas tents can wear out rapidly and need replacing, the shelters provide a hardened structure that has a design life of more than 10 years.

What else can the material be used for? Since its launch in 2005, concrete canvas has been used to replace conventional concrete for projects all over the world, including ditch lining, slope protection, remediation works and pipe protection. The company’s largest project saw the material being used in the Atacama region of Chile, where a concrete ditch was rapidly built to help divert glacial meltwater away from flooding a copper mine. concretecanvas.com

IMAGE 2016 WALDORF ASTORIA

INVESTMENT Dispute resolution training for Hong Kong members

BUYING INTEREST FROM APAC WEAKENS

In response to the exponential growth of dispute resolution and avoidance practices, RICS is offering a five-day mediation training programme for members in Hong Kong, starting 30 May. The training is accredited by the Civil Mediation Council, which is widely recognised worldwide.

Successful completion of both modules is recognised by the Chartered Institute of Arbitrators, and successful candidates may apply to be a member of the institute. Course fees are HK$41,000 for RICS members.

For more information, visit: rics.org/mediationhk.

Investors from the Asia-Pacific region are losing interest in buying more real estate, reports CBRE. Although 42% of investors say they plan to buy more real

BANG FOR BUCK Chinese insurer Anbang bought the WaldorfAstoria in New York last year for $1.95bn

estate in 2016, that is down from 54% in 2015 and 64% in 2014.

The principal cause of bearishness, cited by 46% of respondents, is the global economy.

A further 12% were concerned about their domestic economy and there were also worries about oversupply.

There was less concern, however, over interest-rate hikes.

Core assets, and properties in Australia, Japan and China, remain the most

prized. High prices are starting to become a deterrent, however, which CBRE suggests will lead some to move up the risk curve this year into secondary and value-add assets.

Experienced operators are expressing interest in emerging Asian markets as they push for higher returns.

Hotels have become the hottest properties, attracting interest from 14% of investors, compared with just 1% in 2014.

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SIBERIA COMES TO THE ANTARCTIC There are many flags in the frozen ground of Antarctica, but perhaps the most potent emblem amid the ice is the Church of the Holy Trinity, built from imported Siberian timber to service the needs of workers at Russia’s Bellingshausen Station. Several countries, including China and India, have an Antarctic presence, and competition for the continent’s resources will increase approaching the 2048 review of the current mining ban. At that point, the continent’s estimated 36 billion barrels of oil and gas will be up for grabs … but perhaps we can hope that demand for fossil fuels will have reduced significantly by then.

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73%

69%

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62%

54%

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Intelligence

OUT OF OFFICE Which sector is making the most efficient use of its workspace?

Source: CBRE

Government

Government

Real estate Real

estate

Hospitality/

Financial

entertainservices Hospitality/ Financial ment entertainment services

Media

Media

Manufact-

Education

Business services/ Business consulting services/

uring/ Manufacturing/ Education industrial Industrial

consulting

SRI LANKA

IMAGE PA IMAGES; COLOMBO PORT CITY ILLUSTRATION BERND SCHIFFERDECKER

ANCHORS AWAY FOR COLOMBO MEGAPROJECT 82% The Chinese company building a $1.4bn megaproject in Sri Lanka has said that the additional development, known as Port City,Provide is back on. resources to local authoritiesof The Sri Lankan government’s Ministry Ports and Shipping has sent a letter to the builder, the China Harbour Engineering Co, approving its construction. The Chinese company is a subsidiary of the Hong Konglisted, state-owned enterprise China Communications Construction Co (CCCC).

The project will reclaim some 576 acres 46%Sri (233 hectares) next to the port in the 43% Lankan capital, Colombo, on to which luxury sea-view apartments, a five-star hotel, mall, marina and yacht club will be developed.

Port City won approval under former president Mahinda Rajapaksa with great fanfare. But it was suspended six months Hong San Kong Francisco later, after Rajapaksa lost an election in January 2015. New president Maithripala Sirisena cited numerous problems over permits and concern over the environmental impact when his government put the development on hold in March 2015.

The scale of the project has been reduced from an initial 665 acres (269 hectares) of reclaimed land, including 49 acres (20 hectares) granted as freehold to the construction company. But the government has now stipulated that any land turned over be done so on a 99-year lease.

CCCC said when the project was halted that the move would cause losses of more than $380,000 a day. Chinese state news agency Xinhua claims that Port City will help create more than 80,000 jobs and be worth “millions of dollars” to the local economy.

2010 £274m

2011 £1bn

HARBOURING DOUBTS Port City project stalled in 2015 after problems with permits and concerns over environmental impact

58%

57%

47%

39%

26%

Improve skills & training

Improve access to public land

Loosen rules on Green Belt development

Ease environmental time frames

More garden cities

“The professional has a broader duty to society” 30%

MARTIN J BRÜHL FRICS RICS PRESIDENT 15%

ABIDE NO MORE London New Time Yorkto challenge the idea that it is enough for the profession to merely comply with laws and regulations

2012 £2.7bn

9% Tokyo In the7%lastParis edition of Singapore ModusMumbai Asia, I wrote that it is in the interests of

the Shanghai public for us Los -9% Angeles

to look afresh at what the public interest means in the modern world. Since then, we have held a public lecture on the topic at RICS -19% -22% in Parliament Square, and initiated a debate online. Perhaps inevitably, my -29% challenge generated more questions than answers. So, unusually for this column, what follows below are not the thoughts of your President, but a few of the thoughts many of you have offered. Some readers will hopefully recognise their own words.

RICS certainly should be taking a view on public interest, which can also be regarded as enlightened self-interest. We could perhaps take a closer look at some very practical considerations. For example, green infrastructure such as public parks have limited value on the open market, but significant value to society and the delivery of economic, health and social benefits. So while money invested in maintaining such land may seem commercially doubtful, 2015 it can produce a disproportionate health benefit to society. £5.75bn We might also look at the public interest implications of property as an investment vehicle, especially where this might distort markets and put residential property beyond the reach of most buyers.

When 2014 based on ethical issues, mere compliance with 2013 making decisions £1.7bn £2bn laws and regulations is not enough. All this might lead us to seek a definition of public interest, and yet attempts to impose a universal definition for every circumstance are impractical. Instead we should perhaps ask whether a profession genuinely believes that it is founded upon ethical, rather than simply technical or commercial, principles.

In other words, not only should a client be able to trust a professional, the professional has a broader duty to society. Barristers have a “duty to the court”, which bars them from knowingly telling lies before the judge, even at the expense of a client’s best interests. Medical professionals’duty to protect the population at large may override their duty of patient confidentiality.

From these and many other comments I have received, it is clear that professions must be open to public scrutiny. They have to find ways to express to practitioners and to society how the public interest is best served and where it is at risk.

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DTZ C&W ad_Modus Asia Apr-2016.pdf

dtzcushwake.com

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Intelligence

NUMBER CRUNCH

2017 140 2016 135

WHAT ARE THE TALLEST BUILDINGS COMPLETING THIS YEAR, AND WILL THE FLOOR WAR CONTINUE? Source: Council on Tall Buildings and Urban Habitat

SECRET SURVEYOR

“The surveying industry should, by its very nature, be able to attract the best of all graduates”

E

Last year, a record-breaking 106 buildings over 200m tall were completed (graph, right), taking the global total of skyscrapers past 1,000. To put this in perspective, there were 265 in 2000.

And despite a slowdown in China, 62 were built there in 2015, while more than 300 are under construction. By the end of this year, 110-135 new skyscrapers are expected globally, the five tallest of which are shown below.

xperience, application, endeavour and social skills are the essential qualities required to be a surveyor, not your education or family history.

I entered the surveying industry through the non-cognate route, undertaking a master’s in building surveying while in employment. As a chartered building surveyor I decided I preferred a more project-focused role and soon found myself in project management, and now, latterly, development management.

I am not suggesting that education is not important, but many programmes aimed at getting young people into the surveying profession advocate studying through specific real estate courses. This is clearly a popular and very important route, but what is the industry doing to attract entrants from other backgrounds and disciplines?

With its transferable skills and sociable atmosphere, the surveying industry should be able to attract the best of all graduates. In a time when the sector should be evolving to keep up with new technologies, we may find ourselves not opening the door sufficiently to those from different academic and social backgrounds.

RICS is a well-respected and recognised body, but let’s make sure we do everything we can to attract and retain the best people in the best industry there is. It is time we took the lead in our industry, similar to those in construction, who are attracting people from different backgrounds, ethnicities and with varying educational standards to the workforces.

Great strides have been made taking the RICS brand worldwide and bringing gender and race equality to the fore. But there is so much more we can do to reach the stilluntapped majority of students with many different qualifications and backgrounds.

599m 115 floors

ARE YOU INTERESTED in writing a future Secret Surveyor column? Email your musings to editor@ricsmodus.com

Ping An Finance Center, Shenzen

2015 106 2014 99

597m 128 floors 555m 123 floors 530m 111 floors

2013 74

427m 101 floors

2012 69 2011 80 2010 73

2009 50 2008 47

2007 31

Goldin Finance 117, Tianjin

Lotte World Tower, Seoul

Guangzhou Marina 101, CTF Dubai Finance Centre

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RESIDENTIAL TEAM KNIGHT FRANK The Hong Kong residential team at Knight Frank has now won this award five times in a row, and continues to build on its success in the market.

A prominent example of the team’s approach has been its work formulating a pricing scheme, and acting as the Hong Kong sales agent, for Wardian, a high-end residential development in Canary Wharf, London. As part of this project, the team produced an interactive, cinema-like exhibition that shows 360-degree views from different floors of the Wardian towers.

Knight Frank has also been active putting in place two forward-thinking digital systems for internal and external use. These include a residential database containing over 100,000 property entries and 80,000 client contacts, and a corporate residential relocation and home search tool.

IMAGE THE COURT OF FINAL APPEAL

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he presentation ceremony for this year’s RICS Awards, Hong Kong, held at the Grand Hyatt on 11 March, brought together professionals from across the built environment to showcase outstanding achievements. Each submission had been scrutinised by a jury representing a broad spectrum of markets. The panel looked for teamwork, professionalism, innovation, outcomes and achievement.

“The RICS Awards, Hong Hong always shows an increasing level of competition and commitment from real estate professionals, and 2016 is no exception,” said head juror Marco Wu Moon-hoi FRICS (left), Chairman of Hong Kong Housing Society. “Many awards were very well contested and the jury was extremely impressed with the nominations.

I hope this will inspire members of the industry to enhance their professional competence, and encourage more participation in the competition in the years to come.”

RICS Awards, HK

REFURBISHMENT/RESTORATION TEAM ARCHITECTURAL SERVICES DEPARMENT, HONG KONG SAR GOVERNMENT FOR THE RELOCATION OF COURT OF FINAL APPEAL TO THE OLD SUPREME COURT BUILDING Working with a heritage building is always a challenge, but when the property in question is as iconic as Hong Kong’s Old Supreme Court – which housed the Legislative Council from 1985 to 2011 – the stakes are even higher.

So when the Hong Kong SAR Government Architectural Services Department was tasked with relocating the Court of Final Appeal to the 100-year old building fronting on to Statue Square, they took a highly consultative approach, pulling together representatives from the Antiquities and Monuments Office, the construction team and the end user, to reach consensus and agree common goals.

