03/19 THE CASH ISSUE
TIME TO GET ON BOARD WITH INFRATECH 12
TOKENISATION: REAL ESTATE AS CURRENCY 18
GETTING MORE BIM FOR YOUR BUCK 22
HOW TO SAVE OUR TOWN CENTRES 26
THE INFRASTRUCTURE FUNDING GAP 30
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“ WE NEED BETTER INFRASTRUCTURE, AND NOBODY KNOWS HOW THE COST WILL BE MET ”
ver the past 30 years, progress, peace and globalisation have increased prosperity throughout the world. This period of stability has made it possible to focus upon the essentials of
FOR RICS Stephanie Bentley RICS, Parliament Square, London SW1P 3AD FOR SUNDAY Editor Oliver Parsons Art Director Sam Walker Deputy Editor Andy Plowman Designer Katie Wilkinson Creative Director Matt Beaven Account Director Karen Jenner Head of Display Sales Chris Cairns Head of Recruitment Sales Sam Gilbert Senior Sales Manager James Cannon Production Manager Michael Wood Managing Director Toby Smeeton Repro F1 Colour Printer Walstead SouthernPrint Cover photography Pixeleyes
modern civilisation: clean water, a reliable power supply, being
connected both physically and digitally, and a place to call home. Investment in basic infrastructure means that children in cities such as Mexico City, Delhi and Shenzhen are born with the opportunity to live well, rather than simply surviving. However, there is still a long way to go if we are to achieve this more universally. For those in wealthier cities, life is becoming expensive, congested and polluted. From ancient sewers to overcrowded train stations, much of the infrastructure of the developed world needs an upgrade. The consultant McKinsey predicts a major shortfall in infrastructure spending to 2035. Meanwhile, traditional investors are wary of funding
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modern infrastructure or using new technologies to improve existing assets, and rising instability is slowing down project development. The simple point? The world needs more and better infrastructure, and nobody is sure how the cost will be met.
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.
We must innovate to find an answer, and this is where RICS has a key role. Through our work exploring the future of our profession, we seek to identify the skills and resources needed to address this challenge. If we can find ways to de-risk the way in which infrastructure is built and managed, then I believe we will truly be fulfilling our obligation to work for the public advantage.
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CHRIS BROOKE FRICS RICS PRESIDENT
Connections made more rewarding
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What we can learn from … / … one organisation’s efforts to put slum dwellers on the map
Opinion / Mark Enzer on how data is informing government infrastructure policy
Chartered territory / How are you feeling about your business ahead of Brexit?
Deconstructed / Vertical forests: true green machines or just window dressing?
How to … / … get ahead in the rail industry, by those who have made the journey
News, events and notices /
What if? / How would the UK cope without foreign construction labour?
Infrastructure: hacked / What challenges lie in the marriage of technology with infrastructure, and how do investors realise the benefits?
Building blocks / Tokenisation is the latest innovation that blockchain has brought to real estate investment. Is it a passing fad or here to stay?
Everything must go / Do we need to stop talking about how to “save the high street”, and reassess our entire attitude to how we use town centres?
Digital twin / BIM doesn’t just make construction more efficient, safer and cheaper: it plays a vital role in a building’s operational phase, too
A bridge too far / Asia and the Americas are desperate for infrastructure investment, but face different challenges in how to attract it
Informal settlements / Digitalising infrastructure / Brexitâ€™s effect on business sentiment / Vertical forests /
WHAT WE CAN LE ARN FROM…
ADDRESSING THE UNADDRESSED
WORDS BY BRENDON HOOPER; PHOTOGR APHY BY JOHNNY MILLER
A Kolkata-based social enterprise is improving the lives of people living in slums via the simple step of assigning each home a unique postal address based on its geolocation
Imagine having no fixed address. Undoubtedly, you would not be able to partake in many of the day-to-day activities we so often take for granted. Whether you’re applying for a passport, accessing a bank account, or seeing a doctor, having an address means also having an identity as a citizen. However, for millions of people in informal housing around the world, no such identity exists. “It’s fascinating how an address becomes a sort of glue – in our developed societies we never think about it as being very important,” explains Alex Pigot, co-founder of social enterprise nonprofit Addressing the Unaddressed. In 2012, after a long career in the postal industry, Pigot set up an initiative that aims to vastly improve the living conditions of people in urban slums and shanty towns, via the simple step of giving each dwelling a unique postal address based on its geolocation. The idea is that, once a resident has a formally recognised address, they will be empowered to build their own economic stability. City administrations usually face a difficult choice when dealing with informal settlements. Should the houses be demolished and the people moved to the outskirts of urban areas, or left where they are? “Authorities struggle to find funding to move people from slums, so the latter can be a more attractive option,”
says Pigot. “However, these settlements can only work if the dwellers themselves are empowered to take care of their own lives and be given opportunities to improve their quality of life. This is where a unique postal address can be life-changing.” Index linked In 2012, following a request from another non-profit, the Hope Kolkata Foundation, Pigot and his partner, Tina Roche, travelled to India to assist in providing rudimentary index postcodes to slum dwellings in the city, so that the organisation could identify the social impact it was achieving for the people living there. “People living in Kolkata’s slums are mostly ignored by the authorities,” Pigot continues. “Because they don’t have an address, they cannot access local social services, utilities, bank accounts, pension cards or ID cards. But under our initiative, rather than trying to replicate a number and street name system, as with most formal addresses around the world, we give them a unique address code, which is the first step in being able to access such services.” Positioned above the door to a slum dwelling, the unique alphanumeric geocode looks similar to a car registration plate. Addressing the Unaddressed then liaises with the local post office, training staff to deliver mail to these locations. Where possible, Pigot’s team also helps the
individual living in the slum to open a bank account and register to vote. Furthermore, NGOs working in Kolkata also use the team’s list of address codes to obtain birth certificates for children born in slums, and identify and help families with health and education requirements. “Looking at our list of unique codes and plotting them on a map, we realised we were at the same time mapping the capillaries of slum lanes running through Kolkata,” says Pigot. “So we got in touch with Google, which uploaded our data so that the slum lanes we had mapped were displayed on Google Maps. They also provided us with a more efficient coding technology. It has helped us rapidly increase the speed of creating addresses – previously we were generating codes for about 1,250 houses a month, but now we’re covering 10,000 – around 300,000 people in total so far.” Incredibly, with Google’s support, a team of just 24 staff is helping to change the lives of millions. By the end of this year, Addressing the Unaddressed hopes to have covered all of Kolkata’s slums, giving representation to 1.4 million people. But the team’s technology has the potential to help many more of the world’s “unaddressed” beyond those in developing countries. In the US state of North Dakota, for example, many Native Americans found themselves disenfranchised from voting in last November’s midterm elections because of a law that requires voters to present an ID listing their address at the polls. Addressing the Unaddressed therefore plans to make its Google-enabled tools available online by the end of 2019, so that any city in the world, or anyone who wants to make similar geolocated codes for communities, can download the guidelines and go out and do it. “It’s exciting that our system could be applied to help enfranchise people, anywhere in the world,” says Pigot. Find out more about RICS’ work to resolve the problem of how to value unregistered land at rics.org/valunregland MARCH 2019 / MODUS / 7
“ BETTER DECISIONS, BASED ON BETTER DATA, MEAN BETTER OUTCOMES ” MARK ENZER CHIEF TECHNICAL OFFICER, MOT T MACDONALD AND CHAIR, DIGITAL FRAME WORK TASKGROUP
From how we travel to how we keep in touch with each other, technology now underpins efforts to improve great swathes of our daily lives. But we have only just begun to scratch the surface of what we can achieve when we unlock the full value of data in the built environment. Just over a year ago, three publications helped build momentum towards using information more effectively across UK infrastructure: the government Industrial Strategy, the Infrastructure and Projects Authority policy paper Transforming Infrastructure Performance, and the National Infrastructure Commission’s Data for the Public Good report. The last of these offered a long-term view of how we can deliver better outcomes for people by making the most of our infrastructure data, including the use of new technologies such as machine learning, internet of things and distributed ledger. Data for the Public Good is visionary, not just in recognising the critical importance of data sharing, but also in recommending that we move towards having a “National Digital Twin” to help us better understand, manage and plan our infrastructure. The vision for the National Digital Twin is not that it will be a huge singular digital model of the entire UK built environment. Rather, it is envisaged to be an ecosystem of digital twins that are joined together via secure, resilient data sharing. The central value proposition of the National Digital Twin, and of the broader transformation of information management across the built environment, is that better decisions based on better data will lead to better outcomes for the public. But for all this to work, the National Infrastructure Commission’s report also highlights the need for a digital framework to underpin it, and for a task group to make all this happen by bringing together leaders from government, academia and industry. Last summer, the Treasury confirmed that the government would support the commission’s recommendations, and the
Exchequer Secretary to the Treasury, Robert Jenrick, launched the Digital Framework Task Group. Since then, the group has got straight on with its task of steering the development of the Information Management Framework for the built environment. This framework is intended to establish the building blocks that are necessary to enable effective information management across the built environment. And secure, resilient data sharing is at the heart of this. On 7 December the task group published a document of “Gemini Principles” for guiding the development of the framework and the National Digital Twin. Fundamentally, digital twins must have clear purpose, be trustworthy and function effectively. The Gemini Principles flow from this. They are simple, but their implications are far-reaching and challenging. They are descriptive of intent but agnostic on solutions, so they can encourage flexibility for innovation and development over time. We intend the Gemini Principles to be a living document that will respond to feedback and help to foster alignment in the industry. The task group’s next major step was the publication of a roadmap earlier this year, providing a prioritised delivery plan for the Information Management Framework. With the support of government, academia and industry, the task group seeks to provide the coordination needed to unlock the value of information and better data sharing in the built environment. Mark Enzer will be speaking at the RICS Infrastructure Conference on 2 April. Book your place at rics.org/cominfconf
ILLUSTR ATION BY DANILO AGU TOLI
WHAT’S THE MOOD IN YOUR BUSINESS AHE AD OF BREXIT?
