MODUS Asia Edition Q4.13

MODUS Q4.13 // RICSASIA.ORG/MODUSASIA

Q4.13 // BLOCK PARTY The pros and cons of modular construction p26 GROWING UP How do the five BRICS nations compare? p30 RAIL TALK MTRC’s network expansion plans in Hong Kong p34

THE CHINA ISSUE

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THE CHINA MACHINE INSIDE THE WORLD’S FASTEST-GROWING MAJOR ECONOMY, PAGE 14

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Contents

N O 11 Q4.13 //

CHINA’S RISE Following changes in its leadership, China is seeing significant progress in the growth of its domestic economy. Along with the development of Qianhai as a financial centre and the approval of the Shanghai free trade zone, this highlights the acceleration in China’s financial structures. In order to grow the domestic market, the leadership is also introducing strong measures to eliminate corruption: RICS is at the forefront of promoting professional ethics and is ideally placed to provide leadership in this area with its ever-increasing membership in China. Through the adoption of the ethical behaviour and best practices that RICS promotes, professionals can gain the skills necessary for the development of the land and property institutions in China at a time when these structures are gaining in maturity and international reach.

ALAN CHILD FRICS EXECUTIVE CHAIRMAN, GREATER CHINA, KNIGHT FRANK; MEMBER, RICS ASIA REGIONAL WORLD BOARD

Regulars 05_FEEDBACK Your views on Modus and the surveying profession 06_INTELLIGENCE Global news, plus opinions, reviews and reactions 29_BUSINESS ADVICE How to make sure that your business can cope with a crisis

30_BRICS BY BRICS How China measures up against the other four major emerging national economies 34_GET ON TRACK We interview Tai Chong Chew, projects director of Hong Kong’s Mass Transit Railway Corporation, about the proposals for major infrastructure development over the next five to 15 years

44_LAW ADVICE Exploring the dispute resolution mechanisms available in Hong Kong’s construction industry

38_OUT OF THE BOX Innovative and creative uses for reclaimed shipping containers

Features

Information

14_HERE COMES CHINA Insights into what’s driving the world’s fastest-growing economy, and what could eventually slow it down

45_RICS NEWS News and updates, plus a message from the RICS President

26_MODULAR CONSTRUCTION New prefabrication methods that are speeding up construction and changing the way buildings are designed and specified

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48_EVENTS The latest updates and events 50_THE MEASURE Mapping the world’s top container trade routes

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Feedback //

JOIN THE DEBATE

:REACTIONS AND RESPONSES FROM PREVIOUS ISSUES Do you have an editorial comment about this issue of Modus Asia edition? Email editor@ricsmodus.com.

SAVING FACE In response to Eric Carter’s letter in the previous issue (page 5), and his belief that the UK should ‘set an example to the world’ and adopt a green energy strategy based on the belief that CO2 is altering our climate, I have to disagree. The issue isn’t whether carbon production is changing the climate – and I admit to scepticism – but whether or not the UK should cripple itself with costly ‘green’ legislation, and give even more money to a foreign-owned, barely regulated, utility cartel in the hope that it will produce cheap energy in the long term. In the meantime, while we wait for this wonderful new world that our politicians promise, we will have to dress like impoverished pensioners, wearing all our clothes at the same time with our feet in double slippers. The only example that sets to the rest of the world is of a laughing stock.

Not one major power has gone green, as our government proposes to do. What’s more, carbon-credit trading is dead in the US and dying everywhere else, except in Europe, where governments have been seriously debating whether or not to create a carbon credits market because the private sector isn’t interested. You couldn’t make it up.

I don’t object to low carbon per se, but not if all it does is provide a lucrative source of income for consultancies and foreign windmill manufacturers. I don’t advocate that we should all burn low-grade coal in our fireplaces, but we must be realistic. We are

almost flatlining as a service economy, with bigger debts than almost any other developed country. If we are naive enough to believe that we can start to rebalance the UK economy, and begin to regrow our industries, we need to get real about using the cheapest energy we can source in order to compete with the US, the Far East, India and China. So, when it comes to setting examples, let’s not set one in self-destruction.

Ian Gaynor MRICS, Nottingham, UK MODERN PITCHES In response to the request in the global May issue for other innovations in sport, an important area of change right now is the attitude to synthetic turf in football and rugby. The recent developments in artificial turf technology have meant that the new surfaces play in an identical fashion to high-quality grass pitches. There are no additional injury problems, and the 3G (third generation) synthetic turf pitches allow play in most weather conditions, which is ideal for smaller clubs and those where the weather can adversely affect matches, impacting revenues. The pitch can be used around the clock for club matches and renting out. There is no mud and the bounce and roll are true, promoting better quality play.

My club, Maidstone United, has recently developed the first purpose-built 3G-turf stadium in England, with a 2,500 capacity.

It has been a great success, selling out on several occasions and enabling the whole community to get involved intimately with the club because the pitch is available to all.

The only problem in England is that the football authorities have yet to show the foresight needed to allow this new turf at professional levels of the football pyramid.

In many other countries – such as Scotland, Holland, Spain and Russia – synthetic turf pitches are allowed at most levels, including the professional game. FIFA, UEFA and the FA all approve of the 3G-turf technology.

International matches are played on such turf, as are Champions League matches –

Construction waste //

SURVEYORS HAVE A POWERFUL OPPORTUNITY TO HELP CUT PROJECT COSTS BY REUSING, RECYCLING AND REDUCING CONSTRUCTION WASTE, ARGUES KATIE PUCKETT

WAR ON WASTE

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ince March 2012, Marks & Spencer hasn’t sent any waste from its construction projects to landfill at all. The retailer set a target to eliminate waste to landfill in 2007, as part of its Plan A sustainability strategy, and it has been working with its supply chain ever since to find ways to reuse and recycle surplus materials, old fit-out components, packaging and excavated soil.

On its Cheshire Oaks store, completed last August and its greenest to date, 1,168 tonnes of construction waste was diverted from landfill, with pallets, cable drums and glulam beams finding new homes in the local community.

Sheets of plywood were used to build a local scout hut, hoardings became bee hotels and two trees were donated to Chester Zoo as scratching posts for the lions. But the project still produced 1,168 tonnes of waste in the first place – which is where Plan A’s head of property Munish Datta is looking next, and he wants surveyors to help him: ‘My role is to get designers, cost consultants, constructors and project managers thinking right at the very start. So much more can be achieved by thinking differently and challenging specifications. Measurement is one of the key things. As soon as you put a monetary value on waste, it sharpens people’s minds and they realise that it’s money they’re throwing away, not plasterboard or timber.’

Great strides have been made across the construction industry on diverting waste from landfill over the past five years. In 2008, the government’s Waste & Resources Action Programme (WRAP) set a target of halving construction waste sent to landfill by 2012 in England, which more than 800 companies signed up to. Final figures will not be published until the end of this year, but a report by the Strategic Forum for Construction last July found that the amount of construction and demolition waste sent to landfill had dropped from 6.15m tonnes in 2008 to 4.28m tonnes by 2010, an improvement of almost 30%.

Some contractors went much further, and are now closing in on their own zero-waste-to-landfill targets.

Willmott Dixon, for example, diverts around 98%, as does Simons Group, which built the Cheshire Oaks store.

Meanwhile, attention has shifted to the wider issue of resource efficiency: preventing waste in the first place, and eliminating it at the design stage. The earlier waste is considered, the greater the potential for reduction – but waste that hasn’t been produced is much harder to measure.

This is where surveyors come in. As waste reduction develops in complexity, they are perfectly placed to quantify hypothetical waste, calculate the savings and translate it into hard cash to spur on the rest of the project team. ‘You can measure the diversion of waste from landfill very easily,’ says Gilli Hobbs, director of resource efficiency at the Building Research Establishment (BRE).‘You can measure the number of skips that were produced, you know where it’s going to, and you can establish how much was recycled or reused. With waste reduction, it’s more difficult because there isn’t that tangibility, and that’s where surveyors can play a really important role.’

BRE has been able to benchmark levels of waste production using data gathered by its online SMARTWaste tool, which is used by contractors to prepare site waste management plans. By analysing the performance of real projects, BRE has set targets for projects that are aiming for a BREEAM environmental rating. Under BREEAM 2011, projects can earn one credit if the waste produced >>

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and yet the Football League will not allow them. I think that this is a great shame.

Oliver Ash FRICS, France REFUSE THE REFUSE While it was encouraging to read the article about construction waste in the June issue (page 40), I was disappointed that there was not a focus on legal compliance with waste legislation. As a chartered environmental surveyor, I’ve worked in construction wasterelated matters for most of my career – and, in my opinion, it’s the complex legal requirements on waste management in the EU, and particularly in the UK, that is the major challenge in the industry.

Working with regulators at an early stage of projects is a skill that the industry needs to embrace. Our profession should look at the future of waste – especially whole-life project appraisals for the various legal options – rather than just seeing it as a cost-cutting exercise.

David Inman MRICS, Lancashire, UK

MODUS ONLINE Read the latest and all the previous issues of Modus Asia edition online 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’.

Due to the volume of correspondence we receive, we regret that we are unable to print all letters or respond to every one individually.

The MODUS team // FOR SUNDAY

Modus Asia edition is the official publication of the Royal

FOR RICS

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Institution of Chartered Surveyors in Asia: Room 3707-09,

Editorial board Jaclyn Dunstan and Mark Goodwin (UK)

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Hopewell Centre, 183 Queen’s Road East, Hong Kong

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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.

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Intelligence

Image Corbis

:NEWS :REVIEWS :OPINIONS :REACTIONS

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:PORT OF SHANGHAI SHANGHAI, CHINA In 2010, the the Port Port of of Shanghai Shanghaiovertook overtook Singapore to become the busiest container port in the world. world. Total Totalthroughput throughputinin2011 2011 was 31.74m TEUs TEUs (twenty-foot (twenty-footequivalent equivalent unit), compared to just 6.43m 10 years ago – an increase increase of of 394%.

394%. And Andevery everymonth, month, more than 2,000 2,000 ships shipsdepart departfrom fromits itsthree three main container container port port areas areas––Waigaoqiao Waigaoqiao (pictured), Wusongkou Wusongkou and andYangshan Yangshan–– at the mouth mouth of of the the Yangtze YangtzeRiver.

River.

Foreign trade trade has has led led China’s China’sdizzying dizzying economic growth growth over over the thepast pastthree three decades, and and accounts accountsfor foraround around30% 30%ofof GDP. China imports imports mainly mainlyraw rawmaterials materials and exports finished products – electronic goods, textiles textiles and and clothing clothing––around aroundthe the world. Around Around 17% 17% of of exports exportsare areshipped shippedtoto the US, although the global economic crisis has seen in a slowdown a slowdown inin demand demandfrom fromthis this other and and other key markets. key markets.

As a As result, a result, the new the new Five-Year Five-Year Plan Plan (2011-2015) (2011-2015) saw asaw marked a marked shift in focus shift inaway focus from away from exports, exports, as as policymakers seek expand domestic policymakers seek to to expand domestic demand in an an attempt attempt to torebalance rebalancethe the avoid the thekind kindof ofcatastrophic catastrophic economy and avoid crash Japan witnessed witnessed in in1989.

1989.So Sofar, far, however, the the country country has hasmade madeonly only marginal progress towards this goal.

01.11 // MODUS

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Intelligence //

Opinion

QS CONSULTANTS IN CHINA NEED TO BE A STEP AHEAD Iris Lee MRICS Rider Levett Bucknall (RLB)

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ne of the big concerns for the commercial property market in China is the lack of identity in shopping malls. With very similar tenants, irrespective of locations, shopping malls become localised as the shoppers are mainly residents or office workers in the vicinity, while others from further afield have no incentive to visit. Furthermore, the popularity of online shopping means that retail outlets can find it difficult to survive as people browse the shops, then go home to make their purchases online. Even supermarkets are facing pressure as customers tend to be the older generation who do not spend so much per visit, while the younger people with more spending power opt for online shopping. However, younger people are attracted to the game centres, high-quality restaurants and other recreational activities that shopping malls can offer.

These concerns have led to developers becoming far more cautious of construction costs than ever before and setting increasingly tighter budgets. The quantity surveying (QS) consultant, therefore, has to be continually abreast of new technologies, the latest materials and innovative design features that can be proposed as alternative solutions in shopping centre construction.

This is particularly true for façade materials, as many developers want to have an impressive shell for the shopping mall to attract both tenants and shoppers.

But shopping mall construction is just one area where, in a rapidly changing market, the QS consultant has to remain ahead of the game. As more and more seasoned Chinese developers go overseas to acquire land, the

Property

THE SUPER MALL Big enough to fit the Sydney Opera House 20 times over, Chengdu’s New Century Global Center contains hotels, shops, offices, cinemas, an ice-skating rink and its own beach resort

IRIS LEE is a director of RLB, stationed in Shanghai.