Special care was taken to ensure that building services were appropriately concealed, while structural alterations were kept to a minimum. The Chinese and western roofs were restored to their original appearance as in 1912, while the prisoner-holding cells were adaptively reused as the court library, and the basement boiler room was converted into an architectural heritage gallery. »

FIVE STARS Now in its fifth year, the RICS Awards, Hong Kong is enjoying growing recognition in the industry, and more than 50 nominations were received for this year’s event. Here we highlight the winners

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RICS Awards, HK

CONSTRUCTION PROJECT TEAM ARCHITECTURAL SERVICES DEPARTMENT, HONG KONG SAR GOVERNMENT FOR KWUN TONG PROMENADE STAGE 2

PROFESSIONAL CONSULTANCY SERVICES TEAM KNIGHT FRANK Building on over 40 years operating in Hong Kong, last year Knight Frank performed more than 5,000 valuations, totalling almost HK$3,000bn of properties.

One project that exemplifies the team’s approach is its work securing the land grant for the West Kowloon Cultural District, a world-class integrated cultural and entertainment destination on a 99 acre (40 hectare) site.

Even straightforward land grant cases can take more than two years to complete in Hong Kong, but the Knight Frank team was able to secure the necessary approval from the District Land Conference in less than 18 months.

The team has also been consistently supportive of the Hong Kong SAR Government’s work in creating land from underground and cavern developments. One of the most recent of such projects has been Anderson Quarry Park, the first ever Hong Kong cavern to undergo comprehensive development to create commercial value.

OFFICE TEAM JOINT WINNERS: CBRE AND DTZ/CUSHMAN & WAKEFIELD This year the standards in the office team category were so high that the judges decided to recognise two winners.

The first of these is CBRE’s Office Services team, which completed 2.2m ft2 (204,400 m2) in 174 transactions last year, for clients including BNP Paribas, Citibank and Schneider Electrics. The last of these deals involved quick thinking and imaginative solutions to keep the client’s staff together in one space, while bridging a short-term lack of space at the client’s new office.

The second of the joint winners is DTZ/Cushman & Wakefield’s office team, which consists of 35 professionals and has specialised China, Japan and international client desks. In 2015 the team successfully implemented 172 transactions, totalling more than 2m ft2 (185,800 m2).

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Kwun Tong Promenade Stage 2 extends the existing Stage 1 waterfront promenade at the Kwun Tong Public Cargo Working Area to 950m.

Strong communication and teamwork were key to the completion of the project: a value management workshop was held between the client department, the project team and different stakeholders, such as members of the District Council and Harbourfront Commission. Furthermore, government departments such as the Energizing Kowloon East Office (EKEO), the Highways Department and the Drainage Services Department were all very supportive towards the accomplishment of the project.

Environmental sustainability was also a high priority for the project. For example, the promenade’s administration building can attain zero-carbon operation, while shading walls with vertical greening, low shelters, trees and misting to reduce solar heat gain. A pilot scheme also motivated companies within the supply chain to give their own creative suggestions for the reduction of construction nuisance to the surrounding area, and the contractor achieved a reuse/ recycle rate of 90% for construction and demolition waste.

INDUSTRIAL/LOGISTICS/ DATA CENTRE TEAM CBRE CBRE’s Industrial & Logistics Brokerage Services team has enjoyed a hugely successful year, despite the ongoing challenges of continued low vacancy rates restricting tenant movements and large transaction costs shrinking the number of transactions. The CBRE team completed 17 large-scale deals, transacting more than 1.5m ft2 (139,400 m2) – five times that dealt with in 2014.

One of the highlights of the year was the completion of one of the largest industrial leasing deals of the decade in terms of size, at Kowloon Godown, a warehouse property previously earmarked for residential redevelopment, and therefore a tough sell for commercial tenants.

Meanwhile, in the self-storage sector, CBRE completed major deals for three clients, representing 60,000 ft2 (5,574 m2) of lettings in total, despite a lack of available properties in the market of more than 15,000 ft2 (1,394 m2) and fierce competition from other industrial occupiers.

SUSTAINABILITY ACHIEVEMENT JOINT WINNERS: GAMMON FOR MIDFIELD CONCOURSE, HONG KONG INTERNATIONAL AIRPORT AND WHEELOCK PROPERTIES FOR ONE BAY EAST Gammon’s work at Hong Kong International Airport’s new Midfield Concourse included the construction of a five-level concourse building (above) with 20 aircraft stands, two taxiways, and extensions to both the South Runway Road and the Automatic People Mover tunnel from Terminal 1 – all without interrupting airport or aircraft operations.

The application of building information modelling (BIM) allowed the team to identify any problems with the design before works began, while also minimising the risk of defects, waste and delay, and bringing greater accuracy to material quantities. Also, the use of a bulk stockpile and rock-crushing plant made it possible to reuse over 70% of the excavated spoil on site, and the use of recast floor units and steel formwork systems saved 3,500 tonnes of timber.

Meanwhile, joint winner Wheelock’s One Bay East (below) used BIM to avoid clashes that would have led to over 7,000 tonnes of carbon dioxide emissions. The project is precertified LEED Gold, with provisional BEAM Plus Gold certification. Water-saving measures taken add up to the equivalent of 24.5 Olympic swimming pools per year, while solar control glass, energy-efficient cooling chillers, pumps, T5 fluorescent and LED lighting, motion and daylight sensors, and an efficient vertical transportation system contribute to in-use energy savings of nearly 6m kWh every year. »

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RICS Awards, HK

PROPERTY/FACILITY MANAGEMENT TEAM GREAT EAGLE FOR LANGHAM PLACE LAVATORIES Refurbishing and upgrading 40 lavatories in a 15-storey shopping mall with minimal customer disruption is no easy feat – and yet this is exactly the task that the team at Great Eagle set themselves when they undertook this major project at Langham Place.

The refurbishment, which involved upgrades to heating, air conditioning, electrical systems, plumbing, drainage, lighting and fire alarms, was implemented mostly during non-peak periods, and benefitted from close collaboration across the organisation.

Numerous green measures reduced environmental impacts and running costs, including low-flow water faucets and motion sensor-controlled LED lights. The human side was not forgotten, either, with intensive training for cleaning staff to ensure a higher-quality customer experience.

RETAIL TEAM LINK FRESH MARKET ASSET MANAGEMENT Link Fresh Market Asset Management works on trade and tenant mix improvement, understanding business needs through market research and using those insights to help coordinate masterplanning and development management.

In addition to this, the team also plays a key role in the branding, repositioning and financial modelling of all the company’s revitalised fresh market projects.

Strong teamwork and a creative, inspiring culture that leads on partnership and change management is a key part of the mix for Link. In 2013, a cross-departmental team was formed to develop new proposals to build on implemented ideas, and the work of this team led to a strategic road map for the fresh market portfolio.

This ethos of teamwork is further demonstrated by Link’s work with six single-lease market operators, transforming the conventional landlord-tenant relationship to a more collaborative partnership model.

CORPORATE SOCIAL RESPONSIBILITY PROJECT WHEELOCK PROPERTIES BEST DEAL OF THE YEAR JLL FOR INTERCONTINENTAL HOTEL, HONG KONG The $938m (HK$7.3bn) sale of the InterContinental Hong Kong last year was the largest ever single-asset hotel transaction in Asia, and the second largest in the world.

JLL acted exclusively on behalf of vendor InterContinental Hotels Group (IHG) in the cross-border marketing of the city’s pre-eminent luxury waterfront hotel. The hotel’s sale to the Supreme Key consortium of private investors and its subsequent leaseback aligns with IHG’s asset-light global corporate strategy, while maintaining the company’s presence as a hotel operator in Hong Kong.

As part of the sale process, and in recognition of the current high levels of outbound Chinese capital, JLL prepared specific marketing and due diligence collateral tailored for Chinese investors. A facade study was also conducted to present investors with a vision of the renovated, redesigned building.

The sale is the only significant trophy hotel to have transacted in the Hong Kong market in more than a decade.

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Throughout 2015, Wheelock made significant advances in enriching society through its ENRICH programme: Enliven, Nurture, Revitalise, Inspire, Collaborate, and Help.

The developer has exceeded standard green building certifications on 14 of its projects; carbon emissions at the group’s head office have been reduced; and a fund has been set up to encourage sustainable design in its developments.

At its project locations, Wheelock has been collaborating with local stakeholders to bring art to the community. For its Tsuen Kwan O scheme in Sai Kung District, Hong Kong Design Institute students were invited to create videos and hoarding designs, while the winning pictures in the developer’s Harbour Sights competition were exhibited at the Hong Kong Maritime Museum Meanwhile, Wheelock’s Project WeCan has been assisting underprivileged schools to inspire their students to reach higher than their circumstances might otherwise permit.

Wheelock’s employees have also volunteered on various projects, such as: helping mentally challenged students to develop their artistic talents; refurbishing the homes of elderly citizens; and co-organising the Community Chest’s Swim for Millions, which helped raise more than HK$4m.

LIFETIME ACHIEVER MICHAEL J MOIR FRICS, HONG KONG JOCKEY CLUB The judging panel focused on three qualities in their appraisal of candidates for the Lifetime Achiever category: contribution to Hong Kong’s overall built environment; ability to serve as a role model for real estate professionals; and contribution to the community through improving quality of life for the people of Hong Kong.

Working as a director at Swire Properties throughout the 1980s and 1990s, Michael J Moir FRICS had a huge impact on the development of Taikoo Shing in Quarry Bay, and was instrumental in the acquisition, creation and success of Admiralty’s Pacific Place development.

Over the past six years as director of property at Hong Kong Jockey Club (HKJC), Moir has played a pivotal role in transforming the organisation and its physical assets into a world-leading and well-respected sporting and racing organisation. He has been an ambassador for best practice and innovation in strategic asset management across Asia, including the transformation of assets across all segments of the property portfolio, particularly in the introduction of asset health processes and procedures at HKJC. Finally, his involvement in the charitable arm of HKJC has also been vital to its mandate to give back to the local community, and he has led several projects, most recently the revitalisation of Central Police Station compound. n

PANELISTS

Meet the jury

YOUNG ACHIEVERS JOINT CERTIFICATE OF EXCELLENCE WINNERS: GARY WALTER MRICS, COLLIERS INTERNATIONAL; AND LEO MING-YAN LO MRICS, CROWE HORWATH (HK) CONSULTING & VALUATION As a member of Colliers’ valuation and advisory team, Gary Walter MRICS has been instrumental in building up the firm’s business and professional standards, plus a strong network of local partners. His ability to manage and co-ordinate large projects is evidenced by his work valuing more than 1,200 properties in almost 50 countries, and as co-lead in assessing key harbour-front sites in Hong Kong.

Leo Ming-yan Lo MRICS, meanwhile, possesses over 12 years’ experience in the general practice surveying industry and is the man behind two start-up proptech companies – one of which is a real estate crowdfunding platform called Property Seeding, supported by the Hong Kong Science and Technology Park. He also plays a proactive role in the industry, delivering talks at seminars and conferences.

