MODUS Asia Edition | Q3 2016

MODUS ASIA Q3 2016 RICS.ORG/MODUS

rics.org/modus

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Sub-Saharan Africa

ASK THE BIG QUESTIONS

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32 m illio n

200 9

1,740 millio n

333 million

▼

338 millio n

lion 251 mil

KEY

llion 8 mi 3,22 n millio 313

IN THIS ISSUE Indonesia’s tiger economy 14 / Young surveyors 28 / Infrastructure’s property pay-off 38

Source: Brookings Institution

How can housing supply keep up? / 22

▼

234 million

BY 2030 THE GLOBAL MIDDLE CLASS WILL HAVE GROWN 165%

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n millio 322

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illion 57 m 20 20 n illio 4m 66 ion mill 525

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Middle East and North Africa

703 mil lion

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Asia-Pacific

Q3 2016

International Heritage Conservation Conference 2017 Sustainable social and economic benefits in built-heritage conservation

Thursday 2 March 2017 09:00-17:00

Save the date

Voting Members Box 5/F, Members Stand 1 Hong Kong Jockey Club Happy Valley Racecourse

Friday 3 March 2017 Site visit

7

HOURS

Conference highlights • Industry insights on adaptive reused design • How to successfully operate a heritage property • Ensuring economic viability in a heritage environment • International case studies on heritage conservation and statutory planning policies

rics.org

Contents MODUS ASIA Q3 2016 RICS.ORG/MODUS

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Features

Intelligence

Foundations

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11 PRESIDENT’S COLUMN Amanda Clack FRICS sets her sights on infrastructure, the war for talent, and cities as incubators for innovation

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08 THINKING: WILLIAM GLOVER Taking a closer look at the results of this year’s RICS and Macdonald & Company Asia Rewards & Attitudes Survey

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07-13 NEWS IN BRIEF Industry news, advice and information for RICS members

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06 DIFFERENCE OF OPINION What will the effect of China’s crackdown on corruption be on Macau’s property market? We hear two points of view

S I NF O

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• RI C S

TODD LAUCHLAN FRICS, JLL INDONESIA, P14

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E IN

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MAGA S MAGAZ S deck.

“We are forecasting a reshuffling of the There will Z DU DU be a flight to quality … if you’re a successful organisation, you can take advantage of a market that is more in your favour”

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14 INDONESIAN SUMMER Is the island nation’s enormous real estate potential about to be realised?

44-45 CAREERS How to give a presentation with panache; Tottenham Hotspur’s Richard Serra MRICS

18 CUTTING THE CARBON Putting the built environment’s climate commitments into practice

46 BUSINESS Getting ready to go it alone

22 COVER STORY The global middle class is booming – along with demand for better housing 28 QUALIFIED OPINION What hopes do RICS’ newest members hold for the future of the profession?

34 REFORMED CHARACTER How to make adaptive reuse of prisons viable 38 BUY NOW PAY LATER Funding models for transport infrastructure

47 LEGAL 101 What are the benefits of settling disputes through arbitration?

48 PROFESSIONAL DEVELOPMENT Mastering the art of estimation 50 MIND MAP JLL Australia’s Rajiv Nagrath on how “big data” is changing the way we use offices PLUS 49 Surveyed + Events

42 TROPHY HUNTERS Australia’s most in-demand assets 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.

Q3 2016_MODUS A SI A 03

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 04 RICS.ORG/MODUS

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

SWEETT LEAVES BITTER TASTE Sir, Building recently reported in the UK that Sweett Group had been ordered to pay £2.3m after a bribery prosecution. The magazine also stated that it understands the offence is unrelated to allegations originally made by the Wall Street Journal. The story has been reported widely online and in several newspapers.

I have seen no articles about this matter in Modus. Furthermore, I have seen nothing on the RICS website nor any press releases from RICS. If such articles exist, they are not easy to find.

Why has RICS not been at the forefront of reporting on this event? What sanctions are being applied by RICS to Sweett Group? Is there further outstanding action concerning the separate Wall Street Journal allegations? If not, have these allegations been investigated?

RICS rightly talks a lot about professional ethics. However, for it to have any credibility it should be taking a leading role in exposing and reporting such matters. Silence is unacceptable.

Jonathan Stockdale MRICS Thank you for your letter. RICS is aware of the matter and is dealing with the conviction through its regulatory processes, in the same way as we would treat any other conviction.

RICS treats all firms it regulates equally and fairly in delivering its regulatory functions. We will only publish the outcome of a case once it is complete and a disciplinary panel has agreed publication. We did highlight the case to the profession in Modus Asia (p32, Q4 2014).

We have recently played a major role in an extensive, three-month consultation on the proposed International Ethics Standards, to which the profession was invited to contribute.

Luay Al-Khatib RICS Director of Regulation, EMEA

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。

@RICSnews // #RICSmodus @URBaNEregen Great #RICSModus article @andrew_brister digital laser scanning heritage buildings #HBIM @cadwwales @guardiancities @evewilsonTT great article on #infrastructure in #ricsmodus @RICSnews @courteneyccs Sunday morning reading

#RICSModus So many fascinating & informative articles & features @Mone_87 Catch up on some CPD and

a Starbucks before this busy day takes over. #RICSmodus #RICS #Starbucks @IC_MarkG Great #RICSModus article about the impact of climate change on the built environment and a case for moving towards resilient homes @RICSnews @TomLefek To adapt to 2°C rise

@WorldBank estimated need to spend £49-£70bn each year between 2010 & 2050 #climatechange Great #RICSModus article

BREAK FROM TRADITION Sir, the article “Traditional Buildings Deserve Better” in the May/June edition of the Building Surveying Journal seems to imply that there are significant numbers of chartered building surveyors practising today who do not have the necessary knowledge to be able to tackle basic problems in traditional buildings. If this is true, and I suspect that it is, then this is a serious indictment on the profession.

How has this situation occurred?

Is it because these chartered building surveyors are the products of RICS-approved building surveying degree courses that give equal priority to such subjects as facilities management as they do to building pathology?

Is it because the role of most chartered building surveyors today is to be a generalist, spending the vast majority of their time managing small projects, their role reduced to merely coordinating other specialists while not being expected to be the expert in anything, let alone building pathology?

I would like to hear RICS’ opinion on this issue and what they see as the future role of the chartered building surveyor.

Eric Carter MRICS

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, bryan@rofmedia.com / Production Manager Michael Wood / Managing Director Toby Smeeton / Repro F1 Colour / Printers ROF Media / Cover Image La Tigre / Published by Sunday, 207 Union Street, London SE1 0LN wearesunday.com / For RICS James Murphy and Kate Symons [UK] / Jeanie Chan [Asia]

Q3 2016_MODUS A SI A

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Intelligence

News / Reviews / Opinions / Reactions

DIFFERENCE OF OPINION

China’s crackdown on corruption and excess spending spells trouble for Macau’s property market. Discuss.

PROPERTY PRICES AND RENTS HAVE FALLEN SINCE THE ECONOMIC SLOWDOWN began to affect Macau towards the end of 2014. Although the decline – at 25%-35% – has been significant, the market was extremely overheated and it may be more appropriate to view the decline as a correction. The slowdown in tourism and gaming revenue has certainly had an impact, and while it may be a little premature to say the market is in “big trouble”, there’s no doubt it has been hurt.

As a small market with limited supply, there is great volatility in the pricing of real estate.

The fact that Macau relies so heavily on tourism and gaming means property prices are tied to the success of the casinos TOM ASHWORTH PRINCIPAL, SNIPER CAPITAL, MACAU and resorts. As a result, the slowdown in casino revenue thanks to mainland China’s crackdown on corruption and MACAU’S DEMOGRAPHICS ARE AMONG THE MOST COMPELLING conspicuous spending has had a direct impact on almost in Asia. Scarcity of land and limited supply of new properties, every aspect of business. The government had previously coupled with a burgeoning population and low taxes, are announced an intention to diversify Macau, and that effort likely to act as long-term drivers of real-estate values. Looking at the continues. But the lack of a coordinated and clear plan has fundamentals, several compelling trends underpin Macau’s property market. been its failing. It needs to put one in place.

The progressive opening of new “megaresorts” is likely to boost and The government has failed to provide an infrastructure broaden visitor numbers. Macau will continue to experience effectively full that can support the growth of small companies. Affordable employment and strong wage growth. Meanwhile, established locals and premises and sufficient manpower have both been in very expats looking to invest and upgrade will drive demand for real estate. short supply. These are lessons from which any fast-growing Infrastructure projects continue to take shape, boosting the growth of economy should learn. Without the basics in place, the retail and tourism. By early 2018, the Hong Kong-Zhuhai-Macau crossing foundations of growth are unstable. should effectively be in operation, further assisting the flow of traffic to the The market is starting to recover, and we have no doubt special administrative region. that Macau will continue to grow and develop. Hopefully in Macau is rapidly evolving from gambling mecca to world-class leisure this next phase the growth will be steadier and more centre. The development of new“integrated resorts”is well timed to coincide sustainable. But recovery will take quite some time. with the rapidly emerging middle class in China, which is forecast to rise to more than 400 million people by 2020.

Gaming revenues are showing signs of stabilising. As and when this Macau: busted flush or winning streak? happens, sentiment will improve. Real-estate prices should then start to Join the debate at rics.org/linkedin, recover as cash-rich local buyers return to the market. or email us at editor@ricsmodus.com While it is true that home prices have fallen as gaming turnover has experienced a slowdown, it’s important to note that the decline in values comes after a decade of escalation. It is an essential and healthy pause in Macau’s long-term development.

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RICS.ORG/MODUS

INTERVIEW ALEX FREW MCMILLAN ILLUSTRATION DAVE MURRAY

JULIET RISDON DIRECTOR AND DESIGNER, JML PROPERTY, MACAU

24.5%

Intelligence

4.6%

3.3%

SMARTER HOMES The US leads the way in adoption of smart home measures such as automated lighting, heating and wireless audio systems Source: Statista

0.4%

2015

NEWS IN BRIEF

2015

2020

US

2.4% 0.3%

2020

JAPAN

2015

2.1% 0.3%

2020

GERMANY

2015

1.5% 0.2%

2020

CHINA

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UK

JAPAN ®

‘BIG FOUR’ PENSION FUND POISED FOR OVERSEAS REAL ESTATE PUSH

rics.org/modus

Chinese businesses learn about the benefits of IPMS

Observers believe the pension fund will also announce a private-equity manager in the near future.

RICS has hosted a roundtable The decision follows that of on international property another Big Four member, the measurement standards (IPMS) Federation of National Public Service at the headquarters of Lenovo £1.3bn Science 1.1% Personnel Mutual Aid Associations, Group in Beijing. Representatives £1.85bn Digital 1.3% which indicated in October that it from corporations including £2.5bn Sea 1.5% would also invest in real estate.

Lenovo, Heng Seng Bank, and £8.52bn Road 7.1% The Chikyoren has already DuPont joined the discussion. £15bn Air 12.4% appointed – in March and June Pierpaolo Franco, RICS respectively – Japanese firms managing director, China, One of Japan’s “Big Four” pension COMING INTO BLOOM Resona Bank and Nomura Asset explained to representatives funds has become the first to The Chikyoren’s Management to manage its that RICS can help ensure nominate a manager for overseas appointment £91.5bn Rail 75.8% domestic real estate portfolio. the consistent delivery of real estate, an appointment that of UBS and The pension fund has not measurement standards, as is likely to encourage its peers to JP Morgan could signal a indicated how much of its portfolio each RICS member is trained make a similar decision. resurgence in it will allocate to property. But it is to approach their work from a The Chikyoren has nominated Japanese funds likely it will initially invest a maximum global perspective. International UBS Asset Management as its first investing in real of 5% of assets ($9.25bn) in all business needs consistent international property manager. estate overseas alternatives, including not only real standards, and IPMS is one of The $185bn pension fund, officially the missing links. called the Pension Fund Association estate, but also infrastructure and private equity.

Stefanie Sun, RICS associate for Local Government Officials, had It is reportedly targeting longdirector in valuation, pointed out requested proposals for managers term, core holdings that will that 70% of global wealth is held of both domestic and international immediately produce income. in property, according to World alternative asset classes last July.

“Brexit” may encourage Japanese Bank, but valuations are based on JP Morgan Asset Management, investors to target Britain, making inconsistent measurement data. meanwhile, has won the mandate the most of the positive exchange The aim of IPMS is to meet the to manage the Chikyoren’s portfolio rate (news, p11). requirements of property users of international infrastructure. for consistency in measurement.

So far, several governments have adopted IPMS including REVIEWING THE LATEST DISCUSSION the UK and Dubai, as well as POINTS AT RICS.ORG/LINKEDIN organisations and corporations such as the International Monetary Fund, Deutsche Bank, balance? Does the in my career was What’s holding back Shell and Manulife. nursing profession (say) gender diversity in the minimal and many Mario Jiang, director at CoreNet desperately want more times I considered built environment?

Global, Great China and Japan, men just to redress the doing other things. shared his professional points of balance? Simon Evans I would want the I’m not sure if view on space planning, allocation camaraderie that chromosomes, or FOLLOWING ON and management. He emphasised In any sector, you need having children, has an the men folk shared from February’s the importance of benchmarking the best people for the extended across the influence on success Difference of in China in providing cost job … The solution lies in an industry, whether board to all. Faoziah Opinion column efficiency, speeding up reform and in RICS engaging much male dominated or not. ‘Shade Gamu in the Modus transformation, offering crossmore proactively with I believe in merit and global edition industry solutions and optimising schools and at a much aptitude. Amber Jones I certainly think there daily corporate maintenance. earlier stage. Kids need should be an equality The roundtable was well to be thinking about a of opportunity, but In my 30 years in received by all parties. life in property at what is the case for estate management, 13/14. Nigel Morgan mentoring and support actively altering the

LINKING

modus #RICSmodus rics.org/modus

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@RICSnews

ASK THE BIG QUESTIONS

FEBRUARY 2016

INFOGRAPHIC IAN DUTNALL

The new face of public space 18 / Make it big in infrastructure 25 / Pedal power for property 36

Q3 2016_MODUS A SI A

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“The responses to this year’s Asia Rewards and Attitudes survey capture an industry in an increasingly hesitant mood”

I

t is now 10 years since Macdonald & Co and RICS published their first report on executive pay in the real-estate industry.

The responses on the latest survey capture an increasingly hesitant mood, backing up the predictions from last year’s report that confidence was declining. Demand for property is falling in several sectors and locations. Retail in particular has been hit hard in Hong Kong, so 2016 is likely to be a rougher ride than last year.

The state of the Chinese economy is also a significant cause for concern. Its stalling growth makes it harder to forecast future employment demand and wage increases, since we don’t yet know exactly how that will feed through to the property industry elsewhere in the region. Two statistics demonstrate that lack of visibility: 34% of respondents report that business sentiment is negative, double the number last year. Yet, 63% of respondents expect their employer to increase recruitment over the next 12 months. Company heads are also more than twice as bullish as their staff, which is an interesting tension between leaders and their employees.

Despite that gloom, it was heartening that salaries in the industry have held steady. The average salary for realestate professionals in Asia is $95,480, up only 1% over 2015. But of the 63% who reported an increase, the average rise was 9.6%. Bonuses rose 7% to an average of $26,268, and were received by 57% of survey participants.

Being a member of RICS commands a 12.1% premium in pay. The most junior positions – trainee, assistant or analyst – reported the highest increases in total takehome pay, both in double digits.

