MODUS Asia Edition | Q4 2016 by ROF Media

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ASK THE BIG QUESTIONS

Q4 2016

THE FAIR ISSUE CONTINENTAL DRIFT

What next for the UK now it’s leaving the EU? / 14

GENDER AGENDA

Does the sector have a problem with women? / 30

MOUSE BUILDER

The construction of Disneyland Shanghai / 36

WALK THE LINE Ethical dilemmas in surveying / 18

Contents MODUS ASIA Q4 2016 RICS.ORG/MODUS

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07-13 NEWS IN BRIEF Industry news, advice and information for RICS members 08 THINKING: MEGAN WALTERS Increasing transparency of Asia-Pacific’s property markets brings myriad benefits 11 PRESIDENT’S COLUMN Britain might have voted to leave the EU, but RICS’ role in helping shape future policy is as important as ever, says Amanda Clack FRICS

Features

Foundations

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06 DIFFERENCE OF OPINION Does the success of a smart city depend on the private and public sectors working together? We hear two points of view

14 BREXIT STRATEGY What is the UK’s status on the global stage? 18 COVER STORY When it comes to ethical behaviour, the answer is not always black and white 24 CHASING THE DRAGON On China’s outward investment trail 26 LESSONS OF THE PAST Bringing heritage assets up to date 30 TIME TO FACE FACTS Female surveyors’ struggle to achieve parity 34 MODEL WITNESS How BIM is helping to resolve disputes 36 YEAR OF THE MOUSE Behind the scenes at Disneyland Shanghai

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GILLIAN COTTLE FRICS, SLATTERY DIVERSITY, P30

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AGA S Mways S MAGthings AZ “Women bring different of doing and Z DU DU new ideas, and the more the variety of possible solutions a company has available, the better it does”

44-45 CAREERS Get your business writing up to scratch; Colliers International’s Lina Wong MRICS 46 BUSINESS How inclusive an employer are you? 47 REGULATION 101 The value of being an RICS Registered Valuer cannot be underestimated 48 PROFESSIONAL DEVELOPMENT Avoiding misrepresentation in property 50 MIND MAP CBRE’s Andrew Jay MRICS on the evolving demand for data centres PLUS 49 Surveyed + Events

40 DIFFERENT CLASS Universities are the biggest developer in town 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.

Q4 2016_MODUS A SI A

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

RAIL ESTATE Sir, I read with interest your article highlighting the benefit of linking transport infrastructure investment with property development (Buy now pay later, p38, Asia edition, Q3). You are right to point to the success of Hong Kong’s MTR Corporation, which is, in fact, only 23% privately owned, and whose dividends continue to be divided between its minority shareholders and the Hong Kong government. MTR has been operating the London Docklands Light Rail (DLR) network for many years, and has won the contract to operate Crossrail. The profits it makes operating Crossrail will help to pay for public services in Hong Kong. Far from needing an annual subsidy – as is the case with Transport for London – MTR makes £1bn profit a year, on slightly lower turnover. The same principle was used to develop Hong Kong International Airport, whereby the airport authority is granted a 50-year operating licence, collecting all shop rents and landing fees during that period, in return for having built it. All this is possible because of the system of land ownership in Hong Kong in which all land has been leased to companies and individuals who wish to use it. A decent share of any increase in value as the community grows and becomes more prosperous is collected in government rent on an annual basis, or by the collection of leasehold improvement premiums when, for example, a change of use is agreed. In the UK, the same effect could be achieved by introducing a land value tax – much simpler, and more universal than the country’s current stamp duty land taxes or community infrastructure levies, which rely on transactions to benefit the exchequer. Andrew Purves, Isleworth, UK

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 @APSeccull @RICSnews Reading #modus on train has surprisingly created networking opportunities with spotting other #surveyors! @rheajb 1/2 I think women need to stop

being oversensitive about the use of the word ‘man’ in #RICSmodus articles. @rheajb 2/2 you know what they mean.

It’s not as if they sit and think ‘let’s write this to annoy all the female surveyors’ #takingittoofar @DKirk2012 The @RICSnews #RICSmodus - fantastic example of hero content marketing @Steven_Ramage Fabulous column by

@amanda_clack in #RICSModus - great to see another @RICSnews female Global President @LbsLouise #diversity @robayre_UKLE With exams over I’m finally catching up with everything else I want to read... #RICSModus

CHANNEL FLAW Sir, First, may I offer my congratulations on the production of Modus, a beautifully presented and insightful magazine. However, can I please ask that you make this available via more channels than hard copy and Issuu? As I work overseas it’s not practical – nor good for the environment – to have Modus delivered to me and the Issuu application/website is simply appalling. Why isn’t a PDF download available directly from the RICS website? This option is still provided for each of the Journals. Nick Brown MRICS POTT, KETTLE Sir, In the UK Eastern region, a number of members have received an official email from headquarters requesting participation in discussions about infrastructure, and stressing the need for “joint up thinking”. Is this a new RICS phrase – a variation of joined-up thinking, or an invitation to a cannabis party? I would be grateful for clarification. Simon Pott FRICS, Bury St Edmunds, UK

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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 Malika Favre / Published by Sunday, 207 Union Street, London SE1 0LN wearesunday.com / For RICS James Murphy and Kate Symons [UK] / Jeanie Chan [Asia]

Q4 2016_MODUS A SI A

Intelligence

News / Reviews / Opinions / Reactions

DIFFERENCE OF OPINION

The private and public sectors need to work together for smart cities to succeed. Discuss.

i ThinK ThAT The non-goVernmenT secTor is The mosT imPorTAnT driVer for smart cities, because it can be more entrepreneurial in coming up with new ideas to deal with urban problems. For example, look at how the private sector has turned old telephone boxes into a network of free wifi hotspots in New York, and how peer-to-peer car rental is beginning to compete with public transport in many cities across the world. The worst thing is to impose a bunch of technologies from the top, and hope that people figure out how to use them. Last year, I stayed in Songdo, South Korea, lauded as a “smart” city. But for all its topPROFESSOR YEE LEUNG DIRECTOR OF THE INSTITUTE OF down planning, there was no soul. I wondered where all the FUTURE CITIES, THE CHINESE UNIVERSITY OF HONG KONG ingenuity of individuals was in this age of entrepreneurship. Successful cities need plenty of room for serendipity and This is A Process BesT led BY The PuBlic secTor: The issue emergence. City planners will understand that groups of is how we can make use of information and communications people are ecological systems, like a rainforest. Cities are technology to improve urban governance. living super-organisms, and we co-create them together. A smart city is usually equated with information and communications Thankfully, the dialogue seems to be changing to a more technology (ICT), and that’s not correct. ICT is just the infrastructure to bottom-up approach. I love schemes that bring citizens into govern the city more efficiently. the process, like My Ideal City in Bogotá, Colombia. Smart cities need to be open in terms of big data. The technical part While we might need government-driven plan-and-fund of the infrastructure is not difficult. What’s important is the legal and connectivity, we must give space for random innovation from institutional framework. the private sector. This will come from a culture where Say I want to do land planning. I want to get access to transportation entrepreneurship is encouraged. Technology can enhance data, environmental assessments, land prices. The whole government has this culture, but it can’t create it. to make each department open up the data in an easily accessible form. Smart cities are built by smart people trying new things. Barcelona has done a pretty good job, opening up data for some time. San It’s not something that can be mandated. It may seem Francisco has done a very good job with transport. For parking, they put chaotic. But a little anarchy is always a good thing. sensors in place, and a pricing system so that if there are spaces that are further away, they will encourage drivers to use them for a lower fee. That will reduce transportation congestion: a lot of the time that we’re driving Private party or public prerogative? in cities, we’re actually just looking for somewhere to park. Let us know what you think by In Asia, Singapore is doing a pretty good job. They have opened up quite emailing editor@ricsmodus.com a lot of their data, and then the private sector can come in with a system, for instance, as to where you can catch a taxi. This can all be done quite easily. But the government sector has to initiate and facilitate it, and the private sector will then collaborate. 06

RICS.ORG/MODUS

INTERVIEW ALEX FREW MCMILLAN ILLUSTRATION QUENTIN MONGE

BENJAMIN BUTLER FOUNDER AND FUTURIST, THE EMERGING FUTURE INSTITUTE, HONG KONG

$8.9BN

Sanction violations

CASE LOADS Recent fines for ethical breaches at large firms, and the behaviour that led to them. Source: Chartered Accountants Australia & New Zealand, FT, SFO

$42.8M

$417.6M Manipulating key interest rates

Bribing foreign government officials

UBS, 2012

Barclays, 2012

Daimler, 2010

Former employee conducting bank fraud

$185M

$3.2M

Failing to prevent an act of bribery

BNP Paribas, 2014

Sweett Group, 2016

INVESTMENT

NEWS IN BRIEF

LONDON PROPERTY PROVES HARD TO RESIST FOR CHINESE INSTITUTIONS

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New chair takes his seat on RICS’ Hong Kong board Clement Lau FRICS has been appointed chair of RICS’ Hong Kong board, serving a two-year term. Lau previously served as% the board’s vice-chair. Lau is the head of development and valuations at property investment, managementSouth and Korea development group Hong Kong Land. He previously worked for the Lands Department of the Hong Kong SAR Government, and Airport Authority Hong Kong. The board also welcomed three new members on 1 September: Philip Chen MRICS, designatedirector of property at the Hong % Kong Jockey Club; Dave Hallam MRICS, head of business advisory for Hong Kong and Macau at Arcadis, and Rita Wong MRICS, S. Korea international director of valuation advisory services at JLL.

RICS promotes IPMS at Pan Pacific Congress in Japan

INFOGRAPHIC IAN DUTNALL

Intelligence

RICS Japan attended the 28th Pan Pacific Congress in Kyoto last month, as part of its drive to promote international property management standards (IPMS) in the country. David Faulkner FRICS, a member of RICS’ Global Valuation Professional Group Board, addressed an audience of real estate appraisers, valuers and counsellors at the event. The attendees heard why IPMS are needed, their relationship to valuation and accounting standards, and the process or developing them. The conference was organised by RICS’ partner organisation, the Japan Association of Real Estate Appraisers.

27 %

21 %

19 %

18 %

Japan

Netherlands

Canada

Australia

Chinese institutions are showing little sign of abandoning British real estate, completing two big purchases in the first week of September 2016 alone. First, Hong Kong’s SRE Group – controlled by China Minsheng Bank– bought the London headquarters % % of Société Générale on %a sale and% leaseback for £84.5m ($112.5m). SocGen’s lease on the property at 41 Tower Hill runs until 2020 but Netherlands Canada Australia UK the bank has an optionUSto extend. China Vanke was next in line. China’s largest residential developer by sales bought its first commercial property in Britain with its £115m ($153m) purchase of Ryder Court in Mayfair, which reflects a yield of

VOTE OF CONFIDENCE Work began on Greenland’s Spire London in September, after a delay caused by the UK referendum on membership % %EU of the

Japan

LINKING Are bills of quantities (BoQ) a dying art?

STARTED BY Rod McLennan MRICS, lecturer, Robert Gordon University, Aberdeen

Our company is inundated with BoQ requests. We have two guys who prepare them, but it’s certainly a dying art in terms of those who can actually produce a decent one. Matthew Warhurst The projects where the occurrence of claims are highest and most

4.3%. Brexit did play a role in this transaction – investors have been pressing the vendor, Henderson Global Investors, to shed UK assets amid post-vote uncertainty. In % the same%week, state-owned % % developer Greenland Group released new images of its Spire development in London’s Docklands. The £800m UK Germany New Zealand ($1.065bn), 235m-high Spain skyscraper, boasts 67 floors, 861 apartments, residents’ gardens and a spa and club bar. Construction is now under way, and on completion in 2020 it will be the tallest residential tower in western Europe. Greenland’s managing director, Wenhao Qian, said that the commencement of work on Spire % % London was a% huge confidence boost for the British market postBrexit. The developer is one of the most aggressive Chinese investors Germany Spain New Zealand internationally, and is building four of the world’s 10 largest projects. While the negotiations were likely ongoing before the Brexit decision, there was ample time for developers to put on the brakes after the referendum – an entire quarter.