RESTRICTIONS FOR FOREIGN BUYERS ACROSS ASIA PACIFIC

Governments around Asia are increasingly using restrictions on foreign ownership of property to help ensure residential prices remain affordable to domestic citizens, according to Knight Frank. However, the firm notes, this is being delicately balanced with the need to make property attractive to foreign workers, who

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opportunities are increasing for QS consultants with international exposure to get involved. In these instances, they can assist in the smooth transition from the office in China to the office overseas – not only by helping with language barriers, but also by informing overseas colleagues of the customary practices and requirements of Chinese developers, and vice versa.

What’s more, as it becomes increasingly difficult for overseas developers to acquire land in China, consultants from overseas, including those from Hong Kong, will need to continue to adapt more to local practices. The future focus will be on Chinese developers, and one of the biggest differences between Chinese and overseas developers is that Chinese developers expect more from QS consultants than they may be used to doing. For example, they might be expected to undertake contract administration for design consultancy contracts, or to lead contractors’ prequalification processes. Now more than ever, the QS consultant will need to embrace these changes to their services in order to remain ahead in the market.

make important contributions to the economy. While countries such as Japan, South Korea and New Zealand have no restrictions against foreign ownership of property, other countries across Asia Pacific are using a range of restrictions for both resident and non-resident foreign buyers. For example, non-resident foreigners

are not permitted to buy property in Mainland China, but foreigners who have worked or studied in China for at least a year can buy a home for self-occupation. In Vietnam, meanwhile, the Ministry of Construction has proposed that foreigners residing in the country are given more chances to buy homes as part of efforts

to reduce inventories in the real estate sector. ‘Although there are still opportunities for crossborder acquisitions, the politically sensitive nature of foreign property ownership is likely to mitigate the chances of any wholesale changes in the near future,’ said Nicholas Holt, head of research at Knight Frank Asia Pacific.

rics.org ricsasia.org

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Commercial

UK LEADS ONLINE RETAIL MARKET

The UK is the world’s most developed online retail market, according to Cushman & Wakefield’s inaugural Global Perspective on Retail report.

The report examined online retailing in more than 100 countries focusing on 13 indicators, and placed the UK just ahead of the US due to its high volume of online sales per capita, large online market share and openness to new online business and social media. However, the US is still the largest online retail market, representing almost a third of global sales. The report also notes that the rise of mobile commerce could shift the balance of future retail power in favour of emerging markets where mobile penetration is higher. Download the report at bit.ly/CW_Retail.

Construction

DUBAI’S LATEST SUPERLATIVE

PREDICTED SKYSCRAPER GROWTH IN CHINA China US 802 533

470

2012

563

539

2017

2022

The Anderson Road development in East Kowloon

Source: MotianCity

1,318

The world’s tallest twisting tower has been unveiled in Dubai. Developed by Saudi Arabiabased Cayan Investment & Development, the 306m-high Cayan Tower (formerly the Infinity Tower) features an astonishing 90-degree shift of its floorplates between the base and top, designed by architects Skidmore, Owings and Merrill (SOM). To achieve the twist, and create the shape of a helix, each floor of the reinforced concrete tower is rotated by 1.2 degrees to achieve the full 90-degree spiral.

The project initially began in 2006, but was put on hold due to technical problems and the impact of the 2008 economic downturn.

More than 80% of the tower’s 490 residential units have already been sold.

:ONE BIG QUESTION CONSTRUCTION 2025: WHAT DOES IT MEAN TO YOU AND THE SURVEYING PROFESSION? London A simple thing would be to realise the potential of the industry data that we have.

That’s what we’re doing at Turner & Townsend, and it’s been very successful. Surveyors should be the ‘go to’ professionals for all evidencebased data to enable improved performance.

David Crewe MRICS, Turner & Townsend

Property

Image © Tim Griffith; Dan Sandoval

HONG KONG HOUSING SUPPLY EXPANDS Developers in Hong Kong completed around 7,000 new apartment units during the second quarter of 2013 – the highest quarterly figure since 2005, according to government data. The expansion in new apartment construction follows the government’s push to expand housing supply, as thousands of low-income residents continue to live in cramped, overcrowded apartments.

In the next three to four years, the government estimates around 70,000 new units will come on to the first-hand market. Furthermore, Credit Suisse expects property supply to expand significantly in the second half of 2013.

Chicago I believe that significant initial and life-cycle cost efficiencies will be achieved through more off-site and modular construction over the next decade, which will also save time, reduce costs, increase safety and maximise the power of Building Information Modelling.

Cassandra Francis FRICS, Kariatid

London Hopefully by 2025, BIM will have really taken off and we’ll have true 4D and 5D BIM. Improving the flow and quality of information will benefit facilities management and improve the accuracy of estimates to help deliver projects on time and, importantly, on budget.

Lukasz Rarowski (student member), Idess Retail Take part in discussions by joining the RICS group at linkedin.com.

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Intelligence //

Column

TABLES TURN FOR EMERGING MARKETS Simon Rubinsohn RICS Chief Economist

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he strong appeal of investing in emerging equity markets is pretty well established, with the sector delivering significant outperformance over developed markets through the course of most of the last decade. However, more recently there have been some signs that this trend is not just running out of steam, but could actually be going into reverse.

Construction

ON SALE: SINGAPORE’S BOLD NEW CONDOMINIUM

Apartments in the S$80m (£40m) Ardmore Residence are now being leased by Pontiac Land. Located in downtown Singapore, the 36-storey luxury residential building has been built using an innovative parametric design process. Web Structures, an international engineering consultancy, partnered with architectural practice UNStudio to develop an interlocking system of cantilevered sheer walls, stretched across the height of the tower, to produce its distinctive folding façade. The development involved a substantial amount of prefabrication work, before sections were constructed around its reinforced concrete core.

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In the first six and a half months of this year, while the MSCI World Index has risen by around 16%, the MSCI Emerging Markets Index has actually declined by 5%.

Moreover, this divergence in performance is just as marked in the area of property equity, with the MSCI World Real Estate Index climbing 7% over the same period as against a drop in the MSCI Emerging Real Estate Index of some 9%.

For the time being, the results we are receiving from members who contribute to the RICS Global Commercial Property Survey suggest that the appeal of physical real estate in much of the developing world is still proving rather more resilient. Even so, it’s noteworthy that over the past few quarters, there has been a shift in the RICS data rankings that’s consistent with the general feeling that some developed property markets are regaining popularity among investors at the expense of a number of emerging markets.

It’s also interesting that all of this has coincided with a small but perceptible change in macro fundamentals. Most emerging economies are still on course to comfortably beat the developed world when it comes to growth over the next couple of years, but the gap between the two blocs is clearly narrowing – the differential is now around 1% less than a month ago.

Ultimately, this may prove to be little more than a temporary pause within the longerterm secular trend favouring the emerging world, but even if that turns out to be the case, my suspicion is that it will be hard to replicate the returns this area generated during the ‘noughties’.

In the immediate future, it’s not simply country-specific issues that will hit emerging market performance – although China’s need to grapple with excessively rapid credit growth, and Brazil and India’s battles against inflation, will inevitably take their toll. However, a more fundamental contrast with the last decade will be the benefit reaped by emerging economies from the decline in real interest rates in the US during that time. This effectively contributed not just to lower financing costs, but also easier financial conditions in virtually all parts of the globe.

We are now moving into a new era. While the US Treasury market may have jumped the gun on the Federal Reserve calling time on the quantitative easing programme – following chairman Ben Bernanke’s talk of‘tapering’– the direction of travel over the next few years is clear. The process of ‘normalising’ monetary policy will start at some point, and that, if nothing else, will make it just that bit tougher for the emerging world to maintain its stellar growth.

App of the month

LEASA What is it? A smartphone- or tablet-based app for property professionals to help tenants choose space for lease and manage energy efficiency.

Who’s it aimed at?: The app and accompanying guidance will be particularly useful for valuers, facilities managers, and sustainability consultants to help choose space, and understand how to manage and improve energy efficiency in a tenancy. Developed by RICS Oceania, the app will initially launch in Australia.

Visit rics.org/leasa

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BOOKS

We like

TERMITE HOMES Why termites?

Researchers at Nottingham Trent University’s School of Architecture, Design and the Built Environment in the UK are investigating how termite mounds’ walls ‘breathe’. A termite mound has a unique structure that allows the exchange of stale and fresh air, while maintaining a comfortable temperature inside – the only known animal habitat that’s able to do this.

Can this be applied to buildings?

‘Current construction thinking is to super-insulate buildings, which saves energy but leads to the accumulation of stale and damp air inside,’ explains Dr Rupert Soar, an expert in sustainable technologies and biomimetrics at the university.

This three-year project will seek ways to create buildings with walls that breathe in the same way as termite mounds, reducing the need for energyhungry central heating or air-conditioning. Dr Soar will travel to India and Namibia to analyse termite mounds and digitally scan them to create models using 3D printing. ntu.ac.uk/adbe

RedEye’s industrial 3D printing factory

Property

3D PRINTING TO KICK-START PROPERTY MARKET 3D printing will transform certain parts of the manufacturing industry, increasing opportunities for real estate developers and investors, says a report by Jones Lang LaSalle (JLL). The report, The evolution of manufacturing, notes that, although it’s still developing, 3D printing has the long-term potential to radically change how and where manufacturing takes place, the types of facilities required, and the make-up of the workforce. ‘Instead of large factories, it will create demand for more smaller buildings, which companies would be more likely to lease than own. This will open up opportunities for developers and investors,’ said Jon Sleeman, director of EMEA Logistics & Industrial Research at JLL.

Construction

A NEW GREEN LANDMARK FOR SHANGHAI

Work is underway on a redevelopment of the 2010 Shanghai Expo site at the city’s former industrial dockyards. Designed by a collaboration of schmidt hammer lassen architects, the East China Architecture and Design Institute, and the Shanghai Expo Construction Development Company, the 50,000m2 Green Valley scheme will include a mix of sustainably built offices, retail units and social venues, with open green spaces weaved throughout the urban environment. ‘The project is designed so that, despite the monumental scale of the site, it relates to the human scale in the public spaces, giving a diverse, vibrant and inclusive community,’ said Chris Hardie, associate partner and head of schmidt hammer lassen architects’ Shanghai office.

This 31st edition of the price book contains a major works and a minor works volume, and is still the best pricing information available. rics.org/shop: 19652 £165.99

This new edition is essential for anyone advising landlords or tenants on the costs of complying with Schedules of Dilapidations. rics.org/shop: 19682 £202

This book describes the important lessons that architects and city planners can learn from temporary users.

ISBN: 978-3869222615 RRP £32

Through a range of case studies, this book explores the growing interest in temporary and pop-up uses for land and buildings.

ISBN: 978-0415670562 RRP £30.99

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LATEST NEWS Opinion

Focus on 2025

MYANMAR’S MOMENT: SOUTHEAST ASIA’S NEW EMERGING ECONOMY

According to a report from Global Construction Perspectives and Oxford Economics, construction will grow by more than 70% to become a US$15tn market by 2025. India, China and the US will account for 60% of this growth, while Western Europe is predicted to shrink by 5% against the prerecession peak of 2007.

Bill Jones FRICS Director of RICS ASEAN

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heritage and the highest number of colonial buildings in southeast Asia. The Yangon Heritage Trust is currently leading the restoration of these magnificent buildings in the face of growing demand for new, bigger commercial structures to satisfy investment needs. Many built environment professionals and senior industry figures are already playing a key role in this task, and they are also helping the ministry to introduce a new building code. It’s hoped that RICS will be able to contribute to the development of a range of new industry standards in construction to ensure sustainable economic expansion.

This year, Colliers International recognised the need for property professionals in Myanmar by opening an office in Yangon to support businesses entering this emerging market. No doubt other major consultancies will soon follow, which, in turn, will lead to the introduction of other industry standards, such as valuation and agency/brokerage.

Although Myanmar has many challenges to overcome, it’s important to keep an eye on this promising new market.

ecently, I visited Naypyitaw, the capital of Myanmar (formerly Burma) to meet the minister of construction for the Myanmar government, U Kyaw Lwin, and his director-general, managing director and senior departmental officials. The aim of the visit was to brief the minister and his team about RICS, and to hear about the challenges faced by the construction industry in Myanmar in order to identify areas where RICS can help to bring about positive change.

The ideas discussed ranged from training through to supporting the ministry in improving industry standards and codes of practice in the developing economy.

Myanmar only joined the Association of Southeast Asian Nations (ASEAN) in 1997, but it’s rapidly catching up with its neighbours and, in 2014, the country will chair ASEAN. With a population of around 60m, the country was once the wealthiest in southeast Asia, and is now experiencing considerable interest from multinational corporations anxious to invest.

Myanmar’s largest city, Yangon (previously known as Rangoon), has a rich display of

Go east

Occupier demand for logistics and industrial facilities is growing in Central and Eastern European countries, according to an Industrial Occupiers Conditions analysis by Jones Lang LaSalle. The review notes that with plenty of stock available and positive economic outlooks, lease terms will be favourable.

View the report at bit.ly/JLL_Occupier.

New moves

FIGHTING TALK: CONSTRUCTION DISPUTE LENGTHS AND VALUES Dispute values (US$ millions) One thing I know...