08 RICS.ORG/MODUS

The salary survey revealed a striking wage difference between men and women. Men earn an average of $100,720, a shocking 47.6% premium over the $68,225 that women take home. Although they start out with similar pay – women actually earn more than men between the ages of 18 and 24 – the gap widens once professionals pass the age of 40 and into the prime earning years for senior executives.

Given that women and men start out on the same salaries, we need to question what is the cause of this divergence.

One school of thought is that the disparity occurs over time through a series of appraisals and salary negotiations, and is largely a result of men being tougher negotiators and better networkers. Women might find it beneficial to build a strong relationship with their superior, establishing some common ground outside work. They should also make sure their own achievements are recognised and that female executives know their external value. Don’t be afraid to talk to headhunters that you trust, and don’t feel you’re being disloyal by considering other offers. As it stands, two-thirds of women say they don’t know how to request higher pay, and a similar number feel uncomfortable negotiating such issues. If so, they should consider participating in a workshop on negotiation.

For any employee hoping to negotiate a wage increase, research similar positions elsewhere to find out what they pay. Use the data, whether government statistics or open job postings, to your advantage. Don’t be greedy – but know what increment of increase you should command.

Timing is also important. If the team has been weakened by departures and your job duties have been enhanced, it’s a good time to ask for more. At that stage, the stability of the company is key, and your value increases.

Beyond the gender gap, it is striking that companies are willing to pay a 20.6% premium to secure the best candidates. This illustrates the intense competition for talent across Asia. With salary inflation at its most acute in the 18-24 age group, companies appear to be waking up to the high cost of recruiting people later in their careers.

READ THIS YEAR’S Asia Rewards & Attitudes Survey at bit.ly/asiasalarysurvey2016

ILLUSTRATION ANDREA MANZATI

WILLIAM GLOVER MANAGING DIRECTOR, ASIA, MACDONALD & COMPANY, HONG KONG

Intelligence

NEWS IN BRIEF

WE LIKE

®

rics.org/modus

AIG China joins list of companies to adopt IPMS AIG has become the latest company in China to recognise the use of international property measurement standards (IPMS) and agree to their adoption.

The global insurance group joins China National Offshore Oil Corporation (CNOOC) and international publishing and events company Informa in expressing their interest in implementing the standards.

AIG China said it acknowledged the value of IPMS as an effective benchmark of measurement standards, while both CNOOC and Informa referred to IPMS as the “gold standards of property measurement”.

RICS is now working with several companies in China and Hong Kong to launch pilot programmes aimed at rolling out IPMS within their businesses.

RICS forms business and technical links with Intertek RICS and Intertek have officially established a strategic partnership, which will see them form a long-term relationship of technical and business exchange. RICS will support Intertek on customised talent solutions, as it seeks to transform itself into an international engineering consulting company.

Representatives from both parties, as well as the Shanghai Construction Consultants Association (SCCA) – the relationship match-maker – attended the signing ceremony.

Intertek CEO Wei Deng stated his appreciation for the support received from SCCA in promoting the internationalisation of Shanghai’s construction consultancy service. RICS China managing director, Pierpaolo Franco, added that, through collaboration with leading associations such as SCCA, RICS will be able to better understand local market needs.

BRIGHT IDEA Fitting sensors to street lights has enabled Los Angeles to decrease its reliance on local citizens phoning to report outages

CityTouch What’s that? Street lighting is one element of our urban environment that is a perfect fit for smart technology. Philips’ CityTouch is one system helping users to control the lighting infrastructure of an entire city – turning lights on when required at different times of the day, or dimming them in selected areas to reduce energy. Operators can monitor and manage the maintenance of public outdoor lighting, while also being able to store and analyse historical information about energy consumption.

How does it work? Once a connector node is installed on an existing street light, it transmits its location and operational information via the mobile network, giving operators a real-time, map-based view of all connected light points. With accurate information on street-light location and type, maintenance can also be drastically simplified.

Where is it being used? Los Angeles used to rely on maintenance scout crews and more than 40,000 calls a year from the public to check for street light outages. Now, around half of the city’s light points are being retrofitted with LED luminaires and connected with CityTouch, so maintenance needs can be predicted in a proactive, rather than reactive way. Meanwhile in Salobre, Spain, the system’s use has helped reduce the town’s electricity consumption by 70% and cut CO2 emissions by 29 tonnes a year. Lights in public spaces are also controlled to provide extra illumination where it is needed most, improving safety. bit.ly/philips_citytouch

ON RECORD

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

The relocations will help create a sound electromagnetic wave environment LI YUECHENG Senior Communist Party official, Guizhou, China China is to relocate more than 9,000 people to make space for FAST, the world’s largest radio telescope. Those affected will each receive RMB12,000 (£1,275) in compensation.

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.

Q3 2016_MODUS A SI A

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WINGS OF DESIRE The recently opened World Trade Center Transportation Hub in New York is arguably the world’s most beautiful train station, and with a final price tag of $4bn – originally budgeted at $2.2bn – it is definitely the world’s most expensive. Even this final bill represents a compromise on the part of architect Santiago Calatrava, whose original design allowed for the building’s sweeping “wings” to open and close; a feature that was shelved in the wake of the global financial crisis in 2007.

However, the glass skylight is retractable, and will be opened on temperate days, and on 11 September each year.

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Intelligence SHOPPING AROUND

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72 45

High streets and shopping malls remain the most popular formats for expanding retailers across EMEA, Americas and Asia-Pacific (%) Source: CBRE

High streets Shopping malls Shopping malls (regional) (open air)

20 Transport hubs

18 Outlets

18 Retail parks

15

Concession counters in department stores

8 Duty free

JAPAN

INVESTORS POISED TO EXPLOIT BREXIT FALLOUT The shock of “Brexit” has created plenty of uncertainty in global markets, but might have created opportunities for one group in particular. Japanese investors have not been especially big players in the UK since the real-estate bubble of the 1980s, but will now be reassessing their holdings.

“We expect that Brexit may accelerate Japanese investors’ overseas real estate investment, rather than slowing down,” commented Yukihiko Ito, managing director of Tokyo-based Asterisk Realty & Placement Agency. The chance to pick up trophy assets at a discount will propel them, Ito believes.

The Japanese yen has strengthened AMANDA CLACK FRICS RICS PRESIDENT from a low of ¥198 to the pound in August I AM INCREDIBLY HONOURED TO BECOME PRESIDENT OF THIS GREAT INSTITUTION. MAKING 2015 to ¥130 now – a gain of 34%. And CONNECTIONS negative interest rates within Japan are From the moment I joined RICS, I have been a passionate advocate for the Top of the new 2014 finally forcing large institutions to seek role of surveyors, and I am fortunate that my qualification has led me to president’s to 2015 more international exposure.

-do list for her become partner at EY. Most Japanese investors have limited year in office% is % 9 I am37 also fortunate to30 succeed Martin J Brühl, who has championed our 6 % 6 exposure to UK real estate, thanks to 4 3 a subject close % % % on this, %as we work in sustainable investment in real estate. I will help build % % to her heart 0 their conservative investment strategies. continue to push for the adoption of our standards and recognition of%our However, the huge currency plunge that Architects/ Self generated Specialist property Management Other status, adding to the excellent years in the vital specialists advisoryprogress company made in recent consultants followed the Brexit vote means the design market areas of sustainability, construction and property measurement, is trading at a huge discount to preprofessionalism and ethics.

These topics must be at the heart of any modern referendum values. president’s agenda.

Ito added that Japanese capital will likely target US and Australian markets Harnessing the experience gained from my 30 years in the sector, I will first. But since those are already getting focus on three key themes over the coming year. tapped out or driven to unreasonable First and foremost, the need to build new infrastructure and replace and prices, they will likely have to shift their renew ageing assets is glaringly obvious. And yet matching funds to projects focus. Both the UK and EU will be and supplying professionals with the right skills remains a challenge. “impossible” to pass up, he said.

We have an opportunity to establish RICS as a leading voice in the sector.

“Japanese investors need to invest Through our research we are leading thinking on the role of infrastructure in overseas real estate right now, and hubs in placemaking, and the International Construction Measurement cannot stay conservative for a long time.”

Standard has the potential to make an enormous impact on the sector.

Second, the war for talent. The need to embrace diversity and inclusion within our profession has never been greater. I will focus on making the case for a more diverse and inclusive industry that attracts, retains and develops talent, and enables existing professionals to remain relevant.

Third, cities. Urbanisation relies on the delivery of smart infrastructure to generate wider economic growth. Cities are incubators of innovation and, through the sharing of leading practices, we can showcase the role of our professionals in the built environment.

In particular, I will be looking to Shanghai, where we will host our second World Built Environment Forum; to Mumbai where we are opening our second School of the Built Environment; to the City of London as a key HALO BRAND financial centre; and to Rio de Janeiro with my interest and expertise in cost Mitsui Fudosan is one of the few Japanese investors funding projects in London, such as Angel Court engineering and commercial management.

“We can establish RICS as a leading voice in infrastructure”

ILLUSTRATION BERND SCHIFFERDECKER IMAGE PA IMAGES; COURTNEY VERRILL; ANGEL COURT BANK

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Q3 2016_MODUS A SI A

11

MSc International Real Estate Registration No. 252293

Founded in 1845, the Royal Agricultural University (RAU) is leading the development of teaching in land and property management.

Programme Features: •

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Course can help experts seek a career in real estate both local and international practice

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Please contact our programme consultant for more imformation Website: www.hkaom.edu.hk / www.rau.ac.uk

12

Register/Enquire: 2334 8282 Email: info@hkaom.edu.hk Address: 25/F, SUP Tower, 75-83 King’s Road, North Point, Hong Kong RICS.ORG/MODUS

It is a matter of discretion for individual employeers to recognize any qualification to which this course may lead.

Local Representative:

Intelligence

NUMBER CRUNCH WHERE ARE THE HIGHEST ANNUAL LIVE/WORK* COSTS PER PERSON, AND BY HOW MUCH HAVE SUCH COSTS RISEN IN THE PAST FIVE YEARS? Source: Savills London $112,800 14.9M pop

18%

New York $111,300 20.2M pop

39%

SECRET SURVEYOR

“I knew straight away that I had entered the wrong discipline and to continue would be a mistake”

Hong Kong $103,200 12.5M pop

-3%

U

ARE YOU INTERESTED in writing a future Secret Surveyor column? Send your musings on the profession to editor@ricsmodus.com

Paris $78,200 12.5M pop San Francisco $66,300 4.5M pop

1%

Tokyo $69,800 37M pop

49 %

-6 %

26 %

9%

Los Angeles $48,600 13.3M pop

24 %

Miami $49,000 5.8M pop

Shanghai $43,700 24.8M pop

28 %

Moscow $48,300 12.2M pop

18 %

Berlin $27,700 4.3M pop

Rio de Janeiro $16,500 12.4M pop

Both London and New York have experienced massive rises in annual live/work costs over the past five years, calling into question their ability to attract new talent. Meanwhile San Francisco’s booming tech sector

20 %

Johannesburg $20,700 8.6M pop

Mumbai $28,400 19M pop

-2 %

Dublin $36,500 1.7M pop

-1 7%

18 %

Chicago $44,700 9.6M pop

Sydney $49,500 4.9M pop

71 %

Dubai $58,300 2.4M pop

10 %

4%

Singapore $60,600 5.5M pop

N/ A Lagos $63,000 12.2M pop

30 %

niversity to working life is a daunting process: a long, hard road of applying for jobs, followed by a nerve-wracking period where knock-back follows knock-back.

With every interview there seemed to be more competition, and with every unsuccessful application the pressure began to build. There were times I thought I would never get my first job.

Eventually I was hired by a residential surveying firm. It lasted a day. I knew straight away that I had entered the wrong discipline and to continue would be a mistake. Yes, it had taken me forever just to get this far, but I knew I had to be honest with myself and with my employer, who was very supportive of my decision.

After all, another graduate would soon slide in and take my place.

Finally, I got my first job as a building surveyor – a diverse and ever-changing role that always keeps me on my toes.

One minute you can be researching construction technologies, and the next you could be sent to inspect a stormdamaged property. It is this diversity, however, that keeps building surveying interesting. I can speak for myself and say I am at my happiest when squeezing through a loft hatch to inspect a leaky roof – that’s what this job is all about.

My university lecturer always insisted that there were two types of surveyor: a shirt-and-tie surveyor and a boiler-suit surveyor, and I can truly say I’m the latter.

It wasn’t until a few months into my new job that I realised what he meant: a boilersuit surveyor is someone who doesn’t mind getting under floors, in roof spaces and getting himself dirty to find the source of a problem.

That’s me. And, finally, I’m happy.

*The Live/Work Index measures the combined cost of residential and office rental per person per year, to work out how expensive it is to accommodate an employee in a particular city

has helped make it the secondmost expensive American city, ahead of Los Angeles.

WILL LACK OF AFFORDABILITY put the brakes on booming cities?

Tweet using #RICSmodus

Q3 2016_MODUS A SI A

13

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As its reformist, populist government opens up more pathways for overseas investors, is the world’s fourth most-populous nation about to have its moment in the sun?

Words Alex Frew McMillan Illustration Sam Chivers

14 RICS.ORG/MODUS

Indonesia

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ver since Indonesia’s president, Joko “Jokowi” Widodo, took the helm in October 2014, a feelgood factor has been radiating out across the world’s largest archipelago. The country is seeing dramatic changes in its economy that should create a highly attractive property market, whether that be office, residential, retail or logistics space.

The link between politics and real estate is both direct and indirect. The government has sought to capture more tax by imposing a heavier burden on residential purchases in particular. That has scared buyers off, while a large amount of new supply looms over the office market.

Over the long term, though, prospects are very sunny.

The government insists that it will use its increased tax revenues to ramp up infrastructure spending, in a nation that desperately needs new power stations, ports and highways.

The Jakarta Mass Rapid Transit subway system – due to open in 2018 – will reshape the capital’s property market geographically as well.

“Everything here is about politics,” says Matthew Shaw MRICS, managing director for Indonesia at Cushman & Wakefield. “It’s a new dawn of sorts, with a populist government, and a break with the past and the vested interests that have affected the political scene.”

Under Jokowi’s leadership, reform is now the watchword.

It appears to be more than an empty promise. Jokowi, a former furniture salesman, hails from a humble background.

He is the first president from outside the military or political establishment, a cabal that ruled with no checks or balances.

His election is no fluke. He is aided by another outsider, the reformist governor of Jakarta, Basuki Tjahaja Purnama.

Known by his Hakka nickname, Ahok, he runs as an independent, and is both ethnically Chinese and a Christian, a “double minority” status that has drawn the ire of hardcore Islamists in the majority-Muslim nation. But Ahok, who will run for office again next year, has already signed 1 million Jakartans up in support of his campaign, double the amount necessary for him to run independently.

Since Jokowi must step down after two five-year terms, it is thought that he will support Ahok, who is a close friend, to run for president in 2024. That could promise two decades of change. The pair ran on the same ticket when Jokowi was elected Jakarta governor, with Ahok his deputy.

Structural reform is incredibly hard to pull off, as Japanese prime minister Shinzo ¯ Abe is discovering. But a full 20 years of change – if it comes to pass – would be more than enough to move the needle in terms of the real-estate market.

For now, real estate in Indonesia means only the “Jabodetabek” region – the megacity alphabet soup made up of Jakarta and the surrounding suburbs of Bogor, Depok, Tangerang and Bekasi. The urban conglomeration of 30 million people is the second-biggest in the world, behind only the 38 million in greater Tokyo.