Head Juror: Marco Wu Moon-hoi FRICS, GBS Chairman, Hong Kong Housing Society Guy Bradley MRICS Chief executive, Swire Properties May Lam Senior vice-president, corporate services, Li & Fung (Trading) Ling Kar-kan JP Director of planning, Hong Kong SAR Government Philip Lo FRICS Chairman, Rider Levett Bucknall Kevin Poole Acting executive director, Third Runway, Airport Authority Hong Kong

David Tang MRICS Property director, MTR Corporation Chris Webster Dean and chair professor, Faculty of Architecture, the University of Hong Kong Andrew Weir Regional senior partner, Hong Kong and global chair, real estate and construction, KPMG China

RICS AWARDS 2017 Could your team or project be a winner at next year’s RICS Awards, Hong Kong? Visit ricshkawards.com for more information about the 2017 awards. Nominations open September 2016.

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Designing good public realm that responds to the people who use it is no

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walk in the park.

How are developers and planners rising to

such a challenge?

Words George Bull

Placemaking

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IMAGES BLOM; IWAN BAAN (PREVIOUS PAGE)

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Placemaking

iananmen Square in Beijing is a featureless expanse of concrete. Encircled by lanes of choking traffic and with security cameras peering down from every lamppost, it is not a place to sit in quiet contemplation. In fact, sitting is actively discouraged. Contrast this with Naqsh-e Jahan Square in Isfahan, Iran.

Although still accessible to traffic, central gardens, fountains and seating areas make it a popular social place. Framed by intricate buildings and shaded arcades, the scale feels more personal, more usable. It endures today as the focal point for the city, as it has done for hundreds of years.

Both are among the world’s most iconic civic spaces, but that is where the similarities end. What Naqsh-e Jahan Square succeeds in – and where Tiananmen fails – is creating a place that works on a human scale.

At 10 acres (4 hectares), Bryant Park in midtown Manhattan lacks the grandeur of many civic spaces, but is arguably one of the most intensely and diversely used places in New York City. Surrounded by mature trees and shrubs, the park incorporates everything from cafes and bars to areas for chess and boules. There is ice skating in the winter and open-air movies in the summer. It even has that essential requirement of life in the 21st century: free, high-speed wifi.

Bryant Park typifies the attributes that make a successful space: it is easily accessible from key buildings and transport hubs, and is a comfortable environment, with ample seating areas under shade and in sun to encourage people to linger in all seasons. It is also representative of the kind of funding models that have emerged as public-sector cuts have deepened and awareness of the business benefits of public space has grown.

“Because the park is privately managed by a not-for-profit organisation, a cooperating

SQUARE ROUTES London’s Leicester Square (left of picture) and New York’s High Line (previous page) were among the most unloved spaces in their cities prior to redevelopment

business improvement district and a neighbouring property owner, it enjoys a much larger budget than it would under city management,” says urban development expert Graham Coutts FRICS, international director of strategic consulting, Asia-Pacific, at JLL. “This reflects the value that the surrounding owners perceive in its amenity and underscores the value that wellmanaged spaces can create.”

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ver the past 10-15 years, more enlightened developers and investors – particularly those with a long-term vision – recognise that value is not simply achieved through maximising the amount of saleable or leasable floor space.

Success lies in creating destinations that people want to visit, linger in and return to.

At Tokyo Midtown, for example, Mitsui Fudosan developed 6m ft2 (557,000 m2) of offices, hotels, residential, retail and leisure among plazas and gardens. Home also to the Suntory Museum of Art, it is one of the city’s most popular destinations.

Or take the High Line in New York, now considered a touchstone in public space projects. Before its inception as a park in the sky, most New Yorkers – including thenmayor Rudy Giuliani – wanted the old elevated railway torn down. Today, it is the city’s second most popular tourist attraction and has generated in excess of $2bn of private investment alongside it.

These spaces confer significant value on their surroundings. Landlords are now telling David Bannister MRICS, director at London-based agent Nash Bond, that what makes the building is what is on the ground, because that is what attracts occupiers and enables them to charge higher rents.“Getting the feeling right at the building’s entrance has become significantly more important,” he says.“A tenant looking for 10,000 ft2 (930 m2) is unlikely to take a place that has no vibrancy on the ground floor, as that would not meet the requirements of its staff.”

The accusation that is often levelled at developers is that they only invest in the public realm if they have to. But Guy Bransby MRICS, director, planning and development at JLL in London, says that, in his experience,

Most of our clients are employing public realm or landscape consultants from the outset of a scheme ll

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GUY BRANSBY MRICS JLL

that accusation is unfair. Clients are spending more money and time on public realm schemes voluntarily.

“Most of our clients are employing public realm, landscape or public art consultants from the outset of a scheme. And it’s not just about hard or soft landscaping any more – the ground floor is becoming another part of the building,” says Bransby. Developers understand that it drives the economic performance of the asset, either through increased sales, rental values or greater room occupancy in the case of hotels, he suggests.

And even if there is limited public access, it can also add an amenity value – space can also be enjoyed if you have a view of it.

It also gives buildings an identity, Bransby adds. “In London, people know that the ‘Cheesegrater’ [the Leadenhall Building] has three stories of open space at its base and that they can go to a sky garden at the ‘Walkie-Talkie’ [20 Fenchurch Street].

Developers realise that the quality of the space reflects on them.”

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andowners are also investing in public space to improve the quality of their central London holdings. Since 2002, the Crown Estate has invested £25m ($36.2m) in public realm improvements as part of its Regent Street Vision. It also paid attention to the connecting spaces, commissioning transformational projects such as Atkins’ award-winning diagonal crossing at Oxford Circus – a design inspired by Tokyo’s famously efficient Shibuya crossing.

Making the spaces that connect, such as streets and pavements, more people friendly, generates more activity in those spaces that collect: squares, parks, even shopping malls.

How these fit together is very important, says Gordon Brown FRICS, principal at Chicago-based Space Analytics.“If you look at renaissance Florence, you’ll see that the buildings come right up to the property lines and there’s a lot of space for people. It’s this direct connection between private space of a certain kind and public space of a certain dimension that makes things work.”

Our love affair with the car, says Brown, changed this dynamic from smaller units »

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Flexibility within the public realm is important …

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MARIE BURNS Burns & Nice

that were interconnected to large units that were less accessible on foot. For many cities, particularly in the US, the result has been more than 50 years of constrained pedestrian movement and a separate public and private space.“That separation has led to diminished public space. Now we ascribe value to it, but the physical mechanics no longer enable the kind of activities that we want.”

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IMAGE ALAMY

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rojects such as the Oxford Circus crossing are part of correcting these physical mechanics. As the idea of the liveable, walkable city has come to the fore, attitudes to planning have changed, often resulting in safer public spaces with reduced traffic connections. As the number of people walking goes up, commerce typically responds. One example that captures this is outdoor seating provided by cafes. A 1980 study by Copenhagen-based practice Gehl Architects discovered that there were fewer than 230 seats outside cafes in the Danish capital. Today there are 5,000. From two kerbside cafes in 1983, Melbourne has become one of the cafe capitals of the world, as a result of people-first urban policies that have increased daytime footfall by 40%.

When landscape designer Burns & Nice reviewed the original brief for the redesign of London’s Leicester Square, it decided to focus on the square itself. The practice’s winning design expanded that to respond to the nine connecting side streets. Four paths now radiate out from a central fountain and gardens, neatly scooping up pedestrians from Chinatown to the north and carrying them south to Trafalgar Square and vice versa. Each of the side streets has also been redesigned to achieve consistency and uniformity as a city block.

“People never used to walk through the square, now they’re choosing to cross the gardens. It’s changed pedestrian movement and that affects people’s memory of the city,” says Burns & Nice founding director Marie Burns.

Since it reopened in 2012, Leicester Square has attracted inward investment totalling £500m, as well as 500 new workplaces,

Placemaking

claims Burns & Nice. That is just one measure of its success, though. Designing for the public realm is about balancing competing interests. As Burns says, the challenge is to create a comfortable space that can not only accommodate increased footfall and a better retail experience, but also community expression and events, so that it becomes a destination in itself, rather than simply a means of getting from A to B. “Flexibility within the public realm is the important thing. Part of the success of Leicester Square is choice. People can rendezvous there – they don’t have to be a consumer or feel that they need to have a purpose to go there,” she says. Consider the 200m-long curvilinear white granite “ribbon” that provides informal seating along the square’s gardens. It is available at any time of the day – or night, when it is lit from underneath, giving the impression of floating on air.

The most successful public spaces allow for serendipity. Some, such as Superkilen in Copenhagen, cater for the chance encounters that bring a community closer together.

Running through Nørrebro, one of the city’s most ethnically diverse neighbourhoods, this ambitious urban park weaves together the stories of the people who live there.

“We have a word in German – Hintergrundrauschen – to describe the idea that the universe creates background noise,” says Martin Rein-Cano, co-founder of Berlin-based Topotek 1, landscape architect

on the scheme. “When you move to a new place you are in a soundless space – you have to relearn this Hintergrundrauschen and this is the case for many migrants. With Superkilen, we wanted to give space to the culture and objects that weren’t Danish but that people brought with them.”

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ommissioned by the City of Copenhagen and philanthropic investment organisation Realdania, the project asked residents to nominate specific objects from their home countries.

These were then either produced in a 1:1 copy or bought and transported to Copenhagen.

Throughout the park are 100 objects from 50 different countries, including picnic benches from Armenia, palm trees from China and even a playground slide from Chernobyl.

Each object is accompanied by a small plate describing its story in both Danish and the language of its country of origin.

Since it opened in 2012, Superkilen has become the 10th most visited site in Denmark, says Rein-Cano. “It’s worked well in creating respect. No one went

[there before] – it was a deprived area.

Suddenly it’s an area where people go.”

It seems clear that designers, policymakers and developers increasingly understand the role good-quality public space has in making cities more liveable, competitive and attractive to investment.

This realisation has come hand in hand with debates over how those spaces should be paid for in an age of cuts, and who really owns them. But while the development model is changing, one thing remains constant: public spaces that thrive put people first. n DOWNLOAD the RICS report on the private management of public space at rics.org/publicrealm

PLANT HIGHER The Sky Garden at the top of the “Walkie-Talkie” in London is redefining public space in private developments

CASE STUDIES

Sense of place, or waste of space?

Danish practice Gehl Architects is a globally respected authority on people-centred urban design. Its Public Space/ Public Life surveys have informed Copenhagen’s urban policies since the 1970s. Esben Neander Kristensen, project manager at Gehl, selects his public space hits and misses.

Piazza del Campo, Siena, Italy Piazza del Campo is well dimensioned and the buildings surrounding it are never more than six floors tall. This means there’s little downward wind rush, which helps maintain the microclimate in the piazza. It

has “soft edges”, which means that there is always lots of things happening in the space surrounding the piazza: bollards to rest against, waiters serving outside tables. Verdict: HIT.

Although the total space is large, which works well for events, it has been divided up into smaller nooks and crannies that make the scale more comfortable. Verdict: HIT.

Federation Square, Melbourne, Australia One of the main events spaces in the 2006 Commonwealth Games, Federation Square has done that rare thing and survived as one of the city’s daily spaces. It’s an active place: a lot of people pass through it but they also linger. There are natural areas for seating and shelter from the sun and rain.