BUSINESS MOVES RAPIDLY IN CHINA Kim Berry MRICS MD Asia Pacific, Sweett Group China ‘China is still moving at breakneck speed towards becoming the world’s dominant economic superpower – and that process brings a whirlwind of change in its wake. The pace of progress is rapid and relentless, and the goalposts are always moving, which takes some getting used to.’

What’s your business tip?

Email editor@ricsmodus.com

12 08

Length of dispute (months) 15

120 100 80

Recovery signs

12

60 40

9

20 0

2010

Middle East

2011

Asia

6

2012

US

EC Harris has recruited John Lancaster and Matthew Wills from Turner and Townsend Energy Asia to strengthen its oil and gas contract solutions team based in Singapore. Meanwhile, Faithful + Gould has appointed former ISG Asia director Henry Stevens as head of operations in Hong Kong.

2010

2011

UK

Source: EC Harris’ Global Construction Disputes Report 2013

2012

Vietnam’s economy showed positive signs of recovery in H1 2013, says Savills. While GDP growth achieved 5%, officials have also voted to support the economy with recent policies and incentive packages that aim to speed up the recovery, such as a VND30tn package for social housing projects.

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CHINA HERE COMES

WELCOME TO A COUNTRY LIKE NO OTHER. FROM ASSET BUBBLES TO URBAN POLLUTION, WHAT ARE THE CONSEQUENCES OF BECOMING THE FASTESTGROWING MAJOR ECONOMY – BOTH FOR CHINA AND THE REST OF THE WORLD? Photography by Alexander Gronsky/INSTITUTE

WHERE NEXT FOR THE HOUSING ‘BUBBLE’?

DESPITE CALMING MEASURES, PRICES ARE STILL RISING IN CHINA’S CITIES

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n the wake of government measures to calm China’s roaring housing market in March – which saw increases in minimum down payments and bans on single-person households buying a second home – property prices in Beijing and Guangzhou jumped again at a rate equivalent to 20-30% a year. In Shanghai, the pace of construction has been so hot that at the end of 2012, developers were left with record levels of unsold residential inventory. And in the first three months of this year, prices in the luxury market are still inching up. However, in common with the rest of China, Shanghai’s residential market is turbulent, and average prices within the inner ring road fell 12%.

This is a housing market like nowhere else: fuelled by the rapidly expanding wealth of the world’s most populous nation, shaped by one of the fastest ever migrations from the countryside to the city, and now reined in by a government anxious to avoid public anger at unaffordable prices. But the question for investors and agents is this: is China sitting on a housing bubble and, if so, has Beijing acted too late to stop it going pop?

In less than two years, from the beginning of 2009 to September 2011, average residential property prices rose 90% in China’s 20 biggest cities, including Beijing, Shanghai, Shenzhen

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and Chongqing.‘House-price inflation started around 2003, driven partly by individuals lacking any other place to put their money,’ says James Macdonald, head of research at Savills China. ‘Investment options in China were limited and it was hard to take money off shore, so most people parked their wealth in property and, by the mid-2000s, many investors were buying multiple properties.’

As homes became at risk of becoming unaffordable for the masses, the then Chinese premier, Wen Jiabao, imposed sales taxes and applied greater levies to luxury homes. There were also limits on the number of properties a single household could own, causing some determined couples to divorce and officially create two households to circumvent the law.

Over the past couple of years, the measures have impacted volumes and cooled price growth, although prices did not correct significantly. However, construction slowed in some areas and transaction volumes fell, leaving developers with increasing unsold inventory, according to Macdonald.

By the first quarter of 2012, there were signs that levers pulled by the Chinese leadership were working and some steam was coming out of the market. A quarter less housing was sold in the 20 biggest cities than over the same period in 2011, but price inflation was harder to shift. ‘The fundamentals are strong, with demand driven by migration to the cities, but the problem is that the government is under pressure to clamp down on price growth because of the political issue of affordability,’ says Liam Bailey, head of residential research at Knight Frank. ‘The calming measures have dampened speculative buying, but there is still

strong growth in prices in Shanghai and Beijing, fuelled by growing debt – but it’s still way behind Western levels of mortgage debt.’

In March this year, Beijing announced a 20% capital gains tax on profits from the sale of homes. The tax has always existed but was rarely enforced, as it required sellers to volunteer their original purchase documents, making avoidance easy. The idea now is to rely on official sales registers maintained in the biggest cities, which created a flurry of panic transactions as owners sought to trade before the rule kicked in. Beijing sales almost tripled in March (year on year) – an indication of the volatility in Chinese markets that can be precipitated by government intervention.

However, there is uncertainty over how far this tax will be enforced, commented Frank Chen, head of research in China for CBRE. ‘The other measure that’s likely to have an impact is differentiated mortgage loans,’ he adds, ‘where down payment and the rate for a second-home mortgage are expected to increase further to curb investment.’

But there is a view that, in a housing market driven by such huge amounts of capital from China’s burgeoning middle class, the only way to avoid boom and bust is to give people somewhere else to put their money. Investing abroad and in other products – such as private equity and venture capital funds – should be encouraged, says Macdonald. ‘You want to gently release the pressure from the market, but it will take a number of years for the alternative avenues for China’s wealth to open up,’ he adds. ‘It’s happening slowly, but they are heading in the right direction.’

Robert Booth

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THE RISE AND RISE OF COMMERCIAL PROPERTY

IS AN OVERSUPPLY OF OFFICE AND RETAIL SPACE A GREATER CONCERN?

H

ardly a week goes by without some mention of China’s residential property bubble. But while the housing market and the headlines froth, should surveyors be more worried about the commercial property market? The latest figures suggest they should: in the first three months of this year, residential investment grew 22%, while commercial property grew 26%. A year ago, in Q1 2012, the disparity was even greater: investment in office buildings and retail properties grew by 43.4% and 34.2% respectively, compared with 19% in the residential sector.

Much of the investment is in second-tier cities, such as Tianjin, Shenyang and Chengdu, and is largely driven by a planned approach to city building, rather than market forces.

For these provincial capitals, the result is oversupply and bad prospects for rents – in the short term at least.‘In cities where there’s a lot of new supply coming on at the same time, we are going to have a couple of years of higher structural vacancy and downward pressure on rents,’ says Chris Brooke FRICS, chairman and CEO at CBRE China, and chairman of the RICS Asia board. Anecdotal evidence paints a starker picture. Gillem Tulloch, founder and director at Forensic Asia, says that as soon as you get out of the prime locations, you find there are vast quantities of unused commercial space. ‘In some cities – even those as big as Chongqing – they’ve started boarding up the commercial space, and converting it back to residential where they can,’ she adds.

Despite these poor prospects for occupancy, demand is being driven on several fronts.

There are international investors looking to build for the long-term hold, as well as domestic insurance companies buying real estate for on-block investment purposes.

What’s more, Chinese domestic investors that historically focused on residential are now buying commercial assets to reduce their residential investment risk. ‘A number of major developers have got 10 to 15 projects going on around the country that are all commercial, and that they’re looking to hold long-term,’explains Brooke. This overcapacity is creating a ‘timing mismatch’, he adds, ‘because the product will be there but it won’t be fully utilised until the medium term’.

The final demand driver is the inexorable march of Chinese credit growth. Tulloch puts this at between 37% and 45% of GDP since 2009, and says that this, combined with a period of five to 10 years where interest rates

have been kept artificially low, and the fact that it’s difficult to get money out of China, has resulted in bubbles in almost every asset class – whether it’s pigs, tulip bulbs or diamonds. The biggest bubble of all, though, is in commercial property: realising the tax revenue benefits of commercial space, local governments are now making sure there’s some form of retail and office space in almost every residential complex that’s being built.

In China’s primary cities, there’s less cause for alarm. Prime office space is still being absorbed relatively quickly in Beijing, and rates are continuing to increase. Despite China’s economic growth hitting a three-year low of 7.6% in 2012, Brooke says that the Beijing market has remained particularly strong because of a shortage of supply and expanded demand, as many companies in the capital are focused on industries benefiting from the drive for domestic consumption, such as automotive, pharmaceuticals, financial services and IT. In Shanghai, where companies are strongly linked to manufacturing and exports, there has been a softening of demand from

IN SOME CITIES, THEY’VE STARTED BOARDING UP COMMERCIAL SPACE AND CONVERTING IT BACK TO RESIDENTIAL

multinationals over the past two quarters as a result of economic woes abroad in Europe and the US. However, domestic Chinese demand remains strong and initial yields for office space are down to 4-5% – although they could drop further, according to Jack Measom MRICS, assistant manager in commercial services for Knight Frank China, who believes the office market will see a supply boom in late 2014 and 2015 with buildings such as Shanghai Tower in Pudong coming online. ‘Around a million square metres of Grade A office space will arrive on the market in the space of 12 months, which will inevitably put downward pressure on rents, and swing the market more in an occupier’s favour,’ he says.

More worrying, though, is the growing trend for cash-strapped developers to sell prime buildings by the floor, rather than the entire lot, which points to a lack of depth in rental demand. ‘It’s not uncommon for buildings in Shanghai, even some of the prime investment buildings – such as The Exchange Soho – to be increasingly strata-title owned by developers selling off floors,’ says Measom.

‘While helping the developer’s cash flow in the short-term, it has a strong impact on the appetite from tenants to occupy space in buildings with strata landlords.’

So what’s the overall outlook? Commercial property investors will need to be financed well enough to ride out a choppy short-term market, particularly in China’s second- and third-tier cities. ‘I don’t think it’s a situation where capacity is being built that will never be occupied,’ says Brooke. ‘But, in some of the markets where there’s significant short-term supply or oversupply, you need to have a longterm view – an eight-to-10-year scenario – to make money.’

George Bull

Surveyor’s view

‘China can’t meet the demand for qualified people’ ANDREW CHAN MRICS DIRECTOR AND GENERAL MANAGER, LANGDON & SEAH (BEIJING) ‘When I first arrived in China from Hong Kong to open our Beijing office 19 years ago, there was no such thing as quantity surveying in China. At that time, most of the building work was done under the planned economy system, so they didn’t need cost control experts – but slowly private investors and projects appeared. The problem now, and over the past few years, is that the industry is expanding so fast that China’s universities, developers and companies can’t meet the demand for qualified people, and quality has suffered in the past decade as a result.

‘However, there is huge job satisfaction in being able to see the impact we’ve had on the development of the industry. What’s more, world-famous architects, such as OMA and Zaha Hadid, have projects in China, so we can be involved with projects and people that we just wouldn’t be able to anywhere else in the world. And, if you look at the GDP – 7-8% growth each year – and the rapid urbanisation in China, it’s clear that there will be a huge demand for all types of construction and industry jobs for years to come.’

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OVERSEAS INVESTMENT

A FINANCIAL EXODUS IS SEEING CHINESE COMPANIES INCREASINGLY LOOKING TO INVEST IN THE WEST

I

n an attempt to avoid a scenario like Japan’s ‘lost decade’, the Chinese government has been introducing dramatic measures to cool its overheated domestic property market.

As a result, over the past 18 months, Chinese property developers and investors have started to look overseas for opportunities – and the scale of the financial exodus has been eye-watering. A decade ago, just 2% of all Chinese capital invested in real estate was going overseas. Last year, this figure stood at 26%, according to Jones Lang LaSalle – and in 2012 alone, money flowing out of China into direct real estate investment overseas reached US$4bn – 33% higher than in 2011.

The trend has continued in the first quarter of 2013, with Chinese investors allocating US$1bn to overseas real estate projects. In fact, David Green-Morgan, research director of global capital markets at Jones Lang LaSalle, expects it to continue for the next 20 years: ‘We think that Chinese investment into overseas markets could reach US$5bn this year, which is a 20% increase on 2012 levels,’ he says. ‘Over the past few years, we’ve seen a global rebalancing towards real estate as an investment asset class. Concurrently, we’ve witnessed a rise in savings rates among the BRICS group, providing insurance and pension funds with increased access to capital. We believe this will transform the commercial property investment market to such an extent that it will be a US$1tn market by 2030.’

According to Jones Lang LaSalle’s research, Chinese developers at the moment are

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targeting super-prime assets – particularly residential and hotel developments – in‘super cities’, such as New York, London, Paris, Tokyo and Hong Kong. But investment isn’t being made in these areas just because they are highprofile global metropolises, says Frank Chen, head of research at CBRE in China: ‘Our research, which is still ongoing, found that the popular destinations of outbound investment for individual Chinese investors overlaps the premier destinations for immigration and study abroad.’

It’s a view supported by Shaun Brodie MRICS, head of China strategy research at DTZ. ‘Some Chinese residential developer investment is following the flow of affluent Chinese money pouring into cities that already have a significant Chinese population,’ he says. ‘Whereas other investment money is flowing into these city markets because of strategic partnerships already formed between a Chinese developer and an overseas developer that’s already active in the China market.’ An example of a relationship between companies driving investment is China Vanke’s recent deal to acquire a 30% stake in Keppel Land’s Sherwood Development residential project in Singapore. But it’s not alone: last year, Chinese developer Xinyuan Real Estate secured a deal to develop a prominent waterfront site in New York. And this year, Shanghai-based property developer Greenland Group announced plans in March to invest US$498m in a property project in Sydney, Australia, and in May, Chinese developer Advanced Business Park struck a deal with UK project partner Stanhope to develop a £1bn mixed-use site near London City airport.