The tax office of the new administration has enforced greater scrutiny over how buyers amass funds for property purchases. Few people in Indonesia pay tax, and an amnesty is in the works that is designed to encourage the country’s wealthy families to repatriate money. Indonesia taxes its population on worldwide income, but has few resources to chase down money hidden offshore, often in Singapore. »

印尼之夏 随着改革派民粹主义政府为 海外投资者提供更多投资渠道， 这个全球人口第四多的 国家 会否吐气扬眉﹖ 文：Alex Frew McMillan 图：Sam Chivers

从 印 尼 总 统 佐 科 威 在 2 0 1 4 年 1 0月 掌 舵 以 来 ，这 个 全 球 最 大 的 群 岛 洋 溢 着 一 片朝气。印尼的经济正面临巨大改变，应 该 会 令 地 产 市 场 极 具 吸 引 力 ，包 括 办公楼、住宅、零售或物流空间。 政 治与房 地产之间有着直 接和 间接 的 联 系。政 府 借 着对住 房加 税 来 增加 税收，结果令买家 裹足不前，但办公楼物业市场却有大量新楼涌现。 不 过 ，长 远 前 景 却 是 非 常 光 明 的 。印 尼 急 需 兴 建 新 的 发 电厂、港口和 高 速 公 路，政 府 坚 称 赚 取 更 多 税 收 后 会 用 以 抵 销 基 建 开 支 。雅 加 达 快 速 集 体 运 输 地 铁 系 统 定于 2 0 1 8 年启用，将 会 改写印尼 首都 的房地产市场的地 理格局。 皇家特 许测量师学会 会员、高纬 环 球印尼董事总经 理 Matthew Shaw 表示： “ 这些全跟政治相关。现在 印尼 呈 现 一 番 新 景 象，掌 权 的 是 民粹主 义 政 府，发 展不 再受过 往 及左右 政 局的 既得利 益者 阻碍。”在 佐科威的领导下，一切讲求改革，这似乎并非空言。佐 科威是 平民出身，曾当过家具销售员，在印尼，军政 界 统治者往 往不受制 衡的，佐科威是印尼第一 位 来 自非军 政界的总 统。 佐 科 威 当 选 并 非 侥 幸 。他 得 到 了另 一 位 外 界人 士 协助，就是雅加达改革派特区首长钟万学。钟万学以 客 家 语 小 名 阿 学 为人 所 熟 识 ，他 以 独 立 人 士 身 份 参选。钟万学是华裔人士，信奉基督教，他的“双 重 少 数 派 ”身 份 招 来 了 印 尼 主 要 教 派 伊 斯 兰 教的中坚分子不满。不过，阿学明年会再次竞选，现 在他 已争取得 10 0万名 雅 加 达 人签名 支 持 参 选，较 独立参选所需的人数多出一倍。 佐科威完成两个五年任期之后必须退任，因此，人们 都认 为 他 会支 持 好 友 阿学 在 2 02 4 年竞 选 总 统。这

Q3 2016_MODUS A SI A 15

Indonesia

F

or the first year, repatriated money would have to go into government bonds. But as of the second year, investors should also be able put it into real estate.

“The money is around,” says Michael Broomell, managing director for Indonesia at Colliers International,“it’s just that people don’t want to spend it,”fearful the tax office will catch them. “The tax amnesty would free up a lot of that cash.”

Jokowi is also slashing red tape, and has taken 3,000 restrictions out of the system, removing conflicting legislation at the federal, regional and local level.“Every part of the economy was affected,” says Todd Lauchlan FRICS, the country head for Indonesia at JLL. He believes both Jokowi and Ahok, as former businessmen, are “straight shooters,” committed to cracking down on corruption.“It is a completely different world, and we are starting to see the impact of it.”

Jakarta’s residential market has suffered since the government in 2015 slapped an extra 5% “luxury tax” on the homes that are sold for more than Rp5bn ($375,000).

There is then a “super luxury tax” of 20% on apartments worth over Rp10bn ($750,000). So buyers are taking a “wait and see” attitude. Mass redundancies in the oil and gas industry have stripped the market of many of the highearning expatriates who occupy the properties at the top end of the market.

The oil layoffs have also hit the office market and the second leg of the stool: financial services. Vacancies more than doubled in the 12 months through to the second quarter of this year, to 18%, says Cushman. And with 17.7 m ft2 (1.64m m2) under construction, that figure is expected to climb further. Average rents ran at $27/ft2 ($291/m2) a year as of this June, down 8% in a year.

Office supply in Jakarta is forecast to increase 50% over the next five years, so it is a buyer’s and renter’s market.

“It is actually a good time for people to have a long-term view,” says Broomell.

It may be a much-needed breather. Prices and rents peaked in 2014 when the vacancy rate fell to 4% for the best offices.

“Any given building, essentially, was full. The landlord didn’t need to take your call,” says Shaw. That has changed. He recently attended a briefing with the Council on Tall Buildings and Urban Habitat, which said that, as of 2015, Jakarta had more buildings over 200 metres in height under construction than anywhere on earth.

“We are forecasting there will be a reshuffling of the deck,” says Lauchlan. “There will be a flight to quality coming out of older properties, or buildings not fit for purpose. If you’re a successful organisation, you can take advantage of a market that is more in your favour.”

16 RICS.ORG/MODUS

可 能 会 带 来 二 十 年 的 转 变 。当 年 佐 科 威 获 选 为 雅加达特区首长，担任副首长的正是阿学。 正 如 日 本 首 相 安 倍 晋 三 的 经 历 ，结 构 性 改 变 实 行起来并不容易，可是，足足 20 年的转变（若实现的 话）定 必 能 革 新房 地 产 市场 。 就目前 而 言，印尼 的 房 地 产 仅 指“ 雅 茂 德 丹 勿 ”地 区。这个大都市区由雅加达和周边郊区组成，包括茂 物、德波、坦格朗和贝卡西。这个全球第二大的大都 市区人口达 3,000 万，仅次于东京的 3,800万。 新政 府的 税务局已在 更严密监察 买家如 何集 资 置 业。在印尼交 税 的 人不多，当局 正研 究 赦 税 措 施，以鼓励印尼富户把资金调回本国。印尼对国民在 全 球的收 入征 税，却没有多少资 源 可用于 追讨在国 外的（往往是新加坡）所得。 资 金 调 回国之 后，第一年 必须 投 放在 政 府 债 券，但 投 资 者 可 在 第 二 年 将 资 金 同 时 投 放 在 房 地 产。高 力国际的印尼董事总经理 Michael Broomel l 说， “ 资金是有的，只是人们不想花，因为担心税务局要他 们 纳 税，实施 赦 税 措施会 令 释放 这 类现金。” 佐 科 威 还 简 化 制 度，取 消 当中 3 ,000 项 限制，令 联 邦、区域 和 地方法 例 不 再互相 抵 触。皇家特 许测 量 师 学 会 资 深 会 员 、仲 量 联 行 的 印 尼 主 管 T o d d Lauchlan 说， “印尼经济的方方面面都受影响” 。他相

现在印尼呈现一番新景象，发展不再受 过去及左右政局的既得利益者阻碍。 MATTHEW SHAW MRICS 高纬环球

Indonesia’s economy should grow at 4.9% this year, reports the International Monetary Fund, picking up to 5.3% in 2017. Over the next five years, growth should settle in at 6%, the same pace as headline-grabbing China.

JLL set up a Japan desk in Jakarta at the start of this year to drum up business with companies looking to move into Indonesia. But with the focus shifting away from Japan’s traditional wheelhouse of electronics and car-parts manufacturers, it is retailers, in particular, that are driving demand. Aeon Mall opened BSD City in Tangerang last year, and has reported footfall of around 12 million in its first 12 months. Clothing chain Uniqlo, the Fast Retailing subsidiary, is also expanding aggressively.

J

apanese developers Mitsubishi Estate, Mitsui & Co, Mitsui Fudosan and Sanko Soflan have also announced new projects. Faced with an ageing population at home, they are keen to tap into Indonesia’s more youthful, surging generation.

Chinese companies, on the other hand, are bringing their infrastructure expertise. The Chinese government has been encouraging that expansion as a strategic relationship.

“Indonesia needs the money and the expertise that China can bring to the table, and China needs the resources that Indonesia has,” explains Broomell.

In the past, Indonesian companies were loath to enter joint ventures with foreign partners. “Now with the market weakening, land owners and developers are much more receptive to development from overseas,” says Broomell.

The government has also played its part to spur growth in infrastructure. All land purchases used to have to be settled “by mutual agreement”– and as a result some toll roads took 20 years to be built. It recently introduced a land law that requires property owners to sell within 18 months, after which the government can force a sale.

Although tighter ties with China present some fraught political considerations, policy watchers say a pragmatic businessman such as Jokowi would encourage them, left to his own devices. More than likely, he will get his way. n

It’s a new dawn of sorts, and a break with the past and the vested interests that have affected the political scene

ll

ll

MATTHEW SHAW MRICS Cushman & Wakefield

信由于佐科威和阿学以前经商，所以都很“殷实” ，他 们 致 力 打 击 贪 腐 。他 说， “ 这 是 一 个 完 全不 同 的 世 界，我们开始看得见它产生的影响。” 自 2 015 年 政 府 对 售 价 超 过 50 亿 印 尼 盾（ 375,000 美元）的住房额外征收 5%“奢 侈税”之后，雅加达的 住 房市场 一直 大受影响，其后 还 对价 值 超 过 100 亿 印 尼 盾（ 750,000 美 元 ）的 公 寓 征 收 5 %“ 超 级 奢 侈税” 。因此之故，买家都 抱着“走着瞧”的态度。石 油 和 燃 气 业 大 量 冗员 令市 场 失 去不少高 薪 外 国 人 的市场，他们 往 往 是 房地产 顶 级物业的住客。 石 油 业 裁 员 也 打 击了办 公 楼 市 场 和 第 二 支 柱： 金融 服务业。高纬 环 球 说 直到本年第二季度的 12个 月 ，办 公 楼 空 置 率 增 加 超 过 一 倍 ，达 1 8 % 。目 前 的在 建 大 楼 面 积 达 17.7百 万平方英 尺（ 1.64百 万平 方米） ，这个数字估计 还会上升。截至本年 6月，按年 计 平 均 租 金 是 每 平 方 英 尺 2 7 美 元（ 每 平 方 米 2 9 1 美元），在一年间下跌 8%了。 预 测 雅 加 达 的 办 公楼 供 应 量 会 在 未 来 五年内 增 加 50% ，这 有 利 于 买 家 和 租 户 。B r o o m e l l 说“ ﹐对 于 目光长远的人来说，这正好 是时机。” 也许这正是合适的喘气机会。房价和租金在 2014 年 升到高峰， 当时顶级办公楼的空置率下跌至4% 。Shaw 说， “ 基 本上任 何一楝 大 楼 都没有空置单位，业主根 本无需接您 来电。”现在情况不同。他 最 近出席了世 界高层 建 筑与都 市人 居学会的简 报会，会上指 截 至 2015 年，雅加达楼高 200 米以上的在 建 高 楼 比 世 界 上任 何 地方都 要多。 L auc h l a n说 “ ， 我 们 预 测 情 况 会 有 调 整，发 展 会 转移为 将 旧 楼 或 不合用 的 楼 房 改 建 成 优 质 建 筑。 经营有道的公司都会把握有利于己的市况。” 国 际 货 币 基 金 组 织 报 告 指 ，印 尼 的 经 济 在 本 年 应 该 有 4.9 % 的 增 长 ，2 0 1 7 年 的 增 长 率 会 上 升 到 5 .3% 。增 长 率 在 未 来 五 年 会 稳 定 维 持 于 6%， 与备受关注的中国并驾齐驱。 在 今 年 初 ，仲 量 联 行 在 其 雅 加 达 分 公 司 设 立 日 本 专 部 ，跟 有 意 将 公 司 迁 往 印 尼 的 公 司 接 洽，但 现在日本传 统的电器和 汽车零部件制造商不 再是 焦 点，推动 需求的尤其以零售 商为主。去年，永 旺 梦 乐 城 在 坦 格 朗 开 设 B S D C i t y ，在 开 业 首 12 个月 共 录 得人 流 1,200 万人。迅 销 公司 的 子 公司 服 装 连 锁 店 优 衣 库 也 在 大 肆 扩 张。 日本开发商三菱地所株式会社、三井物産三井不动产 株式会社和三光资财规划也宣布新项目。 面 对 日 本 人 口 老 龄 化 ，它 们 都 积 极 转 往 人 口 年 轻 兼 具 活力 的 印尼 发 展。 另 一 方 面，中 国 公 司 也 带 来 基 建 专 业 技 术 。中 国 政 府 一直 鼓 励 扩 大 这种 战 略 关 系。Broomel l 解 释 说， “ 印 尼 需 要 中 国 拥 有 的 资 金 和 专 业 知 识，而 中 国 需 要 印 尼 拥 有 的 资 源 。” 过 去，印 尼 公 司 都 不 愿 意 跟 外 国 公 司 组 成 联 营 企 业，Broomell 说， “ 现在由于市场不断转弱，土地拥有 人 和 开发 商 都 较 以 前 更 加 接 受 境 外 资 金 参 与 发 展。”政 府 在 推 动 基 建 增 长 方 面 也 发 挥 了作 用 。 以 前，但 凡买地 都 要 经 过“双方 协议”，结果 有些收 费 道 路 要 花 上 20 年才 建 成。政 府 最 近 推 出一项 土 地 法，要 求 业 主在 18 个月 内 出售 物 业，逾 期 则 由 政 府 强行出售。 虽 然 跟 中 国 加 强 联 系 令 人 有 些 政 治 忧 虑，但 政 策 观 察 家 说 像 佐 科 威 一 类 的 务实 商 人 会 以自己的 方式促 成其 事，他很可能会成功。

Q3 2016_MODUS A SI A 17

his is the startling figure that the World Green Building Council (WGBC) and the International Energy Agency predict will be necessary to limit global warming to less than 2°C. Emissions from existing stock must be reduced by 80%, and all new development must be net zero energy by 2050.

Meeting those targets will require a radical rethink, not just of the way we build and refurbish, but also of how properties are funded, valued, procured and managed.

It is a massive challenge, but the industry is planning a massive response, and it may be that we look back at the first-ever UN Buildings Day, held at last December’s 18 RICS.ORG/MODUS

UN climate talks in Paris, as the moment when it all clicked. It was on this day that representatives of the entire global built environment sector met to agree a pathway to keeping global warming below 2°C. It was also on this day that the Global Alliance for Buildings and Construction – a network that brings together countries, cities and the building sector – was launched, with RICS as an initiating partner.

Although the wider climate agreement from Paris has now been signed, maintaining the built environment sector’s momentum in helping to meet its goals will be crucial.

Setting higher standards within building codes provides certainty for investors and a level playing field, says Tatiana Bosteels,

WORDS KATIE PUCKETT

BY 2050, OUR SECTOR NEEDS TO REDUCE ITS CARBON EMISSIONS BY 84 BILLION TONNES

Climate change

THAT’S EQUIVALENT TO TAKING 22,000 COAL-FIRED POWER STATIONS OFFLINE head of responsible property investment at Hermes Real Estate, and co-chair of the property working group at the United Nations Environment Programme Finance Initiative: “If everyone has to do it, it will be internalised into the investment models.”

This is the sector’s “tobacco moment”, Bosteels believes, equivalent to when the link between smoking and ill health became incontrovertible. “As a minimum, investors have to assess carbon risk and whether it’s material to the assets they have.