Sergels Torg, Stockholm, Sweden The positive thing about Stockholm’s main square is that it is connected to the subway, so it generates a lot of footfall.

But people don’t linger here unless they have to and that has ramifications for the types of activities that can happen in the space. For example, the buildings overlooking the square

are monotonous, so instead of slowing down to look or explore, people tend to speed up. It’s a transient place. Verdict: MISS. Boston City Hall Square, Boston, US Boston City Hall is a 1960s brutalist building, and that modernist thinking has spilled out into the square. Most examples of public spaces that don’t work well are to do with over-scaling and this square is a big, windy and hostile place.

There’s little to recommend it: no interesting paving, trees or seating, and not much activity going on either. Verdict: MISS.

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Infrastructure

Big budgets. Big scale. Big opportunities.

No other sector offers as much scope for surveyors as this. Modus meets five professionals to find out how to make it big in this biggest of markets Words Roxane McMeeken Illustration Aleksandar Savic^

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“SPECIALISE IN A NICHE” SIMON LONGSTAFFE MRICS HIGH SPEED TWO, UK

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imon Longstaffe MRICS is in charge of the largest – and probably most controversial – price tag in UK infrastructure. He is head of estimating and cost management for High Speed Two (HS2). While not everyone has the stomach for such a high pressure job, Longstaffe’s journey to the role is instructive for anyone hoping to get ahead in infrastructure.

The planned super-fast rail line that will connect London and Birmingham initially and then extend to Manchester and Leeds, is rarely out of the headlines. The cost of the project – now heading north of £55bn ($80bn) – and whether the resulting shrunken journey times will pay back sufficient economic benefits, has been under more or less continual scrutiny from the media and politicians for the past five years. That was the point when HS2 began transforming from a proposal into the live project that it is today – with enabling works starting next year.

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Longstaffe, who has been involved with the project since 2011, says: “The level of public interest really hit home the first time HS2 was discussed on [BBC show] Newsnight. On the screen behind, a huge number loomed and that was my figure. The scrutiny is understandable – public money is funding this project, so it is imperative that we deliver value for money.”

With the project’s first phase not due to be completed until 2026, followed by the second phase in 2032, it is clear that the costs of materials and personnel could fluctuate dramatically over this period.

Longstaffe is tackling the herculean task of cost estimating this unwieldy programme by creating a pioneering “5D” BIM model,

Infrastructure

which links 3D design information to the fourth dimension of time, and the fifth, which is cost. This bespoke digital cost estimating system comprises a model of the railway that will eventually allow an estimate to be produced of a particular cost of a stretch of the line, including the costs for elements such as land acquisition, people and civil engineering works. The cost applies to both the specified location and the point in time when the line’s construction will reach that location.

Populating this system requires adding around 2,500 “assets”, which include stations, tunnels, bridges and sections of track. “This will change the way quantity surveying is done,” says Longstaffe.“We can apportion inflation at each point related to the assets that we are constructing at that time, rather than smoothing out costs over the life of the project. For each asset we will also be able to extract the cost, schedule and risk, which will mean we can benchmark similar assets against each other, providing us with a more accurate estimate of costs.”

Although the technology might be new, this level of detail combined with huge scale is typical of infrastructure projects, and Longstaffe believes this is a key factor of which anyone hoping to follow a career in infrastructure should be aware. He advises: “Avoid being a generalist and specialise in a niche instead. The complexity of projects means that you need to understand a lot about how the infrastructure you are building fits together, and that takes deep experience of the particular field. For HS2, we are designing based on passenger demand forecasts, which means supporting certain numbers of trains at certain times, each moving ‘X’ number of people. You have to create timetables for trains based on this information, and this has to fit with your signalling infrastructure and buildings.”

Working on cutting-edge builds such as HS2 takes even more specialist knowledge than an average rail project, because the requirements are more exacting. “Overhead lines are built within much tighter tolerances – for normal rail it can be around six inches but for high speed it’s millimetres. The path of the line also needs to be flatter and curves must be less sharp. All this adds to what’s involved, so you do need to be an expert.”

“REMEMBER TIME IS THE BIGGEST COST” GILLIAN COTTLE FRICS SLATTERY, AUSTRALIA

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hile working for Currie & Brown in the mid-1990s, Gillian Cottle FRICS moved from the UK to Australia. At the same time she switched from construction to infrastructure. Cottle is now director and state lead for Slattery, an Australian quantity surveying firm, in New South Wales (NSW).

Cottle’s first assignment was quantifying the construction of a massive coal handling plant in the NSW bush. The project taught Cottle to use tactics that she continued to apply in her ensuing career, right up to her current job. Cottle is undertaking a cost review of the redevelopment of 20 Sydney area train stations to enable wheelchair access and the construction of 40 commuter car parks.

“On the coal plant I discovered quickly that while working in infrastructure may seem different to construction because the projects are so much bigger, the sector requires the same quantity surveying skills, it is just that everything is supersized,”she comments.“The coal plant, for example, required me to price 96 km [60 miles] of cabling. But you still use core skills like working out quantities, monitoring man hours, managing budgets and adding up the final account.”

However, where infrastructure differs from more standard construction work is that projects are stretched out over »

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longer periods. The trickiest element of these drawn-out programmes, however, is that they frequently happen in a live environment – which in itself causes timescales to extend even further. “The inability to construct continuously could easily mean that works that could be done in six months become a three-year job – and that means they’re going to cost a lot more.

Consider how much longer you’ll need to hire plant for, for example.”

The Sydney rail programme is a case in point. It involves adding lifts, footbridges and ramps to fully operational stations in a busy city. Cottle says:“The stations can only be closed for up to 48 hours at a time and then you have to work around the clock to do as much as you can during that period.

So you don’t price this kind of job by working out a cost per kilometre of track, as you would for a brand-new line in the middle of nowhere. You have to be practical about it: don’t simply add up quantities. Instead, think about how the works will actually be constructed.”

The cost of managing the complications of working in a live environment can, in fact, equal that of what Cottle calls “actual costs”, such as labour and materials. She illustrates this point with her experience of conducting a peer review in 2014 of the costs of building Sydney’s CBD to Eastern Suburbs Light Rail. “This was a brand-new light rail system in the middle of the city, so it was extremely difficult to access. Before you could get anywhere near starting to build, you had to move electricity, gas and telecommunications lines. It wasn’t easy and the costs surprised people.”

Giant projects within cities also require the quantity surveyor to think about how the community will be affected by the works. On the current Sydney rail programme, Cottle says: “You have to consider the people living near the stations, especially when they are closed or when you’re doing noisy work.

You might need to put up those living really nearby in a hotel for the weekend.

We also plan to add noise insulation to some properties near stations.” In addition, community liaison officers are employed to keep people updated and collect feedback.

These initiatives, of course, add extra costs.

Cottle also offers some advice specifically for women who are looking to get ahead in infrastructure: “In this sector, being female is not an issue if you know your stuff.

As soon as people realise you know what you’re talking about, there is no problem and you will get a lot of respect. You do have to prove it though, that’s the difference.”

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“DON’T BE INTIMIDATED BY BIG SCALE” RONAN HAYES MRICS QUEENSFERRY CROSSING, SCOTLAND

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eomatics expert Ronan Hayes MRICS is the survey manager on the Queensferry Crossing, the £1.4bn ($2bn) bridge being built across the Firth of Forth between Edinburgh and Fife in Scotland. The 1.7-mile crossing will be the world’s longest three-tower, cablestayed bridge, according to the Forth Bridges Forum, a partnership between public sector bodies and infrastructure owners. It comprises approximately 150,000 tonnes of structural concrete and 30,000 tonnes of steel – with the latter alone weighing the same as 75 Boeing 747s.

It is Hayes’ job to ensure that this gigantic, recordbreaking structure is constructed to minute tolerances.

Hayes oversaw the initial survey of the site, including the marine aspect. Now, with the works well under way and due to complete in 2016, he runs the systems that ensure construction is in the right place by guiding each of the components of the bridge to fit together. As nail-biting as this sounds, he says: “Surveyors should not be intimidated by the big scale of infrastructure projects: the methods of survey are the same as for any other project. It’s about working out where you are and establishing a solid geodetic network: you use GPS and you measure angles and distances to work out coordinates. It is a step up in terms of precision but the first principles don’t change.”

Hayes maintains that this even applies to the submarine elements of the project. These started in 2012 with the precise placement of huge steel caissons in the seabed to form foundations for the north and south towers of the bridge. The caissons acted as watertight moulds in which the concrete for the foundations could be poured underwater. The biggest caisson is one of the largest of its kind in the world, at 32 metres high by 30 metres in diameter.

For Hayes, it is precisely this giant scale that draws him to infrastructure: “It’s a privilege to be involved with a project of such significance. It’s a once-in-a-lifetime experience.”

Infrastructure

“THERE IS NO PERFECT SOLUTION” NICK TOWNSEND MRICS TURNER & TOWNSEND, HONG KONG

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ast year, Hong Kong’s government approved a HK$141.5bn ($18bn) project to add a third runway to Hong Kong International Airport. The plans must allow for efficient construction of a project funded out of taxpayers’ pockets without affecting the timeliness of a single flight. Oh, and did we mention that the site for the runway doesn’t actually exist?

The reclamation of the required 6.5 km2 of land from the ocean is one of the site-specific issues facing Nick Townsend MRICS, managing director for north-east Asia at Turner & Townsend, which is consulting on the masterplanning, procurement strategy and risk management of the project.

Clients on infrastructure schemes are, to a fault, experts with deep knowledge of how to operate in a very specific niche, Townsend notes. But, inevitably, this type of project presents challenges that must be overcome for the first time.

To that end, professionals must give an honest assessment of their capabilities to the client. They must then encourage the client to explore their own weaknesses and where they will need help. “There’s no perfect solution, but we’ve got t0 get an optimal outcome for that particular project,” he says.

Young professionals need to be open to new ideas, and should encourage both client and contractor to be open,

as well. “What we did last year may not be good enough next year. They need to be willing to accept that.”

Townsend feels that a new approach to project management should reward contractually not only hard targets, but also soft skills such as encouraging all subcontractors to share new best practices – even with their competitors.

Would that not then result in giving up a competitive advantage? “Ideas are generally protectionist – we don’t want to share them – but I don’t think they are,” he asserts. “They need to be encouraged to recognise the opportunities.”

There is no doubt that there is an extra element of risk entering an infrastructure project – one that can also provide an extra jolt of satisfaction on completion if it is well done.“You can’t just view them as a building project for getting a return,” says Townsend. “These are economical and societal investments to improve our lives.” »

Q2 2016_MODUS A SI A 31

Infrastructure

“CONTROL PROJECTS, NOT JUST THE COSTS”

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hink gas pipelines sound boring? Think again, says Chris Soffe FRICS, chief executive of Gleeds US. The giant scale and thorny complexity of the cost consultant’s two current pipeline projects are certainly awe inspiring – and the way that they are being run is revealing for anyone building a career in infrastructure.

Gleeds is involved with two large metropolitan liquefied natural gas pipeline systems, in Chicago and Atlanta, for an energy services company. “The pipeline systems throughout both cities now need upgrading in terms of capacity, reach and safety,” comments Soffe. The Atlanta programme, for example, involves 32,600 miles of pipe.