BUSINESS AS USUAL
#RICSMODUS ON T WIT TER @CONSTRUC RAINBOW 5 February Excellent opinion piece in @RICSnews #Modus magazine this month from Andrew Knight @NTUadbe about inter-generational social mobility.
Whether the UK is heading out of the EU with no deal, with or without a “backstop” or even heading back to the polls, such uncertainty is never good for business. This was certainly the prevailing mood among the respondents to this month’s Twitter poll
@PROPERTYDANH 29 January This is great - 10 things to try if you want to make your job easier as a surveyor from @ RICSnews #Modus
25% WHO KNOWS?
OPTIMISTIC FOR THE FUTURE
10 January It was nice to see in the Jan edition of #RICSModus an article relating to the #rural sector of our profession #lovesurveying #RICS #surveyor
PREPARING FOR THE WORST
8 January Very happy to see one of our projects being highlighted in @RICSnews Modus article ‘The Pursuit of Happiness in the Workplace’. The ‘Five Steps to a Healthier Office’ mentioned is particularly insightful! MARCH 2019 / MODUS / 9
KEEPING IT ARBOREAL
INTERVIE W S BY JONN ELLEDGE; ILLUSTR ATION BY CRUSCHIFORM
Are vertical forests the future of eco-friendly architecture, or an Instagram-era novelty that distract from the need to build truly sustainable features into our high-rise buildings?
Vertical forests do work, but they need to be more than just window dressing One of the main arguments against vertical forests is that they’re greenwash, just there for marketing purposes. Our view is that all living infrastructure needs to have a function beyond just looking beautiful. At One Central Park Sydney – our first big project – all the gardens are irrigated by recycled blackwater from an on-site treatment centre, and sewage is used to fertilise the gardens. Greenery can also reduce a building’s heat output by 25-30%: that means huge long-term energy savings. The main driver for what we do is to make our cities happier and healthier for people, by installing green walls using plants that can actually clean the air, for example. These walls may only remove the pollution produced by a small number of cars – but ask yourself what benefits are there in not having them in our cities? I think we lost touch with nature somewhere along the way. Now, there’s a huge groundswell of people realising that. Jock Gammon, co-founder, Junglefy, Sydney Practical considerations might limit their widespread take-up People tend to get very excited about a few examples of vertical forests, which tells you it’s still fairly early days for them. Do we expect to see most buildings covered in vegetation in five years? Probably not.
I don’t think you could argue these types of buildings are net positive in terms of removing carbon from the air – think about how much concrete is required for a facade to be able carry the weight of full-sized trees. And how do you control access to people’s private property so that the facade can be maintained? Someone is going to have to either come through your apartment at some point, or rappel down the building to do some trimming. But, if you have an obligation to densify population levels in cities, the aesthetic benefits of vertical forests might help persuade people resistant to the idea of high-rise living to give it a go. And adding vegetation to surfaces that aren’t porous, reject water and reflect light can help to keep a lid on the urban heat island effect. Daniel Safarik, editor, Council on Tall Buildings and Urban Habitat, Chicago In isolation, the environmental benefits are minimal, so we need to build more Urban centres are a key component in our planet’s biodiversity, not just for animals that live in cities, but also for migrating birds whose journeys have become increasingly difficult as urbanisation and sprawl chips away at their natural stopping points. Vertical forests are by no means a silver bullet, but they do still offer great benefits, as you create more green spaces in cities
that provide overnighting or feeding opportunities for these birds. It’s a form of system thinking: you use green verticals and urban parks as your anchors, and connect them with elements such as rain gardens and green spaces on roofs, and all those things can begin to work together. The parallel I draw is asking what you can do as an individual to reduce your climate footprint. Even if you live an absolutely perfect lifestyle – bike everywhere, don’t take any flights – your impact is going to be minimal. But if everyone in a community does that, it adds up. It’s the same in green space: no single green building is going to make that big a difference. But in aggregate, this approach could be critically important. Todd Gartner, director, Natural Infrastructure Initiative, World Resources Institute, Portland Even if their impact is more symbolic than scientific, every little helps Planting trees and bushes around a tall building can only ever have a small effect on air quality. There’s very little time for pollutants to be deposited on to the branches and the leaves because air passes a building quite quickly. It’d be a very roundabout way of trying to fix air pollution. That’s not to say there aren’t other benefits. In principle, one could get some quite strong microclimate effects from really radically greening a city, so the vertical forest could help a bit with that. And certainly the more surface area there is transpiring water out into the atmosphere rather than absorbing heat and releasing it at night – the urban heat island effect – the better. There are also good arguments around biodiversity – although not everybody appreciates the birds, bugs and bats that are what biodiversity really means. But by far their biggest impact will be made through hearts and minds, by being a beacon and providing a vision of what we can do in terms of marrying tech and nature. Rob Mackenzie, professor of atmospheric science, University of Birmingham MARCH 2019 / MODUS / 11
Want to know the reason why those big, capital projects take up so much time and money? Productivity. Or rather, a lack of it. That’s all set to change as we enter the age of “infratech”
I NFR A STRUC T U RE: H A CK ED WORDS BY RENÉ LAVANCHY
ILLUSTRATIONS BY THOMAS HEDGER
oaring over a development site, a drone scans the concrete skeleton of a building and sends back a model of the structure. On a train, sensors pick up changes in vibration and report a worn-out wheel to the driver. A cloud-based application sends out a call for spare stored electricity to a network of household grid-connected batteries, to deal with a peak in demand. These, and other technologies, are visible signs of “infratech” – the collision of the fourth industrial revolution with the infrastructure sector. For many observers, this revolution can’t come soon enough. Across the globe, urbanisation, economic growth and climate change are all driving increased demand for infrastructure. To keep pace with forecast investment needs to 2040, worldwide infrastructure spending has to increase by $14.9tr, reveals the Global Infrastructure Hub, a G20-funded body. At that scale, simply raiding public and private sector coffers is unlikely to close the gap. On this analysis, we need to make our existing funds – and our existing infrastructure stock – go further. For years, infrastructure has struggled to make productivity gains. Global productivity growth in the construction industry over the past two decades has been less than 20%, compared with up to 40% in the overall economy, according to figures compiled by consultancy McKinsey. The average capital project, it added, runs 20 months behind schedule and finishes 80% over budget. If construction caught up with the efficiency gains seen in the manufacturing industries in recent decades, productivity could rise by one-third, states Mark Enzer, chief technical officer at global engineering consultant Mott MacDonald. “If you take 30% of what’s spent on the built environment globally each year, it’s an unbelievably huge number. But that’s what’s lost to inefficiencies and can potentially be saved,” he says. Industry and government are starting to look to the fourth industrial revolution to deliver that saving. Technologies such as artificial intelligence, big-data analytics and the internet of things (IoT), are being touted as promising impressive benefits. This is not just about new build, either. “Physical infrastructure in the UK is mature. The challenge is to utilise technology to drive more capacity, customer value, resilience and safety out of existing infrastructure,”says Miles Ashley FRICS, partner at UK consultancy Wessex Advisory. A new model But the revolution won’t be simple. Infrastructure is costly and risky to build but, once finished, lasts for decades, provides a dependable public service and, in many cases, a long-term, low-risk revenue stream to private investors. Adding cutting-edge technology into the mix threatens to turn this model on its head. Hightech infrastructure doesn’t always pay off, as investors found after the 1990s dot.com bubble burst. And, as technology disrupts life and work patterns, it could render traditional steel-and-concrete infrastructure extinct. If public and private sectors are to spend wisely and close the funding gap, they need to understand the real benefits – and risks – of digital transformation.