But this is not just about Chinese developers identifying opportunities to spread their wings overseas, says Chen. ‘These Chinese giants seek to learn about development, asset

management, retail etc – and then bring back know-how to China. Through a joint venture or acquisition with mature players in the world, they can surely shorten their learning curve and transfer the knowledge from overseas trials to their home market.’

They are going to need this sort of expertise if their overseas forays are to be successful, says Brodie, because as Chinese developers step up their international investment activity, they will face increasing competition from local market developers who are also looking to attract Chinese buyers. ‘Chinese buyers, like many buyers, are very interested in the quality of the finished product, and they will be able to see which of the local developers has a strong track record in delivering best-inclass projects in a particular overseas market,’ Brodie explains.‘As such, Chinese developers will have to produce outstanding products in that market from the get-go if they wish to largely rely on the pool of Chinese buyers.’

To date, Chinese developers have relied heavily on funds from Chinese buyers struggling to invest in their homeland due to the government restrictions. However, it’s anticipated that Chinese property developers will have to change this strategy going forward, resulting in an opportunity for local surveyors to cash in. But, says Brodie, when it comes to Chinese developers, the main point for surveyors to bear in mind is the business relationship track record – the strength of the trust between the surveyor and a developer/ investor, and the strength of delivery track record of service from the surveyor to the developer/investor.’ If they are able to build these sorts of business relationships, it looks like there might be a major opportunity for surveyors around the globe to pinch a slice of this projected US$1tn cake.

Simon Creasey

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Are you running out of time?

All practising RICS members must complete and log at least 20 hours of CPD online by 31 December 2013.

If you haven’t already done so, don’t leave it until the last minute – go online now to add your CPD activities at www.rics.org/cpd.

CPD is an essential part of being a professional. This commitment to lifelong learning is vital to maintain professional competence and protect the reputation of the profession with clients, regulators, governments and our many other stakeholders. This is why RICS established a policy in 2013 requiring members to record at least 20 hours of CPD each calendar year, including at least 10 hours of formal, or structured, learning.

To access the new user-friendly, online CPD management system, simply go to rics.org/cpd, where there is also a range of guidance and supporting material to help you.

If you need any help understanding the CPD policy or using the online tool, call RICS Regulation on +44 (0)207 695 1670 or email regulation@rics.org.

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INFRASTRUCTURE: THE NEW FRONTIER

CHINA’S NEW FIVE-YEAR PLAN SHIFTS THE FOCUS FOR DEVELOPMENT

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hina is not short on infrastructure: it has the world’s longest high-speed rail network, 70% of all toll roads on the planet and Shanghai is home to the world’s busiest container port, according to KPMG. But, to meet the demands of a nation where 100 cities have a population of more than a million, much more infrastructure is needed.

In 2011, at the same time as introducing a series of measures to slow down the property market, the Chinese government launched its 12th Five-Year Plan (FYP) to outline key economic and development targets. This FYP takes the emphasis away from property and puts the accelerator firmly down on infrastructure development: ‘The thinking behind the plan is to encourage better quality, longer-term growth,’ explains David Crosthwaite, an economist at Davis Langdon.

‘Whereas non-residential property was leading China’s growth, now infrastructure is playing that role.’

A enormous amount of new infrastructure is planned to meet the targets set by the current FYP. In September 2012, 55 major infrastructure projects were approved, including seven port and channel reconstruction projects, 13 new highways and 25 rail and intercity transit projects, as well as a variety of water and environmental projects, according to KPMG’s recent Infrastructure in China report. ‘Broadly, the plan aims to bring the West of China up to the more developed level of the Eastern coast,’ says Simon Baxter, partner at EC Harris in China.

Surveyor’s view

‘Opportunities now exist for professionals to advise Chinese investors’ MARK CHO MRICS DIRECTOR AND HEAD OF REAL ESTATE, CHINA, AT RREEF ‘For the past five years, I’ve been on the ground in Beijing and in Shanghai advising

To link up China’s cities – which number over 600 – the target is to bring the nation’s total rail track up to 120,000km, and the National Trunk Highway System to 83,000km by 2015. Stephen Ip, China lead partner in government and infrastructure at KPMG, says: ‘More than RMB1tn (£105bn) is being invested in rail and roads annually, with forecast spending closer to RMB2tn (£210bn) for some years.’ What’s more, to ease congestion in fast-expanding cities, an estimated 2,100km of metro and light rail track is to be laid, and to facilitate transport between the cities, 50 new airports will be built between 2011 and 2015 – bringing China’s total up to 230 airports.

With China the world’s largest emitter of carbon, in the power sector, the emphasis under the current FYP has shifted away from coal – China’s main source of power – to renewable energy. The nuclear new-build programme is now back at full throttle after a pause in 2012, following the Fukushima disaster, with 100 new plants planned. And extensive development of hydro, wind, solar and biomass power is also in the pipeline.

But plans to develop renewable energy may falter: ‘There’s a lot of work to do in putting

50 NEW AIRPORTS WILL BE BUILT – BRINGING CHINA’S TOTAL UP TO 230 AIRPORTS BY 2015

various Chinese sovereigns, insurance companies and corporates on investments in commercial and residential real estate overseas. In the initial years, capital controls, regulator attitudes and the appreciation of the renminbi (hence lower net returns to Chinese investors) were all major barriers to Chinese institutions investing abroad, meaning that although individual investors were active in accumulating real estate assets overseas, institutions were more cautious.

‘However, there has been a shift in attitudes and investment

the legal framework in place,’ says Baxter. He adds that, at present, the lack of clarity on the legal framework and energy tariffs means that clients are unwilling to invest in renewables.

However, all this planned construction doesn’t fit comfortably with the government’s ambition to be greener. ‘It’ll be interesting to see how the government tackles sustainability,’ says Crosthwaite. ‘For one, some would question how sustainable nuclear power is,’he adds. Procurement for all projects will be another challenge, adds Kim Berry MRICS, managing director for Asia Pacific at Sweett Group: ‘The fast pace of infrastructure development in China dictates that projects often don’t have the rigour in capital efficiency seen in most developed countries.’ This leads to inefficiencies, she says, which will prove an increasing headache if it’s not addressed.

Interestingly, the infrastructure push will boost the property market, according to Berry, as office, retail and residential development is enabled by the new infrastructure. In addition, China’s burgeoning middle class – Ernst and Young forecasts that 500m Chinese will enter the middle class this decade – will likely spark a residential property boom at the start of the 2020s. ‘By this stage, property will probably take over from infrastructure in terms of the pace of growth, although infrastructure will remain the larger market in terms of volume of construction,’ says Crosthwaite.

So despite some challenges, infrastructure development is set to plough ahead. For RICS members, the challenges mean that China is increasingly opening up to foreign participation: ‘A key problem is the lack of expertise in design, engineering and project management,’ says Crosthwaite. ‘While this could put a break on growth, it also means there are significant opportunities for foreign firms.’

Roxane McMeeken

activity in recent months, with regulatory changes encouraging insurance firms to invest abroad, Chinese developers becoming more aggressive and offshore investments offering higher yields all driving capital outflow from Chinese investors. As a result, many opportunities currently exist for real estate professionals to provide advisory, transaction, asset management and facilities management services to Chinese investors looking to invest abroad.

‘Typically, Chinese investors look for professionals or companies with extensive track

records, a local presence and a pipeline of deals to potentially invest in. Overseas investment is relatively new to Chinese investors, so it’s important to develop a sufficient amount of understanding before doing business. There’s no doubt that Chinese investors will continue to increase their representation in the major gateway cities around the world, but industry practitioners should look to invest more time in making sure that potential investors understand local valuation practices, and investment and asset management regulations.’

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HERITAGE PROTECTION

CHINA’S RAMPANT ECONOMIC GROWTH IS CREATING A CLASH BETWEEN HERITAGE AND REVIVAL Opinion

POLLUTION: THE GREATEST CHALLENGE Professor Judith Shapiro School of International Service, American University

‘China’s environmental challenges may be the most powerful determinant of whether the Chinese government can maintain its fragile legitimacy and stability. Caught between a Scylla and Charybdis of bad choices, the Chinese leadership must continue to raise living standards by making China the manufacturing hub of the planet, yet, at the same time, they must attempt to deal with their citizens’ fury at the government’s seeming inability to curb intense, widespread pollution.

‘The government’s response to pollution so far has been to pass more stringent environmental laws, and to try to give them sharper teeth. Unfortunately, though, the same decentralisation that unleashed China’s entrepreneurial passions in the early 1980s has resulted in a lack of control over the middle-level bureaucrats charged with enforcing such laws. These are often the same people who benefit from lax inspections of the industries on which they rely to fill their tax coffers, and government officials themselves own some of the nation’s dirtiest factories.

‘Hope lies in the seriousness with which some senior officials in the central government regard the problem – during the recent leadership transition, even top leaders said they were “depressed” by the air pollution. There are now pilot projects throughout China, with “green” awards for more sustainable cities, as well as efforts to shift leadership incentives away from economic growth and toward sustainable development, and experiments with winwin solutions that curb both carbon and ground-level smog.

‘Some cities are becoming known for innovations such as bicycle-sharing and green building standards, and Western organisations – such as the Natural

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Resources Defense Council and Resources Institute – are active in China in an attempt to share best practice on green building and sustainable transport.

‘However, China’s greatest hope may be its environmental civil society, whose registered groups are now in the hundreds of thousands, with many more unofficial groups. Their political tools have evolved from simple tree planting and recycling in the mid-1990s to a sophisticated array of tactics. These include information politics, such as the publicising of online maps of “cancer villages”; accountability politics, where groups challenge the government to conduct mandated Environmental Impact Assessments when planning dams, for example; and even symbolic politics, such as when Greenpeace East Asia used social media and street theatre to expose polluting companies as part of its Detox Campaign. Ordinary citizens are also using social media to share information, sign online petitions and signal each other to rally, while “supply chain analysis”, pioneered by former journalist Ma Jun, has obliged multinational corporations to take responsibility for the environmental performance of their subcontractors and suppliers. A final frontier is civil society groups’ quest to bring public interest lawsuits, which are common in the West, but have an uncertain future in an authoritarian state whose environmental court dockets remain largely empty.

‘Despite these extraordinary advances, key questions remain. Will civil society muster enough power against a state that is afraid of its own citizens, and often makes poor decisions? Can the pent-up consumption needs of more than a billion people be reconciled with sustainable development? And, as the Chinese middle class fights polluting enterprises, will environmental harm just be displaced to the more vulnerable, both within China and overseas? The wellbeing of a fifth of the world’s population, and indeed of the planet, depends on the answers.’

JUDITH SHAPIRO is the author of China’s Environmental Challenges and Mao’s War Against Nature. She also directs the Natural Resources and Sustainable Development programme at American University Washington, DC.

B

ehind the congested thoroughfares around Beijing’s historic Drum Tower and Bell Tower, the alleyways have changed little in generations. Thin lanes wind between ancient, often dilapidated, courtyards, where residents continue to live as their families have always done: in crowded, rundown buildings that, despite their condition, conservationists say represent a key part of the city’s cultural history.

However, if the local government goes ahead with its plans, many of these alleyways (known as hutongs) and the homes around the two towers, will soon be knocked down to make way for a reconstructed 18thcentury Qing Dynasty public square, which, according to officials, will raise the living standards of local residents and safeguard the appearance of the neighbourhoods. A more ambitious proposal to develop a larger portion of the area was shelved in 2009, due to public opposition – but this time, demolition of some old homes has already begun, and their owners moved on to high-rise buildings on the outskirts of Beijing.

Elsewhere in the city, it’s estimated that more than two-thirds of the 3,000 or so old neighbourhoods have now been bulldozed, replaced by modern infrastructure, offices and apartment blocks – a sign of China’s rapid economic rise over the past three decades.

However, in the face of such incredibly rapid modernisation, the world’s most populous country is struggling to balance its growth with protecting its cultural heritage – and nowhere is this more visible than in the ancient areas of Beijing.

In the late 1960s, the last of the old fortified walls that enveloped the city were torn down – in large part to improve access to the city centre via the first of many ring roads that help to control the traffic. In the decades since, many other trade-offs have been made, as city planners are forced to decide how much of the old city to preserve without forcing the development of a satellite modern city. The old lanes of Beijing are often unsuited to modern developments: they are cramped and crowded with families, rely on highly polluting coal heating, and are often too small to allow access by fire engines or ambulances.

However, despite this, with so few old neighbourhoods left, many are worried about preserving the cultural heritage that the hutongs embody. He Shuzhong, founder of the Beijing Cultural Heritage Protection Center, told the Associated Press earlier this year >>

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China’s growth // that the destruction around the Drum and Bell Towers will destroy ‘a rich accumulation of cultural heritage’.

In fact, many experts consider Beijing’s communal courtyards key to the city’s unique culture, with generations of families living in the same areas, and the streets alive with mahjong games and small-time traders on bicycles. And, while many of the buildings in the area around the Drum and Bell Towers are in disrepair, and lack basic amenities such as bathrooms and central heating, much of the architecture and style of the courtyards carry traces of centuries of Chinese development.