It includes a $275m, four-year sub-programme to replace no less than 756 miles of pipe from the 1960s, 70s and 80s by 2017.

These needs result from the growth of the cities’ populations and the ageing of existing infrastructure. With the combined populations of the Chicago and Atlanta metro areas totalling some 16 million, delving beneath these cities to work on subterranean pipelines is far from straightforward. Not least because the cities have expanded since the pipelines were laid: “They initially went through agricultural areas but now they’re passing in proximity to high-rise buildings, creating a whole new level of risk,” explains Soffe.

For both cities, therefore, the projects involve much more than building and replacing lengths of pipe. Soffe says: “These programmes involve acquiring land, environmental considerations, political considerations and reporting requirements. They really are complex.”

To manage this tangle of risks and obligations, Gleeds is providing a project controls service. Once the sole

32 RICS.ORG/MODUS

preserve of the US industrial sector, demand for the discipline in the wider infrastructure market is on the rise globally. Gleeds recently transferred a project controls expert from its US office to the UK. The service involves managing not just costs, but also simultaneously risk, schedule and performance. Soffe says: “You use cost schedules, cost indices, performance indices and logic-linked schedules [which link project processes logically]. This allows you to see immediately the effect on the rest of the programme if something in the schedule moves – whether it happens earlier or later than scheduled – as well as the impact on costs and performance.”

Therefore, project controls is essentially cost management, combined with schedule and risk management. Quantity surveyors, then, already possess many of the skills required to perform the service. Soffe says: “A surveyor needs marginal extra training to be able to deliver project controls, they really just need to learn the scheduling and risk management aspects of the job.”

In the US, Soffe says that although cost engineers are ahead of quantity surveyors in providing this service, “they tend to reside in heavy industry, so there is a real opportunity for professionals on the civil [engineering] side to take the lead in offering project controls.” n

ADDITIONAL REPORTING ALEX FREW MCMILLAN

CHRIS SOFFE FRICS GLEEDS, ATLANTA, US

Flexible learning solutions Whether you prefer live and interactive web classes or practical e-learning courses, RICS Online Academy will help you up-skill your technical, management and soft skills.

All courses provide a flexible way to gain CPD with no travel expenses or time out of the office necessary.

Popular courses: • QS in Practice – blended learning • Construction in Project Management – distance learning • Building Surveying: Principles in Practice – distance learning • Commercial Management in Practice – web classes • Surveying Safely – e-learning

To view the full range of courses please visit: academy.rics.org

X X X X X X X X 2016_MODUS 33

Advances in digital scanning technology are bringing a new level of sophistication to the preservation of our built heritage Words Andrew Brister

W

hen we think of building information modelling (BIM), we tend to think of new-build developments.

Yet, just as BIM is filtering down to new projects of all shapes and sizes, a spate of recent schemes is showing the technology’s worth in heritage conservation projects.

The massive redevelopment of the area around London’s King’s Cross station is an ongoing example. Developer King’s Cross Central Limited Partnership wanted to take advantage of 3D delivery and BIM techniques on the 67 acre (27 hectare) site, on which newbuild schemes are being developed among 20 existing, historic buildings. Peter Folwell MRICS is a director at Plowman Craven, the primary survey contractor at King’s Cross.

“We had to incorporate the new and the old, and bring the existing environment into the 3D world. Fom the start, King’s Cross Central was very progressive, requiring complete data sets, improved collaboration between people involved in developing and managing their assets, and the application of BIM.” One of the key requirements was an up-todate master set of 3D geospatial information, which could be used and shared with relevant parties, thus reducing the need for repeat surveys. The complexity of the site meant it was crucial that all aspects were tied to the same grid and elevation references, to ensure correlation with subsurface infrastructure such as utilities and rail tunnels.

The historic buildings on the site posed a challenge – how do you get these complex and varied structures into the 3D design world? “At the beginning of the project, you need to know what’s required and who the stakeholders are,”says Folwell.“Who is going to be using the data and what do they need from it? You need enough detail in the model to create a true environment, but not so much that it gets over-heavy on data.”

Folwell and his team use filters to indicate tolerances away from the scan data. “For example, you don’t want to model every »

34 RICS.ORG/MODUS

NEW

Heritage

FOR OLD

Q2 2016_MODUS A SI A 35

aspect of an undulating wall,” he explains.

“Instead, we model a flat plane and put in a filter showing where it moves by a certain tolerance. You can flag that up in case that area is critical and you need to bring in the 3D laser scan to compare it with the model.”

The first building at King’s Cross to be delivered as a BIM-ready, 3D model was the Midlands Goods Shed, built in 1850 by the Great Northern Railway, and now sensitively restored to house a new food store and cookery school, plus an events and cultural space for the Guardian Media Group.

Many of the lessons learnt, such as managing very large file sizes, the level of detail required, and the varying capabilities of stakeholders to deal with the technology, have been incorporated into the 3D laser scans of other schemes. Among these are the Fish and Coal Buildings, to be used by chef Jamie Oliver’s restaurant group, and Coal Drops Yard, a new retail destination.

The merits of using digital technology in heritage projects are not limited to large schemes such as King’s Cross. Cadw, the Welsh Government’s historic environment service, is employing BIM techniques in the preservation of Heritage Cottage, a small, 19th-century terraced house in south Wales.

It is typical of many traditional buildings in the Welsh valleys, but unique in that it has remained almost completely unaltered inside and out since it was built in 1854.

The cottage is being used as a learning resource to highlight how a traditional building can retain its character while being made energy efficient and sustainable.

Heritage Cottage will help Cadw showcase best practices, including BIM, which can be shared across Wales and beyond.

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COAL LINE TECHNOLOGY 3D scans were made of Coal Drops Yard (right) and the Fish and Coal Buildings (previous page) at King’s Cross Central

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IMAGE MIR

ohn Edwards FRICS initiated the project when assistant director at Cadw and is still involved in his new role as director at Edwards Hart, which specialises in historic buildings consultancy.

“You wouldn’t normally create a BIM model for a house like this, but it was a small enough project for us to try a few things and see what we can learn from it,” he says. “You can laser scan a building and, because it’s an irregular shape and you haven’t got perfect walls, it takes a lot of time and effort to create a model that is accurate.”

Heritage

The BIM concept at Heritage Cottage has two basic layers of information: one is technical and operational, while the other comprises historic and cultural significance values and data. Edwards describes this as two types of BIM: existing building information modelling (EBIM), containing the type of information that would be necessary for all existing buildings; and heritage BIM (HBIM). HBIM comprises an additional layer of information for buildings and structures of historical merit.

T

his is also the approach taken by the Hong Kong government’s Architectural Services Department.

It has developed what it calls a heritage information model (HIM) by combining advanced BIM with other technologies to enhance heritage conservation, improve upkeep of facilities and enable visitors to better understand heritage.

The department selected the Victoria Peak Fire Station for its HIM pilot and built a prototype that comprised not only building information, but also historic archives and maintenance information. The team also deployed a range of technologies, including mobile app integration, to demonstrate how HIM can benefit built-heritage management, heritage education and training, and user engagement.

The project team faced several challenges.

“Internal laser scanning to create the model could not be undertaken in an occupied building as easily as for a vacated area,” says Ip Sing-yue, building services engineer/ heritage, Architectural Services Department.

“We had less than two working days allowed for the scanning, yet the team accomplished this within the time constraints.”

The prototype has multiple applications.

“It can be used as a platform embracing a comprehensive data bank of building information such as materials, dimensions, state of conservation and history of the

building,” says Ip. “Plus it allows the flexibility to add future information, such as updating of maintenance and adaptive re-use modifications to the building.”

NFC (near-field communication) tags and QR codes for mobile apps enable the HIM to act as a visitor’s personal tour guide – retrieving animations and providing historic details at key points. They also help with accessing past images, hidden details, alteration records and historic elements of the building. Geolocation-based augmented reality can even allow a mobile device to display points of interest or overlay a past image on to the existing building, providing a more informative experience for visitors.

You need enough detail to create a true environment, but not so much that it gets over-heavy on data

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PETER FOLWELL MRICS Plowman Craven

In north London, Murphy Surveys recently completed a survey of 15 grade IIlisted buildings in Hampstead, including the surrounding land and all utilities services.

The project began with a precise survey control. Murphy then scanned the area using a high-definition, 3D, terrestrial laser scan to produce 360º panoramic imagery.

Alan Halpin, senior BIM coordinator at Murphy, agrees with Folwell that a proper, up-front discussion with the client is imperative if you are to tailor the deliverables appropriately. In heritage projects, you could waste a lot of time modelling the imperfections, when that data might not be required.

“What is going to be the use of the survey,” questions Halpin. “Will there be schedules, will they be using the model for facilities management? You need to filter what you are going to model. If no one is going to be checking something in 3D, what’s the point of modelling it?”

Although BIM might not be on the agenda for all of the world’s existing buildings, it is set for a bright future. “Data storage capability is getting bigger and more people will be able to access the scans and make use of them,” says Halpin. “Also, [the increasing use of] UAVs [unmanned aerial vehicles, or drones] mean that scans can be done quickly and easily on infrastructure projects.”

Photogrammetry – the science of making measurements from photographs – is likely to be the next big thing, believes Folwell.

“There is an increasing alignment between scanning and digital photogrammetry and both technologies are developing rapidly.

I also think that automation of modelling may increase. At the moment, modelling is a very manual exercise, but auto-recognition of features is on the horizon.”

H

alpin is also excited by the potential of photogrammetry.“Photography from drones can project mesh data on to objects and provide high-resolution, rapid photos that will result in high-quality, 3D images. This is akin to Google Streetview, but is mapped directly on to the landscape to give true, 3D ‘model-like’ accurate photographic scanning and data output.

“This is a huge area of advancement that will progress quickly over the coming years and will compete with traditional laser scanning. It’s perfect for heritage scanning, where photographic quality is highly desired in a three-dimensional sense.”

Digitising our built heritage, then, is a fast-moving arena, and one that has the potential to completely transform our understanding of our historic buildings. n

RESEARCH

History lesson for Hong Kong redevelopment projects In February this year, RICS published a research paper, Adaptive Reuse of Built Heritage in Hong Kong, which discusses three challenges: commercial sustainability, policy, and innovative design and solutions in heritage conservation in Hong Kong.

While adaptive reuse of built heritage is widely agreed to be the way forward for Hong Kong, the challenge is to build community consensus and support, especially in relation to commercial uses of buildings.

The paper suggests that a “quadripartite relationship”

involving professional institutions with professionals, and government with nongovernment organisations – underpinned by broad-based stakeholder engagement – is a possible model for coming up with best practices and standards for heritage

conservation that enjoy public trust. The report adds that the private sector can contribute significantly to heritage conservation projects.

DOWNLOAD the report at rics.org/Global/Hong_Kong_ Heritage_Insight.pdf

Q2 2016_MODUS A SI A 37

A SIGN OF

38 RICS.ORG/MODUS

Climate change

THE TIMES

Climate change has already created a “new normal” of frequent, severe natural events.

Why is it taking us so long to adapt our built environment?