They may not have an exposure, but no one can claim they didn’t know there was risk.”

Bosteels is a lead author of Sustainable Real Estate Investment, Implementing the Paris Climate Agreement: an Action Framework,

which explains how investors can meet their fiduciary duty to manage environmental, social, governance and climate-related risks.

In the future, further regulatory pressure will threaten to diminish the value of poorer-performing assets or make them obsolete, while rising energy prices and tighter carbon budgets will make inefficient buildings much more expensive to run.

Longer term, there are the physical risks associated with climate change itself – the impact of extreme events on buildings or on the supply chain needed to service them.

Property professionals can make an important difference simply by asking whether these risks have been considered properly, says Roland Hunziker, director »

Q3 2016_MODUS A SI A 19

of sustainable buildings and cities at the World Business Council for Sustainable Development (WBCSD). “As long as we don’t ask certain questions, they don’t show up as a risk. If you have to provide information and cannot, then an investor will ask why. Asking the question will drive the market to change.” These concerns should support the development of betterperforming new buildings and underpin a business case for upgrading older stock.

Public opinion is also a powerful driver for action. At the Paris talks, 91 countries set building-specific targets within their emissions pledges, and they will have to report on their progress every five years.

WGBC chief executive Terri Wills predicts that this openness will trickle down to the corporate sector. “People will reward those countries and companies that are moving ahead, and name and shame those that haven’t made good on their promises.”

W

ills was struck by the way in which her home country of Canada was publicly ridiculed by marchers at the UN Climate Summit in September 2014, when its prime minister failed to even turn up. In the future, failure to act could influence the outcome of trade negotiations: “You may have countries that are meeting their goals who say they don’t want to work with countries that aren’t doing their part.” Countries could, in turn, blame companies for blocking the way.

Meanwhile, corporates are increasingly aware that recruits will favour companies with a strong record on social responsibility.

“As people see the impact of climate change worsen over the coming years, this will increase the pressure,” says Wills.

Transparency is also likely to become an important market driver at asset level, as smarter buildings make it possible to track energy consumption in real time. This live data will eventually replace labels such as energy performance certificates or rating schemes such as BREEAM or LEED, that may bear little resemblance to actual consumption. “If you make information more transparent to people, they can make choices,” comments Rebecca Pearce, EMEA head of sustainability at CBRE.“They might choose to take no action, but if they don’t have the information, they definitely can’t.”

In Australia, Pearce’s home country, the government made disclosure of energy

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Financial teams in each company need to roll up their sleeves and get a lot more involved in sustainability

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JENNIFER CLARK Skanska

ratings mandatory at sale, lease or sublease in 2010.“They didn’t say you have to have a minimum rating, just that you had to disclose it. So it was almost enforcing a market consideration of energy efficiency.

Now there’s a self-sustaining market around having the most sustainable building that doesn’t depend on government legislation.”

In some emerging economies, electricity consumption may not even be billed at the level of individual buildings, says Pekka Huovila, coordinator of the UN Sustainable Buildings and Construction Programme, which is led by Finland’s Ministry of the Environment. “In many cases, there may just be one meter for the whole block or group of buildings, so the individual consumer doesn’t see the impact of their own choices.”

Energy-efficient properties are not necessarily more expensive to build, but the costs can be distributed differently, comments professor Thomas Lützkendorf, director of the Institute of Sustainable Management of Housing and Real Estate at Karlsruhe Institute of Technology in Germany. “If you have a fixed budget for your house, it’s up to you whether you spend it on the envelope or on a beautifully designed bathroom,” he says. “My strategy is always to convince investors to invest first in the performance-related parts of a building such as the envelope or HVAC [heating, ventilation and air-conditioning] system.”

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osts will also be shifted to earlier in the construction process and the property life-cycle – investing more up front to reduce energy costs later, spending longer on the design or involving members of the supply chain at an earlier stage. Fundamental decisions on the orientation of a building may not add cost but they do need to be considered at the earliest stages.

Huovila was involved in an office project in Nairobi where solar panels were installed

Climate change

at an additional cost of 3%.“But the payback period was between 2.5 and four years, and after that they would have free electricity for the 30 years to follow. Life-cycle thinking means not just investing for shortterm profit. That is going to require some transformation in the mindset of clients.”

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he availability of specific data on actual building performance should enable better design decisions, but there will also have to be a more integrated approach. Right now, investors, developers, designers, builders, managers and occupiers hand off to one another with very little communication between disparate links.

The ideal scenario would be an industry that is a lot more collaborative, says Jennifer Clark, senior vice-president for green and corporate community investment at Skanska, with much earlier involvement from contractors and product suppliers: “It would be a lot more productive if the whole supply chain could sit around the table early on and work together.”

In order to embed sustainability into the process, it is critical that the commercial members of project teams take ownership of it. “I think the financial teams in each company need to roll up their sleeves and get a lot more involved with sustainability,” says Clark. “They need to take ownership of how it is reported, or how it is measured and turned into financial benefits.”

The WBCSD is also exploring ways in which property life-cycle thinking can be made more relevant for decision-makers: “It’s hard to drive a common vision when the investor and real estate communities speak a different language to [that of] the supply chain,” says Hunziker. “We need to learn how to translate technical language used to describe a building’s life-cycle into issues around risk and return.” The chief opportunity for professionals involved in costing and valuing buildings is to provide that translation, he adds.

For those professionals seeking to translate sustainability into a compelling business case, there is help at hand in the perhaps unlikely shape of wellbeing.

In 2014, the WGBC published a report gathering together the evidence for how buildings affect their occupants’ health and, crucially, their productivity. It has gained market traction far more quickly than green building did – partly because

wellbeing is a more positive message than avoiding a distant apocalypse, but also because it comes with a more eye-catching business case. Whereas energy accounts for only 1% of a typical office occupier’s outgoings, staff costs account for 90%.

Even a tiny increase in productivity can make a significant difference to an occupier’s bottom line.

Wellbeing is rising up the agenda for the occupiers of new offices, but it is potentially an even better argument for the refurbishment of existing buildings – 90% of which will still be occupied in 2050. The Renovate Europe campaign estimates that bringing EU property up to the right standard could cost an additional €150bn-€200bn ($167bn-$223bn) a year.

“That investment is a massive opportunity to renew the building stock for the next generation and improve the quality of life of the people who are living and working in our buildings,” says Adrian Joyce, campaign director of Renovate Europe and secretary general at energy efficiency trade body EuroACE. “A properly renovated building, combining the right materials, technologies, equipment and controls, gives a much healthier indoor environment, which improves wellbeing and productivity.”

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ützkendorf believes sustainability is often misunderstood as merely saving energy: “We also have to think about comfort and user satisfaction – so first of all we are making good buildings and happy inhabitants, and then we are thinking about reducing resource consumption and impact on the environment.” Surveyors, valuers and advisers are best placed to hold all of these aspects in a balance and present them in a way that decision-makers can relate to.

Lützkendorf and his fellow professor at Karlsruhe, David Lorenz FRICS, are working with Ursula Hartenberger, RICS Global Head of Sustainability, to develop a training programme for valuers to integrate energy performance into economic valuations: “The RenoValue training shows that the valuer is a key stakeholder,” comments Lützkendorf. “If you convince one valuer, they will convince 100 of their clients.” n

DOWNLOAD the UNEP FI guide, Sustainable Real Estate Investment, Implementing the Paris Climate Agreement: an Action Framework, at bit.ly/UNEPFI_investor_risk

Q3 2016_MODUS A SI A 21

More people than ever before are rising out of poverty, with expectations for better housing.

Can we deliver? We look at three perspectives on the global middle-class problem

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IMAGE LISA WILTSE

Housing

Housing

BRAZIL’S MINHA CASA MINHA VIDA SCHEME HAS RESULTED IN 2.5 MILLION NEW HOMES IN JUST OVER FIVE YEARS. BUT ARE THEY IN THE RIGHT PLACE? Lise Alves senior contributing editor, Rio Times

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ailed as the largest housing programme in Brazil’s history, Minha Casa Minha Vida (My House My Life) has received both praise and criticism in its almost seven years of existence. Created in 2009 by former president Luiz Inácio Lula da Silva, Minha Casa Minha Vida promised to fulfil the dream of home ownership for millions of low-income families who were excluded from previous state-backed housing schemes. Concurrently, the government hoped to boost Brazil’s economy through the construction sector. At the time the programme commenced, the country’s housing deficit was estimated at more than 7.2 million units.

Funded initially until 2014 – primarily through the federal government’s PAC 2 (Growth Acceleration Programme) – the scheme initially called for at least 85% of units to be made available to families earning up to three times the minimum wage, which is currently R880 ($252) a month. The federal government allocates revenues to large construction companies, which build the units that are then made available to low-income families by the state-owned bank, Caixa Economica. Mortgages for families on the lowest incomes can be as little as 5% of their monthly earnings and can be as long as 30 years.

A study on the programme conducted by government-led research organisation IPEA (Institute of Applied Economic Research) found that 86% of its beneficiaries are single mothers; 96.2% of the units house a single family; and that less than 20% of homeowners’ income goes to pay for mortgage, gas, electricity, water and administration bills. The institute also found that 65% of those who live in the units identify themselves as black or mixed race.

“It was the first time in history that a housing programme was specifically directed towards the lower-income population. [Minha Casa Minha Vida], however, has some negative aspects which cannot be ignored,” says Alvaro Pereira, researcher for Rede Cidade e Moradia (City and Housing Network). The company was commissioned in 2014

by Brazil’s Ministry of Cities to evaluate the first two phases of the scheme.

Rede Cidade e Moradia’s report concluded that the biggest problem was the location of the housing. Because of the way the programme was structured, most of the logistics decisions were being made by the construction companies, who were building units on the outskirts of the urban centres where infrastructure, services and jobs are limited.

Evaniza Lopes Rodrigues, coordinator of Uniao dos Movimentos de Moradia (Union of Housing Movements), concurs: “Construction companies seek the best margins they can and purchase the cheapest land available, usually on the periphery of the city. This pressures municipalities to disburse revenues to improve infrastructure, transportation and services in these areas.

Revenues that many [authorities] just don’t have.”

According to Rodrigues, 97% of the federal government’s revenues for the Minha Casa Minha Vida programme go to construction companies, while the remaining 3% go to housing associations, such as hers. “What we are now seeking is a more balanced distribution between entities like ours and the construction companies,” she says, noting that since housing associations are not-for-profit ventures, they are able to build more units with better-quality materials than the construction companies.

Critics also say that a construction pattern for these units has been set without factoring in the individual characteristics of each location. “Minha Casa Minha Vida should have taken into consideration the continental dimensions of [a country like] Brazil, with its deep regional, social, economic and cultural inequalities,” the IPEA study concludes. “The program however, operates as a ‘Ford-like’ company in its large-scale production,” adds the research, alluding to an attitude of “any colour you like, as long as it’s black” among the construction companies.

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rom 2009 to 2014, during the first two phases of the programme, federal government data show that roughly 2.5 million housing units were constructed nationwide with around another one million already under contract to be built. Total investment for these first two phases, according to the Ministry of Cities, surpassed R270bn ($77.4bn).

The third phase of the programme was announced in September 2015, a few months later than expected, but housing experts claim it has yet to leave the drawing board.

This final phase calls for the construction of three million units by 2018. With Brazil’s economy sliding into a recession, however, government investment in Minha Casa Minha Vida is likely to be reduced significantly this year, with the focus shifting from new activities to simply finalising the already contracted units.

President Dilma Rousseff has repeatedly stated that the programme is a priority, but her administration might not have enough economic clout to carry out the final phase of what some say was the social initiative that won her two terms as Brazil’s leader. »

ANY COLOUR, AS LONG AS IT’S… The vast scale of Minha Casa Minha Vida has been made possible by the application of uniform designs and the placement of developments in peripheral locations

Q3 2016_MODUS A SI A 23

THE PRIVACY OF TRADITIONAL HOUSING IS MUCH DESIRED BY CHINA’S RISING MIDDLE CLASS, BUT DELIVERY IS FRAUGHT Alex Frew McMillan Modus Asia editor

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The norms for affordable housing have to be radically different from what is being done for luxury. This requires a lot of changes in local authorities

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NEERAJ BANSAL MRICS KPMG

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example of modern gated living but only for people on the bottom rung of property ownership. Perhaps reflecting concepts dating back to the siheyuan, the entire development has surrounding walls with four entrance points. But there are no guards, and anyone can come and go as they choose.

Although there is a playground and other public amenities, many residents cross over to a public park where they meet with residents from similar nearby gated communities.

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here are more complex reasons behind the desire for gated communities in China. Some people actually want them to be communities, not just gated. Most “high-class” modern developments are suburban, and lose any of the community feel of the Shenyang estate. The role of the street as a gathering place and source of communityprovided social services disappears. Neighbours who might look after the kids, invite the elderly over to join their grandpa, or host the block for a festival dinner, are too far away.

This legacy of sprawl can be traced back to the 1990s, when the country’s leaders envisioned very widespread urbanisation with small cities springing up all over the country. Local governments made most of their revenue from selling land to private developers, and incorporated many surrounding areas into the city limits. Now Beijing is seeking to reverse that pattern. It ruled in late February that no new gated communities should be built in China. The central government ordered those that exist to open their roads to the public, although it is unclear how that will be enforced.

McKinsey is optimistic that China will eventually adopt a pattern of urban densification rather than sprawl, and that its cities will end up phenomenally productive. The share of national GDP produced by cities will hit 95% by 2030, the firm predicts, all while China’s economy quadruples.

IMAGES GETTY; ALAMY

hina’s urban population is predicted to grow from 750 million to one billion by 2030.

Meanwhile, McKinsey predicts average urban household incomes in China to at least double by 2022, against a 2012 baseline, with more than 75% of China’s urban households qualifying as either mass middle class or upper middle class, which is defined as an income of RMB60,000-229,000 ($9,100-$34,750).

The upper middle class is the fastest-growing category, going from 14% of urban households in 2012 to 54% in 2022.

As a result, home ownership – a staple of middle-class status in many Western nations – is becoming China’s new gold rush. A dream for many of the new middle class is to live in a gated, cloistered community.

“Previously, most housing was self-built or built through local communities,” says Robert Ciemniak, founder of Chinese property research specialist Real Estate Foresight.

“A lot of this [new] urbanisation in practice is to say: ‘Let’s build a commercial modern housing development with good facilities, and move out of things built a long time ago.’”

This is resulting in the much-lamented destruction of Beijing’s hutong – the neighbourhoods of narrow alleys that were, in a way, the original gated community. Their bricklined lanes were formed by the external walls of siheyuan, traditional homes built around a courtyard. Several generations of a family lived in four buildings, and while there may not have been a security guard, the homes were gated – and the eyes of some family member would always be on you or any intruder. They are much loved by many older locals, by people who have adopted the Chinese capital as their home, and by tourists. But they are not beloved by property developers, or local city planners.

Modern, gated communities in China take on most of the characteristics and usage patterns of those in the West.

Part of the idea is to set gated owners apart in terms of status, security and style. But China’s long history of“sealed residential quarters” has historical roots that describe housing for a variety of social classes – not just the rich – as two academics from Pennsylvania State University, Alexandra Staub and Qingyang Yu, note in their 2014 paper: The “New” Gated Housing Communities in China.

The paper cites an example of former public housing in the city of Shenyang that has been converted into a community of privately owned mid-rise towers. It is an

Housing

BETTER GATE THEN NEVER Traditional “siheyuan” courtyard homes (left) were once common in Beijing, but are being replaced by modern developments that give a sense of a gated community, even if access is open to all (below).