THE CHALLENGE IS TO UTILISE TECHNOLOGY TO DRIVE MORE SAFETY, CAPACITY AND VALUE OUT OF EXISTING INFRASTRUCTURE
” MILES ASHLE Y FRICS WESSEX ADVISORY
If there was any doubt that digitally enhanced infrastructure is more than just a gimmick, it was dispelled in January 2018 when financial services giant Macquarie, which manages more than $100bn of infrastructure assets worldwide, announced the launch of Macquarie Capital Venture Studio. The business incubator is a home for young digital companies, partfinanced by Macquarie, to hone new technologies aimed squarely at making infrastructure smarter. “We are a financial investor, so getting a return on our investment is really what’s driving this,” says Stephan Feilhauer, senior vice-president at Macquarie Capital in New York. The focus is not only on creating profitable companies, but finding applications for their technologies in infrastructure projects being developed and financed by their colleagues. Or, as Feilhauer puts it: “To have these technologies provide significant benefits in terms of lower construction costs, faster construction, [and] lower operation and maintenance costs as projects are under way. Pushing technologies into projects where we’re looking to be an investor, a developer or an adviser is … a key way for us to deliver more value than just the dollars we’re investing into companies.” Companies invested in so far include Hangar, a provider of drone-based imaging and data services, and Sunfolding, a developer of networked, algorithm-driven pneumatic solar trackers – the devices that point solar
panels in the right direction. Hangar’s drones provide 4D datasets of building sites – 3D images that update over time – and detailed information about structures so that faults can be identified, and progress checked without the need to send humans on site. Macquarie’s interest is widely shared. A 2017 report, commissioned by law firm Pinsent Masons, found that 98% of infrastructure investors surveyed said they would be more likely to bid for greenfield project opportunities in the next three years where those projects included new technology. How investment will be secured is an open question. The rapid improvement that makes digital technologies exciting also means they are constantly becoming obsolete. This is problematic where new hardware and software has to be implanted, such as sensors in a water pipe. Infrastructure assets traditionally enjoy long lives and, although conventional examples like streetlights still need parts replacing now and then, the level of risk in changing a light bulb is far below that of installing new software, which may contain bugs and vulnerabilities. Risk-averse investors such as the pension funds may find this hard to swallow, as may public treasuries. Last year, the opening of London’s Crossrail railway project was pushed back by at least nine months. Construction News reported this was partly due to problems developing and testing the train control software.
“There isn’t an inherent lack of interest or appetite for funding in relation to technology. It all depends on the funder and their investment parameters,” argues Nick Ogden, a partner at Pinsent Masons in London who advises clients on infrastructure projects. “I don’t think there’ll be a fundamental shift in the funding base, because long-term infrastructure is naturally suited to long-term investors. Stakeholders will need to start thinking about how technology risk will work alongside construction risk.”Ogden says that riskier elements such as new technology may attract more bullish investors. Such investors would have very different risk and return expectations to traditional infrastructure financiers, so would be unlikely to co-invest in the same deals. One potential way forward is to deploy nascent technology on existing assets before they are installed in new ones. Technology poses other challenges, however. In France, telecoms operator Orange plans to turn off its switched telephone network to replace it with IP-based dialling. As a result, it will no longer earn revenue from line rental. Telecoms markets could be further disrupted if fibre networks are supplanted by wireless 5G technology. In the US, the rising use of rooftop solar panels and home batteries, and the promise of smart grids – in which software and sensors allow consumers to avoid using power during peak times – are undermining the business model of established electric utilities. MARCH 2019 / MODUS / 15
“ STAKEHOLDERS NEED TO START THINKING ABOUT HOW TECHNOLOGY RISK WILL WORK ALONGSIDE CONSTRUCTION RISK ” NICK OGDEN PINSENT MASONS
USER-CHARGING MODEL PROMISES IN-CAR ENLIGHTENMENT A pilot project near the US-Canadian border holds the prospect of harnessing digital technology to improve road safety and traffic flow, at no extra cost to public authorities. The project is being delivered by P3 Mobility, a specialist in dedicated short-range communications (DSRC). A type of wireless signalling between vehicles and the roadside, DSRC is already used in electronic road tolling, but this project would use it for two-way communication. P3 Mobility has been selected by Oakland County, Michigan, for a $3.7m pilot in which drivers will be encouraged to buy and install on-board units in their cars. The units will provide traffic and safety information, and could also give users preferential access to road lanes and preferential treatment at traffic lights – a light could stay green for longer to allow a connected driver to pass it. P3 Mobility is self-funding the pilot, but if successful, it plans a county-wide roll-out, estimated at $250m. This would require outside investment, refunded through user charging. Discussions are ongoing to assess investor appetite. “We’re in the early stages of testing a revenue generation model, for the purposes of assessing whether sufficient revenue can be generated to support a P3 [public-private partnership] project,” chief executive Erin Milligan explains. The Oakland County pilot is due to be fully deployed in early 2020, and P3 Mobility is in talks with authorities in the US and Canada about further pilots. Ultimately, Milligan says, the technology could make road signs obsolete.
One potential solution is to embrace the disruption. French power and renewables multinational EDF, for example, announced in October 2018 a new venture in vehicle-to-grid charging. Chargers provided by EDF can be used to sell surplus power from electric vehicles back into the grid. But the disruptors are also moving in on traditional infrastructure – and providing more of the funding. At the forefront is Google, which has invested in wind and solar farms and telecoms satellites; but Amazon, Microsoft and Apple have also laid undersea communications cables. Concentrating technology and the hard infrastructure that supports it in the same company allows them to control – and exploit – the whole value chain, while raising questions over competition. Direction of travel Not all disruption is bad news for public authorities. Blockchain, for example, could replace traditional sources of road funding. In the US, the federal “gas tax”that funds roadworks has long failed to meet investment needs. Electric cars, ride-sharing and autonomous vehicles will erode tax revenues still further. But charging car users on a vehicle-miles-travelled (VMT) basis has not been feasible, according to Jean-Francis Strayer, director of Grant Thornton’s public-private partnerships advisory service. Even with modern computing, he says, “a weak link in the chain has remained the timely, reliable and secure calculation, and servicing of assessments, on those millions of vehicles.” Blockchain provides a distributed ledger – a permanent record of each transaction across multiple computers – and offers a way of recording distances and charges in a reliable, tamper-proof way. The infrastructure and technology industries are not natural bedfellows. The former is stereotypically conservative and bound by rules, plans and processes; the latter embraces agile development and views itself as a disruptive interloper. It’s not just about culture, but business models. Software can be taken apart and iterated in a way freshly hardened concrete cannot. Nonetheless, change is coming. Arcadis has launched a programme, dubbed “Spirit Orange”, in which the firm collaborates with clients on developing innovative solutions to infrastructure needs – which could be digital instead of bricks and mortar. “We are taking the start-up principles from Silicon Valley,” says David Glennon, Arcadis’s UK head of digital. “Already you’re seeing a company that doesn’t typically work in this way, working on prototypes and minimum viable products, so the business model is starting to change.” But if digital technologies are going to unlock serious savings and enhance existing infrastructure, sources agree they must be part of a joined-up strategy. “There’s a direct link from data to outcomes, and it provides a structure that offers a place for every bit of informationrelated technology,” Enzer argues. “Until we recognise that, there’s a danger of having lots of fun technology [that] won’t connect up for a common purpose.” Smart infrastructure, then, requires a smart vision. n How do we make cities “intelligent”? We explore the latest thinking at rics.org/intelligentcities
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Terms and conditions apply. For full terms and conditions see www.hiscox.co.uk/rics. The Royal Institution of Chartered Surveyors is an Introducer Appointed Representative of Hiscox Underwriting Ltd which is authorised and regulated by the Financial Conducts Authority. For UK residents only. 19785 02/19
BUILDING BLOCKS Tokenisation promises to turn the notoriously illiquid asset of property into highly tradeable digital shares. Is it too good to be true?
