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The RICS and Macdonald & Company Asia Rewards & Attitudes Survey 2014

Executive Summary and Key Findings


2014 EXECUTIVE SUMMARY

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Foreword It is 12 months since our last look at the attitudes and salaries of the many people employed within the real estate industry across the various sectors and geographies in Asia. Once again, the results provide a fascinating insight into the way staff are thinking and possibly provide a hint of the direction that the market will follow. Anecdotally, Macdonald & Company’s businesses in Hong Kong and Singapore have enjoyed an excellent year and are planning sensible growth strategies in both North & South Asia in the coming 12 months that parallel many of our clients’ overall views. This time last year, we were remarking that investors were finding it hard to raise capital and while this remains the case, there has been significant progress on this front and hiring volumes within private equity arena have increased. Construction in Hong Kong and Singapore is buoyant and developers in both locations have continued their plans in China, as well as casting their eyes further afield to Europe and North America. Salary increases in Hong Kong and Singapore have been on average around 10%, whilst Malaysia follows up its results from 2013 with another region leading result. For the first time since we started these surveys in 2006, China salary growth lags the rest of the region with the average rise coming in at only 7%. This links well into the ‘Business Confidence Index’ as with increased remuneration, there is a higher proportion of respondents across the region predicting growing economic conditions in their market place than the previous 12 months. Once again Malaysia is the most confident region and the general skill shortage in that market and the desire to pull back Malaysian nationals from overseas is likely to see that market continue to report strong salary growth and employee confidence. Worth commenting on is the very small volume of people within China who predict a tightening in their market place (5%) compared to those that predict it will stay the same (50%). So with salaries rising healthily in the majority of situations, you would expect to find a happy workforce responding to our survey but the results suggest otherwise. A surprising 62% of respondents say they are fairly likely or very likely to move jobs in the next 12 months. Whilst I would be very surprised if the actual rate of attrition is anywhere near that figure, it is imperative that managers take care to plan ahead and provide the right environment for their staff to thrive in their businesses. If hiring continues to rise, salaries will

The RICS and Macdonald & Company Asia Rewards & Attitudes Survey 2014 Results

do so as well and the temptation for many will be to take advantage of the conditions to strike a better deal. Employers need to think about securing high performers, providing inducements, training and long term incentives that discourage short term moves.

Peter Moore MRICS, Managing Director, Macdonald & Company, March 2014

Introduction Now in its eighth year, the Annual RICS and Macdonald & Company Asia Rewards & Attitudes Survey is the most comprehensive survey undertaken for the property sector. The survey continues the success of earlier years. 1,525 Asian real estate professionals participated online in November and January 2014 from across the Asian region. Thanks this year must go to RICS and HKIFMA who actively promoted their involvement in the survey amongst their members. We would also like to thank all the participants who took time to complete the online survey. Besides statistics on current salaries, recent salary increases, bonuses and employment package benefits, the results give insight into wider issues that are important to real estate professionals in their role and their attitudes toward employment. New this year, the results now also give insight into key skills required at executive and board level and company hiring intentions for 2014. This executive summary sets out the key findings of the survey. For further information or analysis please contact: E: salarysurvey@macdonaldandcompany.com or call our Hong Kong or Singapore offices. An online statistics package for the 2014 survey is available at a cost of US $999. In addition to the Asia survey, Macdonald & Company and RICS undertake remuneration and attitudes surveys for the following regions: UK, Middle East, Africa and Europe. All reports are available at www.macdonaldandcompany.com For the sixth year, the results have been collated and analysed by BluSky Research (a research trading name of BluSky Marketing Limited – www.bluskymarketing.com).

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KEY FINDINGS

are anticipating an improvement in economic activity (+8%*)

Negative business sentiment dropped to 11% (-1%*)

of respondents received a base salary increase (+7.7%*)

Of the 55.8% who received an increase, the average was 10.1% (-1.5%*)

is the average salary for Asian real estate professionals (-$3,334*)

68.2% (versus 54.5%*) of all respondents secured an average bonus of $25,693 (-$3,159*)

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*Versus last year

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of respondents class their current employer as an employer of choice (-6%*)

are fairly or very satisfied with their current employment (+1%*)

of respondents believe their organisation will increase headcount in 2014

Better salary continues to be the most important job aspect

An MRICS/FRICS earns $105,159 in comparison to a non professionally qualified counterpart who earns on average $73,861

Health insurance remains the the most popular employee benefit provided

The RICS and Macdonald & Company Asia Rewards & Attitudes Attitudes Survey Survey 2014 2014 4 Results Results

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RESEARCH SAMPLE PROFILE

Response Rate Total In its eighth year with 1,525 respondents, the survey remains the most robust and respected survey of its kind with the second highest response rate since it started in 2006. The response rate has risen by 16.6% on the previous year and is the second highest response total over the last seven years.