REVIEWING THE LATEST DISCUSSION POINTS AT RICS.ORG/LINKEDIN difficult to resolve are those without BoQ. I doubt that compiling a bill is a dying art. It is merely cyclical and employers have to suffer lower profitability to understand they would have greatly benefited by using one. David Fryer MRICS There is a dearth of surveyors who can even set down dimensions, never mind prepare

a BoQ. I believe it is down to the education system, where degrees are handed out to students who are not taught the basic skills of measurement. Tim Atmore MRICS I do not think that it is a dying art. It actually changes its shape, requirement and importance over time. Mohammed Azad Hossain MRICS Q4 2016_MODUS A SI A

“There is a clear link between transparency and the attractiveness of a country’s property market. And it’s Asia-Pacific that’s made the biggest strides”

he ongoing political and economic headwinds of 2016 have left many people with a sense of gloom about the global outlook. But despite some dark clouds, there are still reasons to be cheerful for those of us in the real-estate business. For one thing, consider this bright spot: transparency in real estate-transactions has been improving steadily over the past decade or two. And according to JLL’s 2016 Global Real Estate Transparency Index, it is the Asia-Pacific region that has made the biggest strides. The biennial report on transparency reveals which countries provide the most favourable operating environments for investors, developers and corporate occupiers. Covering 109 markets worldwide, it quantifies transparency based on several factors, relating to governance, transaction processes, the regulatory and legal environment and availability of data. In 2016, AsiaPacific outperformed the other regions in terms of aggregate improvements over the past two years. So what does this mean for the people who buy, sell and lease buildings in this part of the world? For a start, there is a clear link between transparency and the attractiveness of a country’s property. In fact, the top 10 most transparent markets attracted 75% of global investment in commercial real estate. Given that JLL forecasts capital allocations to real estate growing by anywhere from $700bn to more than $1tn within a decade, there is impetus for it to have comparable transparency to other asset classes. In addition, transparency in real-estate markets has a significant impact on quality of life. The more transparent

RICS.ORG/MODUS

the market, the more it can enforce building regulations and protect individuals’ property ownership rights. These are things that can save lives as well as livelihoods. Chief among reasons for these improvements has been the increased availability and quality of market data. In some countries, advances have also been made in performance benchmarking, the enactment of new legislation, the introduction of higher legal standards, and the wider adoption of green-building regulations. RICS has also been instrumental in helping to standardise methods and measurements, which has made a substantial difference. Looking at the JLL index overall, improvements in most countries have been small. But they paint a picture of the immense diversity of this region. The biggest improver is Taiwan, which has moved into the “transparent” category for the first time. Japan, South Korea, India achieved more moderate improvements, and China’s Tier 1 cities are now on the brink of the “transparent” category. While the UK retains its place at the top of the index, Australia and New Zealand have consistently scored highly since we launched the report in 2002. Both are rated as “highly transparent”, coming in at second and sixth place respectively in the global ranking. Meanwhile, the developed economies of Hong Kong and Singapore have remained comfortably in the “transparent” category. At the other end of the spectrum, Myanmar retains the title of least-transparent market in the region, although it was among the 10 biggest improvers globally. Thinking back to those headwinds that are buffeting some of the world’s most-developed markets, will they push real estate investors towards Asia’s developing markets? At time of writing, investment into equity funds in emerging markets has been gaining pace in a quest for elusive yield. Are we likely to see the same trend in real estate? The short answer is yes and no. The UK remains the most transparent property market in the world, and it will continue to attract international investors. However, it’s clear that many governments in Asia are taking steps to address transparency concerns because they know that, in the long term, it will help them grab a bigger share of global capital.

ILLUSTRATION ANDREA MANZATI

MEGAN WALTERS HEAD OF RESEARCH, ASIA-PACIFIC, JLL, SINGAPORE

Intelligence

NEWS IN BRIEF

WE LIKE

rics.org/modus

HQ welcomes delegates from Chinese accounting institute In August, a high-level delegation from the Beijing National Accounting Institute (BNAI) visited RICS HQ in London. The meeting was arranged primarily by RICS’ China office, in collaboration with the China Appraisal Society (CAS). The BNAI is the main source of further education in accountancy for high-level managers and public officials in China, and is administered by the Chinese Finance Ministry. RICS’ Head of Global Corporate Affairs, Richard Stokes, UK Valuation Director, Fiona Haggett FRICS, and Head of Regulation Policy & Development, Jonathan Gorvin, gave presentations to the visiting delegation. Among the topics covered were RICS’ mission and vision, valuation in the UK, regulation, and our engagement programmes and partnerships with many governments and international organisations. The RICS team in China will continue to work closely with counterparts at BNAI and CAS, building on this successful visit to drive market awareness and demand for valuation standards in China. RICS President Amanda Clack meets Japanese partners RICS President Amanda Clack FRICS visited Japan in July, to deliver a speech at a joint seminar organised by RICS and its partner organisations, the Association of Real Estate Securitization (ARES) and the Japan Real Estate Institute (JREI). Clack’s speech covered the potential and challenges of private investment in public infrastructure, and drew on lessons learned from examples from the UK. During her trip, she also visited some key government agencies and met senior officials of Japan’s local professional organisations.

GROWING UP Aerofarms expects its new HQ to reach full capacity this summer, which is equivalent to 900 tonnes of crops a year

Aerofarms’ vertical farm HQ What’s that? Once a redundant steel factory, now the world’s largest vertical farm. Aerofarms’ new headquarters in Newark, US, contains an astonishing 69,000 ft2 (6,400 m2) of indoor growing space, stacked in plant beds 12 levels high. This year, the vertical farming company hit full capacity, which means around 900 tonnes of vegetables will be grown each year. How does it work? Leafy greens, herbs and salads are grown in specialised trays under LED lighting, and kept nourished using an “aeroponic” mist that Aerofarms claims uses 95% less water compared with outdoor agricultural techniques. Vertical farming has been touted as a revolutionary way to grow food in as little space as possible, as it needs only around 1% of the land required by conventional growing. Marc Oshima, Aerofarms’ co-founder, believes this makes vertical farming more than 75 times more productive per square foot compared with traditional agriculture: “We can take the same seed that might take 30-35 days to grow outside, and it will have a 12to 16-day crop cycle in our system, so we can have 20 crop cycles a year.” And the downsides? There are limits to vertical farms’ usefulness, as they are unsuited to growing many types of vegetables, such as tubers, or fruit. Critics of the economics of vertical farming also worry that it makes little sense in areas with high labour costs or high real estate prices, and that the facilities take up scarce urban land that might be better suited to housing. aerofarms.com

ON RECORD

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

It’s not enough to say you’re operating in line with local norms, when those norms have been criticised by human rights groups DAMIAN COLLINS Conservative MP The UK construction industry is under renewed pressure to act on migrant worker rights in Qatar.

Are they going to throw people away from their land to develop new forests? SREEDHAR RAMAMURTHI Earth scientist and management trustee at NGO Environics Trust The Indian government is to spend $6.2bn on increasing India’s forest cover from 21% to 33% of the total land. The money will come from fees paid by private companies, but some are sceptical of the project’s viability. Q4 2016_MODUS A SI A

IMPERFECT PERMANENCE With global refugee numbers at nearly 70 million, and encampments such as Nizip 2 in Turkey (pictured), taking on an air of increasing permanence, how must we reappraise our ideas of what a city is – and how can we protect the human rights of those living in these environments? These and other questions are at the heart of Insecurities: Tracing Displacement and Shelter, a new exhibit that opened this month at New York City’s MoMA. The show brings together art, photography, design and architectural innovation in response to the crisis, including Ikea’s Better Shelter, 30,000 of which have now been deployed worldwide. moma.org

10 RICS.ORG/MODUS

Intelligence MIND THE GAP The difference in full-time earnings between men and women in selected OECD nations, as a percentage of a male’s salary Source: Statista/OECD

37 %

27 %

21 %

19 %

18 %

13 %

South Korea

Japan

Netherlands

Canada

Australia

Germany

Spain

New Zealand

INVESTMENT

SINGAPORE LIQUIDITY RISK LOOMING, SAYS S&P Heavy debt loads are putting Singapore’s property companies in jeopardy, a report from Standard & Poor’s (S&P) has stated. % % % % % % % % % % The ratings agency puts the amount of bonds in Singapore at S$60bn ($44bn), with property companies accounting for more than half the bond debt in the city. Japan Netherlands Canada Australia S. Korea US UK Germany Spain New Zealand Gross debt to earnings in the sector has crossed 11x for the first time in three years. That contrasts with the 6.8x debtto-earnings ratio with Chinese developers. “We believe the leverage for Singapore real-estate issuers is unlikely to improve any time soon,” the S&P report explains. “Their debt is very high, and reduction will AMANDA CLACK FRICS RICS PRESIDENT require either a substantial increase in BUSINESS operating cash flows, a dramatic cut in The world is still digesting the outcome of June’s referendum, in which AS USUAL capital spending, or an equity infusion, the British public voted in favour of leaving the EU. The result unleashed RICS’ work to which is not prevalent at present.” initial volatility in markets well beyond the UK, but this eased on Theresa achieve greater Developers with less than $1bn in recognition for May’s appointment as prime minister, who immediately made clear she market capitalisation are building on professional would not be rushed into triggering the formal exit process, and as we began standards is as rockier ground. Roxy-Pacific Holdings, to hear the considered reactions of other European leaders and businesses. important as Centurion, TA Corporation, Tuan Sing ever post It is clear that the consequences for the whole of Europe are far from certain Holdings and Heeton Holdings all have a Brexit, as is its and could be profound. Investors around the world will be keeping a close debt-to-capital ratio of more than 50%. reputation as a eye on developments as they reassess their plans for the UK and the EU. respected If and when interest rates rise, they may global body RICS recognises that Britain’s departure from the EU will have long-term struggle to finance their debt, particularly consequences. We are working with other professional bodies and industry if sales remain slow and their cashflow is poor. The Singaporean government stakeholders to influence governments, so that the future relationship has indicated it has no plans to remove between Britain and Europe serves the public interest as well as possible. measures imposed to cool the market, When it is appropriate to speak out publicly we will do so, but our main effort including a 15% tax on property purchases will not be overtly public. Among our priorities are mutual access to markets, by people who are not Singapore residents. access to skills and labour, investment in infrastructure, and the“passporting” “Any near-term difficulties among the of services. We will continue our work on the recognition of RICS standards, smaller issuers will continue to rattle the qualifications and regulation, which are important for everyone in our broader market,” S&P states. profession wherever they are based around the world. Rather than look back, we will be encouraging policymakers to use this moment to prepare for the opportunities of a changing world economy, shaped by the data revolution and where land, property, construction and infrastructure remain at the core of economic growth. The wider picture is challenging. Concern is growing over the effects of globalisation and what form it will take – one that gains public acceptance by responding to urbanisation and the impact of new technology, or a globalisation that generates greater resentment and inwardness? Our work to create consistent global standards, delivered by qualified professionals that give markets confidence, must be part of the solution. Our status as a respected and outward-looking international body means we will HOUSE COOLING be heard. Now is an exciting time to be leading the profession, for tomorrow Sales at Roxy-Pacific’s Trilive scheme have slowed and towards our 150th anniversary in 2018. due to a combination of oversupply and the Singapore government’s initiatives to cool the housing market Follow Amanda on Twitter @amanda_clack

ILLUSTRATION BERND SCHIFFERDECKER IMAGES MOMA; DELTA FOUNDATION

“Post Brexit, our goals remain the same, as does our status”

Q4 2016_MODUS A SI A 11

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Intelligence

NUMBER CRUNCH BRIBERY AND CORRUPTION PENETRATES ALL BUSINESS SECTORS League table of foreign bribery More than half of all instances of public officials being bribed in international business transactions occurred in four sectors $ $ $

SECRET SURVEYOR

“Among male colleagues, I have found the most likely to hit on me have been quantity surveyors”

$ $

15%

Transportation and storage

$ $

15%

$ $

Construction

$ $

19%

$ $

Extractive

$ $

am contemplating a job move, and have been auditing my working life. In 31 working years, I’ve spent five of them studying part-time for my degree and been chartered for 18. I admit to eight jobs on my CV, although there have been a couple more. Four have ended in redundancy, three were temporary contracts and one was zero hours. At three stages I have been unemployed, and I’ve also taken two maternity leaves. Starting out without a degree definitely added to the number of jobs. Some of the early ones were dire. Being a mum also contributed. I left one job because it was easier to get a new one than to find suitable childcare. I also worked a reduced week for a while and found myself “out of the loop” when it came to a restructure. I’ve had 18 line managers. Three I would willingly work for again. Eight I could probably tolerate. The remaining seven I would cross the road to avoid. In general, technically qualified managers have been easier to work for. I am connected to 52 colleagues or former colleagues on LinkedIn and seven have become Facebook friends. These are disproportionately female. Among male colleagues, I have found that the most likely to hit on me – by some distance – have been quantity surveyors. General practice surveyors are the most fun to flirt with, and building surveyors are the most likely to tell me things I really don’t want to know. My salary has just nudged above the level it was eight years and two redundancies ago, and it is 15 years since I was last offered a company car. I don’t know if this is a good time to move jobs, but I am now confident that I know who I want to work with, what type of work I want to do and what I want in return for my labours. I think I’ll make the leap.