THE INDIAN GOVERNMENT INTENDS TO BUILD 20 MILLION HOMES BY 2022, BUT REGULATIONS FORM A BARRIER Amy Kazmin South Asia correspondent, Financial Times

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hmedabad barber Sanjaybhai Jotangiya has struggled for years to buy a flat so he, his wife and children could move out of the house they shared with his parents, brother and extended family. The takings from his small salon – coupled with his wife’s earnings from giving manicures, pedicures and facials to neighbours – brought them a monthly income of over Rs20,000 ($300), putting them in the ranks of India’s lower middle class.

But the supply of houses in their price range is limited, as high urban land and construction costs, and caps on how much space can be built on any one parcel of land, make it tough for developers to find a viable financial model for this class of housing. It is also tough for the couple to secure a home loan without payslips to verify their monthly earnings.

Jotangiya’s problems in India’s housing market are not unique. Nearly 84% of India’s non-agricultural labour force works in the “informal sector” – either running their own small businesses with few paper records, or toiling in jobs that likewise come with little documentation of workers or their wages. Many of these workers do have steady incomes and long to purchase their own homes to give them security in India’s fast-expanding cities. Now, prime minister Narendra Modi’s government is hoping to help these millions of aspiring homeowners realise these dreams, through incentives intended to stimulate the development of housing accessible to this vast potential market.

New Delhi’s ambitious “Housing for All” scheme aims to stimulate the development of 20 million homes that would be within the financial reach of families with annual household incomes of less than Rs600,000 ($8,900).

Under the scheme, New Delhi will provide an interest rate subsidy of 6.5% to borrowers for a home loan. States are expected to provide land to developers and subsidise some of the other construction costs to bring them within reach of those on the lower rungs of the ladder. Each state will be free to set their own prices, which market analysts say could begin at around Rs230,000 ($3,400) for the smallest unit, and go up to nearly Rs500,000 ($7,400), or more. »

Q3 2016_MODUS A SI A 25

Housing

The targeted beneficiaries are those with annual household earnings below Rs300,000 (£4,450) – and the “lower income group”, earning between Rs300,000 and Rs600,000 a year. The flats will be no-frills, starting at a minimum size of 323 ft2 (30 m2).

States such as Rajasthan, Chattisgarh, Telangana, and Andhra Pradesh have already announced plans for thousands of new housing units in their urban areas, most of which are expected to be built through public-private partnerships.

But Indian real estate experts caution that delivering such a large stock of affordable homes will be a huge challenge, which would likely require many other local policy changes – from accelerated approvals for construction to new building standards that would allow for higher density.

At present, Indian property developments take an average of six to eight years from inception to completion, partly due to the multiple approvals required from various government agencies, which can take up to three years to collect. That process can only begin after developers purchase the land, and the cost of holding these undeveloped tracts on their balance sheets is passed on to buyers.

Affordability is also still undermined by India’s very low floor-space index – the ratio of build space to the size of the land parcel, which prevents developers from building sufficient units at a density that would make them affordable to those on the lower rungs of the economic ladder. “The biggest problem with these schemes is that the density has not been modified that much,” says Neeraj Bansal MRICS, partner, risk consulting at KPMG in Delhi. “The cost of construction continues to be high because you can’t construct beyond a particular number of apartments.

“The norms for affordable housing have to be radically different from what is being done for luxury, or higher segment products,” says Bansal. “This requires a lot of changes on ground level, at the level of the local authorities.”

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nsuring adequate finance – both for the developers and the potential buyers – will be another big challenge, as many of those in the target beneficiary group will still lack the requisite paperwork to assure potential lenders they can really repay a home loan, even with the interest subsidy.

But New Delhi is expected to press state-owned banks to begin lending to prospective buyers of affordable homes, given the priority it is placing on the project, and new finance banks, mandated to concentrate their lending at the bottom of the pyramid, may also be willing to step in.

Overall, it would be a big stretch for India to reach the declared target of 20 million new houses by 2022 for the emerging middle class. But nevertheless, as a statement of intent it is a laudable aim, and is likely to set the ball rolling on many levels. n

TOWERING INFERNAL An apartment complex in Bangalore.

India suffers from a low floor-space index, which prevents developers building at high enough densities

IN DETAIL

Despite its widespread use in discussions around economic development, the concept of a global middle class is hard to pin down with any precision.

For a start, different studies apply different thresholds for earnings. Most studies agree that to qualify for middle class status, a person needs to earn at least $10 a day. Where it gets tricky is in defining the upper limit. The World Bank uses $50, Goldman Sachs $82, while the Wolfensohn Center 26 RICS.ORG/MODUS

for Development pegs the upper daily earnings limit at $100.

Why does this matter?

According to a 2015 study by the Pew Research Center that analysed data between 2001– 2011, such a broad definition “obscures the fact that the growth of the middle class was concentrated at the lower end of the income range”.

In other words, most individuals who constitute this global middle are not middle class in the classical sense, but

instead represent a consumer class that has escaped poverty.

So, if the economic concept of a global middle class is so elastic, what value does it really have in development terms?

Part of the problem comes from focusing too much on the numbers, and less on the underlying cultural shifts that they engender.

Regardless of the relative wealth of any one country’s middle class, the mere absence of absolute poverty brings

greater stability, which in turn makes it possible for an individual’s efforts in study, work and business to bear fruit as an improvement in material circumstances further down the line. In tow with this comes greater discrimination in terms of material consumption, and growing expectations of public services, housing and transport infrastructure. All of which points to a looming challenge – and opportunity – for the built environment professions.

ADDITIONAL REPORTING GEORGE BULL IMAGE GETTY

What does ‘middle class’ mean globally?

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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.

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rics.org/cpd

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Young surveyors

Who’s in the discussion

QUALIFIED OPINION Modus talks to six of RICS’ newest members – ink still drying on their APC certificates – about their hopes and ambitions for the future Words Cherry Maslen Illustration Paul Ryding

WHAT WAS THE MOST IMPORTANT THING THAT GOT YOU THROUGH YOUR APC? ND: Preparation, starting early and being consistent and dedicated. It was also important to be able to reach out to the right people, especially the APC assessors and mentors in my specialism, as well as my counsellor and supervisor. Since passing, I have been accepted by RICS as an APC mentor.

WL: My counsellor and supervisor gave me significant assistance throughout my submission and interview preparation. I have now accepted RICS’invitation to become a mentor and look forward to sharing my experience with new candidates.

EN: The support of people around me, both at work and at home. At home I got family and friends to help with Q&A sessions. At work, talking through topics with colleagues and understanding their interpretations and their experiences was crucial.

LH: I don’t think I could have passed without the support of my counsellor and other RICS members, which is why it is always good to help people who are preparing for their APC. »

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»LAUREN HARRIES MRICS Harries is a quantity surveyor with international infrastructure firm Aecom, currently based in Dubai.

She passed her APC in November 2014, one of the youngest in her previous company to do so, and was named Rising Star in the 2015 Women in Construction Awards. »LEE HEUNG WING WILSON MRICS Commercial property surveyor Lee is the leasing manager at Wharf China Estates in Hong Kong, where he specialises in retail leasing in commercial complexes across China. He built his skills in Hong Kong’s Causeway Bay, one of the most competitive and expensive rental districts in the world. Lee passed his APC in December 2015. »CHRIS MARSH MRICS Marsh is a building surveyor at property consultant Bruton Knowles in Birmingham. He has been there two years, moving from his native north of England for the job. He became chartered in November 2015 and his ambitions are to get involved in bigger projects and become respected in his field. »ELSIE NORTH MRICS North is a professional quantity surveyor in Mace’s London cost consultancy team. She was an apprentice under the Chartered Surveyors Training Trust scheme, won the Association of Women in Property’s National Student Award in 2011, and passed her APC in May 2015. »NEELAM DHUPAR MRICS Dhupar is a development manager at design, engineering and management consultant Arcadis in London. She has worked for Arcadis’ largest property client, Lloyds Banking Group, and was part of a team in Brussels developing a sustainability climate tool to help clients improve their buildings. She passed her APC in October 2015. »NIELS ZAVBI MRICS Zavbi’s specialism is residential property practice. He is manager of acquisitions and sales for real estate asset management company Corpus Sireo in Cologne, Germany, where he has worked on acquisitions valued at more than €10m ($11.2m). He passed his APC in June 2015 and now hopes to become an RICS APC assessor.

“Every company needs someone to champion an idea – young surveyors are trained to use technology, so we can help change mindsets”

“The big data era is here – information is pouring in 24/7.

We need to make sure we don’t drown in the flood”

Chris Marsh MRICS

Wilson Lee MRICS

“A huge part of my job is being sociable.

You need to be able to communicate at all levels. I might be talking to a graduate one minute and a CEO the next” Neelam Dhupar MRICS

Q3 2016_MODUS A SI A 29

EN: My mentors were really important during the down days, when it felt like passing was impossible. Their support could turn a negative experience into something positive and confidence boosting.

NZ: My counsellor was also my mentor and played a huge role. He is in the same field as I am and really challenged me during my preparation.

IS TRAINING MAKING THE MOST OF DIGITAL TECHNOLOGY? LH: Yes. You can take online learning modules and carry out distance learning in virtual environments. However, I think it’s easy for such training and technology to be rolled out, the difficult part is getting enough uptake from people within the industry. The use of BIM has made a dramatic change to the way the industry operates, but it’s only as good as the capabilities of people using it. Keeping people up to speed with technology has never been more important.

CM: We do learn about digital technology during training.

The big one for building surveyors is BIM, which is mainly used on large projects. At the moment it hasn’t quite taken off in my company because we work on smaller projects and our clients don’t request it, but we will phase it in eventually.

ARE THERE SOME THINGS YOU CAN ONLY LEARN ON THE JOB? ND: Yes: how to be effective in meetings, get your point across and win people’s confidence.

CM: Definitely. I’ve learnt most from getting on to sites.

Things are a lot easier to recall when you’ve seen them in real life, such as building defects, and tried to work out what’s caused them.

EN: You have to take into account the client, the project, the contract, the job as a whole and anything else that could influence the outcome to make an informed decision. That can only come with experience.

NZ: Theoretical knowledge is an important base, but in real estate there are situations you can’t be prepared for. When you’re in the process of an acquisition you sometimes have to make very quick decisions. You’ll be trying to get different companies to work together under pressure. Experiencing these situations will give you the confidence to do the next job that no training could.

WHAT EFFECT WILL TECHNOLOGY HAVE ON THE PROFESSION IN THE NEXT 10 YEARS? ND: Technology will have a strong and positive influence on the way surveyors do their jobs, leading to greater efficiency.

It will become more a part of the surveyor’s toolkit.

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“The biggest challenge for our profession is how we can improve the sustainability of our real estate” Niels Zavbi MRICS

CM: Yes, it will make us more efficient.

We’ll see the implementation of BIM and smarter onsite surveying using tablets to dictate into and take photos. I’m looking forward to all that. It’s exciting for young surveyors to be able to contribute.

EN: But technology will never replace common sense and practical knowledge of how a project works. I always carry out a human check as well, such as a scale check on a drawing using a scale ruler, or using a calculator to check a cost plan.

LH: Augmented reality will naturally cause people’s roles to evolve. Those involved in a project will be able to use this technology to improve communication and efficiencies and, ultimately, create a more collaborative working environment.

EN: As buildings become more advanced, mechanical and electrical quantity surveyors are more in demand to help support the team with the developments in technology. They will have to broaden their construction technology knowledge to provide better support to their clients.

Young surveyors

NZ: There are opportunities in emerging real estate markets, but globalisation brings opportunities in Germany, too.

I find it quite exciting because there are a lot of international buyers who want to invest in real estate here, the market is very stable and there are major construction projects in the top seven cities, where rents are rising rapidly.

IS ETHICAL BEHAVIOUR MORE CHALLENGING WHEN YOU ARE WORKING IN A NEW, FOREIGN MARKET?

WL: Enterprise resource planning [software used to collect, store, manage and interpret data from many business activities] and a universal database in the commercial property field will add so much value, especially when conducting market approach valuation.

WHERE ARE THE MOST EXCITING PROSPECTS: HOME OR ABROAD? LH: Both have advantages, but you learn a lot culturally if you work internationally. There is also more opportunity to work on greenfield projects, which progress at a fast pace.

EN: Many people I know have chosen to work in places like San Francisco, New York and Dubai. The opportunities are fantastic and come with different challenges, particularly in terms of regulation and legislation.

ND: It’s my ambition to travel with my job, but working in London is exciting because it’s a capital city where you’re competing on a global scale, with huge investment coming in from abroad.

“I work on a project where four out of five of us are female. That says a lot about how our world is changing” Elsie North MRICS

LH: The biggest challenge I have seen is the fine line between different cultures and ethics. The Middle East has an extremely large ex-pat community in relation to locals.

There are many benefits to having so many different nationalities and cultures and there’s a lot we can learn from one another, but we do need transparency, clarity and ethics to be instilled alongside this.

EN: New environments with different ways of working may produce challenges, but as long as you understand why others behave in a certain way and remain strong in your approach and values, you can overcome this and educate others in your way of working. You are responsible for your own actions and your behaviour reflects your company and your clients.

WL: A new market may need years, sometimes decades, to get ethics aligned to an international standard, but as chartered surveyors we must adhere to the highest standards of ethics, which is the basis of a profession.

WHAT IS THE MOST IMPORTANT NON-TECHNICAL SKILL FOR SURVEYORS THESE DAYS? LH: Building good relationships within the industry.

It’s known for being a small world due to the dynamic nature of project work, so it’s likely you’ll meet the same people more than once. And it’s good to have a support network, especially within RICS if you move to a different area.

EN: Yes, but we’re in an age where communication is instant, via messaging, emails, texts, phone or conference calls. I feel we’re losing the skills to communicate face to face, which we need for presentation meetings, networking or one-on-one conversation. This is being bypassed because it’s quicker to send an email rather than build and maintain relationships by sitting down and having a conversation. Without it, how can you build relationships with not only your clients but your colleagues?

ND: A huge part of my job is being sociable. I am out with clients or colleagues two evenings a week. The social environment is important and you need to be able to communicate at all levels. I might be talking to a graduate one minute and the CEO of a client the next. »

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Young surveyors

EN: I think it’s going to be the skills shortage. There is so much work out there and such a huge requirement for skills.

There’s a big recruitment drive across the industry – not a day goes by when one of my colleagues doesn’t receive a call from a recruitment consultant. But economic growth is fragile in the UK, so it will be interesting to see whether this demand begins to slow down.

A QUARTER OF RICS MEMBERS REACH RETIREMENT AGE IN THE NEXT 10 YEARS. ARE WE DOING ENOUGH TO REPLACE THEM?

WHAT DO YOU THINK WILL BE THE GREATEST CHALLENGE FOR SURVEYING OVER THE NEXT TWO DECADES? CM: Pushing the profession to implement technology – people get used to doing things in certain ways and it can be difficult to change mindsets. What puts people off is figuring out how best to use it. In every company you need someone to champion an idea – young surveyors are trained to use technology so it’s something we can do.

WL: The big data era is here – information is flooding in 24/7. Surveyors will be able to get more precise results with increasing width and depth of comparable data, yet whether we can develop a universal valuation database for the sake of time and cost saving will be a challenge. We need to make sure we don’t drown in the data flood.

NZ: The biggest challenge facing the world is climate change, so the question for our profession is how we can improve the sustainability of our real estate.

