MODUS Asia Edition Q4 2015

MODUS ASIA Q4 2015 RICSASIA .ORG/MODUSASIA

#RICSmodus Q4 2015

®

ricsasia.org/modusasia

IN THIS ISSUE TENSION BUILDING

Counting the cost of construction conflicts / 16

LOCKED OUT

How to combat the global housing crisis / 24

AN OLD AGE PROBLEM

Defusing the retirement homes timebomb / 34

IT’S A SMALL WORLD Micro-homes: the next big thing / 20

MODUS_Asia_Q4.15_P1_Coverv2.indd 1

12/10/2015 10:40

MODUS_Asia_Q4.15_P02_Exactal ad.indd 2

12/10/2015 10:42

Contents MODUS ASIA Q4 2015 RICSASIA.ORG

“Generalisations are always dangerous – but in Asia, there is a real focus on cost rather than value. Accepting the lowest cost leads us down a rather confrontational route”

06 DIFFERENCE OF OPINION Will Shanghai ever replace Hong Kong as China’s financial capital? We hear two points of view 07-15 NEWS IN BRIEF Essential industry news, advice and information for RICS members 08 THINKING: STEVEN MCCORD China’s recent economic turmoil is part of a wider transition towards a more market-driven economy 13 PRESIDENT’S COLUMN Martin J Brühl FRICS reflects on the 30-year journey that has brought him to the presidency of the Institution

07

10

16

34

Foundations

06

Features

Intelligence

NICK TOWNSEND MRICS, TURNER & TOWNSEND DISPUTES, P16

45

46

48

16 FIGHT CLUB Counting the cost of Asia’s rising bill for construction disputes

44-45 CAREERS Getting the most out of LinkedIn; Savills Vietnam’s Neil MacGregor FRICS

20 COVER STORY Flexible, compact homes are here to stay

46 BUSINESS Don’t get caught in a conflict of interest

24 HOUSES UNFIT FOR PURPOSE Confronting our affordable living crisis

47 LEGAL 101 Five things Asian investors should look out for when buying in the UK

32 HOME BUYERS REPORT Global housing market in numbers 34 SEARCH FOR A SILVER LINING How will we accommodate the world’s rapidly ageing population?

40 NEW DAWN IN VIETNAM Rule change on inward investment could spark real estate resurgence

48 BRAIN GAIN Managing assets in the public sector 50 MIND MAP Fast Future Research’s Rohit Talwar on how hotels can adapt for the future PLUS 49 Events

42 APPLIANCE OF SCIENCE Phase three of Hong Kong Science Park turns convention – and layout – on its head 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.

MODUS_Asia_Q4.15_P03-05_Contents_v2.indd 3

Q4 2015_MODUS A SI A 03

12/10/2015 12:31

1-2 December 2015 Grand Hyatt Hotel, Hong Kong

Asia Pacific Real Estate:

mipimasia.com

Special keynote address by

Vision 2025 Revisit real estate fundamentals, rethink retail perspectives and network with top executives at MIPIM Asia’s 10th edition.

Dr. Allan Zeman Chairman at Lan Kwai Fong Group “The evolution and prospective of Entertainment and Lifestyle in Hong Kong and China: 10 years back-10 years ahead.”

Register early and save up to USD 350 Platinum Sponsor

Gold Sponsors

Silver Sponsors

04 RIC S A SI A .ORG

MODUS_Asia_Q4.15_P03-05_Contents_v2.indd 4

12/10/2015 12:31

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

PERFORMANCE REVIEW Sir, The PPP [public-private partnerships] article in Modus (p20, Q2 2015) argues that the whole-life value afforded by PPP is attractive to governments struggling to fund infrastructure projects, but who are also guilty of “moving the goalposts”as parties change, and terms in office either conclude or become jeopardised.

Neglecting whole-life performance of built assets, regardless of size or stature, is route one towards constraining such value and social benefits. We are expected, as professionals, to plan and maintain our own “whole-life performance” with respect to our duty towards society. Therefore, we can only be expected to do the same justice to those assets through which we act out our duty.

We are, generally, too quick to consider large-scale built-asset creation as a massive cost. Surely an important part of our duty is to help change this mindset towards the belief that our existing and future assets are investments that will benefit all. And, as with any investment, being able to draw out and articulate the long-term – or whole-life – benefit is the clincher.

To give our politicians compelling reasons to commit – and society reasons to support – investment that transcends party politics and term in office, not only must we implement whole-life performance as a matter of value for our clients, but use it as a mechanism to articulate the long-term cost/benefit of our investment decisions.

John Robertson MRICS, EC Harris, London

Join the debate Do you have a comment about this issue of Modus? Email your letters to editor@ricsmodus.com. If you would like to contribute to future articles, please contact us first to discuss your idea

WAFFLLY SORRY Sir, Although reference is made to the Belgian photographer, I feel most sorry to see that a quality magazine lends itself to yet another round of “Belgium bashing” (Intelligence, p10, Q2 2015). It must be said that some other countries’ residential areas are not exactly the benchmark for aesthetic architecture either.

I’d rather like to focus on architectural gems as can be found in my home town, Antwerp, and in many other Belgian cities as well.

Eric Tavernier MRICS, Valorem, Belgium LOFTY AMBITION Sir, As a reader of Modus and an APC assessor, I am often reminded about the importance of the professionalism of RICS members. I was therefore rather surprised recently to be on the other side of the fence.

As a homeowner balancing a residential sale and purchase, I arranged a mortgage survey with a large surveying firm, who agreed to call beforehand to ensure that I was available. After the allotted time slot had lapsed, the surveyor arrived, conceding that he should have rung, but it was OK, as I was in. I was then asked to supply a ladder, as he couldn’t get into the loft. I was a little surprised he didn’t have the necessary equipment to carry out the job, and that he hadn’t even noticed there was a ladder in place.

It’s all very well talking about professionalism – but let’s see it being put into practice.

Name and address supplied

BOAT OF CONFIDENCE Sir, Even though my practice is focused on things that float, rather than bricks and mortar or the ground on which they are situated, I always look forward to receiving my copy of this excellent magazine.

While focused solely on admiralty and maritime, my practice was recently appointed as the technical adviser and consultant to the superyacht marina that’s in the planning stages for Ocean Village in Gibraltar. From a recent hearing with the local planning commission, it is clear that the professionalism, commitment and dedication to excellence of our organisation and its members was a key factor in its decision.

In a small way I’ve been able to draw attention to the importance of RICS-accredited valuations of superyachts and commercial ships in an recent article I wrote for the Superyacht Report, which received such positive feedback that the Royal Institution of Naval Architects requested permission to republish it.

Regardless of whether a surveyor deals in buildings or land, or yachts and ships, Modus is definitely a must read. Keep up the good work!

Capt ES Geary FRICS, Gibraltar

MODUS ONLINE

Read the latest and all previous issues of Modus Asia edition at ricsasia.org/ modusasia. To reduce your carbon footprint, unsubscribe your hard copy and receive a digital edition only by emailing your name and/or membership number to ricsasia@rics.org with the subject line “Unsubscribe Modus Asia”.

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

MODUS_Asia_Q4.15_P03-05_Contents_v2.indd 5

Q4 2015_MODUS A SI A 05

12/10/2015 12:31

Intelligence

News / Reviews / Opinions / Reactions

DIFFERENCE OF OPINION

Will Shanghai ever replace Hong Kong as China’s financial capital? Discuss.

ALTHOUGH I HAVE A SPECIAL LOVE FOR MY HOMETOWN, HONG KONG WILL descend into a second-tier city. Look at the volume of stock trading in China compared with Hong Kong. The difference will continue to widen, and that means Hong Kong is going to go downhill.

Even if you do not think China’s economy will get better and better, let’s not forget there are 661 major cities in the country. Just as we choose stocks, everyone wants to choose a champion. It used to be HSBC and Sun Hung Kai Properties that were the market leaders. Now we’ve got Tencent and ALAN CHILD FRICS CHAIRMAN, KNIGHT FRANK HONG KONG China Construction Bank.

Beijing, Shanghai, Guangzhou, Shenzhen and Hong Kong TO ANSWER THIS QUESTION, IT IS NECESSARY TO LOOK AT THE are still the most significant cities. But centuries ago, Xian, two cities in the context of their present positions in the Luoyang, Yangzhou and Nanjing shone brilliantly. After the financial markets. In terms of volume, Shanghai is without relentless march of history, they now have to face the fact doubt at the core of China’s financial operations. Hong Kong, on the other that they are second-tier cities. hand, occupies a key position as an outlet for international capital, a position Hong Kong succeeded because China was closed off.

Nearly every mainland city set up a “window company” in that it has occupied for many years.

In terms of truly global international financial centres, London and New Hong Kong, using the city to allow state-owned enterprises to go global as“red chips”. Now that the Chinese state has its York occupy the top positions in the Western hemisphere. But in the AsiaPacific region, Hong Kong is as close as it gets to being a global financial own markets, they don’t need the platform in Hong Kong.

During Japan’s period of isolation, its most prosperous centre. Tokyo has trading volume, but it is mostly domestic. Singapore city was Yokohama. But after the country opened up, Tokyo competes strongly with Hong Kong to be Asia’s financial capital, but so far and Osaka rapidly surpassed it. I think Hong Kong will have it has been mostly serving south-east Asian economies.

Hong Kong holds its role as a world-class financial centre because it a similar experience. Shanghai will be the centre of the stock exchange, like New York, but Hong Kong will be like Chicago, benefits from a well-established and open legal system, transparent which boasts a world-leading futures and options exchange. financial regulation, unrestricted capital flows, strong international connections and a fully convertible currency. It is largely free from government intervention, is still China’s gateway to the world and, given Shanghai times ahead or Hong Kong still king? the recent sudden devaluation of the yuan as a result of intervention by What’s your view? Join the discussion the Chinese government, will remain so until the Chinese currency on LinkedIn at rics.org/linkedin, becomes fully convertible. or email editor@ricsmodus.com As China’s financial controls continue to ease, Shanghai’s influence and financial dominance will expand internationally. However, in the near future, it is not inevitable that Shanghai will replace Hong Kong as the nation’s international finance centre. But never say never.

06

INTERVIEW ALEX FREW MCMILLAN ILLUSTRATION WILL HAYWOOD

KENNY SIU CHI-YIU MRICS ASSISTANT DIRECTOR OF SALES AND MARKETING, HSIN CHONG PROPERTY DEVELOPMENT, HONG KONG

RIC S A SI A .ORG

MODUS_Asia_Q4.15_P06-15_Intel.indd 6

12/10/2015 11:15

UAE

Saudi Arabia

Qatar

3,785m

2,167m

The kingdom was the fastest growing source of outbound Middle Eastern capital in 2014 Source: CBRE, Real Capital Analytics

Intelligence

2,305m

RISE OF SAUDI ARABIAN OUTBOUND CAPITAL

Kuwait 5,365m

4,327m

1,800m 615m

361m

2013 2014

NEWS IN BRIEF

Qatar

Kuwait

UAE

Saudi Arabia

CHINA ®

REPORT: BUILDING GREEN WORTH THE COST

ESTATE AGENTS’ FEES

ricsasia.org/ modusasia

£5,214 +61%

STAMP

DUTY RICS co-hosts symposium on revitalising Japanese cities£3,620

SURVEYORS’ FEES

CONVEYANCING COSTS

REMOVALS £1,419 £1,034 +37% as whether the building is in the +21% central business district, or has

£607 +51%

+87%

access to the subway, matter more.

More than 300 Japanese real 1009 281 162 126 107 104 76 That tallies with less formal estate investment practitioners London Paris Dublin Amsterdam Frankfurt Barcelona Berlin research by CBRE, which estimates discussed the funding options a 13.5% rental premium for LEED and determining factors that buildings in Shanghai – and as could speed up the revitalisation much as 25.7% in Shenzhen. of Japanese cities on 22 May, at 38,634 15,878 Density The97.3% research would suggest a symposium in Tokyo co-hosted 20,867 72.7% /sq mile 21,068 76,985 66.6% that the LEED certification is20,726 worth

by RICS, the Association for Real % Growth 45.3% 46.2% 32.8% OECD* Other Europe 15,688 & Middle East & Sub-Saharan Latin America East Asia & South Asia 29.7% the money. The paper concludes Estate Securitization (ARES) and countries Central Asia North America Africa & Caribbean Pacific it costs on average 3% extra in Japan Real Estate Institute (JREI).

A groundbreaking report on green TAKE THE LEED Parkview DAYS DAYS DAYS DAYS construction toDAYS install the necessary Regional revitalisation is an DAYS certification in DAYS China has revealed 2 Green, a 2m ft green features. Given that average important part of the five-year the scale of the rental premium 2 (185,800 m ) rents, at RMB229/m2 ($3.35/ft2), strategy plan announced last year an environmentally friendly mixed-use De ns ity by the Japanese government. development can command. are around RMB26/m2 ($0.38/ft2) scheme in London Madrid Singapore Paulo Mexico and City Beijing, was Through revitalising local regions, Salvador In Shanghai, the rental premium higher for a São green building, certified LEED the government aims to create for a building Hong with Kong LEED (Leadership the average construction cost is Platinum in job opportunities, new towns and in Energy & Environmental Design) around RMB10,000/m2 ($146/ft2), 2009 nurture talents. The symposium certification is 12.8%, according to it takes just less than a year to aimed to explore the role of real a white paper published mid-year recoup the additional cost. estate investment in regional by professors Eddie Hui, Eric Chan Since green certification in China revitalisation and how to start a Wetlands and Yu Ka-hung at Hong Kong is relatively rare – the research regeneration project, using case Polytechnic University. compared 23 LEED-certified €40.3 €37.4 €34.6 revealed studies from UK and Japan.

The research that buildings with 36 that did not have €31.4 Coniferous forest €29.8 €28.3 The symposium started with green certification was the most the rating – the report €22.3concludes Ralph Luck FRICS, director of important building-related factor that green certifications are “a Forest real estate at King’s College, in causing a rental premium. critical feature for commercial London, sharing his experience of Only accessibility issues, such buildings to€24.6 remain successful”. revitalisation projects in the city, Agricultural areas and the gap-funding model that France Germany Ireland Denmark Sweden Italy EU average UK funded them. Making reference SKYSCRAPER PRIME OFFICE GROWTH SINCE to the regeneration of Greenwich €21.3 2 €15.6 €14.6 AND CURRENT €13.1 JULY 2014 €8.4 Peninsula and other projects he €7.3 RENTS ($/ft )

27

% Growth

24

33

59

65

81

99

1

3

7

Ho Chi Minh Hanoi 2010

MODUS_Asia_Q4.15_P06-15_Intel.indd 7

14

€3.8

20%

15%

Spain

Slovenia

Greece

Portugal

Poland

Hungary

Bulgaria

10%

Ho Chi Minh Hanoi 2011

Ho Chi Minh Hanoi 2012

Ho Chi Minh Hanoi 2013

Ho Chi Minh Hanoi 2014

20.9% $38 Kuala Lumpur

Mumbai

13.2% 5.1% $58 $51 Frankfurt

8.3% $65

High-end2.9% $69 Mid-end Affordable

Chicago

Source: Knight Frank

0.8% $92

-1.2% $68

Beijing

7.7% $109

-3% $90 Luxury

Moscow

-5%

4.8% $124

Sydney

11.3% 20% $250 $150

London

0%

Tokyo

5%

Shanghai

7,500 5,000 2,500

THE DATA

New York

worked on while at English Partnerships – a government agency that promoted the development of vacant, derelict and contaminated land – Luck pointed out the benefits of gap funding where public-private partnerships were employed.

Yosuke Sano, senior director of JREI’s research and study department, and Junichi 25,000 Kageyama, vice-president of 22,500 FinTech 20,000 Global Incorporated’s investment banking division, then 17,500 15,000 discussed Japan’s real estate law 12,500 and what they mean for reforms 10,000 regional revitalisation.