Words Katie Puckett Illustration Emiliano Ponzi

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as such a small number ever held such significance? Even if global warming is held to the 1.5°C limit set by nearly 200 world leaders at COP21 in Paris last December, this still represents a radical change to the global climate.

Humankind faces its greatest challenge yet in adapting to a future where storms, flooding, droughts, cyclones and landslides are more frequent and more intense. But climate change is not a concern for the medium or long term: it is already happening.

The latest report from the Intergovernmental Panel on Climate Change, released in 2013, said that warming of the climate was now unequivocal, with many of the changes observed since the 1950s unprecedented over “decades to millennia”.

Attention has only recently turned to adapting to climate change, as distinct from mitigating it. The Paris conference devoted more attention to adaptation than any previous climate talks, but it stopped short of setting specific targets or funding mechanisms. The bill is potentially huge.

To adapt to a 2°C rise, the World Bank estimated that we would have to spend $70bn-$100bn each year between 2010 and 2050. This has far-reaching implications for property at every level, from protecting individual homeowners against heatwaves

and flooding, to future-proofing real estate funds worth billions of dollars.

The challenge for property professionals is that climate change is a moving and unpredictable target. Assessing the risks means getting to grips with vast, unfamiliar climate data-sets encompassing many variables. This is why Sven Bienert MRICS, head of sustainable real estate at the University of Regensburg in Bavaria, has been developing tools to help translate climate data into usable metrics for valuers, focusing on extreme events. Since the 1980s, the number of extreme events globally has doubled to an average of more than 800 per year over the last decade, an escalation that is likely to continue at least until the end of the century. “These events have far greater relevance for real estate investors than rising mean temperatures,” says Bienert, “but it’s not yet a core topic in boardrooms.”

This is a serious oversight. Financial losses in real estate and infrastructure due to severe weather events have tripled globally over the last decade. Reinsurers recorded direct losses of $150bn a year, reaching up to 8% of GDP in the worst-hit regions, but this is a substantial underestimate, warns Bienert. It does not include consequential losses, a reduction in tourism for example, or indirect losses, such as reduced turnover and rental income.

To redress the balance, Bienert’s methodology combines data from climate scientists and insurers with property valuations to calculate the annual expected losses from extreme events. He is also developing a geographical information system, covering Europe, to show the likely impact at an individual building level.

The homeowners of Cumbria in northwest England are all too aware of the impact of extreme events on property values; the flooding in December 2015 is estimated to have caused £500m of damage. The key metric for flood protection is return period: how often an event of a certain magnitude occurs. In 2005, Cumbria was hit by a onein-250-year flood. In 2009, there was a onein-100-year event, and another in 2015. »

Q2 2016_MODUS A SI A 39

Climate change

In the 1950s, we used to get major floods every 10 years … At the moment, we are up to one a year

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t is not just the modelling that needs to be revisited. “We can’t go on building barriers,” says Waterhouse. “We are moving towards resilient homes, as opposed to resistant homes.”

At a community level, resilience means installing features such as sustainable drainage systems to manage heavy rainfall.

For the individual house, it means refitting properties so that they can be easily dried out. This includes stone or tiled floors, rendered walls with tanking to prevent water ingress, raised plug sockets and solid wood furniture rather than MDF or chipboard.

This is what Waterhouse did after his own home was flooded. “If we are ever flooded again, there would be a few hundred pounds of damage,” he says.“You have to accept that every so often you’re going to flood. I’m afraid that’s the future.”

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LAURENCE WATERHOUSE MRICS Pell Frischmann

the other way round. “It’s like a Thermos flask – you can use it to keep drinks cold as well as hot,” he says. “We know the weather will become more extreme and this can help.”

Lang’s own house remained a pleasant 21°C last summer, without air-conditioning, while temperatures outside hit 38°C.

T An alternative is to build three-storey homes in the Dutch style, with garages on the ground floor and living spaces upstairs.

Overheating presents another potentially lethal threat. According to EM-DAT, the international disaster database, the 2003 heatwave across Europe was the deadliest in history, killing more than 70,000 people.

Research from the UK Met Office, published in 2014, shows that the chance of a repeat event has increased from once in 1,000 years to once in 100.

Buildings will therefore have to be designed to remain comfortable under much hotter conditions. One possible solution is Passivhaus, the ultra-low-energy building standard. Passivhaus buildings are tightly sealed with high levels of insulation and sophisticated ventilation systems to keep the air fresh. This keeps them warm with little heating during winter.

But, as Günter Lang, engineer and CEO of Passivhaus Austria, explains, it also works

his is one example where a strategy to mitigate against climate change also works for adaptation. But there might also be dangerous clashes. A survey of overheating in London homes carried out by engineering consultant WSP Parsons Brinckerhoff found that more than 80% of people had suffered from uncomfortably hot homes in summer 2015. Residents of newer homes with better insulation were significantly more affected. A further 8% of those affected installed air-conditioning as a result – a sign that if we fail to address adaptation in time, we will also struggle to mitigate further climate change.

So, what will be the tipping point? What will make owners, developers and investors prepare for something for which there are a lot of scare stories but not yet a robust business case? Unfortunately, research indicates that the worst has to happen – and perhaps more than once. Bienert says that property sales in one flood-prone area of Austria only increased when the region was flooded for a second time.

“Without that, people don’t change their behaviour – not their personal behaviour and not their investment behaviour.” n

OPINION

Collective action allows us to achieve more, and faster Everyone who works to promote energy efficiency in buildings can identify the common barriers to action. It seems that almost everywhere, there is an awful lot that is lacking: lack of political will; lack of knowledge and awareness; lack of data; lack of finance or coordination; and a lack of urgency.

One thing that is not lacking is the wealth of expertise that is ready to assist countries and the industry to take a different course of action, and develop ambitious building policies and 40 RICS.ORG/MODUS

practices. We are also not short of proven solutions. Importantly, actions can be taken now, the results of which will translate into the performance and value of buildings, returns on investments, the sustainability of communities, and assist in meeting the challenges of climate change.

In the context of last December’s Conference of Parties (COP21) in Paris, many countries and organisations came together to focus on the building sector. In the event’s

first-ever Buildings Day, these stakeholders – including RICS, the United Nations Environment Programme, the World Green Building Council and the World Business Council for Sustainable Development, in collaboration with the French government – focused on solutions, collaboration and the need to scale-up actions to make buildings everywhere more energy efficient, and realise the full climate change mitigation potential of the sector. The sector is self-

organising to build an alliance to help deliver collective action, and remove the barriers that countries face.

We should all aspire to a future where all buildings are not just structurally sound and safe, but energy efficient and resilient as well. It may be difficult at first, but the longterm benefits are compelling.* CURT GARRIGAN is coordinator at the Sustainable Buildings and Climate Initiative, United Nations Environment Programme

*The author’s views are his own and do not necessarily represent the decisions or policies of his employer

Laurence Waterhouse MRICS, technical director of flood resilience at Pell Frischmann, installed barriers in the Cumbrian town of Keswick after the 2009 floods.“We used the level that the Environment Agency said was the peak maximum flood – the biggest ever,” says Waterhouse. “But in December, it was exceeded by half a metre. All the modelling is going to have to be revisited.”

Waterhouse has noticed the difference over a long career. “In the 1950s, we used to get major floods every 10 years. From 2000 onwards, we’ve had major events every three or four years. At the moment, we are up to one a year. It’s going to be twice a year soon.”

Valuer registration

ensures consistent, high-quality valuations, raises the credibility of valuers and provides clients with a clearly identifiable designation for the best-regulated and qualified professionals in the field Valuer Registration is mandatory in Hong Kong.

All RICS valuers should be valuing to Red Book standards and are required to register To find out more: w rics.org/vrhk or contact RICS Regulation Asia Pacific: t +852 2116 9713 e regulationasia.rics.org

Q2 2016_MODUS A SI A 41

2

1

LITTLE RED BOOKINGS FAIR PLAY Luxury chain Fairmont opened a 380-room hotel in Jakarta last year (1). The Indonesian capital is the most active city in Asia, with more than 25,000 rooms in development SUPPLY AND DEMAND Hyatt Hotels’ boutique brand Andaz opened in Tokyo in 2014 (2). Hotel development in Japan is failing to keep up with a rise in tourist numbers and is ripe for investment.

42 RICS.ORG/MODUS

If you plan to invest in the Asian hotels market, it pays to follow China’s tourists.

Alex Frew McMillan reports

Asia is famous for its hospitality. Thailand welcomes guests as the Land of Smiles.

Singapore Airlines and Cathay Pacific rank second and third in the Skytrax “aviation Oscars,” behind only Qatar Airways – which has built its reputation on linking Asia with the rest of the world.

Asia’s hospitality industry, however, is still nascent. The continent is of course wildly diverse – you would struggle to find more advanced hotels than those in Tokyo, Hong Kong and Singapore. But you would battle to find a hotel at all in smaller cities in the region’s “frontier economies”. This means the region is ripe for hotel development, and the leading source of potential for construction and real estate services.

Asia continues to have by far the largest hotel development pipeline in the world.

China accounts for two-thirds of the 871,400 hotel rooms now under development in Asia, reports hotel research company Lodging Econometrics, with 4,284 hotels on the drawing board or under construction around the region. The next most active hotel market is Indonesia, which is saying something, because it only accounts for 8% of the hotel pipeline. India comes close behind.

The huge amount of activity in China is splattered across the map, whereas most activity in emerging markets focuses on national capitals. Jakarta is the most active city in all of Asia, with 25,741 rooms under development at 143 hotels. Seoul is not far behind with 127 hotels in the works. Only then does the first Chinese city, Chengdu, crop up – although 15 of the next 16 cities are in China.

Vacancy rates run high in China, according to Frank Wong MRICS, an associate director at Hong Kong-based Roma Appraisals. In Guangzhou, for instance, occupancy is around 70%. But hotels are something of a loss leader, often part of large-scale

2017 Q1

4.3% 2018 Q1 2019 Q1

4.8% 4.6% 2020 Q1

5.6% 2020 Q2

% 22.2

Madrid

Briefing

6.2%

% 21.3

% growing in numbers as the post-war baby boomers retire, 20.2 HANG TIME flush with savings and ready to spend on leisure. “Look at % % % 15.8 Established 15.8 the hotels,” says country is beautiful, they are % 13.6Nguyen.2.“The 1 5 % international high quality, the infrastructure is12there. So there are a lot of brands are reasons for people to go to Japan.” extending Average revenue per available room (RevPAR) in Tokyo their reach in Hilton’s 14.3% in the second quarter of the year, compared with Mumbai SanChina.

Francisco Melbourne rose Bengaluru London Los Angeles Hong Kong Hangzhou 12 months ago, to ¥42,940 ($386). That was the largest gain Qiandao Lake among the eight leading markets across the region tracked is two hours’

by JLL, except for the outlier, Bangkok (graph, below). The drive from the tier-two city, Thai capital posted an exceptional 55.2% leap in RevPAR itself around mid-way through 2015, as tourists and business travellers two hours from flocked back. They vanished in 2014 in the political Shanghai

uncertainty following yet another military coup.

Chinese travellers are becoming the common denominator in determining market performance. Their dwindling ranks in Hong Kong and Singapore have led to stagnant results.