‘If all the hutongs are demolished, the city’s cultural characteristics and ancient capital flavour would all disappear, and Beijing would no longer be Beijing,’ says Dr Jinliang Xu MRICS, a researcher at China’s Southeast University’s School of Architecture, and Chairman of the RICS China Continuing Professional Development Committee.‘With an ever-decreasing number of hutongs left, the conflict between their protection and city development has become more and more serious,’ he adds.

In the south of the city, a once thriving district similar to the one around the Drum and Bell Towers was redeveloped in the lead-up to the 2008 Beijing Olympic Games.

The area, known as Qianmen, just south of Tiananmen Square, was demolished and whole communities were moved on, as several-hundred-year-old buildings were replaced by faux-traditional architecture that now houses fancy restaurants and retail stores.

Qianmen is often held up as an example of how not to redevelop the ancient parts of Beijing. ‘We need to protect the social life of the hutongs more than the buildings,’ says Beijing-based architect Ma Yansong. ‘The buildings are actually very simple, but the beauty is the courtyards and interchange.’

In 2009, Ma Yansong’s firm, MAD architects, developed Hutong Bubble 32 – a futuristic add-on to an existing hutong courtyard that provides a toilet and staircase. Not everyone agrees with the design, but Yansong suggests its purpose was to explore alternative options to the full destruction of the ancient alleyways in which he was born.‘No one is building cities any more, they are just building individual towers,’ he comments.

But, as China tries to find the right solution to retaining its ancient built environments in the face of rapid economic and urban growth, many see the fate of Beijing’s remaining hutongs as part of a wider need to preserve the past. ‘There are other legacies, such as old villages, household relics, ancient gardens and delicate historical buildings, that are also in dire need of preservation,’ says Xu. ‘Or else, some day, they will all be destroyed.’

Kit Gillet

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RICS IN CHINA

THE EVER-INCREASING DEMAND FOR STANDARDS AND PROFESSIONALISM

J

ust as China’s economy has rapidly developed over the past decade, so too has RICS’ presence in the country. In 2000, there was only one professional member in the property field based in Mainland China – Henry Li FRICS. In 2001, Li became pivotal to helping a newly formed RICS China Steering Group refine RICS’ global strategy and tactics for the property market in China. With the burgeoning growth of RICS in Asia, six years later, the steering group officially evolved into the RICS China Board. Of its 15 members, Li was elected Chairman – a position he is still very proud of. ‘Over the past 12 years, I’ve spent much of my time building a profile for the sector, liaising with the government, growing the membership and ensuring the range of RICS member services are relevant and efficiently delivered in China,’he says.‘Since 2007, there’s been a focus on enhancing professionalism, and we’ve created a more robust APC [Assessment of Professional Competence] infrastructure in China due to increasing demand. With the joint efforts of board members and staff, RICS membership now stands at more than 2,000.’

Much of RICS’ global membership growth now stems from the property industries of China and the wider Asia region, where RICS is seen as an eminent international brand.

The advantages of membership are clear:

immediate global brand recognition, a display of adherence to high professional standards, and long-lasting career support. ‘RICS launched the regulation of firms in Mainland China in August 2010,’ says Li, whose own firm, BDGH Valuation, was the first to be regulated in China. ‘Interest from Chinese firms wishing to become regulated is positive, with regulation staff based in Hong Kong working closely with firms to expand and develop our operation. Regulated Chinese firms share the same benefits as UK regulated firms, and they are part of a world-renowned regulatory regime. RICS standards are about getting confidence and trust into the real estate and construction markets in China, and getting the government to respect real estate professionals and recognise their contribution to the country’s economic success.’

One of the biggest regulatory challenges is the current fragmentation of professional practice in China – an issue that can make it difficult for members outside China to gain business in the market. ‘The challenge can multiply if cross-border corporate issues are involved, because more local standards and benchmarks have to be observed,’says Li. Two years ago, Li was elected to the RICS Governing Council – the first member from Mainland China to sit on RICS’ top decision-making body. In this position, he hopes to further strengthen the connection between the global institution and RICS China to help overcome these multidimensional challenges by looking at them in a geographically integrated and interdisciplinary forum.

Brendon Hooper ricschina.org

Surveyor’s view

‘China’s need for surveyors is stronger than ever’ LINA WONG MRICS MD OF EAST AND SOUTHWEST CHINA, AND CHINA INVESTMENT SERVICES, AT COLLIERS INTERNATIONAL ‘As China’s commercial property market has boomed over the past five years, the country has a need for qualified surveyors that is stronger than ever. Given the tighter regulations in the residential property sector since 2008, many major developers have shifted their strategy to focus on China’s commercial property market. Furthermore, the rise of the service sector in China has created sustained and growing demand for commercial property. At the same time, there has been a limited supply, leading to strong asset performance. This has been most evident in the leasing and investment markets of first-tier cities, such as Beijing, where the average rent for Grade-A office property grew by 67% and average capital value grew by 116% between 2008 and Q2 2013.

‘In Shanghai, the growth of these figures was much more conservative in comparison, at 1.5% and 46% respectively, aimed at the city’s robust office leasing and investment markets. But the current leasing and sales transaction volumes only represent the tip of the iceberg for China’s commercial property market. Currently, we have around 2,000 RICS members in China, but as the leasing and investment markets grow further in major cities, and become established in regional capitals, developers and investors will desperately need more qualified surveyors to provide professional and localised advice.’

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MO D U DO LA ES R IT STA CK UP ?

PREFABRICATION IS MOVING ELEMENTS OF CONSTRUCTION AWAY FROM THE BUILDING SITE AND INTO THE FACTORY. BUT ARE THE BENEFITS OF THIS TREND ENOUGH TO SPARK A STRUCTURAL REVOLUTION? Words by Michael Willoughby

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L

ast year, Hunan-based Broad Sustainable Building (BSB) drew 5.5m views for its time-lapse YouTube video documenting the construction of an entirely prefabricated 30-storey hotel in just 15 days.

Building on Broad Group’s expertise for providing large-scale air-conditioning units, BSB’s charismatic chairman Zhang Yue has developed a revolutionary building system.

At the factory, 12-tonne steel-framed floor platforms move quickly and efficiently along a production line. These ‘main boards’, which are 3.9m by 15.6m, and 450mm in depth, include everything from water pipes and ventilation shafts to floor tiles and lights.

Even the floor zone, which contains all the electrical and mechanical systems, is pre-fitted ready for connection on-site.

‘The true trick in the system is the ability to move the modules around at ease in the

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Modular construction // factory via the various lifting systems, which enables each layer of the construction to be applied,’ writes Antony Wood, executive director of the Council of Tall Buildings and Urban Habitat, who visited the factory. The finished components are then transported to the site and assembled.

As well as being incredibly fast to erect – at two floors a day, including cladding – the T30 Hotel cost just US$1,000 (£650) per square metre, compared to US$1,400 (£900) for traditional concrete high-rise. What’s more, the multistorey can withstand a 9.0 earthquake and is highly energy efficient, with 15cm thermal wall insulation, fourlayered windows and heat-recovery ventilation systems. And, because 93% of construction occurs in a factory, the building process is far safer for the workforce.

But the creation of the T30 Hotel is nothing compared to BSB’s next move: to construct the world’s tallest building in just seven months. At 838m, the 220-storey Sky City will be 10m taller than Burj Khalifa – the current tallest skyscraper – but it will cost a fraction of the price at just US$628m (£409m). However, after gaining worldwide attention with the announcement of the Sky City plan in late 2012, things have gone rather quiet, and the original March 2013 deadline for the building’s completion has come and gone with no sign of the project breaking ground. Word is that construction will begin soon, but, whether it’s Sky City or another pioneering scheme, only the foolhardy would write off the prospect that one day soon, the world’s tallest building will be prefabricated.

Sky City

‘At 838m, the 220storey prefabricated Sky City in Hunan will become the world’s tallest skyscraper’

A common criticism of prefabricated, or modular, construction is its limited visual appeal and relative architectural inflexibility.

BSB’s buildings, for example, not only look brutal and basic, but they also lack atria, which have to be bolted on afterwards.

An exception is the Leadenhall Building (pictured overleaf) under construction in the City of London. The building’s north core – with its bathrooms, lift shafts and risers – is being constructed separately from its steel superstructure at Laing O’Rourke’s manufacturing plant 150 miles away in Nottinghamshire. Completed prefabricated ‘tables’ are then delivered to the site on flatbed trucks, where they are stacked and connected to provide the structure of the north core.

The tops of each multistorey table layer are temporarily used to install cladding on the lift shafts, while work on the next layer continues at the plant. The process results in faster possession and occupation by the client – and sources suggest a 50% faster construction process won Laing the project.

While the Leadenhall Building represents some undeniable benefits of prefabrication in terms of cost, speed and reduced numbers of on-site personnel, Yorkon’s modular system exemplifies the method’s potential for extreme flexibility and expandability. The company’s extremely wide range of modular components are put together on a multi-station assembly line, with modules in a variety of widths and heights to fit any building footprint, and thousands of different configurations and permutations to fit both single-storey and multistorey schemes. >>

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Modular construction // Yorkon is currently creating off-site an £18m Women and Children’s Centre for North Middlesex University Hospital, which will be made from 152 steel-framed modules up to 18m long, with pre-installed doors, windows, concrete floors, and first-fix electrics and plumbing. According to Kier Construction, the main contractor, the project will be delivered around three months quicker than traditional construction.‘Given the extremely challenging timescales for this project, offsite construction gives us greater certainty and a substantial reduction in risk,’ says Kevin Howell, project director for the hospital build.

What’s more, building the modules inside negates various on-site cold-weather issues.

BUILDING MODULAR COST IT RIGHT Clients and consultants must consider the additional, often upfront, costs of building off-site, such as factory overheads. However, these are usually mitigated by the reduction in on-site costs, including fewer construction workers required.‘Even if we say that building off-site is cost-neutral, the process is faster,’ says Wightman, from Caledonian Modular. ‘This means that clients don’t have to borrow money for as long, and they can start operations more promptly.’ What’s more, he adds: ‘The increased predictability means less contingency for risk is needed, which surveyors need to factor in when they do their costing.’

PLANNING IS EVERYTHING It’s vital to plan to build off-site from concept stage so that the architect designs from the right point of view.

Also, although on-site construction is faster with a modular building, more planning is required upfront, adds Kevin Wood FRICS from Walker Sime: ‘The factory, lead-in time and drawing take just as long as traditional construction methods,’ he says. This is because every detail needs to be worked out to avoid hundreds of replicated errors.

THE MONEY GAME Modular projects work on different payment schedules to traditional

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construction. Due to the upfront cost of the manufacturing process, 30% or more of the total cost might be due before work even starts – which some clients are unable, or unwilling, to pay. This puts a great deal of the risk with one subcontractor, explains Kevin Bonfield, owner of consultancy Bonfield: ‘If the project goes bust, you can lose 50-80% of the cost, and you’re back to square one,’ he says. It’s much harder to get completed modules out of a company in receivership than just pick up work on a partially completed site, so a proper due-diligence and pre-qualification process is vital.

QUALITY MATTERS Amid concerns about the mortgage prospects and quality of some modular schemes, RICS has teamed up with Buildoffsite – an industry body that promotes prefabrication – and several other organisations to develop the new Buildoffsite Property Assurance Scheme (BOPAS). The aim is to provide assurance to the lending community by independently verifying that innovatively constructed properties will deliver a consistent performance for a minimum of 60 years.

However, prefab companies argue that modular construction actually results in higher levels of quality and consistency. Kevin Jones, business development director for Yorkon, says it’s a question of client and costconsultant education: ‘Many would sooner believe their own eyes, so we’re happy to have them come to the factory to walk around and kick the tyres.

We’re proud of what we do.’

However, with modular solutions there are compromises on aesthetics, says Kevin Wood FRICS, associate director of Manchesterbased consultant Walker Sime. ‘It’s ideal where clients are happy to have a uniform building. But when you’ve got a residential project – with balconies stepping forward and back – it’s much harder to use modular.’

Shifting the bulk of the work to the factory also creates a very different experience for the workforce, with skilled and semi-skilled labourers working together on separate stations as the modules move around the factory. Talking about a project he recently worked on, Steve Wightman, development director at Caledonian Modular, says: ‘The bathroom supplier didn’t have to climb nine flights of stairs – he fitted the bathroom on the factory floor.’ As a result, he adds: ‘The work is more predictable and safer.’ Bob Mears, consultant at BMPR Offsite, which exports European prefab know-how to emerging markets, agrees: ‘Familiarity breeds regularity,’ he says. ‘For example, how often does the sealant around baths look messy, or the tiling tatty? Elements are easier to fit in a factory – it’s about the fine detail and quality.’

Working in a factory is also better for mental and physical wellbeing, adds Mears: ‘On a typical building site, there’s always some damage, and blame is passed around. But with modular, there’s less damage and less theft.’