Information and communication

10%

$ $ $

$ $

Manufacturing

$ $

$ $ $

$ $

Water supply

$ $

Wholesale and retail trade

$ $

Agriculture, forestry and fishing

$ $

Public administration and defence

$ $

Electricity and gas

$ $

Human health

$ $

Source: OECD

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

$ $

3% Other

$ $

3% Q4 2016_MODUS A SI A

BREXIT STRATEGY Britain’s decision to leave the EU has thrown its position on the world stage into uncertainty. Should the country’s real estate still be an attractive target for Asia-Pacific’s overseas investors? Words Alex Frew McMillan Illustration Marina Muun

ritain’s landmark decision of 23 June, when 52% of voters in the country opted to leave the European Union, sent some sense of panic over prospects for the British property market. It turned a four-decade status quo into a state of flux – and markets, as the saying goes, hate uncertainty. What was of most concern was that there appeared to be little sense what to do after the decision. That has left a void, with a flurry of opinion filling it, particularly as to what the vote means for international investors in British real estate. The Brexit camp is comprised of people with very different philosophies, notes Simon Rubinsohn, RICS’chief economist. Voters who are pro-trade or even in support of the free movement of labour – but who want more control over immigration – rank alongside protectionists.“You had quite divergent views making up that camp, which partly explains why there wasn’t a plan for victory,” he says. “Clearly it was also fairly unexpected. As a result, there’s an awful lot of work to be done.” Norway’s sovereign wealth fund, which at $850bn is the largest in the world, soon cut the value of its British property portfolio by 5%. Britain is the second-largest part of its holdings, after the US, but external assessors wrote down its holdings amid the uncertainty. Brexit raised too many “question marks”, for Trond Grande, the fund’s deputy CEO. Anything hampering the free movement of goods, services and people creates“frictions in the marketplace,”Grande said in an interview with Reuters,“and if that hampers growth in some shape or form, that will be to our disadvantage.” Contrast that with the view of DTZ/Cushman & Wakefield, which two weeks after the decision put out a report, Brexit May Favor Chinese Investors. Sure, some would be scared off, the firm admitted, but opportunistic investors – even those looking for core and core-plus property – should be taking advantage of the currency savings to add to their portfolios, the report suggests. »

14 RICS.ORG/MODUS

在

在 6月 2 3 日這天，英国人做出了一个重大决定：全国 5 2 % 人士投票选择脱离欧盟，令市场对英国房地产前景产生了一点恐慌，维持了四十年的状况变得不明朗，而市场讨厌不明朗。令人最忧虑的是接着应该怎样做，似乎毫无头绪，因而形成真空状态。人们议论纷纷，特别是这次投票对英国房地产的国际投资者到底意味着什么。皇家特许测量师学会的首席经济师 Simon Rubinsohn 表示，脱欧阵营由理念迥异的人组成。支持贸易和劳动力自由流动（但希望对移民实施更多管制）的人士和保护主义人士站在同一阵线。他说： “ 该阵营的人士意见有很大的分歧，这是无法取胜的原因之一。这并非意料之内，因此还有很多工作有待进行。” 挪威的主权财富基金（总值 8 , 5 0 0 亿美元，属全球最大规模）将会把英国物业投资组合削减 5 % 。英国在其持仓中占比第二，仅次于美国。不过，外部评估员在一片不明确之中减少英国持仓。英国脱欧为基金的副行政总裁 T r o n d G r a n d e 带来太多“ 疑问 ”。 G r a n d e 接受路透社访问时表示，任何阻碍商品、服务及人自由流动的因素都会产生“ 市场磨擦” ，如果这种磨擦以任何形式增长，将对我们非常不利。戴德梁行／高纬环球在英国作出脱欧决定两周后出版了一份题为“ 英国脱欧可能有利中国投资者 ”的报告，当中发表了相反的意见。该报告表示英国脱欧的确会吓走一些投资者，但机会主义投资者（即物色核心及核心增值物业的投资者）应该利用货币储蓄来增加投资组合。

英国脱欧战略英国决定脱欧令其在国际舞台上的地位变得不确定。英国的房地产是否依然是亚太区投资者追捧的目标﹖ 文：Alex Frew McMillan 图：Marina Muun

Overseas investment

Q4 2016_MODUS A SI A 15

The British pound fell to a 30-year low soon after the decision, declining 13% against the US dollar. A 10%-15% rise in Chinese tourism to the UK could result, Cushman calculates, which would add around $146m to the British economy. Soon enough, there were reports that Swiss watch makers were seeing sales in Britain rise rapidly. Chinese investment into British real estate fell from $3.82bn in 2014 to $2.2bn in 2015, Cushman noted, citing figures from Real Capital Analytics. Chinese insurers looking to diversify, for instance, could now drive that figure higher once again, the firm concluded. “Over the next few months, Chinese investors are likely to hold back, hoping for indications of market recovery,” the report states. “But mid- and long-term interest in the UK from China is likely to increase, particularly in the event of any price reductions, and the pound remains weak at the same time.” Volatility could be huge should investors not only from China but also the US and the Middle East actively compete for assets, Cushman warned. On the positive side, existing British property investment has suddenly become more “sticky” – investors with UK holdings have little incentive to sell with the currency so weak.

etting Brexit wrong could affect Britain’s future for the next 20 years, believes Bruce Dear, head of London real estate at law firm Eversheds. Likewise, for the entire property industry. “We must ensure our industry gets ‘Brexit-lite’, not ‘Brexit-brutal’,” Dear says, adding that every company with British roots or connections should be involved. Getting a bad Brexit agreement “is this decade’s biggest business risk”. At a meeting in July, UK prime minister Theresa May told German chancellor Angela Merkel that there would be no progress in 2016 on triggering Article 50 of the Lisbon Treaty, which is the official legal mechanism for Britain’s exit from the EU. But there is still plenty of work being done on that behind the scenes. Passporting – the ability of British financial firms to access European markets – is a key topic for the real-estate industry. Any reduction in access to Europe for banks and brokerages will likely have an immediate detrimental effect on occupational demand and development. “Whether you are landlord or occupier, you should argue for retention of passporting,” says Dear. “It is an invaluable simplification of the previous regime, and a powerful incentive for businesses to locate within the EU.” Rubinsohn’s view is that:“London isn’t suddenly going to disappear as the leading financial centre in Europe, but that doesn’t mean there isn’t going to be some cost.”

Price adjustments will present an opportunity for investors who had previously not been able to enter the UK market due to elevated pricing ll

HARRY TAN TH Real Estate

16 RICS.ORG/MODUS

决定作出后不久，英镑跌至三十年新低，兑美元下跌 1 3 % 。根据高纬环球计算，这可能会令前往英国的中国游客人数增加 10% 至 1 5 % ，为英国经济增加收益大约 1 . 4 6 亿美元。其后不久，多间瑞士手表制造商均表示在英国的销售量迅速上升。高纬环球引述 Real Capital A naly tics的数字，指出中国在英国房地产的投资额从 2 0 1 4 年的 3 8 . 2 亿美元下跌至 2 015 年的 22 亿美元。该公司总结时指出，举例来说，中国的保险公司力求多元化可能会再次推高数字。该报告表示“ ，在未来数月，中国投资者可能会暂停投资，静待市场出现复苏迹象，但以中期和长期来说，中国在英国的投资可能会增加，特别是物价下跌加上英镑疲弱的情况下。” 高纬环球警告说，投资者并非仅来自中国，还有美国和中东投资者争相投资于物业资产，波动性可能会很大。从正面来看，英国目前的物业投资已忽然变得更呈拉锯状态— 由于英镑疲弱，持有英国物业的投资者出售物业的诱因不大。 Eversheds 律师行伦敦房地产主管 Br uce Dear 相信，如果脱欧处理不当，可能会影响英国在未来二十年的发展，整个房地产业也同样会受到影响。D e a r 表示： “我们必须确保本行业‘受惠于脱欧 ’而非 ‘受害于脱欧。他补充说每间植根于英国或跟英国有关连的公司都会受到牵连。 “商业界在未来十年的最大风险”是制订出差劲的英国脱欧协议。在 7 月的一次会议中，英国首相德蕾莎·梅伊对德国总理默克尔说在 2 016 年不会在触发里斯本条约第 5 0 条，即英国脱欧的正式法律机制。不过，背后仍有很多工作有待进行。金融通行证（英国金融公司进入欧洲市场的能力）是房地产界的主要议题。银行和经纪公司进入欧洲的能力受到任何削弱，都可能会立即严重影响职业需求和发展。 Dear 表示： “不管是业主还是租户，都应该争取保留金融通行证，这旧体制下的简化制度十分宝贵，是促使企业进驻欧盟的有力诱因。” Rubinsohn 则认为： “伦敦不会立即丧失作为欧洲金融中心的地位，但这并不表示不用付出某些代价。” 大部分评论员均相信，伦敦的交易会停顿，价格会下跌，但很难确定情况会持续多久。 TH Real Estate 的亚太区研究主管 Harry Tan 认为，在低息环境下，亚洲依然会是主要的资

Overseas investment

Most commentators believe that, in London, transactions will stall and prices decline. But for how long that will continue is very much uncertain. Asia will still remain a leading source of capital in a low-interest rate environment, asserts Harry Tan, head of Asia-Pacific research at TH Real Estate. The promise of sustained, low rates will keep Asian investors focused on core markets that produce stable income. Within Asia, Tokyo, Sydney and Melbourne are top of that list. Brexit instability may speed up a flight to quality that was already occurring, says Tan. Core investors will look for highly institutional and liquid markets, with high transparency. That will see them continue to target the developed world. “London as a global city may look less attractive in the short term, but global investors will take any price adjustments as an opportunity to enter the market, if they have not been able to do so the past few years due to elevated pricing.” Many investors from Asia have been feeling that the yields on London’s most desirable properties had become unappealing as the post-financial crisis “bargains” were snapped up. Although rents may decline as well as pricing, the investment case may strengthen – as long as the UK manages to avert a steep and sustained recession. The Bank of England has been the most-respected body so far to issue a verdict on whether that will happen. It seems that Chinese investors should still be interested. Although the central banks’ forecast anticipates a sharp decline in Britain’s economic growth, from 1.5%-2% in 2016 to 0.5%-1% in 2017, it remains growth nonetheless. “When a Chinese investor looks at the London office market, they want to know not just that they’re getting a blue-chip building, but also that the tenant who is paying a premium rent is going to be able to pay that premium rent in a year’s time,” says Rubinsohn. “The underlying economic performance is critical.” n

金来源。持续低息的承诺会令亚洲投资者专注于能够产生稳定收入的核心市场，亚洲方面以东京、悉尼和墨尔本为首。 T a n 表示，英国脱欧造成的不确定性可能会令投资者追捧优质资产，此情况已经出现。核心投资者会寻求高度制度化、具流动性及透明度高的市场，故此发达国家依然是他们的目标。他说： “作为环球城市，伦敦就短期来说吸引力可能减少，但全球的投资者会趁价格调整的机会入市 — 假如他们在过去数年因为价格高昂而无法这样做。” 很多亚洲投资者一直觉得，由于金融危机过后， “ 超值物业 ”被抢购一空，因此伦敦最有潜力的物业的回报已经不高，虽然租金和价格可能会下跌，但只要英国能够避免经济持续大幅衰退，投资可能会转强。英伦银行向来是断定这种情况是否会发生的至高权威机构。中国投资者似乎依然感兴趣，虽然此央行预测英国经济增长会从 2016 年的 1 .5 % - 2 % 大幅下跌至 2 0 17 年的 0 .5 w % -1% ，但增长依然会维持。 Rubi nsoh n 表示： “当中国投资者在伦敦办公楼市场物色物业时，不仅仅希望确定自己买的是蓝筹物业，还希望知道租户是否整年都有能力支付租金。相关的经济表现十分关键。”

价格调整会提供机会给以往基于价格高而没有进入英国市场的投资者 HARRY TAN, TH Real Estate

Q4 2016_MODUS A SI A 17

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Ethics

CONFLICT OF INTEREST

A client instructs your firm to manage a portfolio of commercial properties, but you have a long-term relationship with a tenant in one of the buildings. How would you manage the conflict of interest, if at all possible?

The panellists Simon Webley Research director, Institute of Business Ethics, London Paul Beland Vice-president, Institutional Shareholder Services, Washington DC, and Chair, RICS Americas Regulatory Board Natalie Breen Partner, Norton Rose Fulbright, Singapore and Chair, RICS Asia Pacific Regulatory Board

SW The issue here is that you might be biased in favour of somebody or something that is really nothing to do with the contract itself – and if it is known that you have this long-term interest, it will be pointed out. The first thing you should do if you know there is a conflict, is to declare it. Second, if possible, take yourself out of the decisionmaking process. This is the one way in which people can be reassured that there will be no bias because of the personal relationship. PB The two main principles here are transparency and disclosure. One tenant in a large portfolio may not constitute a conflict of interest, but by disclosing it to both your firm and the client, you would be able to mitigate any suspicions that may arise.

NB The issue is not that there is a conflict, but rather if a conflict arises, that it is appropriately managed. It may be appropriate to exclude yourself from the management of that building. If you are part of a larger firm, it might be possible for another surveyor to take on the appointment while you put in place an information barrier so you are completely isolated from what is happening in relation to that tenant. Once you agree on the appropriate way forward, you should get it documented with the client so that they have agreed to the process and are comfortable with that. For a small firm, that might not be possible, so it may be appropriate to refer it to another of your offices, or to decline that instruction and refer it to a different company. In Asia, business activity is probably more based on established business and family relationships than in other regions, so there could be a perception that there may be more opportunities for conflicts of interest to arise. I am not sure if that is true, though. Conflicts of interest can occur across the profession regardless of geography and should be assessed on a case-by-case basis. »

MORALITY

PLAYS Internal pressures, professional boundaries, poor labour practices and conflicts of interest are just a few of the ethical challenges that surveyors might encounter. But is the response to each issue that clear cut?