WORDS BY STUART WATSON ILLUSTRATIONS BY MIKE LEMANSKI
n a trip to New York a businesswoman from Singapore passes a strikingly designed new office building. Her curiosity piqued, she uses an app on her phone to download information on its occupants, rent roll, environmental performance and return on capital. Later, after perusing the data again in the Starbucks on the opposite side of the street, she comes to a decision and purchases $10,000 of shares in the block through an online exchange. With a smile of satisfaction, she returns to sipping her flat white. Imaginary scenarios such as this inspire the pioneers of tokenised real estate investment, and recent months have seen the industry in the US take its first baby steps towards turning the fantasy of easily traded fractional ownerships in real estate into reality. In October 2018 the owners of the luxury St Regis Aspen Resort in Colorado
sold an $18m share of the hotel in the form of digital tokens, while US tokenisation platform Harbor is offering a $20m stake in a high-end student residence in South Carolina. Tokenisation is enabled by blockchain technology, which is used to create a digital ownership share, known as a security token (see explainer, p21), and to enable it to be traded cheaply. At present, the market is still in its infancy, admits Ragnar Lifthrasir, president of the International Blockchain Real Estate Association. “We are at the very early stages of security token offerings,” he says. “We have most of the infrastructure in place to do this – a couple of legitimate companies that can do the tokenisation, a couple of companies that can do regulatory compliance, and a couple of exchanges where you can buy and sell tokens are online, but don’t
MARCH 2019 / MODUS / 19
“ IF THERE ARE NOT MANY PEOPLE WHO WANT TO BUY THOSE ASSETS, YOU HAVE A HIGHER EXIT RISK ” THOMAS WIEGELMANN FRICS BLUE ASSE T MANAGEMENT
have a lot of traffic. The next stage is rolling this out with real volume. What’s preventing that is that, so far, there has been very little demand.” Suspicion among professional real estate investors has recently been exacerbated by the deflation of the cryptocurrency bubble, as well as a rash of dubious real estate-related initial coin offerings (ICOs) seeking to raise money for blockchain-related applications. “ICOs really set blockchain real estate back at least a year or two. They violate the securities laws in pretty much every country, so that is not sustainable for legitimate real estate investors in the long term,” says Lifthrasir. Among conventional property investors the basic merits of tokenisation are still being questioned: “If you believe the phone and app is the communications media that brings together investment opportunities and the broader market, it is possible that tokenisation is a means of making that investment more practical and achievable,” muses Professor Andrew Baum FRICS, leader of the Future of Real Estate Initiative at the University of Oxford’s Säid Business School. “But it could also be a complete scam that has no longevity at all. “Anything connected with cryptocurrency and blockchain is highly speculative at the moment, and also unregulated. There is a risk that regulation will come in to nip this thing in the bud or there will be a financial scandal that reduces its appeal to the mainstream.” The crucial factor that will make or break tokenisation as a concept is liquidity. Real estate is a notoriously illiquid asset class because assets are large and the process of trading them is slow and fraught with paperwork. Tokenisation holds out the prospect of frictionless trade open to both institutions and individuals around the world. However, to make a market there must be buyers as well as sellers.
“There are arguments to say that liquidity might increase significantly, but you could also take the view that it gets reduced,” says Thomas Wiegelmann FRICS, managing director at Munich-based investment manager Blue Asset Management. “If there aren’t many people who want to buy those assets, you have a higher exit risk. The first movers will have liquidity issues.” Steve Sillam, CEO at Leaseum Partners, which launched one of the first tokenised real estate investment funds at the end of 2018, counters: “You can invest in a fund in which your capital is locked up for five or 10 years or you can invest in a fund where you have liquidity on top of that for the same return, because the tokens will be listed and investors will be able to sell them.” Leaseum aims to garner $250m from institutional and accredited investors to buy commercial property in New York City, and while Sillam admits some are deterred by tokenisation, he is still bullish about the prospects for capital-raising: “Because of their strict investment criteria, institutional investors in the EU are not allowed to touch any tokenised fund, but it is not the same story in Asia, where institutional funds are more tech-friendly. Most of our potential cornerstone investors are from Asia. Family offices that have traded cryptocurrency before have been responsive as well,” he claims. It is a start, but for large institutional investors $250m is hardly a significant sum. While he is optimistic about future prospects, Lifthrasir believes it may be five years before a tokenised market is properly entrenched. What is the catalyst that could propel tokenisation into the mainstream? A first big vote of confidence from within the property establishment would help, suggests Nick Wright, a London-based proptech consultant and director in CBRE’s strategic consulting team: “It would work if you were to tokenise something really significant – it would need a Broadgate or a Walkie-Talkie [City of London office schemes], something that has value and will hold it over a long period of time.” He argues that some of the technological building blocks needed for tokenisation to take off are still lacking, including a digitised land registry and much more detailed information on building performance. However, he speculates that if those conditions are fulfilled then some market trends could play in favour of tokenisation. “If the valuation model changes then perhaps tokenisation starts looking more interesting,”he says. “If landlords are providing services to occupiers and tenants on more flexible terms, that generates a different kind of income to a traditional lease, and if data about the operational income is available then I think that will make tokenised real estate more attractive to investors.” The first seeds of real tokenisation have been sown, but as with all nascent technologies, the form into which they will grow in the long run is near impossible to predict. In the meantime, property industry visionaries will continue to dream of a truly global and democratised market in real estate tokens. n An expert panel will be discussing the future of tokenisation at the RICS World Built Environment Forum Summit 2019, 13-14 May, New York City. Book your place: rics.org/wbef
Security tokens are a digital wrapper for a traditional private security. In real estate terms that means they represent a share of a property, and/or an interest in the dividend produced by that property. Unlike other digital tokens they are designed to comply with existing securities regulations, and if their use becomes more widespread some think the ease with which they can be traded could enable a broader, more liquid market for real estate investments.
High grow th: 20%-30% adoption
PL ATEAU OF PRODUCTIVIT Y
SLOPE OF ENLIGHTENMENT
Methodologies and best practices developing Second-generation products
TROUGH OF DISILLUSIONMENT
Technology/infrastructure hurdles Less than 5% adoption CRE CRYPTOCURRENC Y TR ANS AC TIONS
GLOBAL PROPERT Y SE ARCHES
Mass media hype
CRE SMART CONTR AC TS
WHAT IS THE DIFFERENCE BE T WEEN A COIN OFFERING AND A SECURIT Y TOKEN?
PEAK OF INFL ATED EXPECTATIONS
Initial coin offerings (ICOs) are the cryptocurrency equivalent of the stock market initial public offering (IPO). Companies looking to create a new service, app or coin make an online pitch to investors, and backers receive a new cryptocurrency token specific to the ICO. Hitherto ICOs have been largely unregulated, and start-up businesses have used them to raise capital while avoiding official oversight. Some ICOs have performed well, providing exceptionally high returns, but frauds and scams designed to fleece incautious investors are common.
E XPEC TATIONS
WHAT IS AN ICO?
Cryptocurrencies are digital tokens for exchange in online transactions based on blockchain technology.
IS IT THE SAME AS CRYPTOCURRENCY?
TITLE AND L AND REGISTRIES
Early adopters investigate
Blockchain is based on a new form of database, the distributed ledger. Each transaction is recorded in the ledger in an encrypted form as a “block” of data, and the ledger is distributed across many different computers in a network of “nodes”. Because it is decentralised, blockchain offers the potential for transparent, incorruptible peer-to-peer digital transactions without the time-consuming need for permission or validation from a third party.
SUPPLY CHAIN MANAGEMENT
HOW DOES BLOCKCHAIN WORK?
A S SE T MANAGEMENT
TOKEN EXPL AINER
DON’T BELIEVE THE HYPE… YET? Every new technology has its ups and downs before taking off, and this journey can usually be plotted against the popular Gartner Hype Cycle visualisation. Here’s how Cushman & Wakefield’s 2018 analysis places the latest crop of blockchain-related commercial real estate applications MARCH 2019 / MODUS / 21
BIM’s value to a project doesn’t stop at the end of the construction phase. Used throughout a building’s whole lifecycle, it becomes a
IMAGE BY TECHCRE TE
TWIN that can help surveyors operate, market and even improve the assets under their care. Robyn Wilson explains how.