2000 1,536

1,525

1500 1,090

1,291

1,308

2011

2012/13

949

1000

500

0 2008

2009

2010

2014

26% 22% 17%

18%

10%

15%

16%

19%

19%

18%

21%

19%

20%

22%

25%

24%

30%

15%

Years’ Experience How many years’ experience do you have in your discipline? The general level of experience of the sample continues to be more senior this year with 47% of respondents having over 16 years’ experience versus 42% the previous year.

30%

+ 16.6% yr/yr

10% 5% 0%

7%

7%

7%

9%

10%

10%

10%

20%

17%

17%

24%

30%

Over 21yrs

22%

40%

16-20yrs

2014

44%

40%

50%

26%

Level of Responsibility What is the level of responsibility within the organisation for which you work? The general level of responsibility or seniority of the sample has seen a growth in the % of respondents who are at Manager/Associate level, up from 44% to 46% this year. While those who are either at Assistant or Analyst level have dropped from 24% to 22% of the total respondents.

2012/2013

11-15yrs

16%

2011

5-10yrs

46%

Up to 4yrs

0% Assistant/ Analyst 2011

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Manager/ Associate

2012/2013

Associate Director/Vice President

GM/Director /Principal

Executive Director/MD/ CFO/COO

2014

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AVERAGE ASIAN REAL ESTATE SALARY & BONUSES (US$ )

Average Asian Real Estate Salary (US$pa) What is your current annual base salary in US$? The average base salary of a real estate professionals in Asia has declined on average, down to US$96,087 per year. The 3.6% decline in average base salary across the Asian Region could be attributed to the significant decline in Executive Director/MD/CFO/COO average salaries, dropping significantly by 21.4% from $235.344 to $185.047 this year.

$99,421

100000

$96,087

$89,851

80000

60000

40000

20000

0 2011

2012/2013

2014

- 3.6% yr/yr

Average Salary (US$pa): Region What is your current annual base salary in US$? Those working in the People’s Republic of China (PRC) showed the highest average annual salary growth, up from US$106,633 to US$138,400, an increase of US$31,767 or 29.7% year on year. Malaysia also demonstrated an increase, growing by 29.2% from $55,660 last year to $71,804 year on year.

$96,087 $99,421 $89,851

Average All

$138,400 PRC

$106,633 $96,466 $125,580 $135,937 $132,765

Singapore $98,929 $100,349 $87,691

Hong Kong

$71,804 $55,660 $41,745

Malaysia

$0

$30,000 2011

Average Salary (US$pa): Region by Qualified RICS What is your current annual base salary in US$? The average salary for a RICS qualified respondent dropped from $120,923 to $105,159 (or 13.0% decrease) year on year. However those working in the Asian Real Estate market with a RICS qualification continued to secure a 42% higher average salary (US$105,159) against those who are not professionally qualified (US$73,861).

$90,000

$120,000

$150,000

2014

2012/2013

$105,159 $120,923 $106,943

Average All

$161,735 $181,342 $172,281

Singapore

$150,602 $120,938 $102,411

PRC

$111,591 $107,903 $104,581

Hong Kong

$94,000 $91,740 $70,592

Malaysia

$0 2011

The RICS and Macdonald & Company Asia Rewards & Attitudes Survey 2014 Results

$60,000

$50,000 2012/2013

$100,000

$150,000

$200,000

2014

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AVERAGE ASIAN REAL ESTATE SALARY & BONUSES (US$ )

Average Salary (US$pa): Level of Responsibility What is your current annual base salary in US$?

2011

2012/13

2014

+/-

Total

$89,851

$99,421

$96,087

-3.4%

Assistant/Trainee/Graduate

$21,222

$19,251

$22,959

+19.3%

Analyst/Officer

$36,242

$46,814

$45,470

-2.9%

Manager

$64,445

$72,850

$66,502

-8.7%

Senior Manager/Associate

$88,446

$99,429

$100,365

+0.9%

Associate Director/ Vice President

$113,675

$120,067

$130,098

+8.4%

GM/Director/Principal

$142,695

$161,059

$151,588

-5.9%

Executive Director/MD/CFO/COO

$217,334*

$235,344*

$185,047

-21.4%

* Response rate below 100 per response year

Annual Salary Is your salary paid over 12 months or 13 months? On average 74% of respondents’ salaries are paid over 12 months, with the highest being Malaysia (88%) and the lowest Singapore (68%). Inversely, 32% of Singapore respondents are paid over 13 instalments during the year.

100% 88% 80%

76%

74%

69%

68%

60%

40%

31%

26% 20%

32%

24% 12%

0% Average All

12 Months

Change to Salary at Last Review What change (if any) was made to your annual base salary at your last pay review? 55.8% of respondents secured a base salary increase, up from 48.1% last year, while 1.8% received a salary reduction. 29.5% of the respondents did not see a change at all in their annual salary, up by 7.3% versus the previous year.