Transcripts Stuart Watson Illustrations Malika Favre

Q4 2016_MODUS A SI A 19

Ethics

TRANSPARENCY

POLITICAL PRESSURE

As a quantity surveyor, you are meant to evaluate tenders objectively. Based on your assessment of three proposals, you think contractor A is the best value for a job, but you are coming under political pressure to change your opinion. Should you be flexible and recommend contractor B instead? NB You need to ask: “If I were to change my recommendation for these reasons, what would an independent person think of my actions? And is it in the best interests of your client or in someone else’s best interest?” If, on balance, you think for valid, legitimate reasons that B is the better choice, then change it, but make sure you document why you have decided to make the change. PB This is a fairly straightforward case of not bending to any political pressure that would in any way impact on your fiduciary responsibility to the client. If you believe that contractor A offers better value but you are being pushed to B for political reasons, that is a clear case of violating ethics. The client’s interests need to be put first. SW If you consider that what you are being asked to do is wrong, you have two choices. You could escalate this beyond your boss to his boss to say that you are unhappy and risk being thought of as a troublemaker. Alternatively, you can ask your professional association for advice and they can come in behind you to protect your position. NB You must uphold the profession and not give in to pressure. RICS can provide some mentoring support for the best way to 20 RICS.ORG/MODUS

handle your particular issue. It is not enough to say that you have been forced into doing something, you have to uphold those standards of conduct. SW Retaliation for speaking up is much more serious than people realise. A high proportion of people have told us that if they do speak up, there will be some form of retaliation – usually informal. You’re treated as a member of the awkward squad. PB We talk about bribery and corruption a lot on the global regulatory board, especially in light of the corruption scandal at Petrobras, which was the largest in Brazil’s history. There is the potential for bribery and corruption in the construction and real estate industries because there are very large contracts at stake. There is a lot more public outcry around the issue, but in certain jurisdictions it is still how business is done. NB Because of their reach and the fact that they are very actively enforced, the anticorruption laws contained in the US Foreign Corrupt Practices Act and the UK Bribery Act are having a profound impact on business globally. Some Asian countries, for example China and Indonesia, are enforcing the law more aggressively and are going after corrupt officials. Having said that, issues of bribery, corruption and money laundering are still a challenge. Professionals need to take steps to ensure they are not implicated in the illegal dealings of others.

Your firm has taken on a residential block management contract. Before you began working with the client, someone else at your firm arranged a maintenance contract with a supplier who is friends with your boss. Your firm has added on a commission for arranging the maintenance and the leaseholders had no choice over the supplier. The leaseholders are saying the maintenance charges are unfair. What do you do? PB In and of themselves these things don’t necessarily point to a problem. Managers and suppliers will develop relationships and can be friends, but that does not mean that something is ethically suspect – and people do often complain about the fees they are paying. A firm can insulate itself from suspicions of nepotism if it has clear procurement policies that are clearly displayed on a website, limiting the potential for tenants to make damaging claims. NB Being honest and straight talking in your profession is one of our key ethical standards. This principle is also set out in the Rules of Conduct for Members and Firms. First, you would have to understand how the supplier was appointed. Was there a tender process undertaken? How was it evaluated? That would provide some more colour around whether the appointment was in the best interests of the stakeholders. In this scenario, the surveyor and the firm have a duty to act in the best interests of their client: the landlord of the block. If they favoured a supplier on the basis that »

CONSULTATION

Conflicted interests “Who are you really working for?” It is the question that we, as chartered surveyors, should always be able to answer with clarity, writes Nigel Sellars FRICS, Associate Director of Commercial Property, RICS. What constitutes a conflict of interest, and when should a professional step aside from acting or proceed with appropriate management systems in place? As part of the consultation for the forthcoming Conflicts of Interest Professional Statement, RICS asked practitioners

and industry stakeholders from across the globe to consider what is important in this area, and what action practitioners should take when faced with such situations. Comments are still being invited, and the more input is received, the better that the Professional Statement can help to guide the profession. Could your expertise help to shape best practice? VIEW THE STATEMENT at rics.org and email your comments to nsellars@rics.org

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22 RICS.ORG/MODUS

Ethics

they were paid a commission and they didn’t disclose that, it could amount to inappropriate behaviour. SW The key issue here is openness. Nobody seems to have been open with the leaseholders. They have not been told how their charges are being calculated and they suspect there has been no competition. To keep the trust of your customers, you should show them that you did have a competition for the maintenance contract.

QUESTION OF COMPETENCE

You are a residential valuer with 15 years’ experience, assessing properties worth up to $1m in a 50km radius. Instructions have been slow and a landlord approaches you to value a mixed-use complex of 15 apartments, an office block and six retail units, but which is 100km from your base. Should you take the instruction? PB This is less about ethics and more an issue of competence, although if there is not much work around, the ethical dilemma lies in the pull of earning money when business is slow. But if you are not fully qualified, you are going to have to pass regardless of how bad business might be. You need to be very honest with yourself about whether you are qualified to undertake the valuation. If there is any possibility that the highest level of expertise would not be provided for the client, you should decline the instruction. You might be tempted by a one-off, “moon-shot”opportunity to do a big project, especially when you need money. However, if you go for it, you put everything on the line and you could potentially lose your job, your RICS membership and your ability to get professional indemnity insurance, which would mean you could no longer practise in the industry. NB Ultimately, the client is owed a duty of care. If a valuation was challenged, the first thing the professional would have to demonstrate is that they were competent enough to carry out the work – including the necessary practical experience. In this scenario, it seems that the valuer lacks the relevant local knowledge and the competence in that specific asset class. RICS valuation standards – the Red Book – oblige members to demonstrate specific competency for the task at hand and proof of the local knowledge required to undertake

evaluations. The residential valuer could offer to value the flats as long as they make it clear that the geographical remit is broader than their usual work area. They could also advise the client to seek additional advice on the commercial property. It is then up to the client to decide how they proceed.

WORKERS’ RIGHTS

You’ve been using a subcontractor on a project you are managing overseas. You’ve worked with the subcontractor many times and know you can trust it to do a job well and within budget. You then hear an allegation that it has knowingly employed illegal immigrants who are being paid below market value for their work. PB This is a very, very big issue in the US. We have a lot of immigration from Mexico and Latin America, and those that enter illegally can sometimes be found working for contractors. There are often allegations in the press that contractors are coming in at the last minute and bidding so low that they are pushing out other companies. The only way that these contractors are able to do that is because they are exploiting illegal labour. I would talk to the subcontractor and find out if the allegation is true. The allegation could come from a competitor trying to win business away from the company. If the subcontractor is hiring illegal immigrants, it is breaking the law and your relationship with it must be terminated or you could potentially be bringing yourself into that illegal activity. SW Reputation risk is a big problem for supply chains and it stems from companies that have not carried out proper ethical due diligence on the people with whom they contract. We suggest there should be a clause in a contract that covers the health and safety of employees and their remuneration. You need to know because it is your reputation at stake, not necessarily theirs.

Paying below the established normal rate to people who are desperate is more common than we would think. There have been instances in the UK, but it becomes much more difficult to manage when you go to a supplier overseas – which we increasingly do for manufacturing – because there are a lot of subcontractors in a supply chain. There is a real risk that someone down the chain is producing stuff in very poor conditions. The 2013 Rana Plaza factory collapse in Bangladesh brought a lot of this to light. That was a dramatic case but there are less visible cases in which people simply suffer because they are treated in a way that we would certainly not expect here, particularly if they are immigrants and they don’t have a voice. NB Legislation such as the UK Modern Slavery Act requires companies to do ethical due diligence up the supply chain and makes them legally responsible for the conduct of their suppliers. For countries that don’t have specific legislation, there are the UN guiding principles on human rights, which also impose some obligations and liabilities on the conduct of suppliers. Whether you fall under these laws or not, as an RICS professional you should always act with integrity, which means not taking advantage of a client or third party. If the contractor is exploiting people, you could be regarded as taking advantage of those workers indirectly. n ALL RICS MEMBERS ARE REQUIRED to undertake some learning on professional ethics at least once every three years. You can find a toolkit and guidance about RICS’ existing ethics standards at rics.org/ethics. RICS also provides a confidential helpline for RICS members: +44 (0)20 7334 3867

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CHASING THE DRAGON As Chinese money flows into international real estate markets, the global balance of power shifts. Is the world ready… and will it last?

Research Roxane McMeeken Illustration Laura Cattaneo

Where did it all go? Geographical split of Chinese outbound real estate investment in 2015

China’s total outbound investment in real estate, 2009-2015: sustainable… or a bubble in the making? ($bn) 30

$10.45bn $4.58bn

$1.03bn

Australia

Singapore

15.8

15.1

$1.57bn

$4.12bn

Japan

Hong Kong

0.6

2.3

4.4

5.6

2009 2010

2011

2012

2013

2014 2015

$2.13bn UK

$4.04bn

Other countries

Harvey Coe Real estate advisory leader, transaction advisory services, Greater China, EY

$2.52bn $11.66bn

Sector analysis: where did the money go in 2015?

$7.67bn $5.20bn $2.13bn

Total

$27.99bn

The long-term beneficiaries: who’s received the most Chinese real estate investment since 2006? SOURCE EY/REAL CAPITAL ANALYTICS

Japan

$9.8bn

Office

Chinese investors are attracted by global gateway cities. New York’s Manhattan, London, and Sydney and Melbourne together account for more than 40% of last year’s transactions

150 120 25

Australia $14.5bn

24 RICS.ORG/MODUS

Industrial

Development site

Hotel

New York

5,960

3,439 2,949

$20.1bn

$35.4bn

Retail

$1.33bn

City focus: which are attracting the most Chinese real estate investment? ($m)

Malaysia

2010

895 347 33

2011

868 200 179

2012

Sydney and Melbourne

4,197

2,376 2,535 1,472 2013

1,104 2014

London

1,882

2015

SOURCE REAL CAPITAL ANALYTICS AND KNIGHT FRANK RESEARCH, UNLESS OTHERWISE INDICATED

There was $10bn in outbound Chinese transactions in the first half of 2016 alone, putting the market on track to exceed last year’s record total

Investment

The big players: top Chinese developers investing overseas Based on total property sales in 2014

Chinese contractors in Western markets: where are they breaking ground? SOURCE PUBLIC DOMAIN

China’s insurance policy: top insurers investing overseas Based on total premium income 2014

$37.7bn

Greenland Group

$33.7bn

Vanke Group

$25.1bn

Wanda Group Poly Real Estate

$21.4bn

Evergrande Group

$20.6bn

$2.4bn

Bank of China

Ping An Insurance

One Nine Elms

$1,613m

$1.3bn

London, UK China State Construction Engineering Corporation

Airport City Enterprise Zone

$1.5bn

Manchester, UK Beijing Construction Engineering Group International

Revamp of the Alexander Hamilton Bridge (with local contractor Halmar International)

$12.3bn

China Taiping Taikang Life

$10.6bn

Anbang Insurance

$9.1bn

50m $600m $506m $Wa1ldo,9 rf Astoria, k (hotel) Tower Place, London (office)

London, UK CITIC Construction

$49.6bn

Ping An Insurance

Sized up: top 10 Chinese overseas property deals in 2015

7 Bryant Park, New York (office)

Royal Albert Docks financial centre

$58.2bn

China Life Insurance

New Yor

Anbang Insurance

$420m 99 Bishopsgate, London (office)

China Life Insurance (joint venture, Qatar Investment Authority)

MassMutual Tower, Hong Kong (office)

$1,170m Meguro Gajoen, Tokyo (office) China Investment Corporation (joint venture, LaSalle Investment Management)

Evergrande Group

$906m

$820m $755m $683m 111 Murray Street, New York (development site)

One HarbourGate West Wing, Hong Kong (office)

Tebrau Bay Waterfront City, Malaysia (development site)

Shimao Property

Taiping Life Insurance

China Life Insurance

Greenland Group

New Kowloon Inland Lot No. 6542, Hong Kong (residential)

$407m

Sterling work: predictions for Chinese money in the UK (£bn)

China GDP annual growth rate: a downward trajectory? (%)

SOURCE GLOBAL CONSTRUCTION PERSPECTIVES

SOURCE TRADINGECONOMICS.COM

Canberra Metro light-rail

Over the next 10 years, more than £100bn ($133bn) of Chinese money is forecast to be invested in UK property and infrastructure

2013

New York City, US China Construction America

First stage, comprising 12km of track (contract won through Australian subsidiary John Holland as part of consortium)

25.5

7.5

7.9

2014 7.6

2015

7.3

7.4

7.2

Infrastructure including transport

$545.3m

Canberra, Australia China Communications Construction Company

43.5

Energy infrastructure

Real estate

6.8

7 6.9

China’s slowdown is double edged: it may mean Chinese companies have less money to spend overseas, but it could also spur them to invest abroad, because there are fewer domestic investment opportunities.