Hong Kong

INFOGRAPHIC IAN DUTNALL IMAGE KERUN IP FOR IDA

INTERVIEW ALEX FREW MCMILLAN ILLUSTRATION WILL HAYWOOD

2013 2014

Q4 2015_MODUS A SI A

07

13/10/2015 12:59

“What the devaluation of the yuan and the loosening of China’s foreign investment laws have in common is that they are part of ongoing structural reform”

I

n mid-August, China’s stock markets experienced a sudden and steep decline, causing widespread concern about the health of China’s economy. To understand what this might mean for the real estate industry, first it is important to note that there is only a limited amount of institutional investment in Chinese stocks, and very little investment from overseas.

This means that stock markets are driven mostly by amateur investors. Furthermore, the average company in China does not depend on the domestic stock market for financing. Equally, the average individual does not depend on the market as an investment tool – only a tiny fraction of personal wealth is held in stocks, in contrast to bank deposits and property.

A rising stock market was desirable to increase equity-financing opportunities for companies. The Shanghai-Hong Kong Stock Connect scheme and interest-rate cuts laid a solid foundation, but the rally quickly became highly speculative. It did not take long for price-to-earnings ratios to become unrealistically high.

Individuals invested with confidence in the belief that the bull market had the backing of the government.

However, official efforts to rein in margin financing raised questions about the level of government support behind the market, leading to a series of sell-offs.

There have been no recent, significant economic data announcements, other than a drop in exports, which by itself is not unusual. In fact, China’s economic data is mixed, just as it has been for quite some time. Overseas equity investors saw stocks slumping in China, and there was a knee-jerk reaction, causing sell-offs internationally.

The devaluation of the yuan was an important catalyst in the global sell-off. But it was widely misunderstood.

Overseas markets saw the devaluation as a reflection of poor economic performance. However, the devaluation was part of an ongoing exchange-rate liberalisation, as China moves away from a fixed-rate regime in a bid for the yuan to become a global reserve currency.

The direct effects on the property market are relatively limited. China is moving towards a consumption-based economy, and recent events do not change this. During the stock market boom, there was no corresponding boost in retail sales or consumption. Similarly, we cannot expect a negative effect on retail sales because of declining stock prices. In the office sector, wealth management firms and small financial companies with stock market exposure account for only a tiny share of occupied space in first-tier markets. However, demand fundamentals in second- and third-tier cities face the same challenges as before the crash. For institutional investors, China’s first-tier cities still represent an opportunity to gain exposure to a market with deep and wide occupier demand, particularly for offices.

In short succession after the yuan devaluation, the government made an unrelated announcement to loosen home purchase rules for foreign individuals investing in property. This is part of a long line of incremental measures to nudge homebuyers, who may be waiting on the sidelines, back into the market. Given the recent weakness in housing in second- and third-tier cities, any form of policy loosening is well timed. However, the reality is that most foreigners live in first-tier cities. All residents in such cities – foreigners included – are still subject to restrictions that limit homebuyers to one or two units, once they have met a defined residency period and with proof of tax payments. Therefore, any potential boost in demand for residential property is very limited.

What the devaluation of the yuan and the loosening of foreign investment laws have in common is that they are part of ongoing structural reform. China continues to move away from an economy managed by administrative measures and towards a market-orientated economy. Policymakers are trying to find the correct timing to roll out these changes, with the fewest negative results.

ILLUSTRATION ANDREA MANZATI

STEVEN MCCORD HEAD OF RESEARCH, NORTH CHINA, JLL, BEIJING

08 RIC S A SI A .ORG

MODUS_Asia_Q4.15_P06-15_Intel.indd 8

13/10/2015 12:59

15,688 29.7%

38,634 97.3%

20,867 66.6%

76,985 32.8%

21,068 45.3%

20,726 46.2%

Intelligence

London

Madrid

NEWS IN BRIEF

1

Wetlands

7

COUNTING CARBON The Chinese government has used the tool to inform how it reduces carbon emissions in the country

14

The Global Calculator

10%

5%

What’s that? It is the biggest open-source model of the world’s energy system ever built. Available as an online interactive tool, the calculator models global energy, land and food systems up to 2050 in order to explore and cost our options for tackling climate change. It then predicts what the consequences of these decisions might be as far ahead as 2100.

Who is it aimed at? Anyone who is interested in exploring what a low-carbon world could look like in the near future. Businesses could find it particularly -1.2% -3% useful for understanding how $68their sector will evolve at a global level as the $90 world 0.8% moves to a low-carbon economy markets will grow and what 7.7% 8.3%– the 13.2% 5.1% that 20.9% 2.9% $109 $65 food $58 $51 could $38 use it to ask $92 $69 For example, opportunities may arise. producers what might be the global demand for food in 2050 depending on population growth or dietary preferences. Or bioenergy producers could use it to speculate on how production could be affected by future yield rates.

Who’s using it? Organisations such as Mott MacDonald, Shell, the World Energy Council and the Chinese government have used the tool to inform their views of how the world should reduce carbon emissions. The calculator also allows you to design your own vision of the future energy, land and food system to 2050 by combining choices of 40 levers to create “pathways”. tool.globalcalculator.org Shanghai

Moscow

Sydney

London

Tokyo

New York

Stephen Haddrill has been 0% 11.3% 20% appointed the new independent 4.8% chair of RICS’ global Regulatory $250 $150 $124 Board. He succeeds Eve Salomon, -5% who has stepped down after six years in the role.

Haddrill was previously chief executive of the UK’s Financial Reporting Council, an independent regulator focused on promoting high-quality financial reporting and corporate governance. Before this he was a member of the high-level Financial Crisis Advisory Group and director general of the Fair Markets Group at the UK’s 70% Department “Securing the 60% of Trade and Industry. next instruction Haddrill said: “I’m 50% delighted is as important as to take up this role and bring 40% my experience to help ensure the deal in hand” 30% the practice, professionalism 20% and quality of RICS’ members are Tim Gilbertson MRICS, 10% Justifiable recognised worldwide. director, FHP trust, achieved through strong, Property Consultants, proportionate regulation and Nottingham 1979 1984 1989 1994 1999 2004 governance is essential to “Agency is urgency” deliver continued confidence to is a quote used to the users of these services.” pinpoint the key to rics.org/regulation success in commercial property marketing.

Hong Kong

São Paulo Mexico City

3

Tony Ho is new East Asia forest Coniferous Managing Director Tony Ho is now Managing Forest Director of RICS in East Asia and is responsible for overseeing RICS’ business development, Agriculturalas areas well as the recognition of RICS standards and qualifications for the region, covering Hong Kong, Japan, Taiwan, South Korea and Macau. A graduate of Indiana 20% State University, Ho has worked in real estate and asset valuation consultation for 20 years and15% was previously Deputy Director of RICS North Asia.

Salvador

WE LIKE

®

New Regulatory Board chair reports for duty

Singapore Hong Kong

ONE THING I KNOW

Kuala Lumpur

ity

Mumbai

ns

Frankfurt

De

Chicago

Source: Bloomberg, Demographia, IMF, UN

Beijing

Population density in Salvador forecast to almost double in a generation (1995-2025)

ricsasia.org/ modusasia

15,878 72.7%

% Growth

BURSTING AT THE SEAMS

INFOGRAPHIC IAN DUTNALL

ILLUSTRATIONS ANDREA MANZATI

Density /sq mile % Growth

Owner-occupier

Private renter “in the market” and But I think “agency is liaising with solicitors thoroughness” would Social renter to push deals over the be more appropriate. line not only results in In a strengthening successful deals, but market with limited also secures a pipeline supply, any agent of new instructions. knows the deal in hand Companies who are is key, but securing the next 2009new instruction 2014 2019possible purchasers or tenants today, is just as important. through thoroughness Therefore, a thorough and regular contact, approach to chasing can become your enquiries, keeping in clients tomorrow. touch with parties

Q4 2015_MODUS A SI A

MODUS_Asia_Q4.15_P06-15_Intel.indd 9

09

12/10/2015 11:15

NEWS IN BRIEF

SECRET SURVEYOR

®

ricsasia.org/ modusasia

“Should the profession be doing more to market the specialist expertise of its members to the hotel industry?”

First RICS Library outside UK opens in Tianjin The first RICS Library outside the UK was officially opened in Tianjin, China, on 15 June.

Co-sponsored by RICS and Tianjin University of Technology (TJUT), the TJUT-RICS Library is an archive of RICS knowledge and comes fully equipped with stateof-the-art technology.

The facility is the world’s largest library that specialises in construction and real estates.

It holds a collection of professional standards and research reports in construction, real estate, land, and other fields published by RICS. In essence, the library embodies the wealth of professional knowledge RICS has accumulated over its near 150-year history.

The library holds 1,300 RICS publications from across six professional areas: project management, management consulting, facilities management, real estate, assessment and environment.

It provides rich resources to TJUT students from construction disciplines, in particular those studying quantity surveying.

It is also an important facility for members in China, from which they can gain access to global knowledge in engineering concepts and professional standards.

Highly automated to increase its efficiency, the library boasts 24-hour self-service kiosks, auto-circulation book machines, self-service reading machines, and various digital platforms and equipment to enable easy searching and lending.

RICS CEO Sean Tompkins, president of TJUT Jing Hongyang and Yin Yilin, dean of the School of Management at TJUT, officiated the opening ceremony, which was attended by 200 members and professionals from construction, real estate, land and other industries across the country.

10

O

ver the last several years, I have stayed at a number of four- and five-star hotels. When viewed in terms of guest satisfaction, without exception, all have been excellent.

What I have also observed, however, is: trees growing out of chimneys and being fertilised by bird droppings; broken downpipes and blocked gutters with rainwater spilling over, staining the masonry, splashing on the ground and spattering mud on painted walls; windows jammed shut from painting in overheated bedrooms; poorly fitting external doors and windows, with the consequential continuous loss of heat; woodland planted when the hotel was built about 25 years ago that has never been maintained – which is now an eyesore littered with broken tree supports and plastic tubes; and paved areas that have been laid on an inadequate base, resulting in slabs that present a hazard to pedestrians and the potential for personal injury claims.

I know that, in the short term, these defects have little or no

effect on guest satisfaction and could appear trivial but, in the longer term, the consequences could be dire. Is money spent on maintenance perceived as reducing profits on a yearly basis? It should be remembered that many of the hotels are part of international groups, whose policies are decided in other countries and therefore may not necessarily be compatible with local conditions. The managers I talked to did not appear to focus on such matters as maintenance and energy conservation.

Should the profession be doing more to market the specialist expertise of its members to the hotel industry, particularly in relation to maintenance and energy efficiency?

Do our members have any input to hotel management courses in the universities? I have no doubt their expertise would be beneficial to the long-term sustainability and viability of hotels.

ARE YOU INTERESTED in writing a future Secret Surveyor column?

Email editor@ricsmodus.com

INVESTMENT

RUSH TO BOOK INTO SPANISH HOTELS CHECKING IN Chinese group Chongqing Kangde paid €50m in May for Hotel Barceló Santiago in Tenerife

Hotel investment in Spain is at its highest level for nearly seven years, and is on course to surpass the €1.6bn ($1.8bn) recorded at the previous peak in 2006, says CBRE.

Investment in Spanish hotels last year was at its highest since the crash of 2008 – up 63.4% on 2013 and totalling €1.09bn ($1.23bn).

CBRE found this investor appetite continued in 2015.

Transaction volumes for the first quarter were up 283% on the same period in 2014, stemming partly from a rise in investment from the Middle East, Asia and the US. “Traditional hotel markets such as London and Paris

have notoriously high barriers to entry and a scarcity of investable stock, particularly in the luxury segment,” said Joe Stather, EMEA hotels intelligence manager at CBRE. “[By contrast] the key Spanish cities are currently proving much more liquid.

Direct flights to Spain from the emirates, China and Singapore heighten the country’s appeal further and those investing in real estate are eligible to obtain residency by investment.”

RIC S A SI A .ORG

MODUS_Asia_Q4.15_P06-15_Intel.indd 10

12/10/2015 11:15

Intelligence

HIGH CULTURE WITH A VERY HIGH PRICE TAG Strange things happen when you build a concert hall on top of a 1960s warehouse.

On the positive side, the Elbphilarmonie Hamburg, designed by architect Herzog & de Meuron, looks like no other concert hall ever built and is likely to drastically boost the tourist appeal of Germany’s second city.

On the negative side, with a final price tag of €789m ($881m), the project will have cost more than double the original budget, and even when completed in January 2017, it will have taken a decade to be constructed.

Whether it will all have been worth it in the end is a question that the city’s inhabitants will only know when it all is finished.

MODUS_Asia_Q4.15_P06-15_Intel.indd 11

Q4 2015_MODUS A SI A 11

12/10/2015 11:15

12 RIC S.ORG/MODUS S A SI A .ORG

MODUS_Asia_Q4.15_P06-15_Intel.indd 12

12/10/2015 11:16

OECD* countries

24 DAYS

Other Europe & Central Asia

27 DAYS

Middle East & North America

33 DAYS

Sub-Saharan Africa

59 DAYS

Latin America & Caribbean

65 DAYS

East Asia & Pacific

South Asia

81 DAYS

99 DAYS

Intelligence

AVERAGE TIME TO REGISTER PROPERTY Slow registration of land perpetuates informal use and blocks sales and development

*Organisation for Economic Co-operation and Development

Source: McKinsey Global Institute

SUSTAINABILITY

ASIAN REAL ESTATE CATCHES REST OF WORLD €40.3

€37.4

€34.6

€31.4

€29.8

€28.3 €22.3 The Asia region’s improvement in terms of environmental, social and governance issues has been described as “impressive”, €24.6 by the 2015 Global Real Estate Sustainability Benchmark (GRESB) report, issued at the start of September. Performance is up Denmark France Germany Ireland Sweden Italy EU average UK 18% to an average score of 54, the report €21.3 found. That puts the region on a par with €15.6 €14.6 €13.1 €8.4 €7.3 US-based companies, and just behind €3.8 Europe’s score of 55.

The report goes on to state that real estate companies in Asia have cut greenhouse-gas emissions by 68,000 Slovenia Greece Portugal Poland Hungary Bulgaria tonnes – the equivalent of taking 14,316 Spain cars off the road. In terms of energy MARTIN J BRÜHL FRICS RICS PRESIDENT reduction, Asia-based property companies Three decades ago, when my father thrust into my hand a copy of the INAUGURAL have reduced energy consumption by ADDRESS 143GWh, or the equivalent of 229,000 Frankfurter Allgemeine Zeitung, little did he know it would lead me to the Martin J Brühl barrels of oil. presidency of this wonderful professional body. There, in the corner of the became RICS The improved figures are the result of President business section was aLuxury short, barely noticeable paragraph extolling the RICS. 25,000 a serious on 29 June.

22,500 review of energy use. The 2015 High-end the concept of a royal institution was exotic.

To a young student in Germany, To read his findings 20,000show that 78% of study participants Mid-end was totally alien and impossible to translate.

The title “chartered surveyor” full inaugural 17,500 in Asia undertook technical building Affordable address, go But my natural curiosity had been ignited and soon my mind was made up: 15,000 assessments over the last four years, 76% to rics.org/ I was going to be a chartered surveyor.

12,500 of which then implemented energy-saving martinbruehl 10,000 Thus began an amazing career that has taken me around the world. I have measures.

The figure is significant because 7,500 met many excellent colleagues, some of whom are active on RICS committees operational costs account for 85% of 5,000 and working groups. But my principal engagement was as a professional a building’s life-cycle cost.

2,500 The report also highlights from Ho Chi Minh Hanoi corporate Ho Chi Minh Hanoi Ho Chi Minhbenefitting Hanoi Ho Chithe Minhassurance Hanoi of the Ho ChiRICS Minh brand, Hanoiaccess to high-quality 2010 2011 2012 2013 leaders by property type. It praises guidance, and the status that goes with it. So2014 my route to the presidency has CapitaLand as the leading diversified been unusual. Although I have served for three years on Governing Council, property manager. Keppel REIT, also I have not been steeped in committee machinations. I will, therefore, look based in Singapore, is the industry leader to others to guide me on processes and procedures. My own contributions in Asia in the listed office space. Invesco will bear the hallmark of personal experience gained across five continents.