The Leadenhall Building

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Business advice //

Prepare your business for

THE UNEXPECTED By commercial insurance specialist John Lanning

Many businesses struggle to recover from a significant incident or crisis, which can lead to employee attrition, lost contracts and, in some cases, business failure. So planning for continued business operation in adverse circumstances can prove essential to a surveying firm’s long-term survival.

Some disruptions can affect many businesses at once – such as snow, flooding, mobile network failure, acts of terrorism and national events like the Olympics – whereas others may be specific to just one organisation, such as fire, vandalism or IT failure. Whatever the problem, successful recovery depends not only on the provision of insurance, but also on a prompt and well-executed response. Time is of the essence in disaster situations, and having a Business Continuity Plan (BCP) helps to avoid delays and confusion.

WHAT SHOULD THE PLAN CONTAIN? A BCP need not be long or complicated, but it should be up to date, readily accessible and easy to reference. Its development is best delegated to a small team within the organisation, with insight from the areas pivotal to the firm’s recovery in a disaster situation, such as IT, human resources, facilities management, finance and communications.

In developing a plan, the BCP team should first consider key threats that would adversely affect the firm’s performance, such as weather disruption, power failure, theft, fire, IT or telecommunications failure, supplier problems, premises inaccessibility and the unavailability of key staff. The team should evaluate the likelihood of each of these threats occuring, and their potential cost to the business and long-term effect. Having identified and ranked the risks, the team should then plan damage prevention and reduction measures to tackle the most serious. These measures will include how the business will deal with issues such as: Staffing in the disaster situation Communication with staff and customers (as well as stakeholders and the press, if necessary) Telephone, email, website, post, electronic files and document storage/retrieval Damage assessment and salvage from the premises, as well as its ongoing security Which team members are responsible for actioning the specific aspects of the plan.

Illustration Borja Bonaque

SUCCESSFUL RECOVERY DEPENDS NOT ONLY ON INSURANCE, BUT ALSO ON A PROMPT AND WELLEXECUTED RESPONSE

The BCP should also contain details of third parties the business needs to contact in its recovery efforts, including staff, customers, insurance and bank contacts, and IT, phone and security suppliers. And if visibility is key for bringing in new business and maintaining customers – for example, on the high street – the firm needs to factor in how this will be maintained if their premises are damaged and/or inaccessible.

While the plan should be specific to an individual business and its operations, the Chartered Management Institute’s 2012 Business Continuity Management Survey found the most common elements of BCPs were: Strategies for maintaining and/or recovering all activities that enable key products or services IT back-up arrangements Arrangements for remote working Site emergency plan Contact cascade Moving staff to alternative site Media response to continuity issues Securing access to alternative utility services.

Also, according to the survey, 72% of managers said that loss of IT would have a detrimental impact on the costs and revenues of their business. Regularly backing up IT systems, and ensuring there is a copy of data outside of the business – perhaps by using a cloud-based resource – will help a firm quickly retrieve files should an IT failure occur.

Each BCP team member should retain a copy of the plan – preferably outside the business premises – and time should be allocated to test it and provide training to employees. The BCP will need to be updated periodically – for example, when there are changes in personnel – and may need to be revised following a disaster simulation exercise. When revising the BCP, it’s important to destroy all previous copies to avoid confusion.

Surveying firms looking for guidance in creating their BCP may find the free business continuity planning tool Robust a helpful starting point (robust.riscauthority.co.uk).

JOHN LANNING is director of insurance broker Robinson Buckley. robinsonbuckley.co.uk

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BRICS BY BRICS

GROWTH, POPULATION, INDUSTRY: HOW DOES CHINA COMPARE TO THE WORLD’S OTHER LEADING EMERGING ECONOMIES? Illustration by La Tigre

BRAZIL

RUSSIA

P O P U L AT I O N

INDIA

CHINA

SOUTH AFRICA

(millions)

SA 49 ◊ RUSSIA 143 ◊ BRAZIL 201 ◊ INDIA 1,221 ◊ CHINA 1,350

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BRICS //

GDP

(billion US$)

(US$)

G D P G R O W T H R AT E

CHINA 9,100 SA 11,300 INDIA 3,900 RUSSIA 17,700 BRAZIL 12,000

2002

502 2011

2002 295 2011

2002

MOBILE USERS

691 CHINA

377 INDIA 782 2011 756

(millions)

2011

SA 2.6%

(millions)

BRAZIL 1.3%

URBAN

2002

RURAL

U R B A N & R U R A L P O P U L AT I O N

RUSSIA 3.4%

INDIA 6.5%

CHINA 7.8%

SA 578 BRAZIL 2,362 CHINA 12,380 INDIA 4,784 RUSSIA 2,504

G D P P E R C A P I TA

657 CHINA 833 INDIA

OBESITY

RUSSIA 237 INDIA 894 BRAZIL 244 SA 64 CHINA 986

BRAZIL 18.8%

CHINA 5.7%

RUSSIA 26.5% SA 31.3% INDIA 1.9%

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T O TA L A R E A

(km2)

SA 1,219,090 ◊ INDIA 3,287,263 ◊ BRAZIL 8,514,877 ◊ CHINA 9,596,961 ◊ RUSSIA 17,098,242

TRANSPORT

(km)

R A I LWAY S I N O P E R AT I O N

H I G H WAYS CHINA 98,000

SA 362,099

RUSSIA 86,000

BRAZIL 29,000

BRAZIL 1,736,000

SOUTH AFRICA 21,000 INDIA 3,090,000

CHINA 4,193,000

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Sources: cia.gov, BRICS Joint Statistical Publication 2013

RUSSIA 728,000

INDIA 64,000

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BRICS //

I N D U S T R Y & A G R I C U LT U R E IRON ORE P R O DUCTI ON

STEEL PRODU CTION

PETROLEUM PRODUCTION

EL EC TRICITY PRODUCTION

CHINA 1,309 ◊ BRAZIL 434

CHINA 717 ◊ INDIA 684

CHINA 207 ◊ RUSSIA 517

CHINA 4,938 ◊ RUSSIA 1,064

PRIMARY ENERGY PRODUCTION

ENERGY C ONSUMPTI ON

CULTI VATED LAND

CEREALS PRODUCTION

CHINA 2,740 ◊ RUSSIA 2,333

CHINA 2,532 ◊ RUSSIA 1,890

CHINA 122 ◊ INDIA 156

CHINA 540 ◊ INDIA 227

(million tonnes)

(million tonnes)

(million tonnes of oil equivalent - mtoe)

(million tonnes)

(mtoe)

(million hectares)

WHO’S VISITING?

SA 22.7%

UNEMPLOYMENT

(billion Kwh)

(million tonnes)

(foreign tourist arrivals from, person-times)

CHINA: SOUTH KOREA 4,070,000 JAPAN 3,518,000 RUSSIA 2,426,000

CHINA 6.4%

INDIA 9.9%

BRAZIL 6.2%

RUSSIA 5.7%

INDIA: USA 980,688 UK 798,249 BANGLADESH 463,543

BRAZIL: ARGENTINA 1,593,775 USA 594,947 ITALY 229,484 RUSSIA: GERMANY 375,285 ISRAEL 85,955 SPAIN 70,291

SA: ZIMBABWE 1,553,008 LESOTHO 1,526,597 MOZAMBIQUE 1,076,753

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Photography by Steve Wong

‘We want to be benchmarked against the best of the best elsewhere, so that if we’re able to win contracts over international giants, the people of Hong Kong can then be sure that MTRCL is offering a worldclass level of railway transport service’

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GET ON TRACK

Interview //

OVER THE NEXT DECADE, TAI CHONG CHEW, PROJECTS DIRECTOR OF HONG KONG’S MTR CORPORATION LIMITED (MTRCL), WILL OVERSEE UNPRECEDENTED EXPANSION TO THE CITY’S RAILWAY INFRASTRUCTURE Interview by Roy Ying, RICS Asia Head of Communications

There are five railway projects in full swing in Hong Kong. How are they all funded? // The financial arrangement for the Hong Kong railway development is a public-private partnership. This means that MTRCL takes on a business risk to generate profits from co-developing properties on top of the future railway stations in the form of a subsidy for infrastructure investment.

From a long-term perspective for Hong Kong’s economic growth, the development of the Shatin-Central Link and the Express Rail Link are funded by the government on a concession basis. As for the ‘rail plus property’ funding arrangement, the development of the Wong Chuk Hang Depot will support the South Island Line, and the Homantin Station development will support the Kwun Tong Line Extension. As there is no developable space available in Island West, the public-private partnership model doesn’t work for MTRCL, but we believe this extension will benefit the local communities so the government is willing to issue a cash grant as a form of subsidy. From a railway operator’s perspective, there is still a business risk as

the fare-box revenue projection could be overly optimistic, but we’re of the view that the future of Hong Kong relies heavily on railway development, as this will lead to increased business activity, the regeneration of older neighbourhoods and the easing of traffic congestion.

How are the districts served by the new major railway corridors likely to be transformed? // MTRCL invests heavily in engaging local communities from the pre-consultation stage of every railway development project. We also employ a team of project liaison engineers to work side by side with the corporate relations office – which, by the way, has tripled in size over the past few years – to communicate with local district councils, retailers, residential estates, schools and churches, to see how we can help minimise the impact of construction work. We also provide dedicated websites with press information, photo galleries, project updates and interactive games to keep the people of Hong Kong updated.

Aside from communications, MTRCL can often go beyond its remit to manage the >>

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expectations of local communities, even if it means substantial capital expenditures. For example, we have the unusual task of building a new swimming pool as part of the West Island Line project to replace an existing public pool that needs to be closed to make way for the Kennedy Town station entrance. This was considered a justified investment in order to push a project forward with minimal policy challenges.

is for it to terminate at South Horizon, but in the future it’s quite logical to see it becoming a loop line connecting to the West Island Line, and Wah Fu Estate has to be one of the stops.

With improved traffic capacity, there’s a strong argument for redevelopment with a higher urban density within this district, but the people of Hong Kong will have to want it to happen, so MTRCL is spending quite a lot of time and effort working with local communities.

The Stage 2 public engagement on ‘Our Future Railway’ ended last May. What are the next steps for the local enhancement proposals? // People should understand that land use and transport planning have to go hand in hand – whether it’s a new town development or an urban regeneration project – and railway development can bring tremendous opportunities for growth to local communities.

Let’s take the South Island Line, for example. The current plan

How will MTRCL deal with everincreasing construction costs? // Since the announcement of the 10 major infrastructure projects in 2007, contractors have been competing for the same pool of workers and also the same sources of material suppliers, so it’s inevitable that prices will go up – a carpenter, for example, can now potentially earn HK$1,700 a day compared to HK$800 about five years ago. The cost of materials is something that’s out of our

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‘Railway development in Hong Kong will lead to increased business activity, the regeneration of neighbourhoods and the easing of traffic congestion’

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Interview // control: Hong Kong does not have its own natural resources, so we rely heavily on the import of materials and the expertise of our contractors in stabilising procurement prices. However, MTRCL is looking at a number of ways to save costs by encouraging prefabricating building, modulising the work process for greater efficiency, and sourcing materials from lower-cost countries.

Labour, on the other hand, is an area we can potentially influence by helping to expand the pool of young construction talent and, where necessary, we can apply through the Labour Department’s Supplementary Labour Scheme to bring in specialised skilled workers, who are currently in short supply in Hong Kong. MTRCL also organised a job fair recently, with 17 participating contractors offering 2,400 jobs – 300 at managerial level. There are already more than 11,000 people working on MTRCL’s projects, but we’ll need a further 5,000 people by the end of the year.

MTRCL is also involved in a number of metro lines around the world.

What are MTRCL’s objectives for its overseas contracts? // It’s easy for us to become complacent if we stay within Hong Kong. But by involving ourselves in overseas projects, we can pick the best practices from around the world and then try to implement new initiatives here to improve our services.

MTRCL has no competitor in Hong Kong, and therefore no one to benchmark our services against – but we want to be

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benchmarked against the best of the best elsewhere, so that if we’re able to win contracts over international giants, the people of Hong Kong can then be sure that MTRCL is offering a worldclass level of transport service.

What can chartered surveyors offer to MTRCL’s upcoming major infrastructure projects? // The attributes of chartered surveyors are very important to our projects. But whatever the profession – surveying, engineering or building – on top of the respective industry standards, I believe there are three facets that professionals and their firms need to excel in.

The first is safety: not only the basic regulatory requirements, but a company’s compliance beyond this, as well as how it operates its internal human resources systems, and how it invests in technology to create a safe working environment.

The second is stakeholder management. Stakeholders can influence clients and potentially impose hurdles on projects, so learning how to manage them, in collaboration with the corporate relations team, should become part of our jobs.

The final facet is quality.