MARCH 2019 / MODUS / 23
he benefits of using BIM (building information modelling) within the design and construction phase of a built asset are now widely accepted. BIM, after all, has been shown to be an effective tool in providing cost and programme efficiencies on many highprofile schemes, of which the V&A Museum in Dundee (previous page), which opened last September, is a notable recent example. Less well known, however, is the longterm value that BIM can bring to the operation of an asset after handover, which is often overlooked when the upfront cost of investing in the technology is so high. But, although lesser known, there are a number of ways that BIM can provide asset managers with efficiencies throughout the operation phase, while at the same time empowering facilities managers and property surveyors in their roles. Central to this is the creation and sharing of quality information through BIM for the building operator, as Edonis Jesus, consulting BIM leader at developer Leadlease, explains: “The use of BIM can greatly help asset
Great Portland Estates used BIM to create a 3D flythrough of its 160 Old Street development in London, which was used to market the space to prospective occupiers
managers save time and money by enabling quicker access to asset information, [resulting in a] higher proportion of preventative maintenance and less inventory.” She adds that BIM enables faster access to the asset information model, which compiles the data and information necessary to support asset management. Jesus’ point is echoed by David Philp FRICS, Aecom’s London-based director of BIM for EMEA and India. “The provision of accurate and complete computer-readable information at handover, including objectorientated models, can undoubtedly be exploited by those that undertake asset management activities.” Philp, who is also an RICS Certified BIM Manager, adds that BIM is most effective in handing power to facilities managers and surveyors when it is coupled with additional software and technology. “When BIM is integrated with other asset management systems such as computer-assisted facilities management platforms, building management systems and additional performance-related telemetry interfaces,
we can create a dynamic digital twin where there is substantial value. “This dynamic digital twin unlocks benefits that are both quantitative, such as cost and carbon, but also qualitative in terms of better operational decision-making. Having a digital twin of an individual asset or portfolio really improves an organisation’s credentials, as reliable information leads to better service provision.” BIM can also enhance the “storytelling experience” for clients when attracting new tenants, Philp believes, by enabling them to walk customers through the building early on in the design phase. This can be seen at one of Great Portland Estates’ offices in central London, says the developer’s director of workplace and innovation, James Pellatt MRICS. “We were able to use the BIM model to assist us in the marketing of our scheme at 160 Old Street. As it was a complex refurbishment, it was difficult for potential occupiers to visualise the building during construction. “By using the BIM model to form the basis of our 3D flythrough, we were able to give our
occupiers a better understanding of what they were going to receive at completion. This assisted us in securing Turner Broadcasting – a significant tenant – before completion.” Similarly, at the £2.3bn Elephant Park regeneration scheme in south London, Lendlease invested in a 360º virtual-reality room which, when coupled with BIM, was able to provide prospective residents with an insight into the development. Jesus says visualisation was key in helping future tenants get a clearer understanding of the overall design. “The ‘VRoom’ allows people to walk, drive or even fly around detailed 3D models for the massive central London regeneration project. “As well as helping to give residents and other stakeholders a chance to see the plans and give their opinions on them, it allows the teams of engineers, designers and safety experts to work together and examine every aspect of the project in detail.” When it comes to assessing BIM’s ability to enhance an investment, however, opinion is divided. Jesus believes that BIM can enhance value for asset managers by creating efficiencies such as: scheduling asset maintenance and replacement works; forecasting capital and operational expenditure; monitoring energy use and building performance; delivering enhanced service to building tenants by responding quickly to issues; and maintaining and updating records. Operational uncertainty Although he is a firm believer in using BIM – and in the benefits it can bring before and during delivery – Pellatt is less convinced about its impact during the operation phase. “Great Portland has used BIM on every major development since 2011. We firmly believe that it adds significant value to the development process, in that it allows us to consistently deliver high-quality buildings on time and to budget. “We’ve found that our investment in BIM has saved money in that it has been offset by appropriate reduction in contingencies and allocation of risk. However, we haven’t seen any significant improvement in performance of the asset either in reduced FM costs or increased value.” There is a consensus, however, that BIM is most successful in the operation phase when aligned with other software and systems. As Philp says: “There needs to be better alignment between those creating the models during the design and construction stages and those receiving and using them during the operational phase.”
“ THE USE OF BIM CAN HELP ASSET MANAGERS SAVE TIME AND MONEY BY ENABLING QUICKER ACCESS TO ASSET INFORMATION ” EDONIS JESUS LENDLE ASE
It’s important to stop thinking of BIM in isolation, adds Philp. Instead, we need to take more of a “master data management approach” when considering the integration of BIM with other asset management systems for near real-time performance measurement and analysis. For Jesus, the main hurdles that remain are both technological and procedural. “In terms of technology, asset management systems need to be improved to integrate BIM models and to fully use its data and geometry, so that asset owners or operators can fully achieve whole lifecycle performance efficiencies from their assets.” On process, she adds: “It would be greatly beneficial if asset operators were more involved with the design and construction process, as it would ensure the information and data they need is recorded in BIM models for later use.” Clearly there is a way to go before the entire benefits of BIM to a building’s operation are realised but, once they are, there’s a good chance they could enable a new generation of facilities managers and commercial property surveyors to unleash the full potential of the assets under their care. n Find out more about the benefits of BIM at our Digital Built Environment Conference. Visit rics.org/digitalconference for more details
CASE STUDY: MASON BROTHERS COMMERCIAL WORKSPACE, AUCKL AND Precinct Properties redeveloped the Mason Brothers commercial workspace in Auckland, New Zealand, in 2016 with a view to integrating data collection and asset management. Working with digital asset information management partners Beca, the hope was this would achieve greater accuracy in forecasting operating costs and capital expenditure. During construction, asset information was captured on site using mobile devices and uploaded to a cloud-based asset management system, providing a link between the construction phase and a live asset management database. This data included supply chain information, essential documents, 3D models and tailored information for the client’s FM and asset needs, such as mechanical plant and equipment information. Barcodes were also placed on specific assets, so they could be scanned with mobile devices to pull up specific information within the building operations about an asset’s history. Beca then provided a complete digital handover of this asset information once the project was complete. As a result, the operations teams were able to instantly access Mason Brothers’ 3D models, documents and asset information. Precinct’s development manager, Dave Luxton, said at the time: “Many people talk about the benefits that BIM can deliver to a project in design and construction. Fewer talk about the benefits that BIM can bring to the asset management and operations stages, where the most benefit can be achieved. Beca has delivered something tangible that will provide real ongoing value to Precinct Properties’ asset management.” MARCH 2019 / MODUS / 25
EVERY THING YOU THOUGHT ABOUT HOW TO BUILD A SUCCESSFUL HIGH STREET MUST GO
Is it time our town centres stopped fighting their losing battle against online retail, and instead found a new purpose?