Malaysia

Hong Kong

PRC

Singapore

13 Months

7.5% Up by 15%+ (=) 6.9% Up by 11-15% (+1.0%) 15.9% Up 6-10% (-0.2%) 20.5% Up by <5% (+3.8%) 5.0% Up not disclosed (+3.1%) 1.8% Reduced (+0.7%) 29.5% Unchanged (+7.3%) 12.9% No response (-15.8%)

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7.9%

7.8%

7.3%

9.2% 7.4%

7.2%

9.2%

8.1%

9%

9.7%

12.9% 10.6%

11.8%

12%

12.9%

15.0% 12.1%

12.8%

15%

9.6%

Average Increase: Age What (if any) was the % increase of your salary? Those aged 25-30 received the highest average annual salary increase at 12.9%. Respondents aged between 18-24 (up from 9.6% to 12.1%) and those aged 60+ (up from 7.8% to 7.9%) both received a greater average annual salary increase this year. However the majority of age groups received a reduction in annual salary increase, which reflects this year’s average annual growth of 10.1%, down from 11.6%.

14.5%

AVERAGE ASIAN REAL ESTATE SALARY & BONUSES (US$ )

6%

3%

0% 18-24 2011

25-30 2012/2013

31-40

41-50

51-60

60+

2014

Average Increase: Region What (if any) was the % increase of your salary? AVERAGE INCREASE

CHANGE TO SALARY – LAST YEAR =

Total

10.1

34%

64%

2%

Malaysia

11.0

36%

61%

3%

Hong Kong

9.2

20%

77%

3%

Singapore

9.0

35%

64%

1%

PRC

7.0

42%

54%

4%

Annual Bonuses Received (US$’000pa) What was the approximate value of your annual bonus (or bonuses) over the last 12 months? 68.2% of respondents received a bonus (up from 54.5% last year) and the average bonus they received was US$25,693 (down from US$28,852). Those who did not secure a bonus declined to 31.8% (from 45.5% last year).

The RICS and Macdonald & Company Asia Rewards & Attitudes Survey 2014 Results

21.8% $20.0K plus (+5.7%) 13.4% $10.0K - $19.9K (+3.1%) 15.3% $5.0K - $9.9K (+6.5%) 8.5% $2.5K - $4.9K (+1.3%) 9.2% Up to $2.49K (-2.9%) 31.8% Nil (-13.7%)

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AVERAGE ASIAN REAL ESTATE SALARY & BONUSES (US$ )

Average Real Estate Total Reward What was the approximate value of your annual salary, bonus and additional remuneration received (e.g. commission & performance related pay) over the last 12 months? The average total reward of a Asian real estate professional is US$140,874, down from $150,269 or -6.3% in the previous year. The total reward includes the average annual salary, average annual bonus (or bonuses) and the average additional remuneration received (e.g. commission & performance related bonus) per annum.

Important Job Aspects How important are each of the following to you in your job? Salary continues to be the most important factor when it comes to job satisfaction (75%, down from 78% last year), followed by management style (69%, up from 68%), range of interesting work (63%, down from 66%) and responsibility (63%, down from 67%).

160000

$150,269 $133,597

$28,852

$25,693

$24,945 80000

$99,421

$96,087

2012/2013

2014

$89,851

40000

0 2011 Average Salary

Average Bonus

Additional Remuneration

75% 78% 77%

Salary

69% 68% 70%

Management style Range of interesting work

63% 66% 62%

Responsibility

63% 67% 65%

Career progression

62% 65% 67% 58% 61% 62%

Job security

56% 58% 55%

Working environment

54% 56% 54% 39% 42% 39%

Location

36% 37% 38%

Range of clients 29% 31% 30%

Latest technology

24% 26% 24%

Travel opportunities 10%

0%

20%

2011

30%

40%

2012/2013

50%

60%

Health insurance

63%

5 day working week

61%

Mobile phone

47% 47%

Performance related bonus

31% 31%

70%

2014 80%

70% 67%

65% 65%

51%

37%

26% 25% 24%

Dental insurance

25% 24% 22%

Housing allowance

24% 20% 22%

13th month guaranteed bonus

17% 20% 18%

Pension/Gratuity

17%

Other insurances

21% 22%

16% 16% 15%

Flights Company car allowance

9% 11%

16%

14% 11% 10%

Lunches/Luncheon vouchers

13% 10% 9%

Company car

12% 13% 13%

Flexitime Profit share

8% 9%

12%

10% 11%

Relocation package

8%

10% 8% 9%

Paid overtime

8% 8% 7%

Share option scheme

8%

Tax efficiency scheme

7%

11%

6% 6% 7%

School fees

5% 5% 5%

Club membership

4% 2% 2%

Sign on bonus None Other 0%

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$19,094

$18,801

120000

Training/ Development

Employment Benefits Which of the following additional benefits are included in your current package? Health insurance (70%), 5 day working week (65%) and mobile phone (51%) are the most popular employee benefits provided, while interestingly those respondents who did not receive any employee benefits remains unchanged at 4% for the third year running.