Real Estate Fund is top dog in terms of With that experience in mind, I am convinced we must redouble our private office funds. The Australian group efforts to attract the best talent, to place ethics at the heart of all we do, to Lend Lease’s Asian retail fund is the leader create successful and sustainable future cities, to embrace technology and in the retail sector. big data, to take new opportunities, and to lead.

Several Japanese companies garnered I shall focus on three key themes over the coming year. First, sustainable praise. Sekisui House is the industry leader in residential development, GRESB found, investment. As head of global transactions for a fund manager, I have a duty while Japan Prime Realty Investment Corp to my clients to invest their savings sustainably and responsibly. For our leads the way among developers with a profession, that means appropriate standards, analytical tools, training and diversified portfolio of office and retail education. It also means a collaborative approach across our professional property. Tokyo-based Hulic came out groups, and between RICS and our many stakeholders. Second, as President top among developers with a diversified I shall emphasise the fiduciary duty of fund managers. RICS can lead thinking portfolio of office and residential. in this area. For example, how can we behave rationally and responsibly in an The Goodman Japan Core Fund is the environment of historically low interest rates engineered by central banks? best privately run industrial fund, while Third, standards, diversity and inclusion. These were all central themes for Mumbai-based Mahindra Lifespaces my predecessor, requiring sustained effort over many years, and I intend to Developers is the leader on the listed industrial side. do all I can to take them even further.

INFOGRAPHIC IAN DUTNALL ILLUSTRATION BERND SCHIFFERDECKER

“My curiosity was ignited: I was going to be a chartered surveyor”

MODUS_Asia_Q4.15_P06-15_Intel.indd 13

Q4 2015_MODUS A SI A 13

12/10/2015 11:16

competence

professionalism p essionalism

leade p lead dership competence reputation p

stan

ll nce status excellence

reputation

statusl

stan ndards ds

competenc p nce ce

leadership p

professionalism m

confidence excellence

standards reputation

competence

status leaders

confidence

excellence standards

status

leadership competence t

standards d s

professional al

reputation n

leadership p

14 RIC S A SI A .ORG

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

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

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

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

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

rics.org/cpd

competence p

reputation n

19696 MODUS CPD AD-202x274mm-AW.indd 1 MODUS_Asia_Q4.15_P06-15_Intel.indd 14

09/07/2014 11:16 12:19 12/10/2015

Intelligence NEWS IN BRIEF

RESIDENTIAL

RULES ON FOREIGN BUYERS HAMMER SINGAPORE HOMES – BUT NOT HONG KONG

®

ricsasia.org/ modusasia

Hong Kong Jockey Club references RICS guidance Congratulations to the Hong Kong Jockey Club (HKJC) on its recent publication of Property Asset Health Management Framework, which references materials from RICS guidance notes.

With a capital replacement value of more than HK$30bn ($3.87bn), consisting of 1.15m m2 (12.4m ft2) of land and more than 700,000 m2 (7.5m ft2) of covered floor space, the health and cost effectiveness of the club’s property asset portfolio is a key focus of its activities.

The document was a result of two years’ research involving international leaders in this field.

The review referenced material from RICS’ measured surveys of land, buildings and utilities guidance notes. Referencing RICS’ standard building schedule allowed the club to align its asset condition assessment to globally recognised industry standards.

Comprised of seven levels, the Work Breakdown Structure is based on our standard building schedule, an industry standard for categorising construction components of a building.

e

adership

tandards d

atusleadership

excellence ll

confidence

RISING MARKET Hong Kong’s Transport and Housing Bureau estimates that a further 83,000 units will come to the market in the next four years

standards

competence

reputation

professionalism p o ess o a s

excellence

leadership p confidence

competence

Reports highlight potential of BIM in built environment

Identical 15% taxes on homes purchased by foreign buyers have produced startlingly different results in Singapore and Hong Kong, causing prices to tank in the Lion City, but having little effect in Hong Kong.

The situation is unusual in that both economies are very open.

But the financial hubs of southeast Asia and greater China have recorded wildly divergent performances, spelling out very different challenges for developers and property professionals.

Knight Frank’s prime global cities index ranked Singapore last out of 35 global cities as of the first quarter of 2015, with prices down 12.6% in 12 months. Hong Kong,

status s a u us reputation p

RICS has released three new reports focused on building information modelling (BIM).

The research papers aim to share insights and experiences from various stages of the real estate life-cycle and examine aspects of how and where BIM technologies are employed to improve project coordination.

BIM was originally developed by the architecture, engineering and construction sectors but, as these research papers illustrate, it also has its uses in other areas and sectors where it can influence project costs and facilitate better information flow.

Download all three reports at rics.org/bim.

where prices rose 5.5% in a year, ranked in the top half of the index.

The Singaporean government has responded by restricting the number of sites released for sale. Only 567 units were completed in the second quarter of 2015, 23% lower than the three-year quarterly average.

Hong Kong, by contrast, continues to increase supply. The Transport and Housing Bureau estimates that 83,000 units will come to the market in the next three to four years – on a quarterly basis, 10 times the rate of completions in Singapore.

The ratio of foreign buyers has undergone a similar decline in both cities, dropping from 35% of new flat sales in central Singapore in 2011 to 14% in 2015, while Chinese buyers alone in Hong Kong have dropped from 42% in 2011 to 11%.

Ong Teck Hui, director of research and consultancy at JLL in Singapore, forecasts that prices will continue to decline through 2016 and will not stabilise until the government’s cooling measures ease. The tough market is pushing local developers into markets such as Australia, the UK, the US and elsewhere in Asia.

Ratings agency Standard & Poor’s has been surprised by Hong Kong’s steady growth, causing it to reverse a call of a fall of 5%-10% in 2015 to a rise of the same amount. Still, it anticipates a decline in sales next year, forcing developers to adopt more flexible pricing models.

leadership

competence p t

PAGETURNER AQUATECTURE: BUILDINGS AND CITIES DESIGNED TO LIVE AND WORK WITH WATER ROBERT BARKER AND RICHARD COUTTS

professionalism

excellence ll

Water plays a vital role in shaping our built environment. This book explores the historical relationship between water and architecture – or “aquatecture”. How has this relationship changed over time, and how will new

reputation eadership

atu

methods revolutionise the way we think about water, design and urban planning?

Using international case studies to bring these new theories to life, practical and technical advice is presented alongside

ground-breaking ideas for the future.

For example, solutions such as amphibious housing, wet-proof buildings, zero-carbon development, rain gardens, flood storage and new methods of waterfront design are discussed and their effectiveness assessed.

RIBA Publishing, $54 Q4 2015_MODUS A SI A

12:19

MODUS_Asia_Q4.15_P06-15_Intel.indd 15

15

12/10/2015 11:17

Disputes

FIGHT CLUB Asia is the worst region in the world when it comes to construction disputes.

Why? And how can we set it straight?

Words Alex Frew McMillan Illustrations Neil Webb

T

he figures are damning.

The average cost of a construction dispute in Asia last year was to $85.6m – more than double the rate in 2013 – according to Arcadis’ 2015 Global Construction Disputes report. The typical spat drags on for just over a year. The cost is more than twice that in North America and Europe. Only the Middle East, averaging $76.7m, comes close.

The report is revealing, since only small disputes tend to make their way into public courts.

Serious claims almost always end up in arbitration, which is not only binding, but also confidential. Neither client nor contractor wins business by being litigious.

The simplest explanation as to why disputes are bigger in Asia is that the projects are bigger. Many regions are still developing, which requires m a s s ive i nve s t m e n t i n infrastructure. These “mega projects” often run to $1bn or more, and are incredibly complex.

The leading cause of disputes, the report suggests, is a failure to administer the contract properly.

Mike Allen FRICS, global leader of contract solutions at Arcadis, suggests this is often the fault of both employer and contractor. It can be the simplest of things that snowballs: failing to notify the other party of a delay within the timeframe in the contract, and failing to then approve it, which results in further delays.

For Kenneth Kwan FRICS, managing director of Rider Levett Bucknall in Hong Kong, there are four chief causes of dispute: prolongation or delay; design variations; disruption; and acceleration.

Acceleration is a particular issue in China, Kwan notes, where the economy occasionally overheats. Heavy demand for contractors and labour also increases the likelihood of lapses in quality control. “In China, Hong Kong and Macau, the programme is usually very tight, and everyone is in a rush,” he says.“The communication is not thorough enough. So there is a higher chance of not making the best use of resources.”

At the root of all disputes are two issues: time and money.

Changes made during a project o f te n h ave u n i n te n d e d consequences. So it is important to write a contract that allows for adaptation. The more work spent on getting the details right up front, the less likely a problem, dispute-resolution experts say.

Unfortunately, Asia may have some of the most sophisticated projects – and most antiquated ways of going about them.

“Generalisations are always dangerous – but in Asia, there is a real focus on cost rather than value,” posits Nick Townsend MRICS, managing director of Turner & Townsend in northeast Asia. “Accepting the lowest cost leads us down a rather confrontational route.” »

纷争场 亚洲是全球建筑纠纷问题最严重的地 区，原因是什么？怎样解决这个问题？ 撰文 Alex Frew McMillan 插图 Neil Webb

以

下数字 提供 确凿 证 据 。凯 迪 思 发 表 的“ 2015 年全球建筑 纠纷”报告显示，去年亚洲每宗 建筑纠纷的平均成本为8560万 美元，是2013年的两倍多，也是 北美和欧洲的两倍多，只有中 东的平均每宗7670万美元较为 接近。 报告反映了事实真相，原因是 只有小型纠纷会倾向于通过法 庭解决。严重的索赔最终几乎 都通过仲裁解决，而仲裁结果 不但具有约束力，而且需要保 密。打官司会令客户和承包商 都成为输家。 亚洲的纠纷之所以较大型，最 简单的解释是工程规模较大。 很多地区仍处于发展中阶段， 需要进行重大的基建投资。这 些特大型工程的投资额通常达 10亿美元以上，而且颇为复杂。 报告指出，出现纠纷主要是因 为未能妥当管理合同。现职凯 迪思合同解决方案全球领袖的 Mike Allen FRICS指出，这通常 是因为雇主和承包商双方的过 失造成。简单的问题可以像滚

雪球般发展：沒有合同时限内 就延误通知对方，接下来又未 能尽快同意作出延误，从而导 致进一步的延误。 香港利比董事总经理关健 FRICS认为，产生纠纷的四大主 要成因包括：工程延期或延误； 设 计 变 更 工 程中 断；以 及 赶 工。 关先生指出，在经济不时过热 的中国，加快工程进度的情形 尤其严重。对承包商及劳动力 的强大需求也增加质量控制不 彰的可能。他说： “中国、香港 及澳门的工程时间通常都非常 紧凑，每个人都在赶进度，彼此 的沟通并不充分，所以资源无 法充分利用。” 所 有纠 纷 无非围 绕 着两个问 题：时间和金钱。在工程进行 期间作出改动通常会造成意想 不到的后果，因此有必要订立 容许作出改动的合同。纠纷处 理专家指出，在前期花费越多 精力去厘清细节，就越不容易 出现问题。不幸的是，亚洲虽 拥有最复杂的工程，却也采用 最过时的方式管理工程。»

16 RIC S A SI A .ORG

MODUS_Asia_Q4.15_P16-19_Conflict_v4.indd 16

12/10/2015 11:22

Disputes

MODUS_Asia_Q4.15_P16-19_Conflict_v4.indd 17

Q4 2015_MODUS A SI A 17

12/10/2015 11:23

Disputes

T

here also exists in Asia an ingrained adversarial culture between client and contractor, each one trying to get the most out of the other.

The exception to the rule is Japan, where contractors and clients have exceptionally long and deep relationships, and claims are very rare. Clients and contractors in Britain, North America and Australasia are also now starting to approach projects as partnerships.

There is an “intransigence in partnering” in Asia, suggests Townsend. It is uncommon to involve a contractor early in the relationship. But construction professionals advise bringing the contractor in on architectural plans, engineering, procurement as early as possible.

Many Asian companies are more hierarchical and family run than their western counterparts.

“Generally, the most senior person in any organisation makes the decisions,” says Townsend.“Without devolution of decision-making and contract assurance, you have a bottleneck.”

This problem can be mitigated by appointing independent and capable project managers. Kwan says that, through active management, 90% of disputes can be resolved on the ground between project teams.

In a surprising number of disputes, there is disagreement about what actually happened, let alone how it should be resolved. Memories fade. People change jobs. And no one can figure out quite what went wrong, or why.

“It’s not uncommon to have a situation where all of the

personnel have left the project, so you have a dispute about the records rather than the issue,” says Allen. It is vital to keep track, in writing, of all decisions made on the fly. “I have never really found a project that has too many records.”

When an issue does come up, it is tempting to avoid it. “That issue doesn’t go away,” Allen says. “It will come back. And when it comes back, typically the parties have lost control of the situation.”

O ne other reason that construction disputes end up being large and nasty in Asia is that projects are still typically awarded on a lump-sum basis.

This may work for smaller

Clients ask me: ‘What is the maximum amount for claims that I can put in the contract?’

That will give me a headache

ll

ll

HUMPHREY CHEUNG FRICS Humphrey & Associates

18

特纳唐逊公司东北亚董事总经 理Nick Townsend MRICS指 出， “泛化操作常常是危险的， 但在亚洲，业界往往注重成本 多于价值。选择最低成本通常 会令我们易于出现纷争。”

亚

洲的客户和承包商之 间也存在着根深蒂固 的对立 文化，彼 此 都 想方设 法 从 对 方身上占 得 便 宜。日本的情况则例外，其承包 商及客户之间拥有非常长期而 深厚的关系，索赔情况十分罕 见。英国、北美洲及澳大拉西 亚的客户和承包商现在也开始 以合 作 伙伴 的形式争取 工程 项目。 Townsend指出，亚洲存在着一 种“不妥协的伙伴关系”，在合 作关系的早期让承包商参与的 情况并不常见。但建造业专业 人士建议应尽早让承包商参与 建筑计划、工程及采购。 与西方企业相比，很多亚洲公 司的等级观念都较为严重，而 且 很 多 属 于 家 族 式 企 “通常，这 业。Townsend表示， 些企业的决策都是由最高层负 责制定。若不下放决策权及提 供合同保证，你就很容易遇到 瓶颈问题。”

聘用独立及能干的项目经理可 减轻这个问题。关先生表示， 通过积极管理，90%纠纷可在 项目团队之间得到解决。 然而，不少紛爭中，双方在事发 情况方面会存在争议，更遑论 如何解决。记忆会淡忘，员工会 转换工作，没人能指出哪里出 错，为什么出错。 Allen说： “所有项目成员都离开 项目的情形并非不罕见，因此 纠纷往往出现于记录方面，而 非问题本身。”在工程进行期间 以书面形式记录所有决策非常 重要。 “我从未见过任何工程是 因为记录过多而出问题的。” 问题确实出现時，往往有人会 “问题 尝试逃避。Allen 表示： 并不会消失，它迟早会回来，但 到了那个时候，问题已經失控， 任谁都无法处理。” 亚 洲的建筑 纠纷 最 终尾大难 掉，另一个原因是工程通常是 按照总承包金额的方法批出。 这种方式过往曾在全球通行， 但现在已显得过时。这对于较 小型工程可能行得通，但对于 大型工程而言，这做法需要 具 备非凡的远见或运气才能订出 正确的价钱。 Allen说： “这无异于要求承包商 预先估计所有成本，并要承担很

RIC S A SI A .ORG

MODUS_Asia_Q4.15_P16-19_Conflict_v4.indd 18

12/10/2015 11:23

客户会问我： ‘我可以在合 同文件中列出的最大索赔额 是多少？’这会让我很头痛 张伟聪 FRICS Humphrey & Associates

一开始就确保合同严密能减少 产生纠纷的可能。英国在 1993 年推出“新工程合约”，并在香 港推行。这套合约提供如何处 理主要建筑问题的方法，包括： 成本超支、质量问题、索赔，以 及工程时限等。但Townsend表 示，在亚洲“很多客户对使用这 套合约显得很紧张。虽然它不 能处理所有建筑问题，但的确 是一套重要的工具。”