Malaysia has suffered the most, after the disappearance in March 2014 of Malaysian Airlines flight MH370 en route to Beijing, which has contributed to a 15.7% decline in RevPAR. Through the first three quarters of 2015, a total of $8bn in capital was invested in hotels in Asia. Japan and Hong Kong

BY NUMBERS

$394 +14.3%

INFOGRAPHIC IAN DUTNALL

Source: JLL

$352 -9.4%

MORE BANGKOK FOR YOUR BUCK Returning visitors in the wake of the Thai junta pushed revenue per available room (RevPAR) in Bangkok up by 55.2% in the second quarter of 2015. Of the established markets, Tokyo is the standout performer

$223 -4.7%

$173 +6.2%

$121 +55.2%

$116 +11.2%

Tokyo Tokyo

Hong Kong Hong Kong

projects, where tourists are welcomed by retail tenants and business travellers fill up offices and convention centres.

“Hotels in some roles serve just an ancillary function,”says Wong. Investors“know the return on investment is not high for the hotel but they know the hotel will enhance the overall value of the project”.

Big names such as Hilton, InterContinental and Sheraton are pushing into second-tier cities, which are often underserved compared with Shanghai, Beijing and Guangzhou. Five-star hotels require greater ongoing capital expenditure to maintain standards, but the management companies will pass on operating costs to the investors backing the projects instead of absorbing them, Wong notes.

For investors, Asia’s most-developed markets look attractive for hotel purchases, according to Cuong Nguyen, head of research and strategy for Asia-Pacific at M&G Real Estate. His two favourites are currently Japan and Australia.

Wong agrees: a weaker currency has made tourism more attractive into both countries, making them temporarily “very hot markets”. There’s also a backdrop of easier visa access and sharply increasing visitor arrivals from China that is likely to be permanent. The number of mainland visitors to Japan in 2015 is double that of last year.

Such trends encourage Nguyen to look past demographics such as the declining population and ageing workforce that plague other real estate sectors in Japan. Furthermore, JLL notes that“active elderly”tourists from within Japan are also

Singapore Singapore

Sydney Sydney

Bangkok Bangkok

Shanghai Shanghai

$100

$73

Beijing Beijing

Kuala Lumpar Kuala Lumpur

+1%

-5.7%

– as well as Australia – each accounted for around $2bn in trades. Thanks to strong interest from Chinese buyers, who accounted for $563m of the investment in Australian hotels, 2015 is expected to be a record year in the country.

Territories such as Singapore have new supply coming to market at a time when the overall property market is suffering. That makes valuation more challenging – investors need to be selective, Wong believes, although long-term prospects should be secure.

Bruce Ford, director of business development at Lodging Econometrics, says hotel operators will find fertile ground in Asia, but need to be selective. “Most hoteliers continue to push rates at the expense of occupancy, which leads to the choppiness in performance metrics,” Ford says. “But taking a long-term view, establishing room rates in markets will become increasingly important, as lower chain-scale properties [less expensive hotels] are built out.” 

REFERENCE POINT REPORTS AND RESOURCES Asia-Pacific hotel construction pipeline Executive summary from Lodging Econometrics bit.ly/apac_pipeline Hotel sales and investment briefing Asia-Pacific hotel research from Savills bit.ly/savills_apachotels

Asia-Pacific research from JLL Includes hotel investment highlights for H1 2015: bit.ly/jll_apachotels Chinese tourist boom fuels hotel expansion plans Report from the South China Morning Post bit.ly/touristboom

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Careers / Business / Legal / Training

Foundations CAREERS It’s a noise we’ve come to dread: the ping as another message lands in our inbox. How can we regain control of our correspondence?

EMAIL ALTERNATIVES

It used to be the constant ringing of the phone that was the most distracting influence in an office. But now it is more likely to be the ping of another email landing in our inbox. Some of us can be transfixed by our screens, as message after message pours in.

Email, and how to deal with it, has become a serious business issue.

Tim Allcott MRICS runs Allcott Associates, which has 10 offices across the UK. As the founder of a company that generates a lot of sales enquiries from the internet, he understandably gets a lot of emails. On a typical day, Allcott reckons he receives more than 300 of them – about half are spam and go unanswered, while the rest are things that require a response, such as quotations, questions and internal emails. Faced with this barrage each day, he decided the company as a whole needed to reorganise.

“We have set up rules so that, for instance, any email with ‘unsubscribe’ in it goes straight to spam,” says Allcott.

“I also set up folders so they go into quotes, reviews and payments, and we assign job numbers and add these to email subject lines so these can go into folders, too.”

Nonetheless, this still leaves Allcott with a lot of correspondence, and leaving the office brings with it no escape. “If I am on site and receive an urgent email then I send it over to the office with a few words, so they can respond or send a holding email,” says Allcott. “You have to respond relatively quickly to emails nowadays, as it is so competitive. For commercial clients, unless you

01 Yammer: The “enterprise social network” is well used by businesses, enabling group chats, collaboration and document sharing 02 Evernote: A great research tool, enabling the collection and storage of web pages, documents and email 03 Hipchat: Easy instant messaging and group chat via mobile and desktop 04 Slack: Designed to stop all internal email with chat messaging. It also plugs into many other cloud-based services 05 Gmail chat: Google accounts offer many services, and chat is one of the useful ones 44 RICS.ORG/MODUS

respond quickly, they will go somewhere else. They don’t always want the work done then, but they want the quote immediately.”

Email systems offer a range of filters, automations and shortcuts, and it is worth exploring these to find the most efficient. Folders can be an effective tool – separating internal email from external, or new business from existing projects, are both options, but staff should find a logical method that works best for them.

It also must be appreciated that often email is used in a way for which it was not really designed. Email was never intended as a storage system, although regular archiving is advisable when email needs to be retained for legal reasons. Also, group chats are rather cumbersome via email and a source of significant distraction for many. In some cases, business owners should dictate what is acceptable and what is not. Email usage should form a part of a business’ IT policy. Also, there are other software systems (box, left) that can be far more effective as a means of organisation and information gathering than email.

Users might also require some help if they are getting too distracted by their inboxes. Time management adviser Mike Gardner says people are often most productive first thing in the morning, but throw away that effective time by giving the thoughts of others priority.

He suggests limiting the number of times you check emails. “If you don’t know how much time you’ve spent checking your email, then you’ve surrendered your agenda.

I recommend checking them via a series of planned email sprints. I do mine three times a day: morning, noon and night.”

ON RICSRECRUIT.COM Simple steps for maintaining email etiquette. For this and much more careers advice, go to ricsrecruit.com

WORDS JON CARD ILLUSTRATION GIACOMO BAGNARA PORTRAIT AMANDA KHO

CAUGHT IN AN EMAILSTROM

Foundations

TIMELINE

MY WAY

Ada Fung MRICS

SENIOR DIRECTOR, SALES MANAGEMENT AND STRATEGIC ADVISORY, CBRE HONG KONG

THE BEGINNING Hong Kong was a British Dependent Territory until 1997, so it has always been common for its younger residents to spend some time studying in the UK. I made the journey when I was 15, and spent eight years in the country at high school and university.

My father worked as a surveyor in the Hong Kong Special Administrative Region (SAR) government, and played a huge part in my decision to pursue a career in the built environment. But I came to the surveying profession in a bit of a roundabout way. I originally took a town planning degree, graduating in 2000, followed by a masters in urban design at University College London.

2000 Graduates with a degree in town planning, before taking a masters in urban design at UCL

to jump into the real estate world, and joined JLL as a project manager. Changing from government-related work to managing projects for private clients took a while to get used to, but having experience of both really helped to broaden my professional horizons.

Five years later, I was approached by CBRE to join its project management division. After taking up the offer, I started setting up a sales management and strategic advisory team and now manage around 10 people, with responsibilities encompassing marketing and communication, pitch and development management.

2004 Moves back to Hong Kong to join the planning department of the HK SAR government 2006 Joins JLL as project manager 2011 Moves to CBRE and sets up sales management and strategic advisory team

THE PRESENT In 2014, and with 10 years’ experience under my belt, I became chartered through the professional experience route. It has been a great progression for me: my networking opportunities really opened up, and it’s been a pleasure to meet and work with a lot of great professionals throughout the RICS world. rics.org/adafung

2014 Becomes chartered through the professional experience route

THE BREAKTHROUGH Coming back to Hong Kong in 2004 and, with dad’s experience in mind, I took a job at the HK SAR planning department. But what I didn’t realise at the time is that the scope for town planning in Hong Kong is very limited “I took a job at the HK SAR planning due to tight land supply issues, and department. What I didn’t realise at the time is I spent much of my time processing rather than designing. So a big turning that the scope for town planning in Hong Kong point came in 2006 when I decided is very limited due to tight land supply issues”

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THE CLIENT IS ALWAYS KING

“It is not the employer who pays the wages. Employers only handle the money. It is the customer who pays the wages.” So said Henry Ford over a century ago and, since his time, every business guru, consultant and senior manager has at least paid lip service to the “power of the customer”.

Richard Metcalfe FRICS, director of Metcalfe Briggs Surveyors in Kent, south-east England, thinks Ford’s words are more pertinent than ever. “A firm that does not put their clients at the centre will not survive today,”he says.

“Changing legislation and ever higher demands on clients’ time and resources mean that it is even more important to ‘put yourself in your clients’ shoes’ to be sure that what they are asking for is right for them.”

Like many things in business, the idea of being customer centric is sound but it can be misinterpreted and used to pursue a bad strategy, or it can underpin a good strategy but be implemented poorly when hundreds of other daily challenges take precedence. So the first stage is to follow the right strategy. Stop and work out what it is that clients want from your firm. Or, more accurately, what problems they want to solve when they instruct you.

As Daniel Smith, senior strategy consultant at Deloitte in London, says: “Companies shouldn’t just assess what they think the client wants in isolation. We all have our own biases that influence what we think customers really want. The company should spend time ‘in the field’ to gauge this. One NEXT ISSUE: GOING SOLO option is to pick a trusted or loyal client who will give you objective advice and test your EVER DREAMED of setting up on your ideas with them.” own but don’t know how to go about it?

As well as getting the client’s view, To take part in future business advice you should create and set client-focused columns, email editor@ricsmodus.com 46 RICS.ORG/MODUS

FLIPPED CHART One of the most famous examples of employee involvement came from Jan Carlzon, president of Scandinavian Airlines System in the 1980s. He flipped the group’s organisational chart, put the CEO at the bottom and the front-line employees – those that dealt with customers – at the top.

Everything was then coordinated towards helping them do a good job.

The key is not to appear as if you have turned up with a fully formed plan and then impose it on your employees. Listen to what

WORDS TIM STAFFORD ILLUSTRATION GIACOMO BAGNARA

BUSINESS In running your own company there’s always a danger of forgetting …

goals before you make more operational plans to, say, upgrade your IT systems or hire a second office manager. The goal is to make your company as convenient as possible for your customers, not for yourself.

David Smith, director of DVL Smith, a London-based market researcher that specialises in supporting SMEs (small and medium-sized enterprises), says managers “can fall into the trap of working on, not in, their business. They can get too close and do not stand back to recognise the importance of having a clear-cut, strategically sound position that is based on understanding their market and customers.”