Q4 2016_MODUS A SI A 25

LESSONS OF THE PAST Only by mastering the methods used to construct our historic buildings, can we hope to equip them for use by future generations

Photography Mary Beth Koeth and Sam Christmas Words Simon Creasey

othing could have prepared residents of Fort Lauderdale, Florida, for what greeted them on the morning of 27 July 2008. For inching slowly through the streets was a 92-year-old, two-bed cottage. Annie Beck House was being towed 6km across town to a new plot of land in a city park, in a desperate attempt to preserve the property. The eight-hour journey it required is an extreme example of the lengths to which people go to ensure old buildings survive, but it is by no means an isolated one. As available land in the world’s most desirable cities becomes ever more scarce, developers are under greater pressure to think of new ways of breathing new life into old buildings, while ensuring they meet today’s strict environmental standards. But this, as John Edwards FRICS explains, is easier said than done. “People just don’t know enough about traditional buildings to make them more energy efficient and sustainable.” Edwards is a director at Edwards Hart Consultants in Cardiff, south Wales, and runs a training course on how to retrofit older properties.“We’ve been treating old buildings for many decades as if they were modern

26 RICS.ORG/MODUS

structures,”he says.“People need to properly understand traditional buildings in the first place and understand their pathology.” This general lack of understanding means that many old buildings have been interfered with to their detriment, Edwards adds.“You have things like concrete floors being put in where there used to be timber. You have ground levels outside that have risen up the height of the internal floors, which is too high and you’ve got cement rendering on the outside. These are all the sorts of things that promote internal dampness.” His concerns are shared by members of the Better Buildings Partnership (BBP), a coalition of UK landlords who are working together to improve the sustainability of existing commercial properties. Christopher Botten, programme manager at BBP, says members are aware that some of the retrofits that have taken place over the last few years have not delivered the kind of energy savings expected. “We have modern ways of constructing buildings, but we have a lot of historic buildings that are completely different in terms of how they were designed, the type of materials used and how they actually perform as buildings. Our level of understanding and skills has disappeared as we’ve developed more modern methods of construction,” he says. In an effort to reverse this trend, the BBP intends to hold a workshop, during which members will explore ideas and techniques that will help to close the energy performance gap between historic and modern buildings. “It’s all about how can we re-skill the industry in how to best adapt this historic set of buildings,” says Botten, “without fundamentally damaging them, and ensuring that they’re actually fit for purpose in the coming years.” The problems the BBP has identified are all too familiar to Lynda Jubb FRICS, director of Jubb & Jubb and Chair of the RICS Building Conservation Forum. Jubb’s firm is one of the few in the UK whose sole focus is on how to deal with historic buildings. She advises that, when tackling projects of this nature, it is vitally important that developers who have no knowledge of traditional building techniques and materials appoint specialist advisers, because sometimes enhancing the performance of older stock requires the use of non-standard approaches. »

Heritage

PORCH BEARER Warren Adams MRICS at Annie Beck House in Fort Lauderdale. The heritage specialist helped save the cottage from demolition

Q4 2016_MODUS A SI A 27

DIFFERENT GLASS Chloe DeBanks-Hirst in Kewâ&#x20AC;&#x2122;s Temperate House. The project manager is part of the team restoring the listed glasshouse

28 RICS.ORG/MODUS

Heritage

“These traditional buildings weren’t made from the sort of complex materials used in modern buildings,” she explains. “There was no plastic or cement. They were built with lime, stone and brick, and for damp-proofing, they might have relied on slate slips.” Unsurprisingly, buildings that were not constructed from modern materials typically do not respond well to modern treatments, such as injection damp-proof courses. And the challenge of restoring and retrofitting old buildings can be further complicated by the nasty little surprises that often crop up during projects.

hat has certainly been the experience of Chloe DeBanks-Hirst, a project manager at Turner & Townsend who is in the final year of her APC. DeBanksHirst is working on the restoration of a grade I-listed Victorian greenhouse in the Royal Botanic Gardens at Kew in London, which entails replacing the windows and patching up any problem areas, while retaining the structure’s historical features. As she explains, when handling a window frame that had previously been repaired in the 1970s, “we cut out a section to repair it and found that they’d cut away the rotten timber, but then resin filled it as much as possible. You can’t predict those things until you start pulling the building apart in its layers.” But before a developer can even get on site and start unearthing these surprises, there is another hurdle to overcome when dealing with older stock: legislation – and not just the rules that apply to the preservation of historic buildings. Jubb cites the UK Energy Act as an example: “The Act says that for a building to be let, it needs to be performing at level E or above, but a lot of historic buildings can’t get over E for technical reasons. They were built at a time when fuel was expensive; people didn’t heat every room and expectations were very different around technical performance. “There is an exemption because listed buildings don’t always need to get an energy performance certificate,” says Jubb, “so it’s important people understand that legislation isn’t a massive stick with which to beat historic buildings.” Listed status may offer some upsides, but it can also make life tougher for those tasked with renovating old properties. Residence One is a small, London-based luxury residential developer that regularly renovates listed buildings. One of the issues it often comes up against is the inability to replace the original windows with more energy-efficient double glazing.

“You just simply can’t do that on a listed property,” says Ben Wilson, director and co-founder of Residence One. “So we have to use secondary glazing, which is actually better performing than double glazing because of the amount of air space created between the windows. Planners don’t have an issue with secondary glazing because it’s considered to be a temporary structure.” Although the property professionals who deal with old buildings typically face the same issues around the globe, some common problems are exacerbated by local conditions. Candy Chan MRICS, a director at Hong Kongbased Property Conservation, says that sustainability is often neglected in the restoration of historic buildings in Hong Kong, but that is mainly a result of the challenges presented by the climate. “We have very hot summers,” says Chan. “Natural ventilation with a veranda and balcony worked in the old days, but with increased populations and density, it is inevitable to include air-conditioning when new use is introduced. But this usually creates the problem of condensation and, in some cases, fans are added to improve the ventilation and reduce the condensation. We do understand the need to allow older buildings to breathe. For example, we suggest the removal of impermeable paint over brick buildings, which will reduce the dampness locked in the brickwork.” Dampness of a completely different kind is something the US state of Florida – sitting barely above sea level on a layer of notoriously porous limestone – knows all about. Many historic homes line the coast, which is prone to flooding and hurricanes. But the bigger threat comes from development pressure,

People just don’t know enough about traditional buildings to make them more sustainable ll

JOHN EDWARDS FRICS Edwards Hart Consultants

suggests Warren Adams MRICS, a historic preservation specialist in West Palm Beach. “The high property prices in South Florida lead to many owners of small historic homes demolishing them as, in many cases, the land is more valuable for development,” says Adams. “It’s rare that a property owner will take the time to save the original house.”

ut that is exactly what happened with Annie Beck House. Adams oversaw the transfer of the cottage, which was located on a prime site in downtown Fort Lauderdale. The owner of the site did not want to demolish the historic building, which had been home to one of the city’s pioneering first residents and had already been moved in 1977 to make way for a parking lot. Instead, she donated it to the Broward Trust of Historic Preservation. It took around three years for the trust to raise the $100,000 required to move the cottage to its new site in Middle River Terrace Park, and make improvements such as adding a sliding door to aid air circulation. “The house was designated as a historic site once the move was completed,” says Adams. “It has now been restored and is used as a community meeting place.” They have been literally moving houses in Florida for 100 years or more, but going to such dramatic lengths is not the easiest method of preserving buildings. The better option is for property professionals to gain a more in-depth understanding of how these buildings were constructed. This knowledge will make the process of breathing new life into old buildings, and preserving them for future generations to enjoy, much easier. n TO FIND OUT MORE and join the RICS Building Conservation Forum, visit rics.org/bcf

Q4 2016_MODUS A SI A 29

Xxxxxxxxx

TIME TO FACE FACTS

30 RICS.ORG/MODUS

Diversity

Female property professionals in Asia earn, on average, 33% less than men. Why is this gap so wide, and why, worldwide, has the industry been so slow to redress the balance? Words Roxane McMeeken

IMAGES GETTY

his year’s RICS and Macdonald & Company salary survey revealed that, if you are a female surveyor in Asia, you can rely on earning, on average, one-third less than your male counterparts. This compares with an average base pay gap of 15% in Hong Kong and China, as recorded in 2015 by Willis Towers Watson. Meanwhile, only 13% of surveyors worldwide are women. In comparison, the latest 2016 figures from the Hong Kong SAR Government’s Census & Statistics Department show that women account for 47.3% of the workforce in the finance sector, 50.8% in professional and business services, and 58.8% in insurance. While not an overwhelmingly positive picture, it is also a very familiar one. Why would women regard surveying as an appealing profession, given that few join the sector and those that do are paid less and have scant chance of making it to the top? Aside from the issue of fairness, what makes the lack of progress more surprising is a growing body of research which supports the idea that the more diverse an organisation is, the better it performs. For Diversity Matters, a report published in February 2015, McKinsey & Company studied 366 public companies in the UK and Americas. It found that companies in the top 25% for gender diversity are 15% more

likely to have financial returns greater than their respective national industry medians. Gillian Cottle FRICS is director and New South Wales lead for Australian surveyor Slattery. She says that 27% of her fellow directors are female, a much greater proportion than she has observed elsewhere in Australia, and the benefits to the business are clear.“Women bring different ways of doing things and new ideas, and the more the variety of possible solutions a company has available, the better it does.” Clients also understand the benefits of having women on the team, says Monique Royle MRICS, associate director of licenced and leisure at Colliers International in Birmingham, UK.“If you go in with an all-male team these days, a lot of clients will question it.” In addition, the increasingly dire construction skills shortage in the UK means that recruiting more women would be of benefit to not just individual businesses, but the entire surveying sector. Encouragingly, some firms in the sector have been pioneering

strategies to foster gender equality. CBRE has been running a high-profile and wide-ranging gender diversity programme for at least 15 years. This began with the launch in the US of the Women’s Network, which aims to attract and retain women through mentoring, networking and training, and has run many more projects since. The UK arm was launched in 2005 and the network is still being rolled out to offices around the world. Sue Clayton FRICS, executive director at CBRE, leads the UK network.“Globally, we aim to get women into senior positions and we measure how diverse we are across the business,” she says. As a result, CBRE is well ahead of the sector’s average. In the UK, for example, one-third of fee earners and 25% of directors are women – although Clayton adds that there is still further to go, “especially if we compare ourselves to the likes of EY”. Crucially, CBRE’s diversity programme is a dynamic affair that regularly launches new, interesting initiatives. Last year, for instance, the UK business started publishing a magazine for women who either work in property or are considering a career in the sector, called Elevate, whose manifesto is to reflect what working in the sector is like and discuss the challenges women face. The firm’s Impact programme, meanwhile, selects senior women for training and sponsorship, as part of a turbocharged mentoring scheme. »

Average salary of a male surveyor in Asia: $102,135. For women it is $76,707, a difference of …

$25,428

Q4 2016_MODUS A SI A 31

32 RICS.ORG/MODUS

13% of chartered surveyors worldwide are female

group has identified an often unfulfilled need for companies to engage with women before they go on maternity leave. “Our members often comment that people don’t return to jobs because they didn’t feel particularly engaged just before they left, so it would make a difference if people left on a high, thinking that they have a great job to return to.” So far, then, efforts to improve gender balance have largely been uncoordinated and voluntary, and we are still far from achieving equality. Should we now be considering enforcement – perhaps even at government level? The UK government plans to force companies with more

of surveying students worldwide are female

However, a culture change is also required among those in the position to promote and reward women, argues Maria Willis MRICS, who runs east Midlands-based training and coaching business Construction Coach. She believes that the lack of female leaders and lower pay for women in surveying can be explained by“unconscious bias”. “It might be that people are not consciously anti-female, but instead they are acting on an instinct we all have to promote and reward people similar to us.” Arcadis has made parallel progress improving unconscious bias awareness. Barbra Carlisle, diversity and inclusion lead in the UK business, says that, in early 2015, the firm trained all partners in unconscious bias. The training session took a mere afternoon but the impact appears to have been significant. In just over three years, the percentage of female partners in

the UK has risen from 5% to 12%. Carlisle attributes the scheme’s success to the fact that “people weren’t patronised, they were asked to think in terms of improving the business. Most had never really thought about unconscious bias, but now it’s part of the Arcadis vocabulary.” As welcome as such initiatives are, women still have a tendency to leave the sector – or at least temporarily withdraw from it – when they have children, typically when they reach their 30s. The Association of Women in Property has identified this mid-career point as critical and is involved in several projects to tackle the issue, including promoting flexible employment. What is required, suggests mentoring programme leader Sandi Rhys Jones, is “flexibility in where, when and how work is done. Those businesses that can offer it will go a long way towards retaining staff.” In addition, Jones believes it is essential to keep women engaged during career breaks and support them when they are about to return. To this end, Women in Property runs APC workshops aimed at both those preparing for their exam, and wanting a recap before returning to the workplace after a break. Law firm Burges Salmon, which has a large property team, is setting a useful example in addressing the mid-career crunch point. Partner and chair of the firm’s diversity and inclusion group, Liz Dunn, says: “We use ‘keeping in touch days’ to help women re-familiarise themselves with work before returning.” She believes this approach has aided the retention of female staff members. However, the pre-maternity leave stage is also key, argues Katie Morrell, associate director at Turner & Townsend. Morrell is London vice-president of a group for women in transport initiated in the US, the Women’s Transportation Seminar (WTS), which holds events to support and inspire women working in the sector. She says that the

27%

The gender pay gap is most prominent among this age group

18-22

Diversity

than 250 employees to publicly disclose gender pay gaps. Brazil, Italy, Malaysia, Norway and Spain, meanwhile, are among the countries to have introduced mandatory quotas for female directors of listed companies. The downside to enforcement is that the culture within a business may remain stubbornly unaltered and potentially hostile to change imposed upon it. Angela So MRICS, director at CBRE Consulting in Hong Kong, is against such measures. “I don’t support the idea of quotas; women should be appointed on merit. Women also face obstacles in their own minds; they need to conquer the fear that they can’t take on jobs that men usually do.” This can be achieved, she says, through the learning, networking and development provided by groups such as Women in Property and WTS. CBRE’s Women’s Network, for example, “gives women the chance to get together and support and mentor each other, while male speakers at the organisation’s events can offer useful encouragement, too”. At Slattery, there is no quota system, but rather simply an enlightened chairman, Peter Slattery, who has set the tone for the business. Cottle says: “The attitude here is, just hire the best person for the job, and that’s why women are in these roles”. FOR MORE ON SALARIES in the real estate industry in Asia, visit rics.org/bigsalaries. For details of RICS’ UK inclusive employer scheme, go to rics.org/inclusion.