防

多风险。”某些业界往往会将多 項小型工程汇集成一个大型项 目，从而令情况变得更糟糕。 业界一种常见的做法是通过开 出低的价格来争取项目，但为合 同提供足够的空间来夸大索赔， 以便于讨价还价。经营律师事 务所Humphrey & Associates的 “客户会问 张伟聪 FRICS表示： 我： ‘我可以在合同文件中列出 的最大索赔额是多少？’。这会 让我很头痛。有些索赔沒有证 据支持。”所以他常常要花费精 力把客户带回现实。 以暂时性的合同决议方法解决 问题，可在小问题变成大问题 之前将其妥善解决，因此是一 种明智的做法。 “付款保障”概 念可确保承包商及顾问能准时 收到适当的付款，也勾画出了 解决纠纷的程序概要。 新加坡及马来西亚已率先引入 付款保障概念并为此立法。立 法为各种纠纷解决方法提供了 一个框架，包括裁决及争端审 议委员会的使用，以减少纠纷 的发生率和需时。香港政府多 个部门已采纳付款保障方案， 其目标是在 2017年全面应用于 所有公共工程及任何价值超过 500万港元（645,000美元）的私 人工程。

止冲突发生的另一个 方法是委任双方同意 的纠纷处理顾问，以 让其尝试解决问题，若未能成 功处理纠纷，可将问题逐步升 级到管理层，以及在所有方法 均不奏效时交付仲裁。这个过 程以快速为本，任何纠纷通常 都不宜持续超过三个月。 唯一可以肯定的是：只有律师 可从卷入正式索赔的纷争中获 益。审讯高等法院案件需要传 召专家证人，因此至少要18个 月才能解决。不过，法院提供了 固定的场所，并可强制证人出 庭。仲裁则需要各方（包括仲裁 员及所有专家证人）共同决定 一个仲裁的日期及地点，这可 能要花上一年多时间。虽然这 是在英国最受欢迎的解决纠纷 方式，但在亚洲，各方通常倾向 于友善地解决纠纷，只会在未 能解决时才诉诸仲裁。 表面看，亚洲在冲突管理的记 录方面做得很不到位。但从经 验中学习会带来革命性的合约 建造及纷争解决模式。毕竟那 些纷争是由於在全球最具活力 的亚洲大陆营商而产生的。正 “我们在从事全 如 Allen所说： 球最具挑战性的工程。” 1月8日假香港举办的RICS亚洲 建筑会议将探讨建筑成本飊升 议题。详情见第49页。

projects, but on largescale assignments, it requires incredible foresight, or luck, to get the pricing correct.

“You’re asking the contractor to take on a lot of risk by estimating all costs up front,” says Allen. To make matters worse, in some sectors it is standard practice to roll many small projects into largescale programmes of work.

A

common practice is to underbid to win a job but build enough room into a contract to exaggerate claims and negotiate them down. “Clients will ask me: ‘What is the maximum amount [for claims] that I can put in the contract document?’” says Humphrey Cheung FRICS, who runs the law firm Humphrey & Associates. “That will give me a headache. Some of the claims are not supported by the evidence.”

Part of his job is to get those clients to be more realistic.

It is also wise to settle on an interim method of contract resolution so that minor issues can be resolved before they become major problems. The “security of payment” concept ensures that contractors and consultants are paid correctly and on time. It also outlines the procedure for resolving disputes.

Singapore and Malaysia are at the forefront of introducing security of payment legislation.

It provides a framework for a variety of dispute-resolution methods, including adjudication and the use of dispute boards, which are reducing the incidence and duration of disputes. The Hong Kong government already adopts the security-of-payment approach in many of its departments. By 2017, it aims to be using it for all public works and any private project of more than HK$5m ($645,000).

Ensuring your contract is watertight in the first place should lessen the likelihood of disputes arising. The New Engineering Contract (NEC) was

introduced in the UK in 1993 and is also used in Hong Kong.

The suite of contracts address how to handle key construction issues: cost overruns, quality issues, claims, and timeframes.

In Asia, though, “many clients seem nervous about using it”, says Townsend. “It’s not a panacea for construction problems. But it is one of the tools in our armoury.”

Another method aimed at heading conflicts off at the pass involves appointing a mutually agreed dispute resolution adviser, who can attempt to resolve issues, escalate them to management if that does not succeed, and pass them into arbitration if all else fails. The process is designed to be speedy – typically, no dispute should take longer than three months.

One thing is for sure: only lawyers are likely to gain from becoming embroiled in a formal claim. High Court cases involving expert witnesses take at least 18 months to resolve. But at least a court provides a set location and can compel witnesses to appear.

Arbitration requires all parties, the arbitrator and all expert witnesses to settle on a date and a venue. This alone can take more than a year. While this is the most popular method of settling disputes in the UK, in Asia, parties generally attempt to solve disputes amicably and only proceed to arbitration if that is not successful.

Asia’s record on conflict management is, at face value, very poor. But learning from the experience could result in new approaches to dispute resolution and contract construction. Those disputes are, after all, the result of doing business in the most dynamic continent on earth. As Allen says:“We are constructing some of the most challenging projects in the world.” n RISING COSTS are on the agenda at the first Asia Construction Conference, in Hong Kong on 8 January 2016. Details on p49 Q4 2015_MODUS A SI A

MODUS_Asia_Q4.15_P16-19_Conflict_v4.indd 19

19

12/10/2015 11:23

Cover story

BY GEORGE! A concrete box flat in Barcelona (above and opposite) makes the most of its limited space by tucking appliances and furniture behind panels, and impressed architect and broadcaster George Clarke

20 RIC S A SI A .ORG

MODUS_Asia_Q4.15_P20-23_Too small.indd 20

12/10/2015 11:28

C

ool, tech savvy and fluent in the new foreign language of social media, the millennial generation has much to envy. But when it comes to buying a home of one’s own, especially in global cities, that appears to be where their luck runs out, with affordability becoming a problem for even the most skilled young professionals.

In this context, the emerging “microapartment”segment offers a real alternative.

Small units are being built in cities across the globe that are distinctly different from the cramped flats found in badly converted houses around London, or Hong Kong’s notorious metal cage homes. Specialist developers are creating centrally located, compact, well-designed homes that appeal to young people and, crucially, are affordable.

“If we don’t develop smaller units where space is critical, the population will be driven out into the suburbs or to other cheaper cities,” cautions Ben Derbyshire, managing partner at London-based architect HTA Design. “The economy of industrialised or post-industrialised countries now rests on the success of knowledge-based industries in our cities and this requires people to live and work in close proximity so they can share their knowledge and skills.”

As people flock to developed cities and the population continues to grow, land will inevitably become even more in short supply. To alleviate this crisis, the housing produced will therefore have to be efficiently designed and affordable, and this is where the emerging micro-home comes into play.

George Clarke HonRICS, architect, builder and broadcaster whose popular UK series Amazing Spaces was inspired by small-scale buildings, sees a huge amount of pressure on cities for space.

“I’ve seen many small spaces that have been designed by incredibly talented and inventive people,” says Clarke, who has travelled the world visiting micro-units, such as an imaginatively designed, multi-level flat in Paris that employed raised beds and dining areas. He was also impressed by a rooftop concrete box in Barcelona, the size of a hotel room, that could be reconfigured for different uses as required. These examples have taught him that building smaller spaces in a creative way is an approach that should be adopted.

In larger, high-cost US cities, such as New York, Boston, San Francisco, Seattle and Washington DC, there is a growing interest in micro-units. The American Urban Land Institute (ULI) published a report, The Macro View on Micro Units, last year that suggested micro-units appeal to city dwellers

Spiralling populations, skyhigh prices and a shortage of land demand a big idea in city living: the micro-apartment.

Amanda Birch reports

in high-cost markets who are willing to trade space for improved affordability and closer proximity to the city centre.

Although there is no standard definition of a micro-unit, the report defines it as a small studio apartment, typically less than 350 ft2 (32 m2), with a kitchen and bathroom.

However, the size can range from less than 250 ft2 to 500 ft2 (23-46 m2), depending on the city building code requirements. More than 400 rental apartment communities, comprising more than 90,000 units, built in 2012-13 in 35 US metropolitan areas were analysed as part of the research.

Stockton Williams, executive director of the Terwilliger Center for Housing at ULI, says the report highlighted a range of factors in the US underpinning the demand for smaller units. “At a macro level, American families and household sizes are getting smaller and particularly in our larger cities, more households consist of one person,”says

Williams.“More Americans are living alone and the emerging micro-units are a reflection, in part, of those demographic trends”.

Williams acknowledges that the other contributing factor is that many American cities have severe affordability problems, creating pressure to add to the supply of lower-cost housing. “This doesn’t mean, however, that micro-units are restricted to those on lower incomes,” he adds. “Microunits also represent a new product at the high end to the millennials [those born after 1980] that have a significant disposable income and are attracted to urban living.” »

MODUS_Asia_Q4.15_P20-23_Too small.indd 21

Q4 2015_MODUS A SI A 21

12/10/2015 11:28

Cover story

Figures from the UK Department for Communities and Local Government reveal that less than 20,000 homes were built in London in the 2013-14 financial year, while its population is growing by 52,000 households a year. And the average price paid by a first-time buyer in London was 8.8 times the average wage in 2014 – the highest level since records began in 1983 – according to building society Nationwide.

G

iven these startling statistics, it is no surprise that Pocket, a developer of compact apartments in central London, has a waiting list of 18,000 prospective buyers. As the name suggests, Pocket builds smaller than average units in central locations with good public transport infrastructure. The flats are sold at 20% below the prevailing market value to key workers who meet the necessary affordability criteria, and the discount is passed on to subsequent purchasers.

Russ Edwards, Pocket’s design director, emphasises that they are not building micro-homes. “Micro tends to refer to units that are below the appropriate space standards and often rely on gimmickry to work as a functioning home,” he argues.

“Our homes are compact and they fully comply with London’s space standards but, importantly, they rely on good design strategies to provide a fantastic home.”

The main Pocket product is a 410 ft2 (38 m2), one-bedroom unit with full-length windows, generous floor-to-ceiling heights and sensibly shaped rooms. Efficient design means that no space is wasted. To date, Pocket has completed seven schemes around London, and sold about 200 homes with a further 500 units in the pipeline.

“In London, only 1.7% of the entire housing stock is of intermediate tenure, where we feel the greatest demand is,” says Edwards. “There’s a huge squeeze in the middle who are poorly catered for and struggling to get home ownership. Our business is catering for that intermediate niche, and is targeted at first-time buyers, typically in their late 20s to late 30s.”

Alix Green MRICS, residential director in JLL’s affordable housing team, is working with Pocket and providing independent valuation advice to its funding partners, Lloyds Bank and the Greater London Authority. She can see why the Pocket model appeals to prospective, first-time buyers because the product is simple and affordable: “Pocket puts location at the top of the list. It’s very much a city product and, clearly, market values are driven by location and proximity to central London, to

IMAGES NARCHITECTS COURTESY MIR.NO

SHARING’S CARING My Micro NY in New York (below) and the Collective’s Old Oak in London (bottom) sacrifice floor space in units for shared facilities such as gyms, gardens, games rooms and bars

If nArchitects’ vision for its nearly complete My Micro NY project is realised, tenants on different income levels and of all ages will soon live there. The project is New York’s first micro-apartment complex and comprises 55 prefabricated modules. Each unit ranges from 260 ft2 to 360 ft2 (24-33 m2) and rents are $2,000-$3,000 a month.

My Micro NY will also provide community spaces, including a gym, studies and small gardens for tenants to share. This is a very similar concept to one embraced by the Collective, a London developer of a new form of private-rented, shared living accommodation aimed at young professionals. The Collective’s Old Oak development, still under construction, will provide gyms, bars, a games room, cinema and outdoor space for its tenants, who will live in studios of 160-215 ft2 (15-20 m2) .

The UK capital, where prices have risen 11% in the last year and the average cost per square metre of a city centre flat is £14,500 ($22,270), is also seeing a vogue for micro-housing.

“There’s more micro design happening in London now than there’s ever been,” says Clarke. “I think people have become fairly bored of very, very expensive standard apartments and are rethinking how they want to live.”

Clarke argues that the trend for smaller spaces in cities has started to influence how the British approach the appraisal of a flat.

Like continental Europeans, they are increasingly describing how many square metres a flat has, rather than the number of bedrooms. “If building costs are based on the amount of square metres, then that has to have an impact on the sales cost,” he adds, “so the smaller we make them, hopefully the more affordable they will be.”

22 RIC S A SI A .ORG

MODUS_Asia_Q4.15_P20-23_Too small.indd 22

12/10/2015 11:28

IMAGES EDGE DESIGN INSTITUTE LTD

IMAGES NARCHITECTS COURTESY MIR.NO

services and public transport hubs. It’s fair to say that unit size comes second to location with the Pocket product.”

Green is keen to point out that the Pocket units don’t feel cramped or too small.“There are some design features that have been very carefully thought through, which gives the feeling and illusion of space and this can make for a very efficient unit,” she says.

So do the Pocket flats live up to the hype?

Debra Stein thinks so. The 37-year-old project manager moved into Pocket’s W9 development in Westbourne Park in 2012.

She works for a financial services firm in nearby Paddington, and paid £200,000 for her one-bedroom unit. Stein “loves” her flat and considers herself “exceptionally lucky” to have noticed the email offering full ownership of a Pocket property.

“There are only 32 flats in our development and they went extremely early. If I hadn’t read that email, I don’t know what I would be doing today, probably still renting,” she says. “I was able to buy something, which meant I didn’t have to sacrifice price for distance. I would have greatly missed living in central London. Without solutions like this, no one’s going to get anything.

It’s quite frightening.”

Building micro-units may be a relatively new phenomenon in London, but in Hong Kong, often considered the birthplace of micro-living, it is a way of life. In a 426 square mile territory where around 7.2 million people jostle for space, Simon Smith MRICS, head of research and consultancy at Savills Hong Kong, has explored the trend for building “shoebox apartments” in Asia.

“The demand for shoebox apartments has risen over the past few years in Hong Kong as an increasing number of the younger generation and single-person households have shown an interest in the sector,” says Smith. “Traditionally, shoebox apartments are single-block apartments located in core locations such as Central, Wan Chai, Causeway Bay and Island East and attract mainly executives, lawyers, bankers and accountants. In non-core areas, the demand is mainly from first-time home buyers, young couples and single-end users.”

People have become bored of very expensive, standard units and are rethinking how they want to live

ll

ll

GEORGE CLARKE HonRICS Architect and broadcaster

SPACE INVENTORS A fluid approach to fixtures means this Hong Kong apartment (left) can be configured into 24 different rooms, while Pocket’s concept (below) sacrifices a little of the flexibility for floor space

S

mith says that the housing situation in Hong Kong is more buoyant than in Tokyo and Singapore. Developers in Hong Kong have completed some highquality apartments of between 250 ft2 and 350 ft2 (23-32 m2) in established residential clusters. For example, the area around Kowloon station features developments such as the Arch, Harbourside, the Waterfront, Sorrento and the Cullinan.

“More than half of the apartments in Hong Kong do not have a mortgage, and 52% of households own their home, of which 60% do not have a mortgage or a loan,” says Smith. “Mortgage-tightening measures, which favour small lump sums for properties, have meant that mortgage borrowers and lenders have changed their preference for shoebox units.”

Savills has noted that demand in microunits has developed in two ways. They are now included in large-scale developments, not just in single-block schemes, and they are now being built in many emerging new towns, such as Tseung Kwan O and Kai Tak, and not just in key business districts.

But is the rise of the micro-unit merely a symptom of urbanisation or actually a longterm cure? Will the novelty of living in a more compact space with fewer personal belongings lose its allure?

“As long as major US cities remain appealing to single households and, as long as these places remain relatively high cost, there will be interest in innovative ways to expand supply,” says Williams. “Whether

[micro-units] become a mainstream product mostly depends on the health of US urban real estate markets and whether any significant regulatory progress can happen at a local level. There are some fundamental barriers that have to be worked through before the micro-unit becomes a common housing type. For example, locally imposed minimum sizes and limitations on building density, which are common in US cities, can create obstacles to multi-family development in general and micro-units in particular.”