LH: Attracting future generations is the greatest challenge, given how many surveyors are approaching retirement age.

Construction is one of the biggest global industries and without investment in talent, the exciting benefits that are coming – such as new technology and the opportunity to expand in emerging markets – won’t reach their full potential.

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“Without investment in talent … the exciting benefits that are coming won’t reach their full potential” Lauren Harries MRICS

LH: We need more education and awareness for the next generation of surveyors. We need presentations in schools and trips to construction sites for students. If it wasn’t for an RICS competition when I was in sixth form, I wouldn’t have learnt about surveying.

ND: It was the same for me. I would have known nothing about careers in surveying if a local firm hadn’t come to give a talk when I was in the sixth form.

NZ: Here in Germany there is increasing interest in surveying as a career and in becoming chartered. Universities are focused on connecting students with RICS and its work in promoting international standards of valuation. That’s one of the reasons I want to become an RICS assessor.

ND: I have been to university careers fairs to promote surveying, but we should also put more emphasis on nonconventional routes into the profession, such as apprenticeships.

CM: Yes, I’ve also noticed a lot of people over 30 at training days I’ve been to, often people in trades who want to move into surveying.

EN: The recruitment drive could be at risk of focusing on simply getting people through the door. The responsibility is on employers to provide training and continually develop their employees to retain them. In terms of diversity, I have never worked in a more diverse team.

We all come from different places and backgrounds and, for the first time ever, I’m working on a project where four out of five of us are female. That says a lot about how our world is changing. n

DISTINGUISHED GUESTS The Liberty hotel, which opened in 2007, was formerly Boston’s Charles Street Jail. Among the past inmates was Malcolm X

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IMAGES ALAMY; REX

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Prisons

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acated recently by the previous tenants, these properties offer central locations, convenient public transport and lively nightlife.

Characterful, period architecture comes as standard, and security measures include a large central gate, bars on all windows and panopticon vistas from every room to a central observation post.”

Selling a prison must offer the ultimate test of any estate agent’s ability to focus on the positives. But with many of the traditional jails built by 18th-century reformers now unfit for the task of rehabilitating criminals – and sited in lucrative urban locations – the sheer force of the market makes commercial and even residential reuse a viable proposition.

So, in theory, the UK government’s plans to sell off its inner-city estate to part-fund a £2bn“super jails”programme could not have come at a better time. First on the block is Reading, which has been closed since 2013, while others potentially in line for disposal include Brixton, Pentonville, Wandsworth and Wormwood Scrubs – all household names in the country, thanks to their underworld associations.

However, redeveloping these prisons will prove easier said than done. Many of the structures are historically important, requiring sensitive refurbishment, and their cellular layout means they are often ill-suited to other uses.

Meanwhile, there is also the fundamental architectural

consideration that these buildings are literally walled off from their surrounding neighbourhoods – hardly a feature that makes them easy to weave back into the fabric of local life.

Until a few years ago, the idea of turning a prison into a desirable property investment would have been dismissed as crackpot.

Trevor Osborne FRICS, chairman of the eponymous property group and the developer who refashioned Oxford’s historic prison into the city’s boutique Malmaison hotel in 2006, remembers the reaction when he first got involved in the project: “A lot of the local councillors really thought I was mad.”

However, Osborne has had the last laugh, recently selling the hotel to the Westgate Oxford Alliance – a joint venture between Land Securities and the Crown Estate.“Now, looking back, it’s hard to find anybody who doubted it,” he says. “But they did.”

Oxford offers a classic example of the challenges that prison redevelopments throw up. For example, much of the site, including the Norman-era keep, is listed.

Architect Mark Panter, whose practice Panter Hudspith worked with Osborne on the project, also found the inherent structure of a prison problematic. “The challenge is finding sustainable uses for particular buildings. It’s quite restrictive. There are lots of cells, they are often densely developed.”

Osborne’s first problem was working out a new use for the prison. The “starting point,” he says, was not to shy away from the site’s historic character. “You must let the building speak for itself. By doing that, »

RMED ARACTER Historic features, city centre locations, willing vendors – redeveloping a prison sounds like a golden opportunity for any property entrepreneur. But how do you make a building designed to be so forbidding, more appealing?

Words David Blackman

Q3 2016_MODUS A SI A 35

you can come up with some pretty interesting answers.”

In the case of Oxford, he hit upon the idea of turning the prison into a hotel.

Malmaison has never attempted to disguise its former use, with guests sleeping in the prison’s old cells.“You know it’s a prison but you don’t feel as if you don’t want to be locked up for the night, quite the contrary,” says Osborne.

“You have to be intrigued that it’s different to staying in a standard hotel room.”

At the Liberty hotel in Boston, US, – formerly the Charles Street Jail, where civil rights activist Malcolm X was a former inmate – some of the cells have been preserved as bars, with names such as Clink and Alibi.

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hotel also provides a neat solution for the biggest headache facing those embarking on a prison redevelopment project: the cells. They are generally too small for alternative uses but integral to the structure of the buildings. Osborne says: “You can amalgamate cells but you have to be very careful because you could have sequential collapse if you went about it in the wrong way.”

At the Liberty, which took its first paying guests around the same time as Oxford’s Malmaison, developer Carpenter & Company removed the cells, meaning that the roof had to be propped up while building work was going on.

Brian Anderson, who heads the Hong Kong office of architecture practice Purcell, faced a similar problem when contemplating the conversion of the city’s Victoria prison (box, opposite). There, the individual cells were even smaller than those in Oxford prison, measuring about 48 ft2 (4.5 m2).

And, like Oxford, each cell was a load-bearing structure.

“They relied on cross walls for structural stability, which gives engineering challenges. If you take those walls away, you have to redistribute that load.”

An added issue for Anderson was finding space for services, particularly the air-conditioning that is such an essential feature in Hong Kong’s often sweltering temperatures. “With the room dimensions being small and the windows being quite high, even if you were to put in a suspended ceiling to disguise the services, you would have to cut off the tops of the windows, which would look rather awkward,” he says. “[Residential or hotel use] would never have worked in Hong Kong

because their comfort expectation is much higher than in the UK,” says Michael J Moir FRICS, director of property for the scheme’s developer, the Hong Kong Jockey Club.

As a result, says Anderson, the project team had to be creative about the complex’s future use, eventually plumping for a contemporary arts complex. The cells in one block will be retained to show visitors how the prison used to be. Most, however, will be converted into art archives, complementing the site’s wider cultural use.“Once you have air-conditioning in there, the massive brick walls will create a very stable environment that lends itself rather well.”

Some developers have, however, taken on the challenge of residential conversion.

In 2009, Maruhn Real Estate Investment launched BerlinCampus, a development of 147 luxury apartments in the German capital’s former Rummelsburg prison. In the UK, Osborne’s group bought Shrewsbury’s defunct jail for £2m ($2.8m) in November 2014, and is planning something similar.

EXTENDED STAY At Oxford’s Malmaison (below), rooms have been converted from three adjoining cells: two for the bedroom, one for the bathroom

Prisons

IMAGE MALMAISON HOTELS

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lans submitted in January for the £42m ($59.4m) development feature private flats, a health club, cafe, restaurant, and a walled garden. The former cell blocks, meanwhile, will be turned into student accommodation. Panter, who is working on the prison’s conversion, says the sizes of the cells at Shrewsbury are not much smaller than bedrooms in typical student halls.

A further complication for redevelopment projects is that many prisons contain historically important buildings.

Listed structures in the UK’s Victorian prisons include the gatehouse at Wandsworth and the clock tower at Brixton.

Across the Atlantic, redeveloping the Liberty in Boston involved restoring the former prison’s historic rotunda.

Panter says such historical features can be retained if there is a willingness to maximise plot densities. “As long as you are comfortable with high-density developments, you can do a lot with the more recent buildings and offset the fact that there’s not much you can do with the old stuff.”

And the most obvious barrier to a successful prison redevelopment is also its most literal: they tend to be surrounded by walls, which means they are segregated from the surrounding urban fabric.“Obviously, prisons can’t have too many doors,”says Osborne. And the walled nature of the sites means that vehicular access will be constrained, limiting their re-use.

But Osborne, who increased the number of entrances and exits at Oxford from one to five, says that their location has to take the surrounding neighbourhoods into account.“You can’t just knock holes through walls. You have to work pedestrian flows out.”

Purcell’s Anderson describes Hong Kong’s Victoria prison as looking “like a fortress, like an island within the city, a place designed to keep people out and in”.

You must let the building speak for itself. By doing that, you can come up with some interesting answers

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TREVOR OSBORNE FRICS The Trevor Osborne Group

However, the Jockey Club is making a virtue of the fact that the Tai Kwun scheme offers 3.7 acres (1.5 hectares) of relatively lowdensity development in the city’s congested downtown. “We made it quite permeable.

It’s a big site so we wanted to create pathways through it so that people can walk through it wherever they want to go,” says Moir.

Breaking down these barriers brings a real benefit to the communities in which they are located, believes Osborne.“The change from being places of incarceration to employment can regenerate areas enormously.”

“They have been no-go areas and the lack of permeability completely affects the way everything has developed around them,” adds Panter.

Prison redevelopment is clearly fraught with challenges. But Osborne says it is a prize worth pursuing: “It’s not just their age, some of these are very good buildings.” n

IN GOOD NICK The Liberty’s developer restored the jail’s historic rotunda (above, left), and turned some of the cells into bars named Clink and Alibi

CASE STUDY

Artistic flair comes to Hong Kong’s “big house” Hong Kong’s Victoria prison was central to the history of the colony from the 1840s onwards, says Michael J Moir FRICS. As director of property at Hong Kong Jockey Club, Moir has overseen the redevelopment of the prison into an arts complex.

The prison consists of nine blocks, all of which were built by the British between 1841 and 1956, several of which are declared monuments – equivalent to the UK’s grade I-listed buildings. “The general consensus is that if it’s a declared monument, it can’t be touched,” says Moir.

Hong Kong’s government handed over the Central Police Station Compound, in which the prison is located, to the Jockey Club in 2007 to find a new use for it. Following a couple of false starts, the club settled on heritage and cultural activities as the main uses for the site.

The scheme is called Tai Kwun, or “big house”, in the local dialect, which was the nickname for the former police station.

More than 25% of the HK$3bn scheme’s total floor space will be leased as retail and leisure, which should enable Tai Kwun to “pay its way”, says Moir.

One of the site’s nine cell blocks will be preserved to show visitors what a colonial prison looked like. “People will be offered the experience of spending a night in the cells if they want to,” says Moir. The rest will be used as art archive space.

However, none of the existing buildings were big enough to accommodate the gallery and auditorium that the scheme’s backers felt were needed to fulfil the site’s role as a contemporary art hub. To house these, renowned Swiss-based architect Herzog & de Meuron is designing two new buildings.

Moir is confident that the Tai Kwun scheme will develop an international reputation based on what he describes as “pretty positive” feedback from visiting curators. The choice of a radical design, which some might feel is at odds with the site’s heritage status, is aimed at putting it on the map, says Purcell’s Brian Anderson. He is certain that Tai Kwun will become one of the “top 10 things to do in Hong Kong”.

TAI KWUN WILL FEATURE at next year’s International Heritage Conservation Conference in Hong Kong. More details on p49

Q3 2016_MODUS A SI A 37

Infrastructure

BUY NOW PAY LATER

38 RICS.ORG/MODUS

New transport links increase the value of the areas they serve.

Shouldn’t they get something in return?

Words David Blackman

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ransport, telecommunications, power and water: McKinsey Global Consulting recently estimated that $57tn is needed to bring the world’s infrastructure up to scratch by 2030 to keep pace with economic and population growth.

The problem is that cash-strapped governments, still recovering from the global financial crisis and facing competing pressures for scarce resources, are illequipped to furnish this scale of investment.

RICS President Amanda Clack FRICS, head of infrastructure advisory, UK & Ireland at EY, believes there is definitely an appetite for infrastructure among private investors, namechecking the purchase in February of London’s City Airport for £2bn ($2.8bn) by a consortium led by Ontario Teachers’ Pension Plan. “Investors are seeing infrastructure as a really good investment,” she says.

But institutional investors such as insurers and pension funds tend to prefer the safe and steady returns offered by completed projects, and usually shy away from the risks involved in new-build schemes.

There is little doubt, though, that improved transport facilities often drive up property values. Research carried out last June by Groundsure and UK magazine Property Week found that, along the route of London’s Crossrail line – due for completion in 2018 – house prices are estimated to have risen by as much as 73% between 2013 and 2015.

And there is growing interest worldwide in how these uplifts in property values can be captured to help pay for new transport infrastructure.

The problem, though, is one of chicken and egg. Without up-front investment, infrastructure cannot be delivered, meaning no knock-on rise in property values. But until land values have increased, sites will not generate the kind of cash needed to pay for what are, by their very nature, costly and complicated projects.

The UK’s community infrastructure levy (CIL) – the funding mechanism under which developers pay a sum to the local authority after securing planning permission on any scheme greater than 100 m2 (1,076 ft2) – offers an example of this time-lag problem. As Jeremy Edge FRICS, owner of Edge Planning & Development in London, explains: “The problem with CIL is the receipts coming forward in a timely way to make a substantial difference to infrastructure investment, which is needed up front.”

Hong Kong shows how these problems can be solved.

The self-governing territory’s public transport agency, MTR, uses the profits from real estate development to directly pay for the costs of extending Hong Kong’s mass transit rail network. The results are illuminating for those struggling to get transport off the ground elsewhere in the world. Over the past 40 years, MTR has built hundreds of kilometres of rail lines without using a single Hong Kong dollar of public subsidy.

In 1979, the then British colony’s rail network consisted of a sole line running from the city centre to the Chinese border. Hong Kong’s mountainous geography meant the city would descend into gridlock if it had to rely on the private car, so any plans to ease congestion would depend on the extension of its rail network. Instead of offering subsidies to build new lines, the government at the time granted MTR development rights over the land above or next to planned railway stations.

Once it has worked out how much a new line will cost, MTR draws up masterplans for the land surrounding the stations along the route. The corporation then sells the sites to developers at values based on how much they will be worth once developed. »

IDEAL PLATFORM Kowloon station is typical of MTR’s approach to funding rail lines in Hong Kong. Retail space has been built above, followed by new residential towers

Q3 2016_MODUS A SI A 39

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icholas Brooke FRICS, chairman of Hong Kong-based Professional Property Services and a past president of RICS, has been involved with MTR rail and property projects since the concept was developed. He explains: “The government sells the sites to the MTR on a greenfield basis: they pay on the basis that there’s no railway there. They then sell on development rights with the benefit of the railway they are going to build.”

The beauty of the model is its simplicity, says Brooke. “There are clearly significant gains to be made by developing above a station: you take your cash up front and sell the development rights.”

Once it has sold development rights, MTR then extracts further value by entering into profit-sharing arrangements with the developers, which it generally takes either in the form of a cash payment or a chunk of the development.

MTR has accumulated a substantial property portfolio, including 13 shopping centres, which helps to generate around HK$3bn in rent a year. Each development usually includes a three- to five-storey

By developing above a station, you take your cash up front and sell the development rights

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NICHOLAS BROOKE FRICS Professional Property Services

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shopping centre that sits immediately above the station.

On top of the retail space, MTR and its partners build up to 10 towers. While in suburban locations these will chiefly comprise flats, those in more central areas generally include a mix of hotels, office and residential accommodation.