$140,874

$21,996

4% 4% 4% 5% 5% 4%

10%

2011

20%

30%

40%

50%

2012/2013

60%

2014

70%

80%

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MARKET ATTITUDES

Skills Gap at Executive/Board Level At a senior level, what key skills do you believe people often lack? At executive and board level, respondents highlighted that having the right attitude and personality (81%) and communication skills (76%) were the key skills people often lack at the top of an organisation within the property sector.

100%

80%

81%

76% 66%

65%

60%

54% 47%

44%

40%

20%

0% Right attitude/ personality

Qualities Required to be Successful at Executive/Board Level At executive and board level, what do you think are the three most important qualities to be successful? To be successful at executive and board level, respondents indicated that excellent communication (27%), being action-oriented (15%), being flexible/ adaptable (13%) and being a great networker (13%) were the most important qualities.

Communi -cation skills

Commer -cial acumen

Professional manner

Relevant Professional/ Literacy Industry Industry and knowledge qualifications numeracy and skills experience

30% 27% 25% 20% 15%

15%

13%

13%

12%

12%

10% 5%

4%

4%

0% Excellent communi -cation

Employer of Choice Do you consider your current employer an employer of choice? Overall 63% (- 6%) of the survey respondents consider that their current employer is an employer of choice, which declined slightly in comparison to last year.

The RICS and Macdonald & Company Asia Rewards & Attitudes Survey 2014 Results

Actionoriented

Flexible Great /Adaptable networker

Cope Confident/ Self Self well Self sufficient/ starter under assured Independent pressure

63% Yes (- 6%) 37% No (+ 6%)

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AVERAGE ASIAN REAL ESTATE SALARY & BONUSES (US$ )

Job Satisfaction How satisfied overall are you with your current job? The majority of survey participants (78%) are fairly or very satisfied with their current job. 22% of respondents felt they were not at all or not very satisfied with their current job, down slightly from 23% last year (or down by 1%).

Moving Job How likely are you to change employer in the next 12 months? 62% of respondents state that they are either very or fairly likely to move job in the next 12 months, up from 60% last year.

20% Very (-2%) 58% Fairly (+3%) 17% Not very (-3%) 5% Not at all (+2%)

29% Very (+3%) 33% Fairly (-1%) 29% Not very (+1%) 9% Not at all (-3%)

Hiring Intentions Do you expect your organisation to increase headcount in 2014? Over half of respondents (66%) believe their organisation will increase headcount in 2014, with 53% of respondents expecting their organisation to modestly increase headcount and 13% expecting a significant increase in headcount in 2014.

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53% Yes, modestly 13% Yes, significantly 10% I am not sure 23% No

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MARKET ATTITUDES

Hiring Intentions At what level/role do you expect your company to hire this year? Of the respondents who expected their organisation to increase headcount in 2014, 68% believe their company will hire qualified or experienced professionals, while 22% anticipate their company hiring at graduate and entry level roles this year.

68% Qualified or experienced professionals 22% Graduates/ entry level roles 6% Director level/ senior appointments

40%

41%

40%

17%

30%

10%

0%

2011

Decrease

2012/2013

Remain unchanged

2014

48%

Average All

11%

Singapore

41% 55%

12%

33% 43%

Hong Kong

8% 50% 44%

Malaysia

22%

34% 40%

PRC

5%

0%

10%

Increase

The RICS and Macdonald & Company Asia Rewards & Attitudes Survey 2014 Results

11%

12%

20%

Increase

Economic Activity Change In your chosen professional activity, do you anticipate economic activity in the next 12 months to increase, decrease or remain unchanged? Those working in Singapore are generally the most optimistic with 55% anticipating a increase in economic activity (up from 32% last year). Only 40% of those working in PRC however anticipate an increase compared to 48% across the Asian regions.

48%

48%

50%

35%

Economic Activity Change In your chosen professional activity, do you anticipate economic activity in the next 12 months to increase, decrease or remain unchanged? 48% of respondents anticipate the economic activity to increase (up from 40% last year), while 11% believe it will decrease (down from 12%). Overall, the Asian region is demonstrating an improvement in economic activity or business sentiment by 9%.

48%

4% Other

54%

20%

Decrease

30%

40%

50%

60%

Remain unchanged

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Asia executive summary and key findings 2014