In the UK, experts argue that the market needs a lot more choice in terms of unit sizes, and the space standards are key to that process. Edwards says:“We’ve lost in the UK the ability to move through the property market, from bedsits, to one-beds, trade up to two-beds and then to a house in the suburbs. We are providing extra rungs in the ladder to fix that process and our view is that that’s true with a lot of Western cities.” n READ THE ULI REPORT, The Macro View on Micro Units, at bit.ly/uli_macromicro

MODUS_Asia_Q4.15_P20-23_Too small.indd 23

Q4 2015_MODUS A SI A 23

12/10/2015 11:28

BY 2025, 1.6 BILLION PEOPLE WILL BE LIVING IN HOMES THAT ARE UNFIT FOR PURPOSE

...but how can you build sufficient housing on such a large scale, while keeping it affordable? Kate Murray investigates how three countries are attempting to meet that challenge

24 RIC S A SI A .ORG

MODUS_Asia_Q4.15_P24-31_Housing.indd 24

12/10/2015 12:01

Affordable housing

CHINA ORDERS FROM THE TOP

T

he sheer scale of the efforts China has made to tackle its affordable housing shortage is what makes it remarkable.

Although a target of 36 million new social homes over five years might seem staggering, the People’s Republic is firmly on course to meet that goal.

The social housing drive, spurred on by the ambitious target embedded in the 12th Five-Year plan in 2011, marks a big shift away from the marketisation of recent decades. A desire to head off unrest from the urban poor, who had been increasingly priced out of ownership after public housing was sold off, was partly responsible for the change of direction. But so, too, was an integrated view of housing, economic growth and urbanisation which means that, for China, building new, affordable housing is part of a bigger strategy for the country’s future.

Firm direction from Beijing has been crucial, for although local government has been expected to deliver and manage the homes, there is a national commitment – and pressure – to build. As a report for RICS by the Centre for Housing Research at the University of St Andrews put it: “Strong, sustained public intervention is perhaps the most noticeable feature of China’s housing system … Policy, strong policy, matters in China.” Dr Albert Cao, a senior lecturer in the department of real estate and construction at Oxford Brookes University, says that, in reversing its withdrawal from housing provision, the Chinese government has succeeded in tackling what was becoming a huge political and social issue.

“When there’s a major shortage, the market mechanism is unlikely to deliver enough to meet social needs,” he says.“If you look at the UK [private sector] housing industry, it has never built sufficient housing that can meet the needs of this country.

From the 1950s to the 1970s, most new housing was built by councils. In China, the government made a decision to prioritise affordable and social housing. They set a very ambitious target but used the power of central government to push it through.” »

MODUS_Asia_Q4.15_P24-31_Housing.indd 25

Q4 2015_MODUS A SI A 25

12/10/2015 12:01

The general direction is clear – China wants to extend affordable housing to include all people

ll

ll

DR ALBERT CAO Oxford Brookes University

IMAGES URBANUS

xxxxxx

Although China’s housebuilding drive has done “tremendous good” for the urban poor, Cao says problems remain. Funding, manpower and construction capacity have all been there but, as his study of the Chinese affordable and social housing sector for RICS last year pointed out, the rush to build big has meant some homes are poorly located or suffer from management problems. But, he adds, the Chinese have managed to deliver while they can. “In 10 years’ time, they will have lost some of their capacity to deliver because wages will rise to the extent that it becomes expensive. They are making the best of a situation while labour costs are still low,” he says.“And it all links in to the overall economy. China produces half of the world’s steel, for example, and the housing sector is a big user of steel, so it’s been cleverly woven into a big system to boost economic growth.”

China’s next challenge is to balance the capacity it has already created with any anticipated future demand. Cao says the government is now looking at a further housebuilding programme, targeting rural migrants who do not have the same residency rights in cities and therefore have not benefited in the same way as the urban poor. “The general direction is very clear – they want to extend affordable and social housing to include all people,” says Cao. “There are more people to be housed, but the glut they have created could then become a shortage. Targeting the right people will be the key issue because, if you extend it to everyone, there are hundreds of millions of people who could potentially migrate.”

26 RIC S A SI A .ORG

MODUS_Asia_Q4.15_P24-31_Housing.indd 26

12/10/2015 12:01

IMAGES URBANUS

Affordable housing

SOCIAL SERVICE McIntyre Drive Social Housing, in the Melbourne suburb of Altona, was built for Victoria’s Department of Human Services and is a rare example of recent, affordable housing development in Australia

AUSTRALIA NEW TRANSFER POLICY

T

SHARED EARTH Tulou in the Chinese city of Guangzhou (opposite) is an affordable housing alternative to standard high-rise blocks, aimed at migrant workers and inspired by traditional earth houses in rural communities

he Great Australian Dream – a suburban home, a garden, perhaps even a pool – has for decades been a key part of the nation’s identity. But for many that dream has turned sour. Australia may be one of the world’s top 10 advanced countries, but it is a lowly 51st in the global Social Progress Index on the availability of affordable housing. Indeed, the International Monetary Fund records Australia as the third least affordable place in the world to buy a home. For those priced out of the market, soaring private rents and a lack of social housing are compounding the squeeze.

The problem is rising up the political agenda. A long-awaited report on affordable housing from the Australian senate’s economics references committee, published in May, called for a big increase in affordable housebuilding. And some states are responding. New South Wales has recently announced a A$1bn ($707.8m) fund for new affordable housing – although it is not yet clear how that commitment will be made up.

But in the absence of large-scale federal government investment, after funding for affordable housing development was scrapped last year, efforts are now being made to expand the community housing sector. Already a series of stock transfers have taken place, whereby public housing is handed over to community providers. In this way, housing experts hope, more not-forprofit providers will be able to develop the new homes the country needs, by borrowing against the property portfolios.

Last year in Tasmania, one-third of the state’s public housing was handed over to community providers. Australia’s largest ever stock transfer, in the Brisbane suburb of Logan, is expected to take place imminently, as part of plans to hand over 90% of Queensland’s public housing portfolio – or more than 50,000 homes – to the third sector by 2020. Australian providers could even take on stock internationally, some having expressed interest in plans to transfer public homes in Christchurch, New Zealand.

Transfers, according to the City Futures research centre at the University of New South Wales, are “increasingly seen by industry insiders as a crucial fix for »

MODUS_Asia_Q4.15_P24-31_Housing.indd 27

Q4 2015_MODUS A SI A 27

12/10/2015 12:01

RICS Recruit Matching the right talent to the right projects RICS Recruit is the UK’s No. 1 built environment job recruitment board. It gives you unparalleled access to the surveying and property sectors with almost 1,100 active vacancies in the UK and around the world.

• Graduate and Executive hub packed full of knowledge and guidance to support your career development.

• Get access to leading companies who are looking for RICS members like you who have the right skills and knowledge.

• Access RICS Recruit via your smartphone or tablet to search and apply for jobs.

Find your future job today

ricsrecruit.com

@ricsrecruit

RICS Recruit

ricsrecruit.com

28 RIC S A SI A .ORG

MODUS_Asia_Q4.15_P24-31_Housing.indd 28 20365 Recruit-MODUS Full Page ad-202x274mm.indd 1

12/10/2015 19/03/2015 14:42 14:08

Affordable housing

THEORY OF EVOLUTION Trilogy I in Saltwell is one of 19 sites being regenerated by the Evolution Gateshead partnership, with the aim of creating 2,400 homes – many of which will be affordable units – over a 20-year period

Australia’s rundown public housing”, enabling community providers to access additional funding to improve existing homes, as well as build new ones.

Professor Hal Pawson, associate director at the centre, says that even under current public spending settings, community housing providers will be developing in the next few years. “The promised A$1bn fund [in New South Wales] is anticipated as funding some modest expansion over the next few years. Any such development will be taking place alongside a modest amount of debt-funded, affordable housing construction already planned by community housing providers over the next few years as a quid pro quo for receiving title to 6,000 new government-built properties.”

If community housing providers are to be an increasingly important route for delivering new homes, there is certainly an appetite among lenders to get involved.

Westpac has already said it will make A$2bn ($1.4bn) available for social and affordable housing by 2017. The Australian bank sealed its biggest ever deal, worth A$61m ($43.2m), with New South Wales housing provider St George Community Housing last October to build homes across Sydney. Jon Ross, head of government and education at Westpac Institutional Bank, says the “landscape is now being reshaped” by the growing role of

community housing providers. The bank, he adds, is keen to strike more deals with the sector to build more affordable homes.

“Our strategy is focused on partnering with key industry stakeholders, including not-for-profit community housing providers, government and asset managers to develop these innovative solutions in a sustainable and replicable way,” Ross says.

UNITED KINGDOM PUBLIC-PRIVATE PARTNERS

W

hen Jonathan Dunk heads into work on the train every morning, he catches a glimpse of a relatively small building site that is part of a much bigger picture. For the 99-home scheme in the Bensham area of Gateshead, north-east England, is part of the first phase of a regeneration scheme which, its backers believe, offers an effective way of building high-quality new homes at a time of shrinking public investment.

The Gateshead Regeneration Partnership, comprising Gateshead Council, the housing association Home Group and housebuilder Galliford Try, plans to build 2,400 homes over 15 years across 19 sites. The £350m ($536.7m) programme will be rolled out in »

14:08

MODUS_Asia_Q4.15_P24-31_Housing.indd 29

Q4 2015_MODUS A SI A 29

12/10/2015 14:41

Affordable housing

phases, and sites batched together in an area where relatively low house prices and the costs of developing on brownfield land make projects difficult or even impossible to stack up. “We bundle sites together because, if some of these sites were left to the market, they would be unviable,” says Dunk, joint venture project manager at the council. “If we didn’t have this model, with the reduction in grant from government, it’s difficult to see how we would be able to do what we are doing.”

But what makes the model so special, Dunk explains, is that it brings all the partners together on an equal, profit-sharing basis. The council puts in the land, while the other two partners bring their development, commercial and housing management expertise. The result will be a series of mixedtenure schemes, to include homes for sale, for shared ownership and for affordable rent – and all built to the highest standards.

“It’s all going to be fantastic quality,” Dunk insists. “The big thing about this model is the influence we can have on what’s built, whereas in the past we had to rely on the planning system to get what we wanted.

We can specify that the homes should all be built to level 4 [of the UK sustainable homes code] and that they will all have good space standards. And we’ve also been able to get training, employment and apprenticeships opportunities included in the programme.”

Capital investment in housing in England was cut under the last government by almost two-thirds, and only 118,000 homes were built last year – fewer than half the number the country should be producing to meet its needs. So housing associations and local authorities are having to squeeze more from less, both through innovative partnerships as in Gateshead, or by building more homes

The big thing about this model is the influence we can have on what’s built.

In the past we had to rely on the planning system

ll

ll

JONATHAN DUNK Gateshead Council

for sale in higher-value areas to crosssubsidise affordable homes. “Housing associations have had to be much more innovative because of the reduction in grant,” says Henry Gregg, assistant director of campaigns at the National Housing Federation. “At the current level of funding, for every £1 in public investment, we invest about £6. Most comes from private lending, but the rest comes from cross-subsidy and increases in commercial activities.

There’s a real appetite out there – housing associations want to innovate and develop.”

In Gateshead, Dunk says other areas are showing interest in the Bensham model.

“This is all about the way the public sector makes best use of its land assets. It’s going to become increasingly important because the public sector is a significant land owner.

Gateshead is at the forefront of making sure we look at the overall value of the assets – that goes beyond just the capital receipt we could get from selling. We have a mechanism to build the homes we need.” n

SECOND TYNE LUCKY Gateshead will be hoping its latest effort to build low-cost housing meets with more success than its last: Skanska and Ikea’s BoKlok concept, which was hit by the credit crunch on its launch in 2007

C

M

Y

CM

MY

CY

CMY

K

READ THE RICS REPORT on China’s affordable social housing at rics.org/chinahousing.

For the latest from RICS on the sector, visit rics.org/affordablehousing

HOME ECONOMICS

How to build houses fit for purpose A decent, affordable home is a fundamental human right.

Yet, across the globe, more and more people are struggling with housing that is either unfit or simply out of their reach.

The McKinsey Global Institute estimates that, if current trends continue, by 2025, 1.6 billion people – or one in three of all urban dwellers – will either be in inadequate and unsafe housing, 30

or so financially stretched that they cannot afford other essentials such as healthcare.

Developing and advanced economies alike are having to think smarter to bridge this gap. Below are some of the key approaches they might take: Unlock land supply. Land costs can account for as much as 80% of housing prices. So freeing up more land, whether

by making surplus public land available for development, cracking down on land-banking, or improving land use through higher density levels, is an important way of getting more affordable homes built.

Build cheaper. The latest wave of prefab and modular homes and low-cost units, such as WorldHaus, can be built for less than $2,000 in 10 days.

Community-led approaches such as community land trusts, in which homes are kept affordable in perpetuity to help low-income households access good housing, are increasing in popularity.

New financial models to stretch investment, for example offering incentives such as tax credits to institutional investors, or public-private partnerships.

RIC S A SI A .ORG

MODUS_Asia_Q4.15_P24-31_Housing.indd 30

12/10/2015 12:03

C

M

Y

CM

MY

CY

CMY

K

MODUS_Asia_Q4.15_P24-31_Housing.indd 31

12/10/2015 12:04

HOME BUYERS REPORT

With the global population booming, and increasingly settling in urban areas, housing is becoming a planet-sized problem House price growth around the world in 2014 (%) Source: imf.org 0 Ukraine

Cyprus

-10 -8

Russia

-5.5

China Singapore Japan

-5

-4

-4.7

Italy

-3.8

Romania Vietnam

-3.3

France

0

0.3

0.5

1.1

Mexico

South Korea

Spain

Brazil

1.3

1.3

Hong Switzerland Kong

-1.5

-3.3

11,089

-20 -30 -40 -50 -48

World’s most expensive cities

7,225

Cost of a 120 m² apartment

Source: globalpropertyguide.com (2014 data)

6,431

Rent ($/month)

5,597

5,413

5,152

5,158

5,317

4,332

3,182

2,943

3,174

3,089 3,047 3,043 2,540

2,318

1,117

Latin America

32

81

110

Western Europe

59

Northeast Asia

Eastern Europe and central Asia

42

Africa and Middle East

51

37 South Asia

30

Rest of Asia-Pacific

48

Monaco 60,114

London 34,531

Hong Kong 22,814

New York 18,499

Paris 18,415

Moscow 16,021

Singapore 15,251

China region

Vienna 14,592

Tokyo 10,784

179

The gap between the total amount that people are able to spend on housing and what that housing actually costs is $640bn. Mitigating the problem would require providing some 440 million housing units, which could cost as much as $16tn. If current trends in urbanisation and income growth persist, by 2025 at least 1.6 billion people will be living in substandard housing or be financially stretched by housing costs.

DATA BRENDON HOOPER ILLUSTRATIONS LAURA CATTANEO

US and Canada

Geneva 13,529

Source: McKinsey Global Institute 2014

Mumbai 11,455

Global affordable housing gap ($bn)

Tel Aviv 10,166

Stockholm 9,439

Helsinki 8,390

Toronto 8,288

Rome 8,007

Luxembourg 7,654

Sydney 7,250

Taipei 7,112

Bermuda 7,056

Buying price ($/m²)

RIC S A SI A .ORG

MODUS_Asia_Q4.15_P32-33_Infog.indd 32

12/10/2015 12:42

Housing

33 30 20 10 2.2

1.7

2.9

3.6

4.2

4.7

South Africa

US

Denmark

Serbia

2.6

2.2

Czech Bulgaria Poland Germany Republic

Percentage of housing in urban areas classed as substandard

India

7.6

6.6

4.4

England

Pakistan (4)

Brazil (11)

Ireland

Qatar

The Confederation of British Industry believes Britain needs to build 240,000 houses a year to keep up with population growth, or around four homes for every 1,000 people. Only Northern Ireland is currently above this rate.