中国活动精选 2016年7月 – 2017年8月

2016年 10月25日 - 系列专题研讨会2 - 北京 11月16日 - 系列专题研讨会3：商业地产O2O研讨会 - 上海 12月16日 - 工料测量与建造论坛 - 上海

2017年 01月06日 - 系列专题研讨会4及RICS年度晚宴，中国华北区 - 北京 02月17日 - 系列专题研讨会5及RICS年度晚宴，中国华南区 - 广州 02月23日 - RICS颁奖典礼, 中国 2017暨RICS年度晚宴,中国华东区 - 上海 03月03日 - 系列专题研讨会6及RICS年度晚宴，中国华西区 - 成都 03月27-28日 - RICS世界建筑环境峰会 -上海 05月07日 - 社交鸡尾酒会及考察交流 -天津 06月16日 - 城市更新高峰论坛 - 上海 07月21日 - 互联网 + 地产峰会 - 深圳

详情请登录 rics.org/cn 或联络 Caroline Li - cli@rics.org

Q4 2016_MODUS A SI A 33

Thanks to its 4D capabilities, BIM is not just shaking up the construction industry, but also the world of arbitration and dispute resolution Words Stephen Cousins Illustration Charles Williams

elays or accidents are the bane of any construction project, especially when they result in a legal battle. Dispute resolution is typically a laborious process, as contractors and their legal teams attempt to piece together evidence based on hundreds, or sometimes thousands, of documents, including project schedules, site instructions and photos. The good news is the industry is now waking up to the potential of building information modelling (BIM) technology to help supercharge dispute resolution, by pulling together all this disparate information in a single, 3D, digital model. Visualising project information in 3D can improve understanding of events on site and speed up decision making. And when animated against time – the so-called “4D” aspect of BIM – models can effectively play back events that occurred on site in court, giving judges or third parties who might be unfamiliar with construction processes a clearer steer on the facts. UK-based BIM consultant Freeform has built 4D information models, designed to retrospectively analyse and articulate cause

34 RICS.ORG/MODUS

and effect, on behalf of main contractors and specialist subcontractors on five separate dispute cases. All five were settled in its clients’ favour. “Using 4D is a powerful tool when trying to win over a judge or an arbitrator,” says Freeform’s founder, James Bowles,“because in five minutes you have told the story in a simple and transparent way. It is not about creating a flashy 3D animation, it must be driven by real data. Within the model we can open up the project schedule for the build programme and drill down into the detail, linking photos, site instructions, or signedoff reports to a specific time or date.” Freeform has dealt with disputes on projects triggered by single events that had a knock-on effect, for example a building frame that was not fully completed so its client was unable to install the facade on time, or a series of disruptive instructions with wider-ranging impacts. In one dispute, over an extension of time related to a £100m

($133m) residential project, Freeform modelled issues ranging from interfacing sequences and progress, to site preparedness and design changes. The £25,000 ($33,300) model was interrogated in a series of meetings between both parties, with lawyers present. Typically, the consultant first builds a 4D model of the contract programme to represent the original agreed construction sequence. It then pulls together information from site reports, photos and, ideally, a monitored site programme, to build a second model showing what actually happened on the project. This “reverse engineering” process helps pinpoint any disparities between the two.

he model, which is hosted in Synchro Pro 4D BIM project management software, can be “paused” at each point in time and interrogated for its accuracy by consulting specific project files, such as site logistical data and build information, which are displayed on screen. This simple visual coordination between project data and 4D helps unlock new insights from contractor teams when preparing the evidence, says Bowles: “It

Dispute resolution

A allows the team to explore the project in depth, on a single platform, and this often reveals key missing parts to the story. We often uncover issues during the build process that were not even on the table when we started, and would have remained hidden otherwise.” In a dispute scenario, judges have to navigate extremely complex “ripple effects” of an event on a project, based on huge amounts of information, presented in different formats. As a result, their decisions can be prone to interpretation. The advantage of 4D BIM is transparency, provided site processes have been well documented, says Bowles. “Centralising all the information in BIM makes it easy to communicate – it can really help accelerate a judge’s understanding. We work hard to strip out any interpretation, letting the raw data tell the story.” This transparency offers a clear advantage when the client knows they are in the right, he adds.

nother innovator in the 4D BIM space is construction consultant Fan Su Ling, professor at Tamkang University’s Department of Civil Engineering in Taiwan. Fan has produced animated 4D models of construction projects for arbitration and dispute cases, developed using commercial BIM software, such as Revit, and her own programming. One arbitration case arose when a main contractor on an office development was forced to alter the construction sequence after the owner decided to move into a small portion of the site when work was under way. “The owner argued that the impact of this small change was not significant enough to cause the delay,” Fan explains. “But our visualisation, showing the plant and equipment in its new configuration, provided evidence of a far-reaching impact and the owner and arbitrator began to understand it.” She adds:“Many judges are not construction experts, so visualisation in 4D helps them understand the problems that can arise.” Fan is now researching how to expand the capability of BIM software to enable it to recalculate the duration of tasks on the fly whenever there is a change to the schedule.

This would prevent potential disputes by providing updates on expected task durations during a project. Should a dispute emerge, the software can provide a more accurate insight into what actually happened on site. The enhancement involves assigning a specific production rate to each 3D element in the BIM model. A change to the schedule results in a change to quantities, so when a new figure is input into the model, the software divides it by the productivity rate to determine a new duration for each task. “One problem with dispute resolution is that we have information on the schedule, the task and the duration of each task, but when there is a change to the schedule it is difficult to recalculate the duration without knowing this productivity rate. By entering it into BIM, our calculations will be more accurate,” Fan concludes. FOR THE LATEST from RICS on BIM, go to rics.org/bim

Q4 2016_MODUS A SI A 35

YEAR OF THE 36 RICS.ORG/MODUS

MOUSE

A WHOLE NEW WORLD The doors to Shanghai Disney Resort’s magic kingdom opened in June. The 963 acre park, which cost around $5.5bn to build, expects to welcome 17 million visitors in its first year »

Q4 2016_MODUS A SI A 37

fter a decade of planning, mainland China finally has its first Disneyland – a $5.5bn, 963 acre (390 hectare) magic kingdom. It has not been an easy ride. The creation of an attraction like Shanghai Disney Resort presents dramatic challenges that are unique to theme parks. The construction required an approach far from what you would undertake on an office or residential project. Construction in Shanghai has been a massive challenge. “You might think it’s just about the park. But it’s not, it’s about a city,” explains Liang Shi-yi, Chairman of RICS in China. “These are not houses. We could not use the normal design tools.” Many of the buildings are, in essence, an art form, says Liang. He consulted on the project with his company, the Shanghai Xian Dai Architectural Design Group, on issues such as design and construction management. With six different “worlds” to create, including back-of-house facilities, the company had to take a very different approach to that of a typical project.

38 RICS.ORG/MODUS

A large number of the design companies involved were tiny and highly specialised in a certain aspect of the park, such as the“skin” coating the tree where the Seven Dwarfs live, which involved a specific form of longlasting, pliable nylon. Just coordinating and paying for the work that had been done was incredibly complicated. Around 100 design companies were involved, and at least 200 contractors. Keeping track of them required a special management-information system, or MIS, to supervise all the work at once.

he technology on the construction side, though, was much more advanced. BIM was used for the design and construction of more than 70% of the buildings in the park. In this instance, the technology was particularly effective in bringing together the 142 different disciplines involved, while also enabling web-based social collaboration and virtual meetings between teams in Shanghai and Walt Disney Imagineering’s headquarters in Glendale, California. BIM also allowed the latter to bring forward the work of their animatronics and audiovisual special effects teams – which would usually only commence on completion of the construction – effectively shaving more than six months from the overall schedule. And this being Disney, BIM was also used to bring a level of advanced visualisation way beyond the basics, bringing in textures, a variety of materials and even special effects within the park. A video wall on site made it possible for team members to explore the BIM model in immersive detail, while later in the project the technology had advanced sufficiently for contractors to use virtual reality headsets remotely, allowing them to explore more fully. It was quite a leap of faith for many of those involved. “During construction we learned a lot,” says Liang. With a project of this vast scale and complexity, changes to the requirements will almost always be a factor for the client and contractors. “The most challenging aspect of the project was cost overruns due to contract directives issued for variation order works,” comments Iris Lee, director at Rider Levett Bucknall. That often involved procuring new materials and extra labour, sometimes, given the rush to completion, at above market rates. And with the park requiring so many exotic and unusual materials,

IMAGES REX; FAYHOO; GETTY

Few could have imagined, 30 years ago, that Shanghai would one day get its own Disneyland. Alex Frew McMillan reports on the unique challenge of creating a home for Mickey Mouse in the People’s Republic of China

Disneyland

sourcing them at short notice – often in limited supply – was often problematic. Lee’s firm ended up revising its contract from a traditional lump sum based on tender drawings, to a re-measurement contract based on issue-for-construction drawings. Rider Levett Bucknall also arranged regular meetings between contractors, the projectmanagement team and the design team to tackle the overruns and ensure that the project remained on schedule. In addition, Disney issued a projectmanager assessment for variation works. This restricted them to time boundaries but also helped contractors with any cashflow problems by speeding up the process. Variation-settlement records were much swifter as a result. One of the more interesting aspects of the new park, is that it puts China in the position of effectively competing against itself. There is already a Disneyland in Hong Kong that is 50% owned by the local government. But because the park in Shanghai, which is also owned in part by the municipal government, is three times larger, there is a fear that it may siphon off some of Hong Kong’s visitors. In February, Disney announced a loss of HK$148m ($19m) at Hong Kong Disneyland – its first in four years – as visitor numbers dropped 9.3% to 6.8 million. The loss has been attributed – in part – to potential visitors waiting for the Shanghai park, where tickets are 20% cheaper, to open. It is probable that both parks will fare just fine. Aecom’s Theme Index predicts that China will overtake the US to be the world’s biggest theme park market by 2020. Fears that the slowing economy might curtail the spending habits of China’s middle classes are tempered by the fact that the fall in manufacturing is being offset by a growth in the service industry. With a customer base of 1.3 billion people to draw on, the turnstiles should keep on ticking. But there has been an immense effort to make sure those customers are satisfied.

You might think it is just about the park. But it’s not, it’s about a city

LIANG SHI-YI Shanghai Xian Dai Architectural Design Group, and Chairman, RICS China

MICKEY AND FRIENDS For the park’s soft launch period in May, 30,000 friends and family members of staff on the project were invited to test the “product”

Even before Disney Resort Shanghai’s official opening in June, the shops surrounding the park have been attracting plenty of visitors. The tests of the “product” began in May, when the staff working on the project invited around 30,000 friends and family to come and visit. The resort is expected to receive as many as 17 million visitors in the first year, and it has been estimated that for every yuan spent on admission tickets, another eight will be spent on dining, hotels and franchised products. As a result, new shopping outlets are popping up rapidly, as retailers attempt to capitalise on the massive number of visitors.

earby real estate values have surged 35% in the last year, as demonstrated by the appreciation in China Vanke’s Vanke Feicui Park in the Pudong neighbourhood of Zhangjiang, which has risen 12% in the last two months alone. Likewise, the French Lakeside project from Jingrui Holdings, just 15km from the park, has risen 18% since its presale period in January. Construction of the park, in fact, went well beyond its boundaries. A motorway has been built leading to the resort, and still the authorities are concerned that there will be blockages on the way to nearby Pudong airport. Liang worries that there will continue to be delays surrounding the park and leading to both the nearby airport and zoo.“We have overcome the initial motorway problem, but still I think there will be traffic jams outside Disneyland,” he concedes. To combat that, the contractors and project managers have dealt with the city police to coordinate their response. Even within the park, Liang and his team have had to deal with issues that could lead to visitors waiting as long as three hours just for one ride. In anticipation of queues in the resort, Disney has developed an app that helps customers book events such as signings with characters, which should reduce the amount of time frustrated kids have to wait. “All in all, despite all the challenges, the result has been worth it,” says Liang. “We are very proud that we designed and constructed it. It looks very good.” n

Q4 2016_MODUS A SI A 39

As they battle to win international students with new facilities, are universities becoming the new property powerhouses? Words Simon Creasey Illustration Sam Chivers

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n annual income of close to £30bn ($40bn). A property estate around eight times that of supermarket giant Tesco’s. A “customer” base in excess of 1.6 million. These are not the numbers of a global business behemoth, but the combined clout of universities in the UK alone. Viewed against a backdrop of lucrative new financial models, and universities everywhere vying to attract international students with brand-new facilities, it is clear that the spending potential of the world’s leading academic institutions is enormous. According to the UK-based Association of University Directors of Estates (AUDE), an industry body for estate directors in the

University sector

higher education sector, over the last decade the average amount spent on refurbishing and developing new academic buildings per year was £2bn ($2.7bn). However, in the academic year 2013-14, UK universities spent £2.5bn, and during 2014-15 this figure is thought to have grown again to more than £2.6bn. Add to that the £2bn they spend on building new residential accommodation a year, plus the £2bn required annually to maintain their estates, and it is clear they carry considerable clout when it comes to their property spend. The UK government’s trebling of tuition fees to as much as £9,000 ($12,000) a year has also opened up the market, forcing universities to treat their students as customers. This has compelled them to improve their facilities, says Andrew May, director of estates at the University of Hertfordshire and a member of AUDE’s executive team. “A lot of universities are taking the view that they need excellent

estates and facilities because that will enable them to attract the really good professors and the best researchers,” he explains. “If you’ve got the best facilities and the best academics, you can attract more and better students.” But attracting more students brings additional pressures. The easing of restrictions on the number of students each academic establishment can admit on an annual basis, which came into force in 2014-15, caused student numbers to rise significantly. According to UCAS, 532,300 people entered UK higher education in 2015 – an increase of 3.1% on the previous year and the highest number recorded. Although the UK-wide rate is expected to slow, research published by JLL in 2015 suggested London’s full-time student population would rise by 50% over the next decade.