WORDS BY MARK SMULIAN
an there be any purpose in “defending” something once its economic purpose fades? The obvious answer is “no”, but still talk persists about defending the traditional high street while the growth of online and out-of-town retailing hollows it out. For planners and the property industry, the idea of a town centre no longer being the focus of retail and commercial activity demands some careful reassessment, as does the challenge of sustaining “retail-led” regeneration – a staple of pre-crash urban renewal. It might, for example, involve planning for residential, leisure, education and healthcare where shops once stood, creating a town centre that people still visit but only incidentally for retail. Famous UK retail names that have vanished in the past year include Toys R Us, Maplin and Poundworld. HMV is on the brink. The Centre for Retail Research reports that 43 retailers bit the dust in 2018, affecting 2,594 stores: more than the total for 2016 and 2017 combined. Furthermore, research by Paul Michael Greenhalgh, professor of real estate and regeneration at Northumbria University, found that between 2008 and 2015, total retail floorspace shrank in all but five local authorities in England and Wales, from 1.69bn ft2 (157m m2) to 1.23bn ft2 (114m m2). The UK’s love of online still makes it an outlier compared with many other developed countries, but the direction of travel is only
going one way. E-commerce sales represent 18% of the UK market – and 25% of all fashion sales – and are predicted to grow at a faster rate (15%) than other Western European countries between 2017 and 2021. High streets have clung on against the internet onslaught through shops that provide personal services or items that are required immediately – hairdressers, coffee bars and convenience stores, for example – but those alone cannot sustain a town centre. Planners must seek solutions to keep these spaces vibrant and prevent them becoming decrepit once declining retail brings empty premises. In the battle for the soul of the high street, the best form of defence is to adapt. Former Iceland chief executive Bill Grimsey, who has conducted two reviews for the government on the state of the UK high street, says: “Plans for town centres have to change. The key is community, not retail, and it’s a broader issue than shops. Forget retail dependency and instead encourage local authorities to plan unique places to live, work, play and shop, prioritising health, education, eating out, leisure and housing. It’s useless to resist [change], as by 2030 about 30% of all shopping will be online. The whole argument that town centres can be fixed with shops is flawed,” he says. There are alternatives if you apply some lateral thinking, Grimsey adds: “Town centres can do other things. Younger people spend a lot of time in cyberspace but could be invited
to bring their devices to events. We are social animals and want to meet each other, and town centres can provide that. People [would still be] coming in, and might also buy things; we just won’t need as many shops.” One place that applied similar thinking is Kingston upon Hull, says the city’s planning manager, Alex Codd. The council fought off an application for a large out-of-town retail project by showing that the city centre had sufficient sites for any additional retailing. Even so, Codd says: “People no longer come to the city centre just for retail, they’re looking for more of an experience. “Some local authorities say it’s terrible that you can have a shop or office changed easily to residential use, but if you’ve got under-used space, why not change it? We are getting residential into the city centre, too.” Codd adds: “What helped was that we had already invested in £26m of public realm improvements and a new square adjacent to the retail sites. You have to diversify what you have in a city centre.” Hull spent 2017 as UK City of Culture, for which it revamped its art gallery and theatre, opened a new live music venue and created a dining out area. Hull is helped by having no competing urban centre nearby, but some former industrial areas in close proximity to each other face greater difficulty (case study, p28). “One shouldn’t generalise, as some high streets are doing fine, but for others it’s an ugly tale of no longer being fit for purpose MARCH 2019 / MODUS / 27
CASE STUDY: NORTH-EASTERN TOWN TAKES STOCK OF ITS RETAIL OFFERING
Hull is fighting the decline of its retail core by investing in public realm, leisure and the arts. For its year as UK City of Culture in 2017, a 300ft wind turbine blade was mounted in its main shopping precinct
when the world has moved on around them,” says Stephen Springham, partner and head of retail research at Knight Frank. “It’s a particular problem in older industrial towns where the population has declined over, say, 50 years and there is surplus floorspace.” Springham is suspicious of calls to simply convert this to residential to fix the UK’s mismatch of a housing shortage with its excess of shops. “Generally, the places where there is a major shortage of residential are not the ones with declining retail and I’d question whether those conversions would stack up financially,”he says. “But you could see a range of residential working in town centres, including students, social housing and retirement housing.” Rebecca McDonald is an analyst at the Centre for Cities thinktank, who co-wrote its June 2018 report Building Blocks: The Role of Commercial Space in Local Industrial Strategies. She argues that the best performing high streets are those in places with a high proportion of “exporting” businesses that sell goods and services elsewhere. These businesses could locate anywhere but choose places with a good supply of skilled labour and the type of public amenities that attract them. Their employees tend to be better paid and, consequently, spend more money in their local town centre. Centres dominated by businesses that are solely dependent on local custom, by contrast, rarely do well. And whereas
“strong” exporting cities have a mix containing more than 50% offices (graphic, opposite), McDonald says, “‘weak’ city centres have more than 50% retail space, which makes them much more vulnerable to closures. The private sector has no incentive for investing in repurposing this retail space because the rents are so low, which means local authorities will need to intervene.” According to Centre for Cities, among the options that councils should consider are: intervening to supply small amounts of new office space for more export-based businesses; converting the excess supply of shops into residential and office uses or, where demand for this type of property is low, demolitions to return the land to the public realm; and reforming business rates to finance interventions into commercial space in “weak” cities. If the future high street is a mix of residential, leisure, education, health and what remains of retail, then a move away from traditional thinking to a more flexible approach to planning use classes is required. Even 10 years ago, online shopping was still rare. The problem for planners is that they now have to think about the long-term for high streets as the economies that have sustained them for a century shift quickly in unpredictable ways. n To continue the debate on the future of the high street, go to rics.org/futuredebate
Stockton-on-Tees is an industrial town in north-east England whose high street faces severe competition from British Land’s 84,000 ft2 (7,800 m2) Teesside Retail Park, 1.5 miles (2.5km) away as the crow flies. Neil Schneider, CEO of Stockton-on-Tees Borough Council says the town centre now seeks to complement rather than compete with this behemoth: “Besides the retail park, we’ve faced the impact of online shopping and the tsunami of many retailers closing stores because they struck bad deals with landlords, so we had to think differently.” Stockton has invested resources from the council, the Heritage Lottery Fund and Arts Council to redevelop its high street with an amphitheatre and other performance spaces and by holding speciality markets and events. The Georgian Theatre music venue reopened in 2017 after a £1.4m refurbishment, and a Hampton by Hilton hotel opened in autumn 2018. Future plans include building on the town centre’s growing evening and leisure economy with independent pubs, the ARC arts centre and the reopening of the Globe Theatre in 2020 as a 3,000capacity music venue. There are also proposals to increase the amount of residential in the town centre, one of which is an “urban retirement village” of 300 mixed-tenure properties. Schneider hopes people will choose to visit the town not just to shop, but to use educational, cultural and leisure amenities in an attractive public realm.
SURVIVAL OF THE FITTEST Thinktank Centre for Cities defines a city centre as “strong” if
it is home to a higher than average amount of exporting firms,
employing a higher than average amount of high-skilled workers. It found that stronger cities were dominated by offices, whereas
F L E OOD ISU AN RE D RE 6% HO US E2 %
FO L E OD A I S U ND RE WA 8% RE HO US E2 %
weaker cities had more retail space than they could sustain
SOURCE: CENTRE FOR CITIES, 2018
MARCH 2019 / MODUS / 29
More than half of the worldâ€™s infrastructure demand comes from Asia, and nearly half of the funding for projects across the Americas is yet to be secured. Who on earth is going to pay for all of this?