Northern Ireland

41

47

China (62)

Estonia

2.6

Wales

12

UAE

Scotland

Phillippines (4)

29

UK

Portugal Australia Colombia

Source: Office for National Statistics

Share of total urban households (%) Substandard housing units in urban areas (million)

Russia (5)

10.2

16

13.8

UK housebuilding rates per thousand people, 2012-2013

Source: McKinsey Global Institute 2014

(xx)

5.5

4.7

11.5

1.8

Nigeria (11)

27 63

62

Source: Office for National Statistics

India (28) Iran (4)

Bangladesh (6)

15

30

23

2

Average UK house price to earnings ratio

33

Scotland Wales England London Northern Ireland

In London, the number of households forced to move out of their boroughs to find affordable housing doubled between 2009 and 2013, from 5,389 to 10,832 (Bureau of Investigative Journalism)

Indonesia (7) 12.5

DATA BRENDON HOOPER ILLUSTRATIONS LAURA CATTANEO

In the EU, 5% of households live in overcrowded or substandard housing.

About 8% of Japanese households live in units that don’t meet acceptable standards. In the US, around 2% of the population lives in substandard housing.

10

7.5

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

Population residing in urban areas (%) Source: UN 2014 2010

35.4 30,8

38.3

2015

37.9

40.4

2025

42.9

2050

54.8 SubSaharan Africa

44.8

44.9 55.9 Africa

78.4

72.7

48.2

73.6

53.9 64.2

70.7

81.6

79.8

75.8

Asia

80.8

82.1

70.8 83.4

82.0

86.2

Europe

Latin America and Caribbean

71.1 87.4 North America

73.5 Oceania

Q4 2015_MODUS A SI A

MODUS_Asia_Q4.15_P32-33_Infog.indd 33

33

12/10/2015 12:42

Demographics

A global shortage of later-life housing is looming on the horizon.

Where is our rapidly ageing population going to live?

Words Roxane McMeeken Illustrations Ray Oranges

L

et’s face it, none of us are getting any younger. But more of us are living longer. Declining fertility rates and increasing longevity among the world’s developed and developing populations will lead to the number of people aged 65 and over mushrooming from 530.5 million in 2010, to 1.5 billion in 2050. So, you would expect there to be a global later-life housing building boom under way. In fact, there isn’t. Instead, a chronic lack of accommodation for older people is set to be the next great housing crisis. If we are to avoid it, we need a retirement home revolution.

“We are facing a global imbalance as the numbers of people of working age shrink while the numbers of those that have traditionally been their dependents grows,” warns David Sinclair, director of the UK branch of the International Longevity Centre (ILC) Global Alliance, which studies the impact of the ageing population worldwide.

The shift to a“greyer”population will be strongest in Asia and eastern and southern Europe. The Organisation for Economic Co-operation and Development predicts that, in these countries, the number of people aged 65 and over per 100 of those of a working age (15-64) – is set to more than double. The exception is China, where it will quadruple.

Even as the senior population grows, where and how they live is becoming less suitable. Monica Ferreira, former co-president of the ILC Global Alliance and honorary president of ILC South Africa, says:“In the developed world, affluent people tend to choose to live on their own.” This is creating a generation who do not have sufficient help from younger family members, and who are prone to loneliness.

In the developing world, Ferreira says: “The migration of younger people to cities or to more affluent countries, is also leaving the older generation living alone. Or they might »

34 RIC S A SI A .ORG

MODUS_Asia_Q4.15_P34-39_Timebomb_v3.indd 34

12/10/2015 13:55

Demographics

SEARCH FOR A SILVER LINING

MODUS_Asia_Q4.15_P34-39_Timebomb_v3.indd 35

Q4 2015_MODUS A SI A 35

12/10/2015 13:55

Demographics

In developing countries, policy for older people is usually nonexistent because governments are reluctant to commit to things that might be difficult to deliver ll

ll

MONICA FERREIRA International Longevity Centre Global Alliance

be left with the grandchildren and when they become unable to cope we see them‘follow-migrating’to co-locate with the parents. In Africa and Latin America, this scenario frequently means the multi-generational family can only afford to live in inadequate shacks on the city’s periphery.”

Some of the world’s most populous countries are among those in greatest need. In China, for example, where the speed and scale of the population’s ageing makes the need for later-life accommodation and care particularly acute, solutions are in their infancy. American Jim Biggs is managing director of Honghui Senior Housing Management Consulting Co, which has launched what it hopes will be the first of a chain of private care homes in Tianjin, China. He says: “In China, families were the traditional caregivers for the elderly. But the one-child policy has led to fewer working-age people to pay for the needs of their parents.

Other families might have more money but they’ve moved away from the grandparents in the village to work in cities.

There are some state-run care homes, but the range of choice that is needed, such as assisted living and retirement communities, are really only just starting to be developed.”

In India, the provision of options is similarly nascent.

A 2013 ILC Alliance report, Housing for Older People Globally: What are the best practices?, says: “India’s population aged 60+ is set to reach 315 million by 2050.

There is an abysmal lack, however, of political and societal will to address the challenges this trend will bring.”

Ferreira believes that governments should focus more on ageing: “In developing countries, policy for older people is usually nonexistent because governments are reluctant to commit to things that might be difficult to deliver. There are policies but they don’t always translate into great places to live. For example, a common tendency is to focus on safety – ensuring that there are fire alarms – rather than comfort.”

R

etirement developments also face financial challenges, not least struggling to attract residents.

Ben Hartley MRICS is director of Carterwood, a UK surveying firm specialising in social care. He says: “This is a tough market to sell to because people are more risk averse than the general population. For some, the idea of moving out of a family home where they have lived for decades is traumatic. This means that they can take a long time to decide to move. So a developer could take, say, two years to sell a scheme.” This long wait, in turn, deters investors.

The lack of provision for an ageing population has a knock-on impact on the rest of society. Although older

people are not necessarily better off in specially designed retirement housing, the dearth of this type of accommodation blocks many from moving out of larger family homes. This then prevents young families from moving into the space that they need. In the UK, for example, a 2013 report by thinktank Demos, called Top of the Ladder, found that onethird of people over 60 want to move to a smaller home.

Demos found that if only half of those keen to downsize did so, some 3.5 million homes would be made available.

John Slaughter, director of external affairs at the UK’s Home Builders Federation (HBF), adds:“Downsizing can also take the pressure off hospitals, because retirement housing has been proven repeatedly to improve the health and wellbeing of residents – many of whom are widows and widowers – by reducing loneliness.”

T

o establish a way forward we first need to understand what type of environments older people need and will enjoy living in. Later-life housing experts agree that while building more – and better – retirement homes is part of the answer, there are other models that should be in the mix. Several inspiring initiatives around the world demonstrate some of the best approaches.

Taking retirement homes first, the US has pioneered the idea of the private “continuing care retirement community” (CCRC). The model allows residents to move into villages of sometimes thousands of people from the age of 55 and stay for the rest of their lives. As and when they need, they can move from fully independent living, to receiving varying degrees of care in their own home, to moving to an on-site care home, either for the short or long term. The US has honed this model so that the communities feel more like resorts, replete with swimming pools and golf courses. The CCRC can also help reduce the trauma that older people experience when they are forced to move between several locations in the later years of life as their health deteriorates.

The model is gaining ground in developed countries. Some of the best examples can be found in Japan, where, according to the national Statistics Bureau, one in four people are aged 65 or over. David Collins, chief executive of senior housing consultant Active Living International, says:“Japan is dealing with older people really well. They have adopted the CCRC model widely, they build beautiful environments and they really think about how to make them work – for example, building them close to the rail network, which allows family to visit easily.”

However, Professor Duncan Maclennan HonRICS, director of the Centre for Housing Research at the University of St Andrews in Scotland, says: “Most people in the world can’t afford retirement communities, so we need to think about more economical alternatives.”

An intergenerational model being trialled in France offers an interesting alternative. Older people cohabit with a younger person, who benefits from lower rent in return for being contracted to provide a level of support, whether »

36 RIC S A SI A .ORG

MODUS_Asia_Q4.15_P34-39_Timebomb_v3.indd 36

12/10/2015 13:56

Demographics

MODUS_Asia_Q4.15_P34-39_Timebomb_v3.indd 37

Q4 2015_MODUS A SI A 37

12/10/2015 13:56

Demographics

that is cooking, cleaning, or even simply spending time with them. Ferreira says: “This is a low-cost approach that avoids older people living apart from the rest of the community, while ensuring they have security and help if they need it.”

Some seniors, however, need a specialist environment – particularly those with dementia, a condition that non-profit organisation Alzheimer’s Disease International says affects one in five of those over 80. Gradmann Haus in Stuttgart, Germany, is a great example of how to tailor accommodation for specific needs. It caters for medium to advanced dementia sufferers and accommodates the impulses that they tend to have. For example, protected green space responds to the commonly felt urge to wander and explore, while remaining in a safe environment. A cosy, homely area, meanwhile, meets the needs of those that seek to be close to others.

For many, the best option is to actually stay in their own home. Stephen Oxley FRICS, director of housing and care at Sweett Group, says: “The point is the care that is received, and that people have dignity, choice and independence. And there is a lot of evidence suggesting that people do best when they stay in a familiar environment and community.” The answer is, therefore, often for older people to stay in their own home, but adapt it – adding non-slip flooring and grab bars, for example – and provide care at home.

In Brazil, a series of initiatives sponsored by financial institutions show how what experts call “ageing in place” can be achieved in lower-income neighbourhoods, with apparently no cost to the taxpayer. The ILC cites a scheme in Rio de Janeiro and São Paulo, where porters in apartment buildings have been educated about issues that affect older residents, such as falls and building accessibility, and “empowered to engage with building owners” to persuade them to make improvements. At another, bank-sponsored pilot project in a favela in Rio, community members are trained and paid to provide care for vulnerable older people.

The point is that people have dignity, choice and independence … and evidence suggests that people do best in a familiar environment

ll

ll

STEPHEN OXLEY FRICS Sweett Group

The Brazilian schemes were prompted by the World Health Organization’s (WHO) “Age-friendly World” initiative to raise awareness of the need for cities to provide environments that support older people. Ken Bluestone, head of influencing and policy at charity Age International, believes the initiative is a good starting point: “The WHO is providing good guidance for city planners and communities on how to respond to ageing populations. The idea is to think about issues such as how much time are traffic lights giving people to cross roads, and do we have enough benches in public areas.” Although an encouraging 258 cities and neighbourhoods have committed to becoming“age friendly”, they represent just 28 countries, so there is still far to go.

RICS members are well placed to raise further awareness of the urgent need to respond to the rapid ageing of the world’s population. Oxley says:“Firms like ours work across housing, health and care sectors, so there is a real opportunity for surveyors to bring the relevant sides together to develop solutions.” Surveyors can then influence changes in built environments to better meet the needs of older people and champion the best solutions from around the world. n UNLOCKING THE SILVER-HAIR MARKET is the key theme of next year’s RICS Hong Kong Annual Conference. Go to p49 for details

B

CHINA MARKET

Q&A: Laurence Liauw, director, Spada Health Concepts WHAT IS THE SCALE OF THE CHALLENGE? China’s rapidly ageing population presents one of the biggest opportunities for socioeconomic transformation in the next 20 years. By 2025, there are forecast to be 360 million people over the age of 60, up from 140 million now. The government is projecting the seniors market for services and products to grow from RMB4tn ($628bn) in 2014 to RMB106tn ($17tn) by 2050.

Existing housing for seniors is desperately inadequate – particularly for a rising middle class population. Around 10 million nursing home beds are needed on top of the existing four million. Obstacles to increasing the quantity and quality of housing for seniors lie with the way in which properties have been licensed, developed, financed, constructed and operated, as well as cultural differences.

38

HOW IS THE SENIORS MARKET DEVELOPING? The government has been leading the way since 2013 by deregulating private-sector senior homes and allowing international elderly service providers to operate.

The traditional regulated model of segregating seniors into different types of care homes is gradually being challenged by integrated lifestyle-managed models.

These combine accommodation, healthcare, hospitality and aged care into “continuum of care” facilities, which encompass healthy ageing through to higher care needs.

Successful business and financial models have yet to be proven in China, but the potential of the commercial opportunity can be seen in Japan, a mature market worth $1.2tn a year. China is a growing market that diversified players are entering.

WHAT ARE THE OBSTACLES AHEAD? The biggest problems remain poor service standards and lack of integration between operations and property. Many wrongly think that buildings should come first, without operators and a sustainable business model.

Quality service operators are lacking and even greater is a shortage of trained staff – there are only 200,000 aged-care nurses.

These shortcomings provide opportunities for property owners, asset managers, service operators, management companies and age-care providers, as well as the insurance industry and financial services.

For now, if the government-supported private sector is to lead reform, then it may at first benefit only the mid- to high-end market, but hopefully that will eventually improve standards across the board.

RIC S A SI A .ORG

MODUS_Asia_Q4.15_P34-39_Timebomb_v3.indd 38

12/10/2015 13:56

Asia Construction Conference 2016 Building sustainable capacity: challenges & solutions

Friday, 8 January 2016 09:00-17:00

S RIC CPD

6

S RIC CPD

RICS CPD

The Ballroom, Level 7, Cordis (formerly Langham Place Hotel) , Hong Kong at Langham Place, Mongkok, Kowloon, Hong Kong

S RIC CPD

Book your place today rics.org/acc2016 +852 3759 4105

Over 200 leaders and representatives from the construction industry gather to discuss the roadmap for future development of construction in Asia.

Highlights include: Roots of issues, solutions and stabilising construction costs Solutions to lower carbon emissions The journey of BIM globally

The programme is subject to change and updates.

Q4 2015_MODUS A SI A Please visit event website for latest information.

MODUS_Asia_Q4.15_P34-39_Timebomb_v3.indd 39

39

12/10/2015 14:34

1

2

NEW DAWN IN VIETNAM

A relaxation of the laws governing foreign owners may transform the market. Alex Frew McMillan reports

Singapore style Landmark City, under construction in west Hanoi, promises “Singapore-style living” in nine, 40-storey apartment towers, with international schools and business centres (1) Pool with a view The Residences (2), a luxury development of 12 villas near the coastal resort of Nha Trang, will appeal to overseas investors looking for value. A similar property in Phuket or Bali would be triple the price

For a while, everything that could go wrong for Vietnam’s property market, did.

It has been a region to avoid for the better part of five years. A systemic problem within its banking system created a mountain of bad loans. This caused interest rates to skyrocket to 23% in 2012, taking mortgage costs with them and making bank finance unavailable.

Speculators shied away, and transactions ground to a halt. Developers, faced with massive oversupply, left projects partially built or simply walked away.

This is now the third year in a row that property professionals have claimed will be different. But they may have finally called it correctly, with clear demand demonstrated by a jump in transactions. A new property law that frees up investment by non-nationals also promises to spark the tinder.

The amended housing law allows overseas investors to buy up to 30% of any apartment building, and a maximum of 250 villas or townhouses in any one ward. Foreigners can also lease out their properties, something they were unable to do before, and get mortgages. The new law also grants non-natives an unlimited number of 50-year extensions, whereas before they were only entitled to a single lease of 50 years when they bought a property. To Tony Foster, a Hanoi-based lawyer with Freshfields Bruckhaus Deringer, that means ownership rights in Vietnam can be viewed as permanent.

The new law also enacts a number of changes for foreign-owned property companies that will make it much easier to build real estate in Vietnam. Singapore’s Keppel Land and CapitaLand have already made headway with in-country developments.

In terms of individual buyers, high-end condominiums in Hanoi and Ho Chi Minh City – formerly Saigon – should reap the benefits, as well as coastal resort properties, particularly around Da Nang, Hoi An and Nha Trang.