MTR’s approach has sparked disquiet among Hong Kong residents about the “sweetheart” nature of the deals between what is now a privatised company and the territory’s government. However, the flipside is that MTR has been able to support the city’s growth while keeping the city moving. Focusing development so tightly around stations has helped increase the use of the territory’s mass transit network, which carries nearly half of all franchised public transport journeys made in Hong Kong.

MTR is now exporting its model to the Chinese mainland, where it is developing two “rail and property” projects. And its influence can be seen in the UK, where chancellor George Osborne used his March Budget speech to ask Transport for London (TfL) to investigate the scope for using land value uplifts to pay for upgrades to the transport network.

London’s transport agency has recently established a string of joint ventures to redevelop its spare and underused property assets. It has already imposed a top-up business rate on the capital’s large occupiers to help fund Crossrail’s construction. And it is using a tax increment finance (TIF) scheme (box, opposite) to pay for an extension of the Tube to serve the redevelopment of Battersea Power Station.

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uch integration of transport and development can be a powerful spur for regeneration projects, suggests Laura Mazzeo, a partner at architect Farrells, which designed Hong Kong’s Kowloon station scheme.

“You are in a much better connected place to start with than on greenfield sites, because you are straightaway connected into existing services and high streets,” she says. “When Kowloon was built there was nothing round it. It was built on the assumption that if you built a transport hub meaningful development would come.”

“If you can get a deck built, you could say it’s just another brownfield site to spring off,” says Martin Rowark FRICS, a management consultant at the Nichols Group and a former commercial director of TfL. However, he cautions that the civil engineering challenges involved in building railway stations are not straightforward. “Infrastructure has a reputation for being very, very expensive: you can see the margins shrink in front of your eyes.”

Rowark, who is also chairman of the RICS Infrastructure Forum Steering Group, says the costs of station redevelopment projects are unpredictable.“It’s not because people in infrastructure are grossly incompetent, but because you are dealing with far more interfaces than you would ever expect in a building.”

These headaches often include trying to run a public transport system alongside a construction project. “If you could just close a station like London Euston for six years it would be just another brownfield building site, but if you try doing it while several million people are using it on an annual basis, you build it in a completely different way, piece by piece, which is incredibly expensive,” Rowark adds.

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RAIL FARES Tax increment finance has been used to fund the subway extension to Hudson Yards in New York (1), and San Francisco’s Transbay Transit Center (3). London’s Crossrail (2) is being part-funded by an increase in business rates

Infrastructure

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hese complexities and costs mean that governments cannot be expected to rely on property redevelopment to fully shoulder the burden of providing new transport infrastructure, particularly in less dynamic markets where uplifts will be smaller, such as the north of England.

However, Alexander Jan, director of city economics at Arup, believes there is a plenty of unexplored scope to capture more of the value that is generated by transport improvements.“We know that Crossrail has created windfall gains in terms of value uplift, which hasn’t been captured by the business rate supplement.”

He argues that more value could be captured by creating transport investment zones in a radius up to 1km surrounding station redevelopment projects, with the knock-on benefits that these could then be built to a higher specification.

Property professionals may bridle at being asked to furnish a bigger share of the public spending cake, but in this case at least it could be a win-win situation. n

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EMAIL your thoughts: editor@ricsmodus.com

IMAGES HUDSON YARDS [1]; CROSSRAIL LTD [2]; TRANSIT CENTER [3]

FUNDING MODELS

US masters incremental arithmetic The idea of harnessing land value increases to pay for transport infrastructure was pioneered by the state of California in 1952. Since then, local authorities in some of the US’s biggest cities have set up tax increment finance (TIF) zones to pay for transport upgrades. In a TIF scheme, any uplifts in property tax revenue increases within a ringfenced area can be used to pay back up-front investment in transport projects or other

improvements at a later date.

A TIF has been set up in New York to help pay for the 1.6 km extension of the No. 7 subway line from its current terminus at Times Square into Hudson Yards. This ambitious project involves constructing a 17.5m ft2 (1.63m m2 ) mixed-use development on a deck over 28 acres of in-use rail sidings.

A new station serving Hudson Yards opened last year.

“Bonds have been issued, which are guaranteed by

the city or the state and the revenue is generated from increased values that will come from the real estate in the area,” says Alexander Jan, director of city economics at Arup. He compares the Hudson Yards project to the ongoing regeneration of the area around London’s King Cross station.

Looping back to California, TIF is also being used to provide a portion of the funding for the $4.2bn Transbay Transit Center in San Francisco.

Construction of the multimodal transport terminal is now under way, and is expected to serve 100,000 passengers per day on its completion in 2017.

A TIF set up to capture increased values resulting from the regeneration of the area around the terminal is expected to generate $1.4bn over the next 45 years. Around 3m ft2 (279,000 m2) of offices will be developed along with 100,000 ft2 (9,300 m2) of shops and 2,600 homes.

Q3 2016_MODUS A SI A 41

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TROPHY HUNTERS EAST MEETS WEST Upper West Side, a A$1.4bn scheme in Melbourne’s CBD that includes more than 2,000 flats (1), is being developed by the Hong Kongbased Far East Consortium NINE, DANKE Sydney’s distinctive Deutsche Bank Place was one of nine towers in the Investa Property Group portfolio, bought last July by China Investment Corporation for A$2.45bn (2)

42 RICS.ORG/MODUS

Asia-Pacific investors have pushed volumes in Australia’s business districts to record heights. Brendon Hooper reports

Seismic shifts are taking place down under. As Australia’s once-booming mining industry slows down, the markets that have been powering the country’s economic growth are shifting from extractives to real estate and the service sector. Meanwhile, offshore investment into property, particularly from Asia, is reaching record levels.

“Offshore investors now own 17% of Australian office stock, around twice as much as they did five years ago,” says Daniel Lees, associate director in research at Colliers International, Sydney.

For a relatively small market – comprising just 1% of global office floorspace – Australia’s central business districts (CBD) are proving remarkably popular with investors.

With a strong economy, high level of transparency and low sovereign risk, the country continues to be attractive to investors, and Sydney in particular could be at the start of a three-year boom period. Strong tenant demand from international firms and a dearth of new supply are squeezing vacancy rates and pushing up rental prices.

This activity is reflected in figures from Knight Frank, which show that in 2015, offshore groups accounted for 59% of total sales in the Sydney commercial market, or A$3.7bn ($2.7bn) – a huge increase on the five-year average of A$1.9bn ($1.4bn). The strongest capital inflows came from China, dominated by the purchase of the Investa Property Group portfolio by the China Investment Corporation for A$2.45bn ($1.8bn) in July.

David Rees MRICS, head of research at JLL Australia, says 2015 was a record year for both inflows and outflows – so it is not all a one-way street, as domestic investment has been very strong. But, he explains, offshore investors – particularly from Asia – have become far more active in the Sydney market, while yields have been compressed to around 5%.

Briefing

2010

BY NUMBERS

IMAGES FAR EAST CONSORTIUM INTERNATIONAL LIMITED[1]; ALAMY[2]; 2016 THE RIBBON SYDNEY[4] INFOGRAPHIC IAN DUTNALL

WHO’S OFF TO OZ? Investors from Canada, the US and Malaysia have dominated foreign investment in Australian commercial property for five years, but China and Singapore are on the rise.

Source: JLL

2011

BEDDING IN A weakening dollar is not only attracting tourists from China, but hotel investors also.

A 228-room Ritz-Carlton is planned at Melbourne’s Upper West Side (left), while Zhengtang has funded Grocon’s A$700m (£356m) 2012 Ribbon scheme in Sydney (left)

professional service firms, for an offshore-based tenant, opening an office in Sydney is potentially around 35% cheaper than it was in 2011.”

Melbourne is also experiencing heightened attention from global investors and multinationals. JLL’s March 2016 investment intensity index shows the city is punching well above its weight in attracting real estate investmentRest – while of the world Sydney sits fourth in the worldwide rankings, the capital of Malaysia Canada Victoria is an impressive 10th place.

USA Furthermore, Melbourne recorded the 11th highest level of cross-border office investment in 2015, globally, according Singapore to Richard Jenkins, research director for Victoria at Knight Frank. As a result, vacancy rates in Melbourne’s CBD fell to China their lowest level in three years, down from 9.1% to 7.7% over the 12 months to January 2016, and supply is forecast to 2013 2014 2015 remain below the historical average over the next three years.

Typifying the wave of Asian investment into Melbourne’s inner city is the four-tower Upper West Side project. Hong Kong-based Far East Consortium is still on site at the A$1.4bn ($1.02bn) mixed-use complex, and already has plans for an additional four towers. When complete, the scheme will boast more than 2,600 apartments and 488 hotel suites.

100%

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80% 60%

Malaysia Canada US

40%

Singapore

20%

China

0% 2010

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“Chinese investment has expanded very sharply from a low base only a few years ago,” says Rees. “We’re seeing a lot of Chinese development coming in, increasing the supply, but they are also selling the stock to Chinese investors. This has also had the effect of making Australian banks more conservative in funding and lending to projects.”

KPMG and the University of Sydney’s Demystifying Chinese Investment in Australia, published in April, predicts that Chinese companies will invest more than $90bn into Australia over the next decade across mining, infrastructure, real estate, leisure and tourism, technology services, food and agribusiness. Significantly, the report notes, Chinese direct investment has reached a turning point – the focus is now much less on resources and more towards real estate, infrastructure and consumer sectors.

Although US and European investors still dominate, the Australian Bureau of Statistics reports that China is now the fifth largest investor, holding 4% of investment stock.

“By value, Chinese investors spent more on Australian commercial property in 2015 than any other nation,”says Lees.

The spike in international interest can also be attributed to the Australian dollar, which has lost around 30% of its value from the heights recorded in 2011. According to Cushman & Wakefield, this is accelerating economic growth in Australia’s service industries. John Sears, national director of research at Cushman in Australia, says: “With wages and rent making up around 52% of total costs for Australian

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“Investor interest in Australia, particularly in Sydney, has not diminished as many had feared – even after China’s latest currency devaluation and with demand for natural resources weakening,” says Matt Whitby FRICS, head of research and consulting at Knight Frank Australia.“The China-Australia Free Trade Agreement and the Qualified Domestic Individual Investor [QDII] schemes are expected to drive more Chinese investment in the Australian property market.”

However, competition for office stock is only going to intensify. In the next few years, Lees believes a growing challenge for offshore investors will be the difficulty in accessing stock, thanks to the small size of the market.

“Although the main Australian CBD markets contain 15.5m m2 [166.8m ft2] of offices, most offshore capital continues to target Sydney and Melbourne, which reduces the amount of stock available to less than 10m m2 [107.6m ft2].” n

REFERENCE POINT REPORTS AND RESOURCES Up-to-date Australian real estate news for first-time buyers, property investors, sellers and developers realestate.com.au/blog/news JLL’s Investment Intensity Index compares the volume of direct real estate investment in a city over a three-year period relative to the city’s current economic size bit.ly/JLL_III

Demystifying Chinese Investment in Australia KPMG and the University of Sydney’s April 2016 report bit.ly/KPMG_UOS Colliers International’s Australia CBD office research and forecast for H1 2016, with video analysis bit.ly/ColliersCBD Cushman & Wakefield analyses the location considerations of regional headquarters in Asia-Pacific bit.ly/APACHQ

Q3 2016_MODUS A SI A 43

Careers / Business / Legal / Training

Foundations CAREERS With a little preparation and judicious use of technology, you can turn a pedestrian presentation into outstanding oratory

TECH TIPS

If making presentations is a source of worry, then take heed. With some practice, preparation and a little technical know-how, they can soon flow like a dream.

The best presenters make it look easy, but until it is you standing at the front, you might not realise what a challenge it can be.

Few of us are naturals and we all have something to learn. But the good news is that, with the right method and a bit of practice, we can all master the art of presentation.

Su Butcher is the founder of social media consultancy Just Practising, advising and training people in the construction industry. She estimates that she has given more than 100 presentations in the last five years, even though previously she had little experience. Her advice is to think hard about the recipients of your speech: “Research your audience and understand your brief.

Then you can structure your presentation to their needs.”

Butcher says it is best to arrive at an event in good time and speak to the technical staff. Never “turn up at the last minute with a USB stick in your hand”. She likes to keep her presentations fairly simple and to illustrate points with images. “I use visual aids and photography a lot. I look for Creative Commons pictures [which have more relaxed copyright rules] on sites such as Flickr.

Slides need to be visual aids, not simply text.”

She also recommends offering handouts or providing online resources post-event. “I tend to put my slides on my website and give the audience a short URL. Organisers

Use a wireless remote This will give you greater control of your slides and allow you to move around.

Commons-free photography There are many pictures available online for restricted and non-commercial use that can add colour to a presentation.

Create online sources A website of links and info will add value for attendees.

Send your presentation in advance Ensure your software is compatible with the organiser’s before you arrive at the venue.

Create a back-up In case of technical failure, bring a USB stick and a printout of your presentation.

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will like that you’ve added value, and you’re more likely to get invited back.”

Andy Lopata coaches businesses in the art of networking and is a fellow of the Professional Speaking Association.

He agrees with Butcher that good presenting is about thinking about your audience rather than yourself. He advises presenters to focus on a core message, rather than attempting to impress with the depth of their industry knowledge.

“Think about what you have to offer and how relevant it is for that audience.

If you go in and try to impress them by showing how much you know it can be counterproductive. It’s best to have one main message and to weave that in throughout your presentation,” he says.

Lopata suggests that confident public speakers could start off with a deliberately provocative statement, as long as it is done with a touch of humour. “I go for a disruptive approach and try to get people to sit up in their seats. It’s not something I’d recommend for everyone because it involves taking a risk.

But it can make the audience want to listen.”

Nick Blenkarn MRICS, managing director of 3D visualisation company Seeable, gives presentations at numerous events and conferences and says having the confidence to speak slowly and assuredly is the best approach. “Take your time when speaking.

Listen to big speeches from world leaders; they pause because they think what they are saying is worth listening to and important.”

Practice is also key, Blenkarn says, and because most events are tightly scheduled, speakers should time their presentations before the event. “Practise your final version of the talk, just in an empty room, and see how long it takes,” he recommends.

ON RICSRECRUIT.COM Landed that final interview? It’s likely you’ll need to give a presentation. Follow our advice at rics.org/presentations

WORDS JON CARD ILLUSTRATION YUKAI DU PORTRAIT JASPER FRY

PERFORMANCE ENHANCER

Foundations

TIMELINE

1989 Studies for degree in building management at Northumbria University 1993 Graduates and lands a job as a site surveyor at Tolent Construction

you can really advise on town planning in isolation. You have to have more than a basic appreciation of the mechanics of property development to provide more rounded advice.

MY WAY

Richard Serra MRICS

HEAD OF PLANNING, TOTTENHAM HOTSPUR FC, LONDON

THE BEGINNING I was always interested in making things – right back to being a Lego enthusiast as a boy. So I took the perfect course, building management, at Northumbria University. Back in 1989, it was quite groundbreaking, as it was designed to train in “both languages” of design and construction. I graduated in 1993 in the depths of recession, and was lucky enough to get a job at Tolent Construction. It was a great grounding, helping me get to grips with the building process.

1995 Switches profession and joins Tynedale District Council as a planning technician

THE PRESENT I moved back north to Leeds in 2006, taking up a directorship at Hepher Dixon, who later merged with Savills. Tottenham Hotspur FC was one of the firm’s clients, so as early as 2007 I’ve been advising the club on planning.

After a spell at rapidly growing practice Quod, Spurs’ chairman asked me to oversee their planning affairs, including the delivery of the club’s new 61,000-seat stadium. It’s been a full-time job steering the proposals through, as it’s involved liaising with the local authority and community on the wider regeneration around the stadium.