Although every contract has an acceptance level of condition or service-delivery standards, professionals must continuously look for ways to surpass their clients’ requirements. As a client, I find that now I spend increasingly more time weighing up the quality of a bidding proposal, rather than just focusing in on the costs. mtr.com.hk

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Shipping containers //

Opened in 2011, BOXPARK pop-up mall brings more than 60 carefully chosen brands to derelict land in Shoreditch, east London, each housed in a refitted shipping container

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OUT OF THE BOX

AFFORDABLE, MOBILE AND PRACTICALLY INDESTRUCTIBLE, SHIPPING CONTAINERS ARE INCREASINGLY BEING PUT TO USE ON DRY LAND AS SHOPS, OFFICES AND EVEN HOMES. AMANDA BIRCH INVESTIGATES THIS PROMISING PROPERTY TREND

‘M

y first reaction was… what?! The idea of converting a shipping container into a home seemed crazy,’ says Andy Winter, chief executive of the Brighton Housing Trust (BHT). But it took him only 10 minutes to be convinced of the concept’s potential.

Located between the sea and the South Downs, there is little room for Brighton to expand much further, and the UK city is experiencing an acute shortage of affordable housing. BHT works with around 12,000 people a year who, as well as battling other issues such as drug or alcohol abuse, are all in need of accommodation. By installing 36 converted shipping containers at Richardson’s Yard to provide temporary housing for Brighton’s homeless men and women, important spaces will be freed up in BHT’s services, enabling more people to get off the streets. Winter says that those who use BHT’s services particularly liked the self-contained nature of the units, which feature their own shower, toilet and >>

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Right and below: Container City II, the second phase of the original project at London’s Trinity Buoy Wharf, and the 24 containers that comprise LOT-EK’s PUMA City, a transportable retail and event building, which was assembled at several different international ports

40

kitchen: ‘For people who have experienced an unsettled way of life and have lived on the streets, having your own facilities and your own front door is very important.’

The joint venture between BHT and development partner QED Property has been granted five years’ temporary planning permission, as the site is earmarked for longterm redevelopment. The tenants will live in the units for between six months and two years. During that time, the accommodation will be monitored closely for such things as soundproofing and heating costs, and after five years, the homes will be transported to another vacant site.

But QED is by no means the only company to realise the unique potential of container conversions. Transforming the corten steel boxes typically seen stacked 10-high on huge container ships into usable spaces for commercial and residential projects abound across the world, ranging from offices and pop-up shops to bird hides and schools.

Some architects have produced quirky one-off pieces by cutting openings in the container walls and reconfiguring them, and elsewhere, containers have been used in conjunction with other building materials to create strong, cheap and unique spaces.

According to Drewry Maritime Research, there are more than 21m shipping containers worldwide. And with the slump in global

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Shipping containers //

Images Sergio Pirrone; Kim Myung-Sik

shipping trade during the recession, an increasing number of containers are now collecting in ports, resulting in many being recycled. This glut means that they are also relatively cheap, with 40-foot (12.9m) units costing £2,000-£3,500, depending on their condition. But these are not the only benefits of the humble shipping container: they are also very mobile, and can be easily lifted on to a truck and relocated to another site, making them suitable for a multitude of temporary uses, such as emergency shelters, pop-up shopping malls and mobile art galleries. Since Hurricane Katrina in 2005, emergency container shelters are being used increasingly in the US and elsewhere to house victims of natural disasters.‘The main reason for their growing popularity in this field is their ability to be shipped virtually anywhere in the world,’ says Caitlin Clark, of Auburn University in Alabama, who has written a thesis on using shipping containers for

student housing.‘In most cases, the interiors of containers are fitted out using traditional construction methods, and shipped with the windows and doors loose inside. Once the containers arrive on site, the windows and doors are punched in and installed.’

The mobility, low cost and rapid off-site fabrication of shipping containers were the main reasons why Quinten de Gooijer, CEO of Tempohousing, used them to provide a quick housing solution for 1,000 students near Amsterdam. Keetwonen is believed to be the biggest ‘container city’ in the world and, according to de Gooijer, has been such a success that there is now a waiting list.

Planning permission for the complex has been extended to 2020.

Development consultant Urban Space Management pioneered an even more usable space by joining two containers together when they built the groundbreaking Container City in London’s Docklands.

The company has subsequently carved out a successful business niche and developed more than 60 other container projects, including marketing suites, a sports hall for south London’s Dunraven School and a travelling theatre called the Electric Hotel.

They also designed the temporary BBC television studios for the London 2012 Olympics, the ‘Big Blue’, which was made from 114 shipping containers painted >>

Below: Richardson’s Yard in Brighton, a temporary housing scheme that will use 36 refitted containers to create self-contained units Top left: Completed in 2010, LOT-EK’s APAP OpenSchool, an art school and exhibition space in South Korea, is made from eight containers cut along a 45-degree angle and raised 3m above ground

Above: The modular design of ECOntainer Bridge, by Israeli architects Yoav Messer, allows for total flexibility and means that much of the construction work can be done off-site, minimising disruption. The bridge will connect Arial Sharon Park near Tel Aviv to its car-parking areas

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Shipping containers //

Below: Re:START temporary shopping mall, New Zealand Bottom: Plans for the dramatic conversion of the abandoned Pier 57 on the Hudson River in New York Bottom right: Onagawa community centre, Japan

:FROM SHIP TO SHORE

CUSTOMISING A CONTAINER FOR USE ON LAND

Pop-up places As the containers only need a power source to operate, they can literally ‘pop-up’ anywhere, making them ideal for temporary retail outlets and exhibitions.

In New Zealand, for example, salvaged shipping containers

42

bright blue and stacked nine storeys high.

‘To make a 16ft-wide (4.9m) space, we join two containers and remove the adjoining walls,’ explains John Burton MRICS, project manager at Urban Space Management. ‘Then we use columns at certain distances to stop the roof from bowing. If you start cutting along the length of a container to make it shorter in order to fit into a plot, you’re cutting into the structural integrity and spending a lot of money cutting and then re-welding it. Containers are really good when you’re clever about the engineering and don’t reduce the length.’ Burton adds that, overall, the advantages of converting containers far outweigh the disadvantages.

If building costs are quite high, he says,

were used to create Re:START (pictured top), a bright, funky temporary shopping mall in the city of Christchurch following the devastating 2011 earthquake.

Meanwhile, as part of the radical transformation of the 61-yearold Pier 57 on the Hudson River in New York (pictured above), the use of containers will reference the river’s shipping history and the pier’s previous port function.

The ambitious scheme by architects LOT-EK and developer Young Woo & Associates will see the abandoned pier redeveloped into an innovative retail, food, art and cultural centre.

there’s an immediate benefit as labour costs are much lower and shipping containers don’t require deep, complex foundations.

What’s more, the finished product is usually starkly different from the original metal box. ‘It feels just like a normal office,’ says Glenn Payne MRICS, associate director of construction consultancy ig9, which rents studio space in the Riverside Building on Trinity Buoy Wharf, part of Container City.

‘The internal partitions have been removed so we have the width of three containers, and you don’t feel confined at all. Before I came here, there seemed to be a stigma towards working in a container environment, but now I think attitudes are changing. If people are willing to go with a less conventional space, and if it suits the needs of the business, why not consider it?’

It seems that more and more people are now considering container conversions, and attitudes are changing. Many now see the robustness, flexibility and mobility of containers as a real opportunity, and given their availability and recyclability, it’s also a sustainable practice that’s long-lasting and relatively cheap.

Modular construction At Portishead Marina in Somerset, 28 shipping containers have been stacked four-high at either end of a traditional concrete frame to house a new pub and restaurant for UK brewery Hall & Woodhouse. The second part of the scheme, by architects Mackenzie Wheeler, will see a further 108 containers converted into hotel accommodation and stacked on top at a later date, when the funds are available.

A few of the containers will be fitted out as they are to be single rooms, while the double rooms will be made from two 20-foot-

long (6.1m) containers welded together to create more space.

Strength and durability Shigeru Ban is one architect who has found an entirely new use for the container’s form.

His community centre (pictured above) for the tsunami-ravaged town of Onagawa in Japan uses shipping containers as robust, disaster-proof outside walls to support the centre’s timber roof.

They also provide ample storage space. The building is compelling in its simplicity and beauty, and shows what can be done when containers are left intact.

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The Royal Institution of Chartered Surveyors (RICS) is the world’s leading qualification when it comes to professional standards in land, property and construction.

The annual RICS Hong Kong Awards is held again this year to recognise outstanding work in the industry. Last year’s awards were a resounding success with a total of 55 nominations and 17 winners.

We now invite your nominations for 2014! Results will be announced at the RICS Annual Dinner 2014 to be held on 20 March 2014.

Log onto RICS Hong Kong Awards website (http://www.ricshkawards.com), fill in the Nomination Form according to the category and submit it with supporting materials / documents as neccessary.

Nomination closes : 13 December 2013 Please contact RICS Hong Kong Awards 2014 Secretariat Office Ms Winky Leung / Mr Miles Wilson Email : winky.leung@creativegp.com / miles.wilson@creativegp.com Phone : (+852) 3159-2927 / (+852) 3159-2943

Diamond Sponsor :

Gold Sponsor :

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Law advice //

Hong Kong: the development of

DISPUTE RESOLUTION By construction dispute specialist Gilbert Kwok

SOME ADJUDICATION PRACTIONERS HAVE DESCRIBED STATUTORY ADJUDICATION AS ‘QUICK AND DIRTY’

44

This mechanism is more suitable for consultants because employers do not usually insist that consultancy agreements contain an arbitration clause, whereas with construction contracts, they usually do. In addition, an employer should have fewer reasons to justify not making a payment to a quantity surveying firm. On the other hand, an employer may find it easier to establish a defence of its liability to pay other consultants, such as an architect or a contractor, if he can prove to the satisfaction of the judge that there is a defective design from the architect or defective workmanship from a contractor.

My understanding is that security of payment legislation will be enacted in Hong Kong around 2015.

It is a very complicated legislation involving many issues, including the amount of time that a professional surveying firm is allowed to value progress payment or loss and expense claims. Furthermore, I believe RICS members in other countries around the world that have had similar legislation for many years may have a better idea of the pros and cons of such legislation, and so their experience may help Hong Kong to formulate a system that is useful and helpful to consultants and contractors, as well as adjudication practitioners.

GILBERT KWOK FRICS is a partner at global law firm Clyde & Co. clydeco.com Share your views on the security of payment legislation in your countries. Email ricsasia@rics.org with the subject title ‘Law Advice – Modus Asia’.

Illustration Borja Bonaque

Within the construction industry, there is a wide range of dispute resolution mechanisms available, including litigation, arbitration, mediation, adjudication, expert determination, independent expert certification, dispute review boards and the Dispute Resolution Adviser system.

In Hong Kong, since the 1980s arbitration has become increasingly popular, while recently, the popularity of this type of dispute resolution mechanism has dwindled elsewhere. Beginning in the UK in 1996, many common law countries, including Singapore, Malaysia and Australia, have adopted statutory adjudication instead, and now Hong Kong is said to be one of only a few remaining common law jurisdictions not to have adopted this mechanism.

The main argument for adopting statutory adjudication in Hong Kong is that, according to recent findings of surveys conducted by the Hong Kong SAR government and the Hong Kong Construction Industry Council, many consultants and contractors have experienced payment problems, and the industry is looking for a quick process to sort out disputes during the construction phase of projects. Some UK- and Australia-based adjudication practitioners who have recently promoted this means of dispute resolution in Hong Kong have described it as‘quick and dirty’, and according to them, given the complexity of construction disputes and the short duration of the adjudication process, adjudicators’ decisions are inherently, or more likely than not, inaccurate or wrong. However, they add that consultants and contractors in the UK and Australia usually don’t mind such inaccuracy, provided they get paid promptly.

Another possible way for consultants or contractors to achieve a quick resolution of construction disputes during the construction phase of projects is by making an application called the summary judgement application to the Hong Kong court, with the support of an affirmation explaining why the defendant has no defence to a particular claim. Under this mechanism, a judge can make a quick summary judgement if he is satisfied that the defendant indeed has no defence based on such affirmation evidence. However, this mechanism only works if there is no arbitration clause in the agreement concerned, or the court has no discretion but to stay any court action in favour of arbitration.

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Information :RICS NEWS :DIARY :BENEFITS :RESOURCES

1982

The year quantity surveying was first introduced in the Philippines

A RISE IN INPUT COSTS AND A SKILLED WORKER SHORTAGE COULD IMPACT ON THE DELIVERABILITY OF CONSTRUCTION PROJECTS GOING FORWARD

Andy Wu, RICS Asia Senior Economist, in the RICS Hong Kong Construction Market Survey Q2 2013

STRONGER BONDS RICS Asia has recently formed a memorandum of understanding (MOU) with the Philippines Institute of Certified Quantity Surveying (PICQS), a professional organisation open to all citizens of the Philippines who are quantity surveying trained engineers. The organisation has more than 600 members worldwide, with overseas chapters across Asia and the Middle East. The MOU formalises the existing relationship and encourages the development of a stronger bond between the organisations. In the long term, the agreement is expected to lead to more PICQS members joining RICS, and vice versa. Visit picqs.org.

RICS ASIA +852 2537 7117 General enquiries APC guidance Subscriptions Events Training Bookshop REGULATION HELPLINE +44 (0)20 7695 1670 CONFIDENTIAL HELPLINE +44 (0)20 7334 3867 DISPUTE RESOLUTION SERVICES +44 (0)20 7334 3806 SWITCHBOARD +44 (0)20 7222 7000

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RICS news //

Linking land law to development RICS has published new research exploring the theory that land administration activities support a country’s economic, social and environmental development. The report takes the national land titling programme of Thailand as a successful example, and the surveying

settlement programme in Bangladesh as a case study of a village in the Gharinda Union.