40 RIC S A SI A .ORG

MODUS_Asia_Q4.15_P40-41_Briefing.indd 40

12/10/2015 14:00

OECD* countries

24 DAYS

Other Europe & Central Asia

27 DAYS

Middle East & North America

33 DAYS

Sub-Saharan Africa

59 DAYS

Latin America & Caribbean

65 DAYS

East Asia & Pacific

South Asia

81 DAYS

99 DAYS Briefing

MALL OF SAIGON Singaporean developer€40.3 Keppel Land is scheduled to complete phase two of the Saigon Centre in Ho Chi Minh City – comprising Denmark a seven-floor shopping mall, €21.3 office space, and more than 200 serviced apartments – later this year Spain

BY NUMBERS TALE OF TWO CITIES The number of residential units launched dropped off a cliff in 2012, when interest rates hit 23%, but the expected change to rules on overseas investment has prompted a rebound, particularly at the high end of the market

IMAGE NBBJ INFOGRAPHIC IAN DUTNALL

Source: CBRE

Borrowing costs have come down from 20% two years ago to around 9%. The economy is also rallying. HSBC predicts growth of around 6% this year and next, an improvement over the previous three years. €37.4that everything Not is€31.4 smooth sailing. There was a spate €34.6 €29.8 €28.3 of anti-Chinese rioting last year after China installed an oil €22.3 rig in a part of the South China Sea claimed by both nations.

Tension continues to simmer over the Spratly Islands, which €24.6 likely contain oil and gas reserves. So although Chinese developers are increasingly influential around Asia, they have not launched any kind of product in Vietnam.

France Germany Ireland Sweden Italy average UK Korean and Japanese companies, however, areEUrapidly stepping presence€13.1 – particularly retailers, thanks to €15.6 up their €14.6 €8.4 €7.3 a rule change made in January that allows overseas companies €3.8 to set up wholly owned retail and wholesale subsidiaries.

Vietnam has the lowest level of foreign-brand penetration in the world at just 1%, says CBRE, the same rate of participation as Iran, Kazakhstan and Oman.

Slovenia Portugal Poland Hungary Bulgaria South Greece Korean conglomerate Lotte has opened five supermarkets since late 2014, taking its total in Vietnam to 15. It plans to have 60 across the country by 2020. It is also building a $2bn “Eco Smart City” outside Ho Chi Minh.

25,000 22,500 20,000 17,500 15,000 12,500 10,000 7,500 5,000 2,500

Luxury High-end Mid-end Affordable

Ho Chi Minh Hanoi 2010

Ho Chi Minh Hanoi 2011

It is likely that local expatriates will form the first wave of buyers. But Savills’ Vietnam office reports a jump in enquiries from overseas, particularly Hong Kong and Singapore. “You get a lot more bang for your buck than you do elsewhere in the region,”explains Matthew Powell MRICS, director of Savills in Hanoi.

He is promoting 40 villas in the Point at Danang Beach Resort of 3,000 ft2 (280 m2), each with three bedrooms, a small garden and pool. They cost $250,000 and will yield around 5% if placed in the hotel’s rental pool. A category above, the Residences at Mia Nha Trang sit on lots of 13,000 ft2 (1,200 m2), with direct beach access for each five-bedroom home. The units cost around $1.5m and would sell for triple that amount in Phuket or Bali.

The new law is due to come into effect this month.

Although the government is committed to freeing up the market, the devil will be in the details, Powell suggests.

“Sometimes in Vietnam it’s better to wait and see how things are implemented.” He believes the rule change will be pretty straightforward for the property that foreigners are likely to buy, but it is not clear how the intricacies will work out.

During Vietnam’s extended crisis, there were more than two years during which banks essentially refused to lend to property projects. Most of the VND90tn ($4bn) pile of nonperforming loans that the government bought while bailing banks out originated in the property industry. But financial institutions are demonstrating a change of heart.

Ho Chi Minh Hanoi 2012

Ho Chi Minh Hanoi 2013

Japanese mall operator Aeon entered the market in 2014 with two malls in Ho Chi Minh’s suburbs. If all the plans come to fruition, Vietnam’s pool of supermarkets will increase by 40% in the next few years.

Such retailers are looking to attract a growing middle class.

Only around 25% of Vietnamese shoppers visit “modern” stores as opposed to traditional markets – half the rate of Thailand and Malaysia, and well below the two-thirds of shoppers in China. However, they need to pitch their product carefully, and squarely at needs-based consumption.

High-end retail space is overbuilt in Vietnam, according to the 2015 Asian edition of the Urban Land Institute’s report, Emerging Trends in Real Estate.

The biggest opportunity lies in mid-market residential real estate, the ULI predicts, since demand continues to grow.

As the country’s manufacturing sector grows, industrial and warehouse space is also a good bet, the institute adds. n

REFERENCE POINT REPORTS AND RESOURCES New land laws Overview from law firm Freshfields Bruckhaus Deringer bit.ly/vietnamlandlaws The amended housing law Spotlight from Savills bit.ly/amendedhousinglaw Hotel Intelligence Vietnam JLL overview on hotspots for overseas visitors bit.ly/hotelintelligence

Ho Chi Minh and Hanoi residential and offices Research from Savills bit.ly/savillsvietnam_resi; bit.ly/savillsvietnam_offices CBRE Vietnam MarketView Q1 2015 Covering the main markets of Ho Chi Minh City and Hanoi bit.ly/cbrevietnam_q12015

MODUS_Asia_Q4.15_P40-41_Briefing.indd 41

Ho Chi Minh Hanoi 2014

Q4 2015_MODUS A SI A 41

12/10/2015 14:02

APPLIANCE OF SCIENCE The third phase of the Hong Kong Science Park is a lean, green, awardwinning facility that makes the most of natural ventilation and light.

Alex Frew McMillan reports

Client Hong Kong Science and Technology Parks Corporation Project manager Mace Group Quantity surveyor Rider Levett Bucknall Sustainability consultant Cundall Architect Simon Kwan & Associates

THREE’S A CHARM The HK$4.5bn ($580.6m) phase three comprises more than 1.1m ft2 (105,000 m2) of offices, laboratories, mixed-use space and associated infrastructure

Constructing the frontrunner for the greenest office building in Hong Kong was never going to be easy. But it was necessary.

The first two phases of Hong Kong Science Park allocated much of their area to open space, for a campus environment. But that space is “hard landscaping”, stone, glass and concrete, and since construction it has become clear that such features attract and trap heat, only to reflect it back into the environment. Greater air-conditioning use and higher power bills ensue.

Science Park 3 instead gives 40% of the project over to green landscaping, much of it watered with recaptured and recycled run-off from the buildings. Temperatures of the buildings and, with an airier environment, their inhabitants, are lower as a result.

“I’m proud of it,”says Michael Yam, design director at Simon Kwan & Associates and one of the main architects on the project.

“There are a lot of sustainable buildings in Hong Kong, but they are only small scale.

This is on a commercial scale.”

42 RIC S A SI A .ORG

MODUS_Asia_Q4.15_P42-43_CaseFile.indd 42

12/10/2015 14:03

Case file

GREEN MACHINE The park last year won Hong Kong Green Building Council’s Grand Award and this year it scooped the Sustainability prize at the RICS Hong Kong Annual Awards

OPEN AND SHUT CASE Windows can be set to let in fresh and dry air in Hong Kong’s rainless autumn and winter, and stay closed during the rainy spring and steamy summer

BREATH OF FRESH AIR The orientation of the buildings was rotated to allow the cooling sea breeze to blow through, eliminating the heat island effects created in previous phases

Stephen Wong, senior project manager at Mace Group, the executive project manager on the scheme, says those involved in the construction knew the eyes of the industry would be on them. It was also important to target BEAM Plus and LEED Platinum environmental standards and heed them at each step – the green features must be“built in, not bolt on”, as its project profile states.

The development is one of the largest showcases of sustainable construction practice in Hong Kong, adds Wong. During construction, the crew deployed wastereduction methods such as reusing timber, recycling materials where possible, and even using waste water to wash the wheels of the vehicles on site. The building materials were sourced as locally as possible in a city that has extremely limited natural resources.

Ironically, although the scheme earns its eco-friendly wings, it did not happen naturally. Hong Kong ranks behind only Switzerland and Denmark as the most expensive place in the world to build, and

costs soared between the planning of stage three and its construction. The masterplan stipulated a design that, as prices rose, needed to be tweaked significantly to work.

One offsetting measure to contain those costs was a rethink of the car park. Instead of piling expensive and labour-intensive foundations, the design shifted to a raft foundation that was dropped into place with the car park on top. The innovation saved around HK$35m ($4.5m).

The main building also needed to perform more efficiently. Using a flat-slab floor construction, which removes the need for supporting beams, meant ceiling heights could be maximised. This innovation cut costs and allowed a vital extra storey to be built, creating another 14,000 ft2 (1,300 m2).

There were other lessons learned from the first two phases of the park. They both face the Tolo Harbour seafront and this solid edifice blocked the cooling winds blowing in off the South China Sea and produced a heat island. The solution was to twist the third

phase by 45°, away from the ocean to allow in the breeze. This has another advantage – it turns the west side of the building, which is clad with a curtain wall, into the direction of the searing afternoon summer sun. The long frontage to the south and north, which draw cooler morning and midday sun, are extended to maximise natural daylight.

These heat-deflecting systems meet a very practical need as subtropical Hong Kong heats up. Based on calculations by Professor Gabriel Lau at the Chinese University of Hong Kong – a lead author on the Nobel Prize-winning report from the Intergovernmental Panel on Climate Change – the number of heatwave days per year is due to quintuple from 17 to 96 by the second half of the century.

Yam believes the project itself is climate science in action. “The weather is getting warmer here. We all need to contribute to reduce carbon emissions,” he says. “This is the direction Hong Kong should be moving towards in building design.” n

MODUS_Asia_Q4.15_P42-43_CaseFile.indd 43

Q4 2015_MODUS A SI A 43

12/10/2015 14:03

Careers / Business / Legal / Training

Foundations CAREERS Social media platform LinkedIn is a powerful tool, but users must never forget it is a public forum and always remain professional

QUICK WINS

LinkedIn is one of the few work-based social networks that has enough critical mass to be really useful.

But, like all social media platforms, it is constantly evolving, and it has taken time for users to really understand its potential.

For professionals and businesses, LinkedIn is a highly efficient means of creating and maintaining relationships, accessing information and ensuring you remain visible in a competitive sector.

There are LinkedIn basics that all should undertake, such as ensuring your profile is complete, that it displays a professional picture and that new contacts are regularly added. But professionals and regular users suggest going further. Su Butcher runs Just Practising, a social media consultancy for the construction industry. She says one of the big mistakes people make is to think of LinkedIn as an online CV when, in fact, one of its most useful aspects is the way it allows users to write recommendations for one another. “You can invite people to recommend you and then choose which ones to display on your profile. If you have worked on a well-known building, others will be able to see who you have worked with and who you are associated with – in construction that’s really important. LinkedIn is a visualisation of a referral network, that’s the core of why it is such a useful tool.”

Tim Garratt FRICS, managing director of Nottinghambased property consultant Innes England, uses LinkedIn to network, blog, find information and vet prospective staff.

He agrees that the platform is great for recommendations and referrals, but he is also much more engaged. “I get an

01 The more you engage on LinkedIn, the more you can communicate about your personality and knowledge.

02 This doesn’t have to mean writing long blog posts – you can simply curate interesting stories that relate to your work, or engage in relevant discussions.

03 Shout about your victories. “If you want to advertise an award you have been nominated for, you can publish this information instantly,” says recruiter Lisa Townsend.

04 The RICS LinkedIn group is an ideal place to meet other surveyors and discuss issues facing the profession. Visit rics.org/linkedin.

44

email telling me who has viewed my profile.

Sometimes I will call them and see if there’s anything we can do or if they’d like to meet for a coffee.”

LinkedIn can also be tethered to other social media, as well as users’ blogs. The Buffer app, for instance, enables you to tweet and share on LinkedIn simultaneously.

Garratt is a regular blogger and has linked his blog to his LinkedIn profile. He cautions that, while social media requires users to express their personalities, they should remember it’s a public forum. “People want to know what you’re like as a person. It’s important for it to reflect your views,” he says. “However, I am still surprised by what some people post. People really nailed their political colours to the mast during the [recent UK general] election campaign and made some quite aggressive comments.

Clients do look at your profile, it is public, and once you’ve said it, it’s out there.”

The public nature of LinkedIn is both a blessing and a curse, and users need to develop a little savviness around it.

Nicholas Katz FRICS is founder of Splittable, an app designed to help flatmates share and manage bills. He uses LinkedIn both openly and clandestinely, depending on his objectives. “I do check people’s profiles out on purpose when I want them to know I looked. If you want to check out a competitor and keep it secret, log out and use an incognito browser,” he suggests.

Finally, LinkedIn users would do well to regularly update their details and add points of interest whenever possible. Recruiter Lisa Townsend, of Lisa Townsend Associates, says: “People should always be prepared to sell themselves online and LinkedIn is a quick way to reach a large audience.”

NEXT EDITION: NEGOTIATING TERMS For further careers advice, go to rics.org/careers, and for the latest jobs, see ricsrecruit.com

ILLUSTRATION TOMI UM, GIACOMO BAGNARA PORTRAIT MORGAN OMMER WORDS JON CARD

THINK BEFORE YOU LINK

RIC S A SI A .ORG

MODUS_Asia_Q4.15_P44-49_Foundations_v2.indd 44

12/10/2015 14:20

ILLUSTRATION TOMI UM, GIACOMO BAGNARA PORTRAIT MORGAN OMMER WORDS JON CARD

Foundations

BUSINESS BRIEFS

MANAGE YOUR CASHFLOW Know at all times your exact cash/bank position If you don’t know what you have available in the business, it’s hard to make fully informed decisions.

The importance of liquidity cannot be underestimated Ensure that the finance function can always provide you with an accurate position at any moment.

Always know who owes you and be firm in your terms Businesses must be able to collect cash from customers within the terms they set, and collect this proactively.

A bad paying customer is not usually worth having Don’t be tempted to trade with businesses who repeatedly fail to meet their payment commitments.

Deal with queries from customers promptly They won’t usually pay anything if there are any matters to be resolved on an invoice, no matter how trivial.

Don’t pay suppliers in an ad-hoc manner This means the business’ outgoings can be controlled and planned.

Stage monthly salary payments at a different date to supplier payment runs.

Keep your bank informed Any unexpected changes in cashflow expectations must be reported.

MY WAY

Neil MacGregor FRICS MANAGING DIRECTOR, SAVILLS VIETNAM

Neil Sevitt is partner and specialist in middle market services at Baker Tilly. bakertilly.com

Growing up in Edinburgh, I was surrounded by some of the most inspiring architecture in the world. I’m pretty sure it was this that drew me to working with physical assets rather than simply being tied to a desk. Back then, it was not so common for people to travel long distances for work, and starting my career in London was exciting enough!

I graduated from Aberdeen University in 1997 with a degree in land economy, and became a chartered surveyor in May 2000 after completing DTZ’s graduate programme in London. I joined the firm’s international investment team, and it was perhaps this move that initially stirred my interest in working in real estate elsewhere in the world.

A huge turning point for me came in 2001, when I decided to join Chesterton in Vietnam. It raised many eyebrows in London,

where the country was more associated with its wartime past. But Vietnam has made incredible progress, and by the time Savills bought Chesterton in 2007, the market was starting to boom on the back of annual GDP growth averaging around 7.5%.

Following a government decree that was issued last December, Vietnam is taking a big step by opening up its residential market to foreign buyers, which could make the country one of the most attractive investment destinations in the region.

I oversee Savills’ 1,000-strong team in Vietnam, as well as the other emerging Asian markets of Cambodia, Laos and Myanmar.

After a slow start, membership is now starting to rapidly increase in Vietnam. As the market matures, I think RICS is playing an important role in ensuring greater professionalism here. The government has also been very open to listening to expertise from elsewhere in the world.