I’m at the stadium three days a week, but I have great flexibility in being able to work from home in Leeds. I’m lucky to be involved in such an exciting project and, personally and professionally, I’m so excited to be helping deliver an amazing new stadium for Spurs. rics.org/richardserra

2000 Becomes chartered while at Healey & Baker in London 2001 Joins GVA Grimley as an associate 2006 RTPI membership

THE CAREER BREAK Working on building sites wasn’t quite for me, so I found a job as a planning technician with a local council in north-east England. However, I was keen to become more professionally qualified, which wasn’t possible with that local authority, so in 1997 I joined NAI Fuller Peiser in Sheffield, who eventually became part of BNP Paribas. While there, I took a diploma in surveying at the College of Estate Management.

Like many, I was drawn to London, and joined Healey & Baker in 2000 where I became an RICS member. Later, I moved to GVA Grimley and spent five years accruing enough experience to also gain “You have to have an appreciation of the membership of the Royal Town Planning Institute in 2006. Dual qualification is mechanics of property development to really important to me. I don’t think provide rounded [planning] advice”

2015 Leaves Quod to become head of planning at Tottenham Hotspur FC

Q3 2016_MODUS A SI A 45

LOOK BEFORE YOU LEAP FIVE-POINT PRIMER

Conquer your fear Contemplating failure is a waste of energy. Channel it into embracing the challenges ahead.

Don’t burn bridges Make sure you leave your employer on good terms.

Count the cost Will you be able to pay yourself, your staff, and suppliers?

Many people daydream about setting up on their own but far fewer take the plunge, often because of one little word with a big hold over us: fear. Fear of failure; fear – in British business culture at least – of explaining to others that they’ve failed; fear of not being able to pay the bills and of letting down the family or those who have invested money.

All are enough to give anyone pause.

But sit on any psychiatrist’s couch and they will tell you that fear is a good thing. It stops us taking risks that we do not have the ability to manage, and it can spur us on to greater feats. So, although it may be easier to say than do, there is no value in worrying about taking on a new challenge: it is a waste of energy. Instead, use that energy to understand the healthy fears that you need to be ready to embrace if you want to start running the show yourself.

First, know how to leave your employer on good terms.

It is imperative that you fully understand your employment contract and have a good idea how your news about flying solo will be taken by your firm. Is it a small practice that will struggle to replace you? Will they appreciate you telling them as soon as possible and working out your exit plan together, or should you work your notice period and leave?

What clauses prevent you competing directly with your employers once you leave, or even dealing with former

Limit your liability Know where you stand legally and make sure your business is protected.

Stand out from the crowd Find a niche and trade on your difference over the competition. And make sure you are prominent on Google.

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PAYMENT PROTECTION When it comes to finances, remember first that cash is king. You need to be able to pay suppliers, employees – when you come to employ them – and, of course, yourself.

Invest in good accounting software and record everything – this is particularly important when it is time to pay your taxes. Also, befriend your bank manager: not only will you need their help at some point, they can hold a wealth of advice that is worth listening to.

The law is often the biggest source of unknown fears, says Hadrill. “As with anything, it’s the lack of knowledge that is the scariest thing, compared with what you’re actually obligated to do under those regulations.” He advises people to avoid sole-trader status and get some form of legal protection, by setting up as a limited company, for instance. It is a “simple procedure” and offers “the certainty at the end of the day that you’re not going to get sued for everything you’ve got”.

Beyond that, Hadrill stresses the importance of establishing any relationship – with a supplier or a consultant, say – with a contract, vetting those people correctly, and understanding what your obligations are as a business owner.

When it comes to finding a steady stream of clients, Holden’s two important pieces of

WORDS TIM STAFFORD ILLUSTRATION ARON VELLEKOOP LEÓN

BUSINESS Scared of flying solo? Prepare for take-off with these preflight checks

colleagues, suppliers or clients? Will you be staying in the area or moving on? Will you be placed immediately on gardening leave?

Whatever your circumstances, you must have a plan for dealing with all of this before you say anything.

After that, there is a simple “triangle” to consider, says Chris Hadrill, employment law solicitor at Redmans Solicitors, who advises clients on running their own business: “Having the finances to start out, getting the correct legal framework, and asking ‘how am I going to get enough clients to make this financially viable?’.”

One surveyor who has done that is Michael Holden FRICS, who set up two years ago after working for a practice in St Helens in north-west England for 15 years and teaching property management and facilities management at the University of Bolton.

“My first proper client was Colne Town Council,” he recalls.“To do a building survey of the community centre.” While he’s an experienced surveyor, his practice has quickly gone from a“one-man-and-his-dog type of set-up”, to a team of five. He now plans to open a second office.

Foundations

LEGAL 101

advice are to “network and get a mentor”. He speaks with other surveyors regularly and is a member of the local chamber of commerce.

Holden also advises people to: “Work hard on your website and search engine optimisation [so you appear prominently in relevant internet searches]. I’ve designed my own website and I only pay £20 a month for it. In terms of searches, it’s important to get the Google Business

“As with anything, the lack of knowledge is the scariest thing, compared with what you’re actually obligated to do” CHRIS HADRILL Redmans Solicitors results sorted out, and I’ve been on a couple of sponsored courses through local business development initiatives. They’ve proved very useful,” he says.

Finally, Holden and Hadrill both stress the power of understanding how you differ from the competition. If you know how to do something better or cheaper, then use that to inform how you market yourself and the services you offer.

While all this might seem like a lot to consider, the rewards can be huge. As Hadrill says: “Although you may not succeed financially for the first few years, the value you gain from succeeding with something like this is immense. It really is one of the best things I’ve ever done.”

DRAWING UP YOUR BUSINESS PLAN A business plan is a more formal document of the immediate goals you want to achieve. Common components are likely to include: ››good accounting practices in respect of management control ››financial performance target derived from practice direction ››identification of any investment requirements

››indication of allocated staff resource ››assessment of how sensitive the plans are to changes in the main forces that might affect those plans. This not only implies being ready for business not materialising, but also suggests planning for circumstances of greaterthan-expected demand.

This is an extract from the Developing a business plan factsheet, which can be downloaded by going to rics.org/smallbusinesshub and clicking on “Setting up in practice”.

A method on which we can agree NEIL KAPLAN Honorary chairman, Hong Kong International Arbitration Centre Arbitration is not a new concept. It has been used since Egyptian and Assyrian times and long predates state courts as we know them today. But why should disputants use arbitration, when the courts in Hong Kong are efficient and able?

Despite the strong rule of law in the territory, arbitration still offers substantial advantages over the court system.

The main benefit is privacy and confidentiality, which avoids any embarrassing courtroom dramas being played out in the press.

The arbitration procedure has greater flexibility than a court case, and decisions are handed down by experts with a knowledge of the specific type of dispute and are final and binding, with no opportunity to appeal.

In some cases, it is also possible for a very quick decision to be made at arbitration, and this usually means less cost. It is worth remembering, however, that some cases will be complex and time-consuming regardless of the forum in which they are heard.

It is sometimes necessary for your dispute to be heard outside your home territory, particularly in cases between parties from different jurisdictions. In this context, the great advantage of arbitration is its ease of enforcement. Under the terms of the 1958 New York Convention, it is far easier to enforce an arbitration award across global jurisdictions than it is a judgment of the Hong Kong courts.

The New York Convention does not apply between Hong Kong and China because, technically, the two territories are one state. But both governments have entered into an Arrangement that effectively implements the same terms as the convention, to good effect.

Whether an arbitration should be heard overseas or domestically depends on how substantial a part of the parties’ obligations are performed outside Hong Kong. It is perfectly feasible, for example, that two Hong Kong-based companies would have an agreement that relates to a project in China. This would render the arbitration international, thus avoiding the Chinese court system, which is radically different to Hong Kong’s.

EXPERT DETERMINATION A rent review is a common issue that is settled by way of arbitration. However, sometimes the parties use expert determination. This should not be confused with arbitration, and decisions cannot be enforced under the arbitration ordinance.

The decision of the expert determiner has to be enforced as a contract, and therefore is pursued through the courts. The successful party will have to begin legal proceedings to enforce the decision if the losing party fails to comply with the expert determiner’s decision.

Expert determination can be used for a variety of purposes, such as valuing the holdings of a partner who wants to be bought out by another partner.

FOR MORE INFORMATION, contact the secretary general of HKIAC at hkiac.org Q3 2016_MODUS A SI A 47

CPD booster Related content from RICS

ESTIMATING AND COST PLANNING: NEW APPROACHES AND BEST PRACTICE. Improve your outcomes and client service. Presented by Sonia Desloges (above). cpdfoundation.com/ webcasts/227 ››CPD hours: 1

UPPING YOUR ESTIMATION PROFESSIONAL DEVELOPMENT How do you ensure that you achieve the highest level of accuracy in your cost planning and estimating?

Question of perception Quantity surveyors and cost managers know that, by definition, a cost estimate is not intended to be 100% accurate, but it must set the cost limit for the project within reasonable parameters.

The challenge is that accuracy is subjective and is perceived differently from one client to another. Therefore, it is crucial that quantity surveyors establish what accuracy means to each of their clients and manage their expectations early in the process.

New Rules OK Look to RICS best practice to assist your need for greater accuracy.

For instance, quantity surveyors tend to price “on-costs” such as preliminaries, risk/ contingency, inflation and professional fees as a percentage of their estimate. This is acceptable in a project’s early stages, but as more information becomes available, they should refer to groups 10-15 in the New Rules of Measurement (NRM) 1 for greater accuracy, and to improve client service.

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 RICS.ORG/MODUS

Best in class Another technique that is often misunderstood is benchmarking. Far from being about calculating averages for a building type, benchmarking

really is about establishing best-in-class standards and incorporating all the elements in your project that deviate from this ideal scenario. This may include the procurement route, environmental targets, basements, design efficiency, or architectural features.

Information overload These days, “big data” is very much at the heart of a surveyor’s working life. We can easily get overwhelmed with cost data, and we need to learn how to collect it, interpret it and manage it. Efficient data management is all in the balance: keep it as simple as you can, focus on the important bits first and allocate responsibilities. Demonstrating good cost data management could even become part of staff appraisals.

Standards practice It is essential that we rapidly embrace international property measurement standards (IPMS). A group of Mace graduates started using it six months ago and found that the application of IPMS 3 – which replaces net internal area – took some time to get to grips with. In parallel, we must educate our clients so that they are as clear as possible about its benefits.

SONIA DESLOGES MRICS is a senior cost consultant at Mace Group and director of APC Support apcsupport-ltd.co.uk

THE EMPLOYER’S AGENT/CONTRACT ADMINISTRATOR Burges Salmon partner Marcus Harling (above), looks at how risks can be managed with the use of a certifier. cpdfoundation. com/webcasts/211 ››CPD hours: 1

RICS PROPERTY MEASUREMENT – MANDATORY PRACTICE STATEMENT Alexander Aronsohn (above), RICS Director of Technical International Standards, explains how the Code of Measuring Practice is changing to incorporate IPMS. cpdfoundation. com/webcasts/218 ››CPD hours: 1

Foundations

SURVEYED Is there a book, website or app you couldn’t be without? Email editor@ricsmodus.com

BOOK

MODEL EXAMPLE Building information modelling (BIM) has become a fundamental part of the building industry, and the technology is redefining the roles and working practices of its stakeholders.

Authored by experienced quantity surveyors, BIM and Quantity Surveying is designed to help quantity surveyors

and students understand what BIM means for them, and how they should prepare to work successfully on BIMcompliant projects. Through a series of case studies, the guide demonstrates how firms have integrated core quantity surveying responsibilities such as cost estimating, tendering and development appraisal into highprofile BIM projects. For those in construction project management roles, the implications of BIM for project management, facilities management, contract administration and dispute resolution are also explored through case studies.

The authors believe the role of the quantity surveyor is likely to permanently shift as a result of BIM, and cover both the organisational and practical aspects of this crucial industry development.

BIM AND QUANTITY SURVEYING Steve Pittard FRICS and Peter Sell MRICS Taylor & Francis

EVENTS

Book RICS events online rics.org/events For inquiries, call +852 2537 7117

HONG KONG

››International Heritage Conference 2 March 2017, Happy Valley Racecourse This year’s theme will be “Sustainable social and economic benefits in builtheritage conservation”. Take part in high-level discussions on conservation and planning policy, economic feasibility, design and architectural elements and post-completion

operational management. Case studies include director of CPS Euan Upston’s presentation on the challenges of revitalising Hong Kong’s Central Police Station (p37). Half-day tours of some of the sites discussed at the conference are also planned. rics.org/heritage2017 ››RICS Awards, Hong Kong March 2017 For the sixth year running, the RICS Awards, Hong Kong

ALSO THIS ISSUE

››Start-up MyCaptR is developing an app that lets you 3D-scan a room in about three minutes, and view the point cloud image in real time. mycaptr.com/en ››Is virtual reality the future of the hospitality industry? JLL’s Real Views blog looks at how innovative hotels are virtually transporting potential clients to exotic locations, all from the comfort of their room via VR headsets. bit.ly/realviewsVR ››Watch futurist Parag Khanna deliver a TED talk on how megacities, supply chains and connective technologies are moving the world away from states and borders. bit.ly/TED_Khanna ››Five strategies for the construction industry to be more inclusive of women and minority groups, set out

by Mott Macdonald’s Richard Chapman Harris: bit.ly/mottmac5ways

celebrate excellence, professionalism, achievement and overall contribution to projects, teams and development of our built environment. The awards are open to everyone working within the property profession.

Nominations open in September. rics.org/hkawards

INTERNATIONAL

››COBRA 2016 19-22 September, Toronto, Canada In partnership with George Brown College (Canada), RICS presents the world’s leading construction, building and real estate research conference dedicated to

providing stimulating debate between researchers from around the world, providing the basis for new areas of research for construction.

CPD: TBC $765 rics.org/cobra2016 ››RICS/IPTI 5th Annual Caribbean Valuation & Construction Conference 9-10 November, Bay Gardens Hotel, Saint Lucia, Caribbean The conference will address issues related to valuation and construction, and organisers are seeking expressions of interest to participate as speaker in the event.

CPD: TBC $300 rics.org/fifthcaribbeanconf Q3 2016_MODUS A SI A 49

Mind map

HOW IS “BIG DATA” CHANGING THE OFFICE? Rajiv Nagrath Head of corporate account management – Australia, JLL, Sydney

Most modern offices have up to 10,000 points connected to a building management system.

Such a large volume of data needs to be collected, analysed and acted upon. It is much more efficient to channel this information back to a command centre to monitor, analyse performance, and detect failures and anomalies.

Individuals will soon be able to set their own lighting and temperature preferences via an app on their smartphone. Such technologies will bring another layer of complexity for facilities management, but opportunities also.

If we have the right analytic tools, big data gives us a chance to identify the causes of malfunctions, and manage maintenance spend on buildings, delivering better outcomes for owners and users.

ILLUSTRATION GIANMARCO MAGNANI

In future it might also be possible to aggregate data from employees’ individual fitness monitors to determine the condition of the team. Why not look at how healthy your staff are and relate it to productivity?

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RICS-MAPPI Asia Pacific Valuation Conference 2016 Inaya Putri Bali 13 – 14 October 2016

In partnership with MAPPI and the Ministry of Finance, Indonesia

To book please contact Linda Kwok at lkwok@rics.org or call +65 6635 7158