RICS International Sustainable Development Adviser John Tracey-White said: ‘This report adds to a body of research focussing on the land rights of low-income rural and urban

populations. Surveyors are increasingly involved in assessing property values in these conditions, and facilitating the land registration process – both in the field and in setting up land data storage systems.’ rics.org/research

SMART CITIES

Do smart cities have the answer, and what are the opportunities for surveyors? The recent International Federation for Housing and Planning Centenary World Congress addressed the question of ‘smart cities’, and their potential to contribute solutions to some of the world’s most pressing urban challenges. It has been observed that the growth of cities follows the technology of the day: for example, in the 19th century, UK cities were built around railways and sewers, whereas later, they were built around metro systems. In the US, cities were built almost exclusively around the car, and then in the mid-20th century, they began to be rebuilt around the urban motorway - until someone shouted ‘stop!’

With the vast array of information technologies now being employed in everyday life, what are the implications of employing these technologies at the scale of the city?

Read views from Cisco, IBM, Siemens and Accenture at rics.org/smartcities.

FACTS, STATS & SURVEYS 08 46

In China, the construction sector total workloads net balance slipped dramatically from +41 in Q1

In June, Sir David Tweedie, Chairman of Trustees at the International Valuation Standards Council (IVSC), hosted a meeting of valuation professional bodies at the International Monetary Fund in Washington DC. A number of organisations – including RICS, IVSC, the Appraisal Foundation and the Appraisal Institute – were in attendance, and participants discussed the importance of developing a global valuation standard.

The meeting was very positive, with general agreement among the bodies to support the formation of one international standard of valuation, and to address consistency in qualifications. Based on the discussion and feedback received,the IVSC will be developing papers for consultation. For further updates, visit rics.org/internationalstandards.

+8

Private commercial net balance eased, from +44 in Q1

Illustrations Oscar Bolton Green, Bernd Schifferdecker

ONE STANDARD

In the private industrial category, workloads deteriorated significantly

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T

PRESIDENT’S COLUMN

‘As professionals, we need a global outlook. Success at home is no longer possible without recognition abroad’ Michael Newey FRICS RICS President

he fast-paced interconnected world we know today is almost unrecognisable from the one I knew when I entered the profession in 1981. Enormous political and technological change has transformed our everyday lives; what we now take for granted would have seemed like science fiction 30 years ago.

In the business environment, globalisation is arguably the biggest change we’ve witnessed.

Today, governments and business leaders acknowledge that no developed or developing nation can be self-contained and hope to succeed; the very few that persist with isolationism are failing. Isolationism is a bad business model. As professionals, therefore, we need a global outlook and to understand international business dynamics.

Take investment flows, for example. Money moves around the globe in an instant – rapidly flowing into new investment opportunities, but leaving just as fast if investors become nervous. Consequently, the corporate ownership of many companies is increasingly international. In 2012, the UK alone benefited from around £42bn of foreign direct investment, and companies such as Jaguar and Land Rover have thrived under international ownership while retaining a UK brand identity.

This phenomenon extends beyond major employers: the UK small business market is currently the most favoured inward investment location in Europe, attracting 40% of Japanese, US and Asian investment within the EU. As CEO of a housing association, I see this every day: we house people in the east of England, but we couldn’t do it without international interaction. We source funding, building technology and even some consultancy services from outside the UK, which ensures our viability so that we remain able to provide work for local small and medium-sized enterprises.

But while clients and employers take an increasingly global perspective, they still demand professional services to the highest technical and ethical standards. For example, UK investors acquiring a scheme in Asia want to know they can access good advice from RICS members in that market. As developing economies become more developed, the demand for professionalism increases. And as we respond by giving access to our standards, our status as qualified members is enhanced.

Whichever market we operate in, we need external investors to recognise our standards and choose our services. Success at home is no longer possible without recognition abroad.

Isolationism is not an option.

RICS HONG KONG BOARD ANNOUNCED The 2013/14 RICS Hong Kong Board has been announced, with Dr Daniel CW Ho FRICS elected to chair the board of 12 members for a one-year term. Commenting on his

new position, Dr Ho said: ‘The board will continue to ensure quality services are delivered by chartered surveyors in the region, and in the more mature markets such as Hong Kong, we shall

Energy, oil & gas workloads also dropped sharply from +46 into negative territory

85%

Shortage of skilled labour was once again the top factor limiting building output

extend our advantage to Greater China, Japan, and Korea to provide fellow surveyors with more opportunities to expand their services in these locations.’

As a chartered building

surveyor, Dr Ho initiated the Building Health & Hygiene Index (BHHI) during the SARS outbreak in March 2003. This research has since been extended to cover building safety in Hong Kong.

18%

$32,237 of those completing the survey said the use of Building Information Modelling has increased

Results taken from the RICS China Construction Market Survey Q2 2013. rics.org/economics

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RICS news //

Events FOR RICS EVENTS BOOKINGS AND ENQUIRIES ricsasia@rics.org // +852 2537 7117

HONG KONG Distinguished Speaker Seminar Reception – Conversation with the Chief Secretary 28 January 2014, Hong Kong The chief secretary for administration assists the chief executive in supervising the policy bureau as directed by him and plays a key role in ensuring coordination in policy formulation and implementation.

This is particularly important in areas that cut across the policy bureau. The chief secretary also covers specific priority areas of the chief executive’s policy agenda, and is responsible for forging a closer and more effective relationship with the Legislative Council and for drawing up the government’s legislative programme. Carrie Lam HonRICS, chief secretary for administration of the HKSAR government, will share with members the 2014 policy address, respond to the RICS annual submission, and discuss policies initiatives relevant to land, property and construction. Roger Nissim, adjunct professor of the Department of Real Estate and

08 48

Construction at the University of Hong Kong will moderate the seminar.

CHINA RICS Urbanisation Summit 27 February 2014, Beijing The one-day summit will gather investors, developers, contractors, corporate occupiers, economic analysts, government officials and professional advisers to map out the future of asset management.

Topics will include how to minimise risks accompanied by development opportunities; the key features of the Chinese market; growth potentials of cities in China; investment strategies and benefits for global investors; and how to increase investors’ confidence using new technologies and standards.

INDONESIA RICS Indonesia Real Estate and Construction Summit February 2014, Jakarta This summit will focus on the challenges and opportunities for real estate and construction professionals across ASEAN, but in

particular, those operating in the Indonesia market, and will provide market insights and opinions from global real estate experts and leading Indonesia-based professionals. The event will highlight the key challenges and opportunities, understand how leading professionals are meeting these challenges, and how the industry is achieving sustainable growth and talent retention in Indonesia’s property sector.

MALAYSIA FIG-RISM-RICS Summit June 2014, Kuala Lumpur This week-long summit will be held in conjunction with RISM (the Royal Institution of Surveyors Malaysia) and FIG (the International Federation of Surveyors) Undergraduates Conference, with an expected attendance of around 2,000 surveyors. RICS President Michael Newey, PresidentElect Louise Brooke-Smith and Past President See Lian Ong will be keynote speakers.

For more details, visit ricsasia.org.

UAE RECOVERY GATHERS PACE Recovery in the United Arab Emirates (UAE) continues to gain traction and Asia remains an upbeat story, according to the latest RICS global commercial property survey. Reversing the generally negative pattern that characterised the UAE market from the end of 2009 until the middle of last year, further improvements in sentiment in both the occupier and investment real estate markets show that the tone in the property industry is continuing to gain ground.

Results for Asia also demonstrate promise, with Japan leading the way on the investment side while also delivering a strong result for the occupier market. Headline numbers for China remain firm, generally, despite a slight loss of momentum in the economy and growing concerns over the rapid

increase in credit. In India, meanwhile, the real estate picture holds broadly flat, indicating a degree of caution as the central bank grapples with the challenge of a subdued economy and volatility in the currency.

By way of contrast, the picture in Brazil is rather more downbeat, particularly in the occupier market.

However, the Brazilian investment market is continuing to display a greater degree of resilience, with data suggesting that, for the time being, property investors are willing to take a longer-term view of the prospects for the economy.

Unsurprisingly, Europe’s headline indicators reflect the ongoing recession in the region, with occupier and investment markets remaining generally weak.

However, the numbers for Canada remain firm, and results for the US are encouraging, with further evidence of rising investor appetite and a stronger tenant demand driving rents and capital value expectations in an upward direction despite some mixed economic data. rics.org/marketsurveys

HOUSING RECOMMENDATIONS The Hong Kong government’s Long Term Housing Strategy Consultation document provides a vision of how to achieve adequate and affordable housing for Hong Kong, with a target of supplying 470,000 public and private units in 10 years. While RICS welcomes the document, it believes the proposal lacks detail on implementation. To address this, RICS has proposed a number of recommendations, including the development of the North East New Territories; a feasible reclamation plan outside Victoria Harbour; the establishment of a land database; speeding up the land-use approval process; the introduction of arbitration to land premium negotiations; and speeding up the allocation of public houses. For more details, visit ricsasia.org.

rics.org ricsasia.org

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DISCUSSION POINTS

Why RICS?

CATHIE CHUNG MRICS

DIRECTOR – CONSULTING, GREATER PEARL RIVER DELTA RESEARCH, JONES LANG LASALLE, HONG KONG

Although Asia-based real estate professionals have a range of options for industry accreditations, RICS membership tops the wish list for those who are keen to display their adherence to high international standards

‘Being a member of RICS is highly regarded by clients and employers in Hong Kong, and gives me a genuinely competitive advantage. As a chartered surveyor, I’m able to guarantee clients that RICS’ high international standards of professionalism inform my work. Furthermore, my employer, my clients and I all benefit from RICS’ Continuing Professional Development programmes, which ensure that members keep abreast of any changes and new developments in this fast-changing world. And with plenty of networking opportunities, RICS has strengthened my professional, as well as my personal, development.’

BENJAMIN TOWELL MRICS

EXECUTIVE MANAGER, BUILDING AND CONSTRUCTION AUTHORITY (BCA), SINGAPORE

‘I used to work for an architecture practice in Northumberland, UK, and I often worked with land, building and quantity surveyors. But it was not until I began working for the BCA that I gained a much better idea about what RICS stood for.

I decided to pursue membership of RICS under the planning and development pathway of the PER (professional experience route), due to the shared values RICS has for progressive, research-driven knowledge and high global standards that respect local contexts.’

ESCODE YUEN FRICS

MANAGING DIRECTOR FOR HONG KONG AND CHINA, DAVIS LANGDON KPK

‘I’m proud to have been associated with RICS for around 35 years now. I was a student member while studying quantity surveying at Portsmouth University in the UK. Then, after returning to Hong Kong to continue my career, I passed the Assessment of Professional Competence and became a full member in 1981.

Following many successful years in the industry, I was awarded Fellow of RICS status. I’ve worked in the UAE, Hong Kong and China, where my FRICS qualification has been an international recognition of my ability and professional knowledge.’

FOR MORE INFORMATION on the benefits of RICS membership, visit ricsasia.org.

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Measure //

TRADE WINDS

2.4

TOP CONTAINER EXPORT ROUTES Illustration by Ian Dutnall

LATIN AMERICA

EXPORTS 2.4 IMPORTS 2

UNITED STATES

3.4

EXPORTS 3.4 IMPORTS 15.6

UNIT: Million TEUs (twenty-foot equivalent unit)

5

2.6 2.7

3.1

2.8

OTHER ASIA

EXPORTS 16.2 IMPORTS 13.2

5.3

8.5

2.9

2 3.3

GREATER CHINA EXPORTS 28.9 IMPORTS 12.2

6.9

MIDDLE EAST & AFRICA

EXPORTS 1.9 IMPORTS 9.4

1.9

EUROPEAN UNION 3.1

2.9

2.9

EXPORTS 11.5 IMPORTS 11.9

2.1

3.4

Source: worldshipping.org

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RICS Asia Valuation Conference 2013

Asset Valuation – The Life Blood ofGlobalFinancial Markets Date : 6 November, 2013 (Wednesday) Time : 09:00-17:20 Venue : Main Hall, 3rd Floor, BelleSalle Kudan Address : Sumitomo Fudosan Kudan Bldg, 1-8-10 Kudan-Kita, Chiyoda-ku, Tokyo, Japan

The 2013 RICS Asia Valuation Conference is organised by the Royal Institution of Chartered Surveyors (RICS) and co-organised by the Japan Association of Real Estate Appraisers (JAREA). Experts from all over the world from different industries will be in attendance to discuss a range of issues pertaining to asset valuation.

Interested?

Please visit www.ricsasia.org/avc

to register NOW!

For enquiries, please contact: Mr Patrick Sun at patrick.sun@creativegp.com or Mr Miles Wilson at miles.wilson@creativegp.com

Organiser:

Co-organiser:

Lead Partner:

Sponsor:

Supporting Organisations: Remarks • Medium of Conference: English and Japanese.

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