For those looking to enter a market that is full of great potential, Vietnam is ideal, but there are many challenges. You’ve got to be ready for a certain amount of culture shock. rics.org/neilmacgregor

“For those looking to enter a market that is full of great potential, Vietnam is ideal, but there are many challenges. You’ve got to be ready for a certain amount of culture shock” Q4 2015_MODUS A SI A

MODUS_Asia_Q4.15_P44-49_Foundations_v2.indd 45

45

12/10/2015 14:20

SERVANT OF TWO MASTERS

Managing conflicts of interest is a fundamental ethical challenge for the surveying profession, and one that arises on a daily basis for firms large and small. But some firms still do not have appropriate processes in place, reveals Eve Salomon, former Chair of RICS’ Regulatory Board. “It’s one of the first things that our members should think about when they’re tendering, or given an instruction,” she says.

“When we inspect members’ files for routine monitoring, we can find they are not doing proper mitigation.”

Conflicts of interest may take many forms. They can be professional, whereby a surveyor or practice is approached to act on a transaction on which they have already been engaged by another party, or asked to provide a valuation as security for a loan from a bank when they already have a fee-earning relationship with the borrower. They could be personal – a friend might work for a contractor on a tender list – or the surveyor might have a financial interest in the transaction. Patrick Crowther MRICS, managing director of Crowther Overton-Hart in Sussex, UK, was once asked to survey a house he was considering buying himself.

“That was an open-and-shut case, you just say ‘no way’.”

The problem with conflicts of interest cuts to the heart of what it means to be a chartered surveyor, says Salomon.

“Acting where there’s a conflict puts pressure on the core principles of the profession: to act impartially and in the client’s best interests. If the two are competing, you can’t give a client a dedicated, impartial service.”

It is no longer enough to act in an ethical manner – surveyors must be seen to do so NEXT EDITION: CYBER SECURITY and to be able to prove it. “People expect professionals and public figures to be ARE YOUR SYSTEMS up to scratch or cleaner than clean. Standards of probity a hacker’s playground? To take part have always been there, but now they can in future business advice columns, be measured and assessed more readily by email editor@ricsmodus.com

LET’S BE CLEAR If a potential conflict does surface, complete transparency is essential. But even if all parties agree that the surveyor should still take the job, they should still think carefully, warns Salomon. “Even when it’s properly managed, the perception that there’s a conflict of interest can stick – to the surveyor and to the transaction.

If the press gets hold of it, it not only raises questions over the integrity of that firm, but about the profession as a whole.”

Ethical walls are commonly used to avoid a conflict of interest, particularly within medium and larger firms, by making a clear separation between conflicted teams.

However, impregnable barriers can be hard to enforce, no matter how robust your firm’s policy is, especially in the era of integrated data management and communication. This means a barrier policy may not always be sufficient to remove the conflict, especially where major commercial interests exist.

Professionals are expected to be able to use their own judgement on ethical issues.

However, clients’ own internal policies are becoming much stricter and increasingly

WORDS KATIE PUCKETT ILLUSTRATION GIACOMO BAGNARA

BUSINESS Steering clear of conflicts of interest will stop you from becoming a …

anybody,” Salomon adds. In response, RICS is undertaking a review of its guidelines to protect members and the public interest – conflicts of interest account for a very small number of the complaints RICS receives, but Salomon expects this to increase as awareness grows.

Not all conflicts are immediately obvious. Crowther Overton-Hart routinely carries out a database check for any link to previous jobs as part of the quotation process, and each quotation is signed off by one of the firm’s two directors. Identifying conflicts among its 10 staff is a case of keeping an ear to the ground.“The key is to have the right policy in place but not rely solely on that,” says Crowther. “It’s about having a clear focus on what’s happening day to day, without spying on everyone.”

The larger the organisation, the more conflicts may arise – and the greater the importance of a quality database and robust processes, says Eric Forgie FRICS, senior director at Bilfinger GVA. Large firms with multiple departments and offices will send company-wide emails with details of new instructions: “No single party is going to know everything, so you have to go groupwide, inviting anyone to say whether they or the firm has acted for these parties in any form within the last five or 10 years.”

46 RIC S A SI A .ORG

MODUS_Asia_Q4.15_P44-49_Foundations_v2.indd 46

12/10/2015 14:20

WORDS KATIE PUCKETT ILLUSTRATION GIACOMO BAGNARA

Foundations

LEGAL 101

preclude any conflict, says John O’Neill FRICS, a partner in the valuation and advisory team at Cushman & Wakefield, who often discovers his agency colleagues are already involved in a project. “Banks in particular are subject to a lot more restrictions now, so you’ve got to have it all on the table from day one. If there’s any doubt at all, it’s better to walk away.”

“People expect professionals to be cleaner than clean. Standards of probity have always been there, but now they can be measured and assessed more readily by anyone” EVE SALOMON RICS Regulatory Board Any failure to deal with conflicts will be followed up through RICS’ disciplinary processes and taken very seriously, warns Salomon. “There are regulatory ramifications, but there could also be professional indemnity ramifications, legal ramifications and ultimately reputational ramifications. That’s four different things that can hit you if you get it wrong.”

Given the potential repercussions, acting with a material conflict of interest is not worth even the most lavish fee – and turning it down may be the best investment you ever make. As Crowther points out: “I don’t think it does any harm for a client to know that you’re protecting their interests ahead of your own.”

FOR MORE INFORMATION about handling conflicts of interest, visit rics.org/ethics.

RICS is preparing further conflicts guidance, and updates will be published on rics.org.

HOW TO DEAL WITH CONFLICTS OF INTEREST n Client consent is not

enough: even if both parties agree for you to represent them, consider whether they are able to understand and manage a potential conflict.

It is your job to determine if there is a conflict and, if so, decline the instruction. n Write everything down.

Keep a clear audit trail of conflict checks and written correspondence. Make sure to document phone calls as well. n All professionals should have a defined process. Set

up a database at an early stage to save you trawling through old paperwork as your workload multiplies. n Apply the “tabloid test”.

If the situation was reported in the press, could you mount a convincing defence?

Getting the best of British CHRIS HARVEY partner and head of real estate investment, Mayer Brown International

The UK is an attractive investment destination for Asian investors. It offers a clear legal framework and certainty of title. But there are still quirks to the market. Here are the top five matters Asian investors should consider.

Get approval At present, there are no inbound restrictions on Asian investors buying commercial real estate in the UK. On the other hand, outbound investment from Asia may be subject to regulatory approvals. These can take time, so it is important to plan in advance.

Act fast Competition to invest in UK real estate has led to challenging transaction timetables.

Investors must be prepared to meet these time limits by: n forming the investment structure to hold the real estate investment in the UK n calculating the total transaction costs, including any tax payable, such as value-added tax (VAT) n making sure that funding is in place n completing all compliance and identity verification with professional advisers n transferring a 10% deposit for exchange of contracts, and the balance of the price on completion.

Understand the process To ensure a deal is executed quickly and efficiently, it is crucial that the investor understands the UK legal system and transaction

process. This is more complicated if purchasing an ownership structure rather than direct real estate – the investor takes on all of the assets of the entity, as well as current and historic liabilities. This requires more extensive due diligence.

Build your team The UK market is tricky to access as a first-time Asian investor, so an experienced buying team is imperative. Investors should use advisers with Asian-language capabilities and offices in Asia, who can offer an understanding of both markets. The market is very competitive, especially for prime properties. Some vendors prefer to sell to a well-known name because they see that as less risky.

An experienced buying team provides better access to certain opportunities.

Cover all your costs It is important to consider the acquisition costs payable on the purchase. These include: n Land Registry fees, for the registration of a transfer of the property n building surveyor’s fees, to establish the condition of the property n agent’s fees, to identify suitable on- or off-market opportunities and negotiate the transaction n legal fees – each party usually bears its own costs n valuation fees, payable in relation to the valuation of the property n bank fees (including the bank’s legal fees – unlike some Asian countries, the bank and the borrower will use separate law firms) n tax, which may include both Stamp Duty Land Tax and VAT.

MODUS_Asia_Q4.15_P44-49_Foundations_v2.indd 47

Q4 2015_MODUS A SI A 47

12/10/2015 14:20

traditionally managed their property on a day-to-day basis, instead of seeing it as a strategic resource that needs to be deployed to its best effect. Strategic public-sector property asset management helps us look at the asset base as a whole and its contribution to the objectives of the organisation.

BRAIN GAIN

IN THE PUBLIC INTEREST Public sector property asset management follows more or less the same techniques as corporate real estate asset management, except that the emphasis is on social benefits within reasonable or budgeted costs, rather than profit.

BRENT CONTROL Brent Civic Centre in London brings under one roof services that were spread across 14 buildings

The UK’s public sector asset base, to use as an example, is worth around £380bn.

Successive governments have looked at the portfolio and come to the conclusion that it needs to be managed much more strategically to get the most out of what is being used. But that’s not to say every public sector organisation, or property practitioner, is managing public property badly.

Chartered surveyors generally receive very good training around core disciplines, but this training can fall short when it comes to strategically managing a property portfolio for their public client’s or employer’s business. Most public-sector bodies have

Public sector debt remains high, so every pound that is tied into property in its value or running costs needs to be used wisely. But when we think strategically, it allows us to ask: could some money be released to pay off local authority debt, or reinvested in the portfolio, or used to build something new that would give better returns?

With improved training, surveyors would be more able to strategically plan an asset base on behalf of an organisation.

They would gain techniques to assess the social and financial benefits and costs, and be better equipped to help a public body recognise the need for joinedup management and decision-making on its assets.

APP LAUDED

Pic2Paper It is: An iPhone or iPad app that helps surveying professionals add photos and captions to customised reports or presentations.

It does: The app is a quick and effective tool for adding captions to site photos, and presenting the images within a customised PDF 48

report. It’s ideal for reporting on construction site progress, recording notes when buying and selling houses, property or mechanical inspections, or environmental monitoring.

Once you have taken a photo, you can add captions in the form of notes or doodles, then select a template to generate your PDF report and share it with clients or colleagues. The report also

rics.org/shop

Ferry and Brandon’s Cost Planning of Buildings New edition of the classic quantity surveying textbook.

Updated to reflect recent changes in the industry, especially in procurement. $60

RICS Building Maintenance Price Book 2015 Essential for the professional who wants to avoid undercharging or over-paying for maintenance work. $222

Remember, property asset management is an organisational issue, not a department issue. The chartered surveyor or asset manager is the facilitator, but at the end of the day, it has to be thought about on a corporate- or organisation-wide scale.

KEITH JONES FRICS is director at Performent Consulting. performent.co.uk

RICS books

Managing Health and Safety in Construction Provides guidance on the legal requirements for CDM 2015 $23

time-stamps the photos, to verify when they were taken.

What else can it do? Report layouts can be created in portrait and landscape, and shared via email or Bluetooth. An upgrade option allows you to embed your company logo in the PDF report.

Price: $1.99 (in-app purchases also available) Search: Pic2Paper at the Apple App Store.

RIC S A SI A .ORG

MODUS_Asia_Q4.15_P44-49_Foundations_v2.indd 48

12/10/2015 14:21

Foundations

EVENTS

BOOK RICS EVENTS ONLINE ricsasia.org For inquiries, call +852 2537 7117

BUSINESS BRIEFS

ILLUSTRATION TOMI UM

BUILDING AND PROTECTING YOUR BRAND Select a distinctive name Check company names, the government trademark register, and carry out a Google search to try to avoid names and logos that are already in use by others.

Secure a copyright If you engage someone to design your brand, make sure they assign copyright in it to you.

Protect your mark Make sure you apply for a registered trademark.

This gives you a monopoly right in the mark for the goods and services for which it is registered.

Distinguish yourself from your competitors Don’t forget to actively police your brand – ensure it is always used consistently and that no one copies it or uses something close to it for similar services.

Be social media savvy Consider using the brand as part of the naming for employee social media accounts, but think about encouraging employees to follow a particular format or code of conduct in using the account to be consistent with your brand. Also, it is easier to secure the removal of offending posts on social media websites if you have a registered trademark.

Jill Bainbridge is a partner at Blake Morgan. blakemorgan.co.uk

HONG KONG

››MIPIM Asia 2015 1-2 December RICS representatives will speak at MIPIM Asia this year, an event that gathers 900 top-level property leaders. We will host a session on the latest trend and delopment in the real estate industry and have a glance into the future. We will also join a panel to discuss the Asia REIT market. mipim-asia.com ››Business of IP Asia Forum 2015 3-4 December RICS will feature in a breakout session on intellectual property (IP) transactions at this annual event. Speakers representing IP valuers, accountants, lawyers and dealers will discuss key elements in building a successful IP business and how to carry out IP transactions effectively. bipasiaforum.com

MALAYSIA

RICS Asia Valuation Conference 2016 January 2016, Kuala Lumpur This annual flagship valuation event will return to Malaysia in 2016. The full-day conference will gather top industry leaders to gear valuers up for the future. Delegates will explore trends lying ahead of the industry; the challenges and risks associated with increased global capital flow; intangible asset valuation; and opportunities for practitioners in Asia-Pacific region.

RICS AWARDS HONG KONG, PRESENTATION CEREMONY AND ANNUAL DINNER 2016

Grand Hyatt Hong Kong, 11 March 2016

››RICS Asia Construction Conference 8 January 2016 Industry leaders discuss the roadmap for Asia’s future development at the first ever RICS Asia Construction Conference. Today’s construction industry faces complex challenges. Construction costs are unstable. Carbon emission continues to be an issue. BIM looks to become a new standard, but is uncharted territory for many.

This conference will examine these topics closely, and provide delegates with insights to overcome these challenges in their professional life. rics.org/acc2016 ››RICS Hong Kong Annual Conference 2016 20 May 2016 According to population projections from the Government of the Hong Kong Special Administrative Region, by 204,1 around one in three Hong Kong residents will be an elderly person, up from one in seven in 2013, leading to reduced GDP and shrinking workforce. Drawing references from Asia-Pacific countries, the RICS Hong Kong Annual Conference will explore the challenges and opportunities presented by this increasingly ageing population, with a focus on master planning in the city to cope with the changes in needs; sustainable business models for an emerging silver-hair market; and the creation of a workforce to support it. rics.org/hk2016

For the fifth year running, the RICS Awards Hong Kong celebrates excellence, professionalism, achievement and overall contribution of projects, teams and development to our built environment.

The awards are open to everyone working within the property profession. A presentation ceremony will be held at the RICS Hong Kong Annual Dinner. ricshkawards.com

MODUS_Asia_Q4.15_P44-49_Foundations_v2.indd 49

Q4 2015_MODUS A SI A 49

12/10/2015 14:21

Mind map

HOW SHOULD HOTELS BE ADAPTING TO THE FUTURE? Rohit Talwar futurist speaker and CEO, Fast Future Research, London

Many hotel brands are struggling to respond to a world in which everyone wants choice and flexibility.

There are huge amounts of furniture in hotel rooms that no one uses. Why shouldn’t guests choose exactly what goes in their room? The increasing personalisation of services could become a major cost for hotels.

We can expect experimentation.

I think we’ll see new players who will employ very innovative designs, such as moveable, customisable walls to vary the size of the room according to the guest’s desire.

The internet of things will tell hotel operators a huge amount. Sensors will provide data on what furniture is being used, whether a kettle has been used, and what items need replacing.

ILLUSTRATION GIANMARCO MAGNANI

For instance, we’re in a time now when guests may want to choose if they have a TV screen in their room or not, because they might already be bringing one with them in the form of a tablet.

50

RIC S A SI A .ORG

MODUS_Asia_Q4.15_P50_Mind map.indd 50

12/10/2015 14:23

IP Valuation: Quantifying and Leveraging the Value of IP Saturday, 5 December 2015 09:00-18:00

RICS CPD

7

S RIC CPD

Intellectual Property Department Room 2501, 25/F Wu Chung House S RIC CPD 213 Queen's Road East Wanchai, Hong Kong S RIC CPD

The Masterclass aims to provide delegates with: ．A working knowledge of how to estimate the value of technology, brands and artistic works. ．An understanding of how to apply a value-based approach to IP strategy to reveal new opportunities and pathways to maximize returns on innovation.

Supported by

The programme is subject to change and updates.

Please visit event website for lastest information.

MODUS_Asia_Q4.15_P51_IP Training.indd 51

12/10/2015 14:49

MODUS_Asia_Q4.15_P52_Knight frank ad.indd 52

12/10/2015 14:26