A BRIDGE TOO WORDS BY SAKSHI SHARMA ILLUSTRATION BY FERNANDO VOLKEN TOGNI
he McKinsey 2017 report Bridging Infrastructure Gaps states that the world spent $2.5tr, or 14% of global GDP, on economic infrastructure such as transport, power, water and telecoms in 2015. But huge as this number is, it’s not enough: $3.7tr is required every year to 2035 – and to meet the UN’s sustainable development goals, this could increase by up to $1tr annually. However, perhaps the most compelling issue with the world infrastructure gap is not its size, but how it plays out across the globe. Asia, hungry for railways, roads and power stations, predictably dominates global demand, accounting for 54% of the global picture, while the Americas represents 22%. But the difference in how successful these two regions have been in attracting or allocating the investment needed is striking: Asia’s infrastructure gap stands at 10%, while the Americas’ is significantly higher at 47%. A primary reason for this is the US’s ageing and poorly maintained infrastructure. The American Society of Civil Engineers (ASCE) produces an infrastructure “report card” every four years, which assesses how each sector has fared over the period: in 2017, most sectors scored a“D”grade, except rail, which scored“B”. Infrastructure veteran Joseph Aiello, a former partner and now senior fellow at infrastructure investment company Meridiam, says it has been very clear over the past 15 years that the “US federal government is reluctant to step in and raise funds for infrastructure investment.” Aiello continues: “The federal government is unlikely to spend a large chunk on infrastructure as it is already dealing with a large deficit and needs to manage social security, medical care, etc.” Another factor is that much of the infrastructure fundraising happening in the US takes place at state and local level, through an increase in petrol taxes and other regional funding sources. “The
US is a more fractured market, as a lot takes place at the regional agency level,” says Aiello. “The federal government has a limited voice in what is built locally. There are a lot of local agencies, like transit or port authorities, which also means it can take a long time to get a project approved.” Meanwhile, in Asia, many of the biggest markets are comparatively successful in allocating and attracting investment. China is expected to spend $26tr on infrastructure in the years up to 2040, against a requirement of $28tr. India’s gap is $526bn against a 2040 target of $4.5tr, while Japan’s shortfall against the target for the same year of $3.8tr is a mere $91bn, according to Global Infrastructure Hub data. “Across Asia, the ASEAN countries present the biggest challenge and a huge need for infrastructure. They have massive populations and are at different stages of economic development. Large-scale infrastructure development is essential to improve connectivity, support continued economic growth, and generate improvements in living standards,” says Julian Vella, partner and Asia-Pacific regional leader for global infrastructure at KPMG in Hong Kong. “There has to be greater collaboration between the government and private sector for the gap to be closed. There is unquestionably a need for more private capital in the construction, financing, and operation of infrastructure,” Vella continues. “It is important for governments to understand what is required, and to create the conditions to attract that investment. There is plenty of capital seeking to invest in the infrastructure sector, but the owners of that capital will only seek to invest in markets and projects which will generate acceptable returns for the associated risks.” The cost of repairing and maintaining infrastructure itself will present a massive challenge to governments such as the US in the
FAR MARCH 2019 / MODUS / 31
high thanks to the underlying political risk. Vella believes that investors view most emerging markets as high risk due to regulatory uncertainty, weak institutional capacity, lack of procurement transparency, and inadequate project prioritisation and preparation. This is also the case with countries within the Latin American region, where infrastructure investment is hurt by market and projects risk, as well as non-standardised infrastructure procurement practices. Steve DeWitt, a senior vice-president of business development at global construction company ACS, who has also spent over three decades in the US public sector, says: “The infrastructure issues across the US and, I imagine, across the Americas in general, are very likely the same – wherein there has never been near enough money for infrastructure, either for new construction or for asset maintenance.” This is true regardless of whether these assets are in urban or rural areas, DeWitt comments. However, in urbanised areas, no matter which asset class they belong to, the costs of maintaining and repairing these assets are well beyond current funding streams. “The key thing is that there isn’t necessarily a financing gap,”says Martin Haran, professor of real estate and urban studies at Ulster University’s Built Environment Research Institute in Northern Ireland. “There is a huge volume of capital earmarked by institutional investor community for infrastructure which is [waiting] to be invested in real assets.” Over the past few years, there’s been significant progression from large equity investors. Blackstone Infrastructure announced a $40bn infrastructure fund, while Global Infrastructure Partners and Brookfield Infrastructure Partners raised $15.8bn in 2016 – no doubt all these investors will be seeking investment-worthy assets
Seattle’s Alaskan Way viaduct (above) was damaged by an earthquake in 2001. Experts warned in 2007 that the structure needed to be demolished within a fouryear timeframe. Its replacement, a double-decker tunnel (left) finally opened last month, 10 years after plans were first approved
IMAGES BY GE T T Y, SE AT TLE CIT Y COUNCIL
coming years, and only widen the investment gap further. The report, Between A Budget And A Hard Place: The Risks Of Deferring Maintenance For US Infrastructure, by Standard & Poor’s, highlighted this in May 2018, alerting of the costs of deferred maintenance, and how this could hurt state and local government budgets. Due in part to the lack of a standardised reporting methodology, the ratings agency commented, it can be extremely hard for prospective investors to quantify maintenance backlogs. Better defined and more transparent disclosure would allow credit rating agencies and municipal bond investors to have more visibility into the relative ranking of state and local governments’deferred maintenance levels. On the other hand, Asia’s need for greenfield infrastructure requires a significant amount of capital, and investor confidence. “The main challenge [in funding] is that the markets carry a relatively high level of institutional risk, so investors tend to look very carefully before they invest here,” says Vella. He points to the fact that investing risks are high in many Asian countries due to relatively weak institutional frameworks. In turn, these create significant risk in key areas such as contractual enforcement, dispute resolution, regulatory uncertainty, financing or currency risks and lack of procurement transparency. This is combined with the next level of risk at project level: are the right ones being selected, have they been subjected to financial feasibility, and are they being structured well. Whether projects are being de-risked, and is the procurement process fair, transparent and easy for international investors to participate in, are all questions investors have to deal with when deciding to invest in any project. Although the role of development banks in Asian infrastructure projects is quite prominent, the cost of capital remains relatively
XXXXXXXXXXXXX PROJECT FINANCE
PRIVATE PARTY During the first half of 2018, $43.5bn was invested by the private sector in 164 infrastructure projects across 34 countries. The top five countries – China, Turkey, Vietnam, India and Brazil – accounted for 66% of the total,
$1 A IN CH
$7 EY RK TU
M NA ET VI
BN $3 IL AZ SOURCE: WORLD B ANK, 2018
which is still 13% lower than the World Bank’s 10-year first-half average
XXXXXXXXXXXX MARCH 2018 2019 / MODUS / 33
in the coming years. “A lot of those funds are struggling to invest, as there isn’t a visible project pipeline. The gap hasn’t been translated into actual investable projects on the ground,” Haran comments. “Two things need to be done better,” comments Vella. “The first is for countries to work on developing their institutional framework to reduce risks. The problem is that, in many markets, these investments are not adequately compensated through higher returns, so markets need to be de-risked.”He continues: “The other thing they need to do is spend more money on experienced consultants to help undertake more rigorous project feasibility, project risk assessment, and to structure projects to make them commercially viable and more appealing to investors.” Governments can also embark on further actions to help, states Vella. “Other interventions to mitigate specific project risks, including the establishment of funds such as the Indonesian Infrastructure Guarantee Fund, should also be considered in other markets.” Nations need to take these steps to improve their international competitiveness and business environments. Although the specific needs and methods may notably differ between the two regions, the future paths for both require serious consideration on how to optimise and prioritise investment. As populations continue to grow and the subsequent strain on existing infrastructure increases, it’s vital for governments and organisations to tackle the matter head on and confront the challenges posed, before their effects become critically detrimental. n Access the latest market information and intelligence on all major stages of an infrastructure project with an isurv infrastructure subscription. Take a demo at rics.org/isurvinfra
The Tappan Zee bridge in New York opened in 1955 and was designed with a lifespan of 50 years. Plans for its replacement were first discussed in 1999 but construction of the new structure, the Governor Mario M. Cuomo Bridge, didn’t begin until 2013. It was finally completed, at a cost of $4bn, last September
MARCH 2019 / MODUS / 34
THE ROLE OF PUBLIC-PRIVATE PARTNERSHIPS With infrastructure, there will always be limits on how much funding the public sector can handle – so the need for private capital will persist. Publicprivate partnerships (PPP) offer an innovative option for effective delivery. Private investment is rising: the World Bank’s Private Participation in Infrastructure report for H1 2018 found that investment for the period stood at $43.5bn. The East Asia and Pacific region dominated, accounting for 40% of that figure. Governments can also use private sector capital for more than just building new projects, says Steve DeWitt of construction firm ACS. “Insufficient infrastructure funding is a huge issue, regardless of the delivery model. PPPs can help leverage available funding by ensuring long-term performance, lifecycle optimisation, risk transfer and long-term operations and maintenance considerations, which can provide for a more efficient project with overall better value to public owners.” Ulster University’s Martin Haran encourages partnerships, but says governments should think before committing. “There is a need for more effective matching of prospective investors with available projects. Investors differ in funding type and risk profiles, so there must be better matching [of] them with opportunities to get a better cost of finance, [and] improved sharing and managing of risk.”
Knowledge | Product | Service
Water Management Water Management Knowledge | Product | Service
Build a railway It’s a vast, fast-moving and – as the recently announced delays to Crossrail illustrate – complex sector that’s crying out for the kind of expertise that surveyors bring. We spoke to five industry insiders to get the inside track on a career on the railways
PATIENCE IS A VIRTUE – BRINGING ABOUT SUCH BIG CHANGE TAKES TIME
IT ’ S A VARIED SECTOR, SO HAVING A RANGE OF SKILLS IS ESSENTIAL
Bryony Goldsmith MRICS, head of programme management, Digital Railway, Arcadis
Chris Preston FRICS, senior survey engineer, Network Rail
Just over 12 months since I moved from focusing on buildings into infrastructure programme delivery, I feel like a fully fledged and passionate member of the rail sector. This sector can feel a bit old-fashioned in its attitudes at times. As a woman and a relatively young professional in a senior position, it’s important to me to be a real role model. We are working on opening up this industry to more talent, and it’s exciting to see a younger, more diverse contingent now joining. The Digital Railway programme is developing and supporting the industrywide roll-out of digital signalling and train control. The boost in efficiency should lead to greater capacity for services and better performance, while improving safety for rail passengers and staff. Bringing about such a big change will take time, because it can only work with the track infrastructure it has, and it’s difficult to change the way things have been done for such a long time. It often feels unachievable, but we are starting to see positive change. Resilience is key in this industry, along with a passion to succeed and some patience. Once you get past the technical jargon and start to understand the different acronyms, it’s an exciting place to be and it’s motivating to be part of the leadership team of a programme where you really are making a difference.