If this increase in student numbers is to be accommodated, then more residential, leisure and social space is also needed. The problem is, it is usually not possible to incorporate this space on existing sites, says Adam Harman, partner at Carter Jonas. Private operators such as Unite and Greystar are meeting some of this demand – Bilfinger GVA reports that 18,970 new beds were added to the UK’s top 25 regional cities in the 2015-16 academic year – but not every student can afford to live in such increasingly luxurious, off-site accommodation. “It is not easy to deliver new facilities in city centre locations, particularly London, where heritage buildings are protected and difficult to convert, and where institutions are land-locked in locations where their very presence has helped drive land values they can no longer afford,” says Harman. University College London (UCL) was presented with just such a dilemma, after undertaking a strategic masterplan of its central London campus in 2010 that established it would only be able to accommodate a limited amount of future »

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University sector

growth. Instead, it started looking at potential new sites to house expansion and, with the support of former London mayor Boris Johnson, who helped get the backing of central government in 2014, it secured 11 acres (4.45 hectares) on the Olympic Park in Stratford for a new site: UCL East. UCL aims to submit planning applications for two buildings – one academic and one residential – later this year and if all goes well the buildings will be operational during the academic year 2019-20. The university is expected to contribute £270m ($360m) towards the cost of the 1.35m ft2 (125,000 m2) campus, and has said that the total cost of building UCL East and refurbishing its existing facilities will be £1.25bn ($1.7bn). An important factor behind UCL securing the site for its new campus was private research carried out for the university by Deloitte Real Estate, which provided the socio-economic evidence required by the government to help gain its support. The subsequent £141m ($188m) pledged by the Treasury for the “cultural regeneration” of the park suggests it put forth a compelling case. “The last decade or so – in part as a response to the downturn – has seen a sea-change in policymakers’ recognition of the university sector as a driver of economic growth and by city planners as a catalyst for regeneration,” says Harman, who is project director on UCL East.

lthough the regeneration of local communities might be a useful byproduct of the real estate investments made by universities, many institutions’ property plans are, primarily, a defensive play to fend off competition – both domestically and from further afield. Even academic heavyweights are taking the growing threat from overseas universities seriously. The University of Cambridge is developing North West Cambridge, which will provide 1,500 key worker homes for staff, 1,500 private houses for sale, accommodation for 2,000 postgraduates and 1.08m ft2 (100,000 m2) of academic and research facilities on a 370 acre (150 hectare) site. Costs for phase one are estimated at £280m ($373m), rising to £1bn ($1.33bn) for the full, completed development.

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rian Buckingham MRICS, partner at Bidwells, describes the development as the biggest real estate project in the university’s 800-year history. “The whole drive behind this is that Cambridge is one of the world’s premier education institutions and they have to stay there,” he says. “What it is trying to do is build worldbeating research facilities because it is an international market now and it is certainly fearing the Chinese getting their act together. If we fast-forward 30 years’ time there will probably be 30 to 40 universities around the world competing with the likes of Cambridge, Oxford and London for the very best people.” And they cannot afford to rest on their laurels, suggests Trevor Humphreys MRICS, director of estates and facilities management at the University of Surrey, and AUDE chairman. The association’s sister organisations in North America and Australasia are reporting similar levels of investment in property.“Many EU countries are also investing heavily in their estates, recognising that international students may well come, particularly if courses are offered in English,” he says. One European institution embarking on an ambitious real estate scheme is Neapolis University Paphos, a private university in Cyprus backed by the Leptos Group, the developer behind the 11.8m ft2 (1.1m m2) Neapolis Smart EcoCity project. Currently no more than a collection of artist’s drawings and 274 acres (111 hectares) of groundworks on the south side of Paphos, once completed, Neapolis will boast an office park, healthcare facilities, a research and innovation centre, shopping mall, leisure facilities, residential, plus a fully fledged new campus, sports facilities and student accommodation for the university. Until the new campus is completed, Neapolis University Paphos is operating out of a nearby hotel owned by Leptos, which has renovated the property and converted it into a temporary campus.

Combined with art galleries and museums, universities are considered one of the best ways to regenerate a city ll

THOMAS DIMOPOULOS MRICS Axia Chartered Surveyors

Thomas Dimopoulos MRICS, director of Axia Chartered Surveyors in Nicosia and lecturer in real estate at the university, says:“This transformation is a great example of brownfield development where the almost obsolete premises of a hotel were converted to an operating university campus.” How long the students will end up spending in their temporary site is difficult to predict. The €2bn ($2.23bn) cost of Neapolis Smart EcoCity is being met by EU funds, the Cypriot government and private investment, says Leptos, but funding issues keep delaying the project.

niversities act as“poles of attraction for students”, Dimopoulos adds, and can play a vital role in revitalising towns and cities. “Combined with art galleries and museums, universities are considered one of the best ways to regenerate a city.” That is partly why the Chinese government has started investing significantly in improving the country’s network of universities. Earlier this year the Organisation for Economic Cooperation and Development claimed China was building the equivalent of “almost” a new university a week as part of a “silent revolution”. It is a revolution that has not gone unnoticed by Timothy Chen, director of advisory services, east China, at Colliers International. “In the past few years, many big institutions merged with local, smaller universities and colleges to strengthen the capability of their teaching and research to compete with their overseas counterparts,” says Chen. “In addition, the big universities have expanded, particularly into new, planned educational zones to enrol more students.” As a result, universities cannot afford to take their foot off the gas when it comes to future investment. Nor is it likely that they will, believes May, who urges universities to “think about how they position themselves in the market and how they become an institution of choice for students”. The message, then, is to invest, or be overtaken by domestic or overseas competition. “If you don’t invest, China, India, the Americas and other global powerhouses will,” warns May. “You just won’t be able to compete any longer.” n

China conferences and events October 2016 – August 2017 2016 25 October - Local Conference Series 2 - Beijing 16 November - Local Conference Series 3 - Commercial Real Estate O2O Conference - Shanghai 16 December - Quantity Surveying and Construction Summit – Shanghai 2017 06 January - Local Conference Series 4 and RICS Annual Dinner, North China - Beijing 17 February - Local Conference Series 5 and RICS Annual Dinner, South China - Guangzhou 23 February - RICS Awards, China 2017 & RICS Annual Dinner, East China - Shanghai 03 March - Local Conference Series 6 and RICS Annual Dinner, West China – Chengdu 27-28 March - RICS World Built Environment Forum Shanghai 07 May - Networking Cocktail and Study Tour – Tianjin 16 June - City Regeneration Summit - Shanghai 21 July - Internet and Real Estate Summit - Shenzhen

Find out more at rics.org/cn or contact Caroline Li - cli@rics.org

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Careers / Business / Regulation / Training

Foundations CAREERS In an increasingly data-driven and time-poor world, getting to grips with your business writing could really help you stand out

WRITERS’ CHECKLIST

Good business writing is an essential skill in today’s information-saturated world. The ability to write clearly, concisely and with confidence can help you to cultivate better business relationships, generate new opportunities, and enhance your professional reputation. Surveyors are often required to prepare reports, write business plans and strategy documents or pitch to win a new contract. Although having to present technical information in a straightforward and engaging manner may be daunting for some, the good news is that writing is a skill that everyone can develop. Before you even put pen to paper, think carefully about your audience, tone of voice and the message you want to convey. “Consider the reader first and what kind of language is appropriate to them,” says Duncan Hopwood, managing director at Hopwood Public Relations. “Make the key points about what you will offer up front, followed by the technical detail. In our own proposals, we list what we think are the 10 best reasons for the particular client to choose us.” Most people are short on time, so ensure you are direct and get to your point quickly. It can also help to begin with the end in mind, so have a thorough understanding of your goals and objectives. “I always think about the conclusion or outcome of a report before commencing the main body of text,” remarks Rennie Dalrymple MRICS, joint managing partner at quantity surveyor Bruce Shaw in London. “It is much easier to write a report when you know how it finishes.” You should also produce several drafts of your document, because you will always find something that can be improved.

Start at the end Have a conclusion in mind before you begin. Be concise Don’t use 10 words when five will do. Get to the point Present your key message at the start. Avoid jargon Buzzwords are jarring and lack clarity. Ask for feedback An objective review of your work is vital. Redraft and rewrite Your first draft can always be improved. Know your audience Decide what language and tone is appropriate. Read other writers Be inspired by their style and learn their methods. 44

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“Revise, rewrite and redraft ruthlessly,” advises David Vallance, senior copywriter at marketing agency Digital Impact. “Your first draft is probably going to be bad. That’s okay, though. All of our first drafts are bad. The important bit is what you do after writing your first draft.” This includes cutting out non-essential and ineffective phrases, leaving a simple and effective message behind, Vallance adds. “If you can make a point with five words, there’s no reason to use 10. All you’re doing is wasting your reader’s time and reducing the impact of your writing. Ditch the florid prose, cut the rambling narratives and select only the absolutely essential words.” Ask a colleague or manager to read and edit your work – a fresh pair of objective eyes can often be just what you need, so welcome their feedback and do not be offended by their comments. Next, avoid jargon at all costs. It will neither impress your readers nor add any value. “Jargon tends to come over badly to clients, who may have been in the property industry a long time, and have extensive experience in what you are writing about,” warns Dalrymple. Wrapping your message in “fluff” is one of the most jarring mistakes you can make, says Vallance. “Buzzwords are meaningless and do nothing but dilute your message. Stick to plain English.” Hopwood’s final suggestion is to read other people’s work. “Find well-written examples of the kind of document you have to write and examine them in detail. Look at how the document is structured and try to emulate this,” he says. “Becoming a good writer takes years. Practise continually, with a desire for improvement.”

ON RICSRECRUIT.COM Good business writing starts with your CV. Get plenty of CV writing tips, and much more careers advice, at ricsrecruit.com

WORDS LUCIE MITCHELL ILLUSTRATION ADAM AVERY PORTRAIT RAPHAEL OLIVIER

FIGHT FOR YOUR WRITE

Foundations

TIMELINE

1991 Joins Colliers Jardine in Taiwan. 1996 Moves to Kerry Properties to market the firm’s Shanghai developments.

MY WAY

Lina Wong MRICS

MANAGING DIRECTOR, EAST AND SOUTH-WEST CHINA, COLLIERS INTERNATIONAL, SHANGHAI

THE BEGINNING My first taste of a career in real estate came while I was studying for an economics degree at City University New York. I had a friend who worked at a residential real estate agency, and she offered me a part-time job helping to organise open-house events. I remember being fascinated by the architecture of people’s homes, and found the process of buying and selling compelling.

2000 Returns to Colliers to manage the Shanghai office.

THE PRESENT In 2004, I was promoted to managing director of east China, which made me the real estate industry’s first female MD for Shanghai. I am so proud of this achievement, and I’m glad to say I’m now seeing more and more women in high-level management positions in Shanghai – far more than when I started out. I regularly encourage female colleagues to aim high in their career paths. Day to day, I’m pretty non stop, managing more than 200 professionals involved in brokerage, consultancy of property sales and leasing, and property management.

2004 Managing director, east China – the industry’s first female MD for Shanghai. 2008 Winner of the Shanghai Morning Post’s award for Most Outstanding Female Leader in the Shanghai real estate industry.