What clients want certainly differs by company, but Lara Ponomareff, practice leader at business management consultant CEB in Washington DC, provides some food for thought. She says that data from more than 120,000 customers in both business-to-business and consumer settings shows that we all want it to be as easy as possible. Customers want“an answer, or if there’s a problem, they want it resolved, and they want to get back to their life”, she says. “The very simple thing that I do with any executive is I ask them to … put on their consumer hat.”

From that, Ponomareff asks managers where they think customers get frustrated and expend effort. This can be a good starting point: talk to clients, find out what they want from you, ask them what makes it hard or frustrating for them to get that service, and prioritise fixing those things.

The next stage is then to make the right changes to the day-to-day roles of everyone affected which, to a certain extent, is everyone in the firm. Any changemanagement expert will tell you that when making big changes, such as who reports to whom or what constitutes “good” performance – and so what results in pay rises or promotions – it is best to get all employees on board from the start.

Foundations

LEGAL 101

they have to say, make changes if need be and then, crucially, explain why you’ve made the final choices you have. You want employees to feel they agree with – or at least respect – the strategy they are following and, crucially, to understand their role in implementing it.

This is especially important because, as Smith says, SMEs that get the clientcentred strategy right should not be “afraid to change direction early ... to ensure that

“Changing legislation and ever higher demands on clients’ time and resources mean that it is even more important to put yourself in your clients’ shoes” RICHARD METCALFE FRICS Metcalfe Briggs Surveyors limited resources are deployed effectively.

Product or market fit is an iterative process and instilling a sense of curiosity about customer needs into the firm’s culture will help support customer centricity.”

Finally, once people have bought into a strategy, you need to keep them working towards the right goals, keep that“curiosity” – to use Smith’s phrase – and help them tweak the strategy in response to changing client needs.

This is something that cost consultant Turner & Townsend has done. David Whysall MRICS, head of commercial services, UK infrastructure, explains: “Fundamentally, we train and develop our people to think beyond sales and service, to think about clients first.”

Turner & Townsend then ensures that all employees are measured in its performance management system by how they made a difference to clients.

HOW TO BECOME A CLIENT-FOCUSED BUSINESS ››Understand what problem

››Work on client-centred

your clients want you to solve, and make your firm easy to work with.

goals separately from operational ones. ››Involve all employees early in big changes, explain why you are making changes and what their role will be. ››Change reporting lines and performance management processes to keep employees engaged and working towards client-focused goals.

Is crowdfunding breaking the law?

LEO LO MING-YAN MRICS Director, Crowe Horwath Although crowdfunding has developed rapidly around the world in recent years, Hong Kong has yet to introduce specific laws or regulations relating to such projects. This creates risks … and opportunities.

In Hong Kong, most activity has, so far, revolved around crowdfunding for rewards or donations.

Neither provides a financial return or yield. But the opportunity to invest in real estate via crowdfunding, and for equity crowdfunding and peer-to-peer lending, is fairly limited and covered by stringent regulatory governance.

In 2014, the Securities and Futures Commission (SFC) issued a notice on potential regulations that could apply to crowdfunding, as well as on its risks.

For example, under the companies ordinance, each closely held company should restrict its offering to no more than 50 investors. Furthermore, only institutional investors or wealthy individuals are allowed to purchase the shares or debentures. This would apply to companies backed by crowdfunding.

In Hong Kong, equity crowdfunding is limited only to professional investors who have an investment portfolio of cash and securities worth at least HK$8m ($1.03m). The public cannot access the share offering. However, there is a grey area. The existing regulatory regime has not set any hard-and-fast rule to state how many people you can offer an investment before it becomes a public

offering. Two people, or 200, could mean it is a public offering. This means you need to file the paperwork, in particular a prospectus.

This is clearly a problem, as you will never know exactly how many people will read the offering. Some crowdfunding platforms perform the basic filing to avoid a legal offence. But most restrict themselves to being merely a platform and an intermediary. They cannot handle any money or give advice. Otherwise, they would likely fall under the SFC requirement to have a Type 1 license, Dealing in Securities, for stockbrokers.

Other licensing may also apply. But, again, none of this has been spelled out.

Hong Kong lags behind mainland China in regulating crowdfunding. In late 2014, the Securities Association of China proposed regulating equity crowdfunding, and invited public comment.

This defines the privateplacement nature of equity crowdfunding, and specifies the self-regulation required.

The China Securities Regulation Commission is likely to introduce trial regulation this year.

In his 2015-16 budget speech, financial secretary John Tsang Chun-wah said the Hong Kong government would set up a steering group to study how to develop the city into a financial-technology hub.

He mentioned this would involve looking into issues regarding crowdfunding.

We hope that Hong Kong will gradually optimise the related laws and regulations on crowdfunding. This would improve the entire financing environment for groupfunded real estate.

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CPD booster Related content from RICS

COMMON CONFLICTS OF INTEREST IN COMMERCIAL BUILDINGS Webcast led by Simon Wainwright (above), Chair of the RICS Commercial Property Board. Watch at cpdfoundation. com/webcasts/215 (subscription required) ››CPD hours: 1

DON’T BE CONFLICTED PROFESSIONAL DEVELOPMENT Always be aware of your business’ circumstances to avoid questions of impropriety

Simplistically, the focus has been on conflicts of interest in the “double running” scenario, where an agent might act for both buyer and seller. In fact, this is quite rare, because most people can sensibly avoid such a situation. Furthermore, there is nothing illegal about this under the current guidance, provided all parties are fully aware of the situation and consent to it in writing.

CPD: ON DEMAND The CPD Foundation offers members a convenient and comprehensive way to meet their CPD goals for one annual payment. For more information go to cpdfoundation.com 48

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Conflicts of interest more commonly occur through secondary services. On such occasions, one party might be acting for a vendor, while someone else in the same firm is providing a building

survey for the buyer of the vendor’s property.

In addition, another person in the same firm might be helping to arrange a mortgage for the buyer by acting on behalf of a bank. This is particularly common in residential estate agency, where a whole range of services are being provided for different parties in a series of connected transactions, by firms that could all be owned by the same group.

Surveyors should ensure they have proper compliance procedures and understandable systems that record the clients for whom the firm is acting, and carry out necessary checks before taking on instructions. Be open and honest, ensure you advise your client of a potential – or even perceived – conflict of interest, and make sure it is all in writing. Furthermore, when advising a client, be careful not to disclose any confidential information of which you might be aware.

Bear in mind that what is applicable in one part of the world may not be in another, so surveyors working internationally should always adhere to the laws of the country in which they are operating.

SIMON WAINWRIGHT FRICS is managing director of JPeiserWainwright and Chair of the RICS Commercial Property Board jpeiserwainwright.com

THE HARRIS DEBATE – ETHICS AND THE PUBLIC INTEREST: WHO, WHEN, HOW AND WHAT? Watch last November’s debate, chaired by Lord Bichard, the National Audit Office chair (above), free at cpdfoundation. com/harris-debate ››CPD hours: 1.5

PROFESSIONAL ETHICS AND CORPORATE RESPONSIBILITY Free-to-view seminar with RICS’ Peter BoltonKing (above) and Skanska UK’s Adam Crossley. Watch at cpdfoundation.com/ webcasts/224 ››CPD hours: 1

ILLUSTRATIONS ANDREA MANZATI

It is common practice to avoid conflicts of interest wherever possible, but it is never quite that simple. A conflict might not occur at day one of a transaction, but further down the line. Although all parties may believe conflicts of interest have been dealt with, surveyors should always be aware of how a transaction might change and evolve, and whether they can spot the potential for a conflict of interest to occur at a future date. If a situation goes wrong, your professionalism could be questioned.

Foundations

EVENTS

SURVEYED Is there a book, website, or app you could not be without? Email editor @ricsmodus.com

BOOK RICS EVENTS ONLINE rics.org/events For inquiries, call +852 2537 7117

HONG KONG

››RICS Hong Kong Annual Conference 2016 20 May, Grand Hyatt Hong Kong According to government projections, by 2041 around one in three Hong Kong residents will be an elderly person, up from one in seven in 2013, leading to reduced GDP and a shrinking workforce. Drawing references from Asia-Pacific countries, this event will explore the challenges presented by this ageing population, with a focus on masterplanning to cope with the changes in needs; sustainable business models for an emerging silver-hair market; and the creation of a workforce to support it. ricshk-conference.org

SINGAPORE

››Accredited Expert Witness Training 19-22 May, M Hotel This accreditation course is designed to deliver key knowledge and skills for those interested in becoming expert witness practitioners.

››Infrastructure and Proptech Asia Conference 13 July, co-located with World Cities Summit, Marina Bay Sands First of its kind in Singapore, this event will bring key thought leaders discussing important disruptive initiatives and technology that will impact infrastructure and city management.

WHAT3WORDS Around 75% of the world suffers from inconsistent or poor addressing systems, while some places have no address at all. Available in multiple languages, what3words is an app that uses a unique combination of three words to identify a 3m x 3m square “address”, anywhere in the world from a global grid of 57 trillion squares.

By providing simple, non-technical addresses, the app could be used to help improve countries’ social and economic development. Surveyors could use it on a dayto-day basis to improve their business efficiency, for example by using the system to pinpoint a hard-to-find place on a construction site, or in combination with technology such as BIM. “What3words is a navigation system where we can get anyone to a right location, without the risk of latitude and longitude being brought into the surveying system,” says Mark Lawton, chief engineering surveyor at Skanska UK.

››Accredited ACRE Mediation Training 23-27 July, M Hotel Globally recognised accreditation training to equip built environment professionals with the skills to be mediators or managers of multifaceted teams and projects.

MALAYSIA

››Accredited Expert Witness Training 23-26 July, Kuala Lumpur This accreditation course is designed to deliver key knowledge and skills for those interested in becoming expert witness practitioners.

INTERNATIONAL HERITAGE CONFERENCE 2017

IMAGE WHAT3WORDS; TAI KWUN, HERZOG & DE MEURON

2-3 March 2017, Tai Kwun, Hong Kong

Taking place at Hong Kong’s revitalized former Central Police Station (pictured), the theme of this two-day event is “Sustainable social and economic benefits in builtheritage conservation”. Attendees can engage in high-level discussions on conservation and planning policy, economic feasibility, design and architectural elements and post-completion operational management. Featuring case studies from Asia and around the world, and guided, half-day tours of some of the sites discussed at the conference.

WHAT3WORDS Free from your preferred app store, or visit what3words.com

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Mind map

WHAT WORKSPACES DO MILLENNIALS DEMAND? Dr Marie Puybaraud Global head of corporate research, JLL, Paris

If companies are serious about investing in millennials, they need to invest in the tech they rely upon.

Although millennials are increasingly able to work flexibly – anytime, anyplace and anywhere — many also desire to go to a workplace every day, be with colleagues and belong to an organisation.

Millennial workers (generally people born between 1980 and 1995) belong to a very different generation, who are much more involved in technology and the internet than any generation before them.

An interactive working environment is very important. Highly connected spaces where workers can feel relaxed when working, or even take time out to play, are common attractions for millennials.

ILLUSTRATION GIANMARCO MAGNANI

There is often a big gap between the technology a millennial owns, and the equipment they are given at work. This can result in millennials bringing their own devices to the workplace.

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