THE FUTURE Shanghai is one of the key cities in global real estate, and I want to enable Colliers’ growth as one of the biggest real estate agencies in east and south-west China. I’m also keen to continue my work as an honorary principal of Colliers’ Hope School in Sichuan Province, a wonderful project where Colliers has sponsored the campus reconstruction. rics.org/linawong

THE BREAKTHROUGH In 1991 I came back to Asia to join the commercial agency team at Colliers Jardine in Taiwan. It was a great starting point to get to know the basics of commercial real estate. Five years later, I took up an offer from Kerry Properties to be the marketing manager for the firm’s developments in Shanghai. The city has changed enormously over the time I’ve lived here, so in 2000 when Colliers invited me to become general manager of the Shanghai office, I seized the opportunity. My forte is investment, and after becoming a Certified Commercial Investment Member, a colleague informed me that I had built “I’m glad to say I’m now seeing more women up enough experience to apply for RICS membership, so I became a member in high-level management positions in through the senior professional route. Shanghai – far more than when I started out”

2011 Head of investment services for Colliers China.

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OLD HABITS NEED NOT DIE HARD

FIVE-POINT PRIMER

The property sector has long struggled to shrug off a reputation for being a less diverse industry than other professions. But there is now a recognition that employers need to be more inclusive, partly as a result of initiatives such as the UK’s Association of Women in Property (WiP), and Freehold, a group set up to support lesbian, gay, bisexual and transgender professionals in the sector. Lisa-Jane Risk MRICS, director of group property at Kentbased Towergate Insurance and national chairman of WiP, says a good place to start is with recruitment. “Take a look around. Does your business reflect the society we live in? Are you recruiting in your own image – identikits from specific universities – or have you tried other approaches? This might mean hiring from apprenticeships, or part-time or non-cognate degree courses.” Risk also suggests implementing a “blind CV” policy, where any details about gender and ethnicity are omitted. Richard Ryan FRICS is director of Cardiff-based practice Fletcher Morgan. The firm has recruited two graduates over the past two years but realised it had only received one application from a woman. “WiP pointed out that our website isn’t particularly female friendly. There are no women represented on the site and there’s no previous case study of where we have encouraged women in the workplace,

Look around you Ask yourself whether your business reflects wider society. Cast your net wide Don’t just advertise positions on standard jobs boards. Someone to look up to If possible, create role models within the business to inspire others. Set the standard Consider signing up to the RICS Inclusive Employer Mark as an incentive to improve on areas such as staff development and retention. Be self aware Once you recognise unconscious bias exists, you’ll be better equipped to deal with it. 46

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MARKS FOR PROGRESS Implementing a genuine, flexible working policy can also encourage those with family commitments to remain with the business. In 2015, RICS introduced its Inclusive Employer Quality Mark, which identified six key areas where most firms can improve their diversity and inclusiveness, including leadership, recruitment, staff development and retention (box, opposite). “One issue we found is that there are a lot of female entrepreneurs who start their own businesses in their mid-30s after returning from maternity leave and not feeling supported in going back into the workplace,” says Wallis-Leggett. To date, almost 100 firms have signed up to the scheme, committing to both implement the six core principles and conduct a two-yearly selfassessment of how they operate. Freehold has attracted 850 members since it was first set up six years ago. Co-founder Saleem Fazal, head of real estate disputes at law firm Taylor Wessing in London, stresses the need to create a culture in which people can feel comfortable being open about their sexuality, and urges companies to create role models so employees can see it is possible to progress within the business. “It’s about creating an environment where those individuals can be themselves and aren’t lying when they come to work in the

WORDS NICK MARTINDALE

BUSINESS Challenge your own approach to inclusiveness and create a better workplace

so that’s for us to recognise and tackle,” he says. The business did take on a female language student a few years ago as a secretary and ended up supporting her to become a qualified surveyor, Ryan adds, something he now plans to reference on the website. RICS’ Equalities Manager Justine WallisLeggett, meanwhile, suggests advertising for vacancies on sites such as Stonewall’s Proud Employers, or supporting initiatives to get particular groups – such as disabled people – into work.“You are sending out a message that everyone is welcome. People sometimes underestimate the effect that has,” she says. “If you create a more inclusive culture, you will find that your workplace begins to reflect the population in which you live.” Beyond recruitment, a good manager should be able to recognise and correct the unconscious bias that may exist in how certain employees are treated. “Fairly small changes can make a huge difference,” says Risk. “Who are you selecting to deliver a presentation? Who will be leading the next project? Consider role models in your business, and your recruitment pipeline: is there gender and ethnicity balance?”

Foundations

REGULATION 101

morning,”he says.“We need to see continued endorsement within the profession, and create environments where everyone is made to feel welcome.” Freehold runs a mentoring programme to help junior property professionals who are experiencing issues in the workplace, he adds, while several member firms in the sector have also held events to provide support for LGBT staff. Individual businesses are also starting to take action to make themselves more

“If you’re aware of unconscious bias and how that might manifest itself in one’s behaviour, you can do something about it” COLIN WILSON MRICS Cushman & Wakefield inclusive. Colin Wilson MRICS, head of UK and Ireland at Cushman & Wakefield, has hosted several workshops on unconscious bias, teaching staff to identify where they may be falling victim to this. “People talk about it a lot more now, and if you’re aware of what the signals are and how that might manifest itself in one’s behaviour, then you can do something about it,” he says. “A lot of people are looking for a holy grail of an answer and I don’t think there is one,” Wilson adds. “It’s a little about attitude, behaviours and working practices, which will take time to work themselves into the culture of an organisation or an industry. But very few now remain cynical of the process.”

BECOMING AN RICS INCLUSIVE EMPLOYER There are six principles of RICS’ Inclusive Employer Quality Mark. ››Leadership and vision Demonstrable commitment to increasing the diversity of the workforce. ››Recruitment Engage and attract people from underrepresented groups; best practice recruitment methods. ››Staff development Training and promotion policies that offer equal access to career progression for all members of the workforce. ››Staff retention Flexible working arrangements and adaptive working practices.

››Staff engagement A culture in which all staff engage with developing, monitoring and assessing diversity and inclusiveness policies. ››Continuous improvement Sharing and learning from industry best practice. Go to rics.org/inclusion for more on how to become an RICS Inclusive Employer.

The value of registered valuers RAQUEL A. LOLL RICS Head of Regulation, Asia Pacific

There is a view in some markets that the valuer is merely a means by which to rubber-stamp a purchase price, and facilitate a transaction. This detracts from the professional knowledge and experience that a qualified valuer offers. It also invites litigation to the profession at large. Clients seeking simplified valuation reports that validate their opinion of value encourage inadequate due diligence; allow valuers to mask limited knowledge of a market or asset; and create a potential harm to the public. The risk goes beyond incorrect figures – the report could also fail to discuss the asset’s threats and weaknesses. Should a problem come to light, it will be easier to point the finger at the valuer, and without a proper audit trail, it will be more likely that a claim would be upheld. VALUER REGISTRATION Being a registered valuer reinforces the terms of the RICS Valuation – Professional Standards (the Red Book), which requires all members who undertake valuations to provide a level of detail sufficient for the client to make an informed decision. In some cases, this may be more than a client asks for. A complete Red Book valuation will ensure a client and valuer are aware of what has been instructed, what is being valued, by whom, for what purpose, and what level of due diligence will be undertaken and the assumptions being made.

An additional benefit is the inclusion of a SWOT analysis, which ultimately forms part of the valuer’s approach and reasoning. By setting out the principal valuation considerations, the client can understand the underlying nature of the asset, and as such make a better-informed decision. Where the client insists on a short-form report, or legislation requires it, the valuer can either insert an approved statement that allows a departure from the terms, or a declaration of the legislative obligation. DETAILED REPORT Cross-border investment should always be supported by a detailed valuation report, carried out by a qualified and competent valuer who is knowledgeable in the local market, and is able to share that knowledge in a structured report that can be easily understood by a reader who may not be familiar with the market. Although the Asia-Pacific region is not, by and large, litigious, there is a risk that investors from other markets who suffer a loss might make a claim. Valuer Registration seeks to ensure that RICS valuers are meeting best-practice requirements – not just in reporting standards – but regarding the entire lifecycle of the instruction. This includes file keeping, which is the best defence against a claim and saves time when revaluing an asset. Valuers should not be viewed as a hindrance to a transaction, but as trusted, professional advisers who provide valuable insight – not just a number. rics.org/vr

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CPD booster Related content from RICS

MISREPRESENTATION IN A PROPERTY CONTEXT Nabarro’s Nick Wood (above) on the basics of misrepresentation; what happens if it occurs; and what a claimant can do. cpdfoundation.com/ webcasts/137 ››CPD hours: 1

MISLEADING QUESTIONS PROFESSIONAL DEVELOPMENT To avoid allegations of misrepresentation in property, you must possess all the facts and ensure they are fully disclosed Truth be told Misrepresentation occurs when one party in a contract makes a statement of fact or law to another party in the contract, which later transpires to be false. Moreover, not only was the statement false, it was relied upon by the receiving party when entering into the contract, and subsequently caused them to suffer a loss. False profits There are several types of misrepresentation, the most serious of which applies when a person makes a statement knowing it is false. This is called fraudulent misrepresentation, and can have serious legal and financial consequences. At the other end of the spectrum, innocent misrepresentation occurs when a party makes an unintentional false statement. Hold your tongue Generally speaking, silence cannot amount to a misrepresentation. In a property context, that can be important, because a party has to conduct due diligence on what they are buying. CPD: ON DEMAND The CPD Foundation offers members a convenient and comprehensive way to meet their CPD goals for one annual fee. For more information, go to cpdfoundation.com 48

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Contract negation Surveyors should be aware that the remedies for misrepresentation depend on the type of misrepresentation

involved, but that liability for damages and rescission of contract are available in most cases. In the event of a fraudulent misrepresentation, a party is entitled to both rescind a contract and to seek damages. Rescission is an equitable remedy that allows the wronged party to end the contract. Split the difference In property, damages are often assessed by comparing the actual value of the property against the value assuming the representation had been true. In a recent UK residential case, McMeekin v Long (2003), a vendor was asked if there were any disputes of which the buyer should be aware. They replied no, but it transpired they were involved in numerous disputes with neighbours. The buyer therefore acquired something less valuable than it expected. Respond responsibly On either side of a transaction, but in particular if you are representing a vendor, surveyors should pay close attention to the nature of responses to precontractual enquiries and statements. Think about how you or your client articulate those responses: the success of a plaintiff’s actions will depend on the words formulated and the veracity of information disclosed. NICK WOOD is a partner in the real estate disputes team at Nabarro nabarro.com

SURVEYORS ACTING AS AN EXPERT WITNESS What is an expert witness and when is one required? Vivien King of Hatherleigh Training (above) explores what the court rules and protocol have to say. cpdfoundation.com/ webcasts/235 ››CPD hours: 1

KEEPING THE OCCUPIER HAPPY Karen Williamson (above), JLL’s research director, discusses how important ti is to understand your clients, at a time when occupier demands are evolving. cpdfoundation.com/ webcasts/242 ››CPD hours: 1

Foundations

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

HARDWARE

CALL THE HOT LINE Construction sites can be hazardous places – and not just for people. The increasingly sophisticated gadgetry that has become essential for our work, such as laptops, tablets and smartphones, can all be at risk from a

bit of a bashing, a slip from the hand, or an accidental drop into water. Cat’s S60 rugged smartphone has not only been built to be survive everyday damage, it is also the world’s first smartphone to incorporate an integrated thermal camera – in this case, an FLIR Lepton. This means it can be used to perform surveying activities such as detecting heat loss around windows and doors, spotting moisture and missing insulation, identifying overheating electrical appliances and circuitry, and see through obscurants such as smoke. The smartphone can also be submerged in up to 5m of water for as long as an hour, and withstand a drop on to concrete from a height of 1.8m. So it is fair to say you will not need to buy a protective case. CAT S60 from $599, prices may vary. catphones.com

EVENTS

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

HONG KONG

››International Heritage Conservation 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 the conservation of Diaolou and villages in

Kaiping, China, and revitalising Hong Kong’s Central Police Station. Half-day tours of some of the sites discussed at the conference are also planned. rics.org/heritage2017 ››RICS Awards and Annual Dinner, Hong Kong 17 March 2017, Grand Hyatt Unite, catch up, and celebrate with fellow professionals at the RICS Awards and Annual Dinner, Hong Kong. The awards recognise achievement, excellence, professionalism and overall contribution to projects,

ALSO THIS ISSUE

››The world’s first 3D-printed office has been assembled in Dubai. Designed by Gensler, the 2,600 ft2 (242 m2) building is composed of concrete layers, which were printed in China with a 35m-long 3D printer. Watch a video of its construction at bit.ly/3Doffice ››India has the third-largest base for start-ups in the world after the US and the UK. CBRE’s India research team presents key corporate real estate strategies for start-ups to thrive in the country. Download the report via a free login at bit.ly/indiareports. ››Nonflict: The Art of Everyday Peacemaking, is a new book by Amir Kfir and Stephen Hecht, which provides practical information and easy-to-follow exercises to help resolve issues of conflict.

teams and development of our built environment, and are open to everyone working within the property profession. Nominations are open until 1 December. rics.org/hkawards

CHINA

››Commercial Real Estate O2O Seminar 23 November, Jing An Shangri-La Hotel, Shanghai O2O (online to offline) commercial property is no longer a recent concept, but new directions and models are constantly emerging. The interaction between online platforms and retail and office properties is rapidly evolving. To address these issues, industry experts will present sessions that lend a new perspective to the world of

O2O real estate. The conference also presents a great opportunity to communicate with speakers, top experts and delegates. ››RICS World Built Environment Forum (WBEF) 2017 27-28 March 2017, Shanghai Join more than 500 leading decision makers, practitioners and thought leaders from real estate, infrastructure and construction across the globe for two days at the second annual meeting of the World Built Environment Forum. We will explore the highly ambitious and visionary One Belt One Road initiative, which will have an enormous impact on the more than 60 countries it encompasses. rics.org/wbef Q4 2016_MODUS A SI A 49

Mind map

HOW IS DEMAND FOR DATA CENTRES EVOLVING? Andrew Jay MRICS Head of data centre solutions, EMEA, CBRE

The basic standards for data centres are mostly the same from a power, cooling and security point of view. The biggest regional differences involve voltages, types of cooling infrastructure, and any local risks.

Everyone is grappling with how to get into China from a macro perspective â&#x20AC;&#x201C; there are very different regulatory and tax considerations, and ownership is difficult in the country.

Hotspots for data centre demand in Asia-Pacific are Singapore, Hong Kong, Tokyo and Sydney.

For example, data centres in Tokyo use measures such as floating buildings to reduce risk from seismic activity, while in some countries, armed guards are needed to protect data centres.

ILLUSTRATION DANILO AGUTOLI

Data centre demand is peaking in the big cities, where companies can best provide their services. London, Frankfurt and Amsterdam are the three strongest markets in Europe, and there is a real clustering of cloud companies in Dublin.

RICS.ORG/MODUS

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