The UK’s rail industry has changed a great deal in terms of the technology it now employs, but some things remain the same. There’s still a lot of variety of careers on offer, and anyone wanting to go far in rail is still well advised to get as much varied experience as they can. In comparison to some, I have stayed in one fairly specialist area throughout my career: collecting, analysing and managing data – or surveying by another name. After starting with British Rail, I then worked for a consultant, then for myself, and now I have a more strategic role with Network Rail, involving new technology such as laser scanning and LiDAR. I’ve become quite specialist in my career but whichever part of the rail infrastructure industry you’re in, I still think to be successful you need a broad range of knowledge and experience, including maintenance elements. Design and build represents only a small proportion of the lifespan of a piece of infrastructure, and it has to be built in such a way that it can be safely maintained. The rail industry is constantly under scrutiny as well. You have to be pretty thick-skinned to be prepared for putting up with the negative press and you need to be able to juggle changing priorities in what is a very dynamic industry, but it still feels like we’re working in a big family.
INTERVIE W S BY JON MA STERS; ILLUSTR ATIONS BY DENIS C ARRIER
RAIL INDUSTRY EXPERTISE HELPING TO IMPROVE MIGHT BE OPTIONAL BUT SOCIETY DEMANDS DRIVE ENTHUSIASM IS A MUST – AND A THICK SKIN
COMPLEX PROJECTS REQUIRE FLEXIBLE AND COLLABORATIVE MINDSETS
Jim McCluskey, senior commercial manager, Vinci Construction UK
Josie Drath, practice manager for transport planning, SNC-Lavalin Atkins
Rod Nathan FRICS, commercial manager, Crossrail
A career in the rail industry can be whatever you make of it. There are so many ways into it. If you’ve got good commercial management skills, these can be applied to rail as much as any other sector. A degree in rail engineering is not necessary, but it’s important to understand how critical it is to be able to collaborate with different disciplines, and the consequences if handovers are delayed. This is a very interesting industry. Rail as a sector includes all kinds of different elements of engineering and construction. I’ve been struck by some of the beautiful architecture that we’ve been restoring and the wonderful station projects that have been developing over recent years. The variety is incredible, no day is the same. Certainly an enthusiasm for this industry helps if you want to succeed. You have to keep yourself abreast of all developments in the contractual and commercial world, and you have to be proactive, broad-minded and pragmatic, with a thirst for learning new things. BIM and Digital Engineering have been real eye-openers for me, including how they were used to good effect on the Victoria Underground station upgrade. The interactions, and stakeholders you encounter, make this a really interesting and challenging industry, and the rewards and sense of fulfillment are just as great.
It is not for the feint-hearted, working in the rail industry. As a mode of travel or sector of transportation, it gets a lot of criticism. Everyone has a view and it can be a challenge to respond to them all. But there are a lot of talented people in this industry that deserve trust in what they are doing. To succeed in rail, a real drive and passion for the job is vital, with an understanding and a real interest in the industry. I always want to reach the best possible outcome for society. Bringing together a consideration of all the possible options with a focus on what’s best for communities and economies is what gives me a great deal of satisfaction. In the procurement process of “optioneering”, the ideal scenario is often one of integrated and sustainable transport that minimises our impact on the environment. That is not necessarily rail. It’s often very expensive, but for London, the line upgrades to create the Overground system certainly was the solution that worked best for all, including the public purse. One of the fascinating things about rail in a transport planning context is that we’re getting much better at forecasting the capacity and economic benefits of rail projects. We are gathering more data and improving our experience and statistical evidence all the time.
Having a successful career in the rail sector requires a certain amount of flexibility, because the work is usually part of a project that is constantly evolving. A willingness to work with change is needed and you have to be collaborative. For about 16 years I have worked as a commercial manager exclusively in rail and mostly on capital projects. These included the modernisation of the West Coast Main Line, the East London Line and, for the past six years, Crossrail. It helps to have a firm belief in what major rail investment projects are trying to achieve – but specifically with regard to commercial management – as these are among the most complex challenges around. They start off as civil engineering schemes, then evolve through phases of building and M&E (mechanical and electrical), before finishing as IT projects with signalling and other systems. You have to be able to adapt and work with the changes, in what is often a challenging contractual environment. And you’re at an advantage if you understand contractors’ main aims. It’s very useful when negotiating if you understand what those at the coal face are going through, which also allows constructive relationships to be established. Largescale rail projects need collaboration if they are to deliver best possible value. MARCH 2019 / MODUS / 37
“ CONDITIONS FOR BUYING PII ARE MORE CHALLENGING FOR THE FIRST TIME IN YEARS ”
PI insurance: a complex picture With the market looking tricky for 2019, it’s more important than ever to speak to a specialist broker when arranging cover For several years now, market conditions have been favourable for buying professional indemnity insurance (PII). Capacity among insurers has been plentiful, and renewing PII has been relatively straightforward for most. However, recent events indicate that conditions are becoming more challenging for the first time in many years. A recent review by Lloyds of London (pictured) highlighted the poor financial performance of PII underwriting. Notably, non-US PII was found to be the second least profitable class of insurance. Consequently, many Lloyds syndicates are now writing less business while they address their deteriorating loss ratios.
Worse still, there have been instances of underwriters declaring themselves “full” and therefore unable to take on new business, and occasionally renewals as well. With reduced capacity in 2019, there is likely to be a significant shift as insurers try to increase rates, or possibly even move away from those professions that have underperformed. It is also unlikely there will be many new replacement markets, and they will probably only come at an increased cost to clients. Tougher underwriting conditions seem inevitable. There are steps that buyers can take to mitigate the effects of a hardening market. It sounds obvious, but please remember to not leave it until the last minute to submit
Benefits Plus is the member rewards programme from RICS, with a range of exciting special offers, discounts and incentives for RICS professionals. For the full line-up of benefits, visit rics.org/benefits
your proposal form. Some firms will leave renewal of PII to the last minute, thereby not securing their cover until the last few days, which could result in an outcome that significantly disadvantages you. Speaking to a specialist broker will be important. During the height of the PI crisis for valuers, Howden was one of very few brokers that was repeatedly able to secure PI cover for firms that were severely distressed by claims. This was due in no small part to the level of engagement it has with the surveying sector. A specialist broker’s technical knowledge in your field will be invaluable to the quality of communication between you and your insurers, which is vital in achieving the most positive outcome available. Businesses should also ensure that their insurance programme is as robust as possible. Larger firms should consider a primary layer of insurance shared by several insurers, with a good quality lead insurer that stood by surveying firms between 2009 and 2014 – or at least an underwriter that did. Consider the long-term implications of changing insurer for a small cost saving. It’s important to note that a change of broker doesn’t always require a change of insurer. For advice on any aspect of your insurance or risk management arrangements, please contact Greg Harrison on +44 (0)20 7133 1505, or email@example.com
INTERVIE W BY BRENDON HOOPER; ILLUSTR ATION BY DANILO AGU TOLI
Launched in early 2018, Proplist.com aims to make searching for commercial property as easy and effective as possible by ensuring the quality of its live listings. We spoke to CEO Richard Howells about the company’s journey from dream to reality.
“ We haven’t tried to reinvent the technology, but rather keep to our principles ” RICHARD HOWELLS PROPLIST
What spurred the idea behind Proplist? It was one borne out of frustration. I’ve been in the property profession for 15 years, previously I worked for a commercial property consultant and an investordeveloper, buying and selling everything from land for shopping centres to offices for residential conversion. The most frustrating aspect of our work was trying to find good-quality properties and land in the first place. Despite having funds ready to go and a desire to buy, we struggled with the suggestions from the available online portals and the quality of advice on offer. Most suggested properties were out of date, or worse, “scraped” from other websites – the site might show 50,000 potential properties, but of those only 15,000 might be “live” and the rest are scraped-up junk. So we thought, why not just do it ourselves? What makes Proplist different to other listings sites? We wanted Proplist to be a trusted, qualitycontrolled portal of live commercial properties. It comes down to a simple premise: how would we ourselves want to search for property, and how would we like to sell property? After launching with just a few hundred properties on the site, by the end of 2018 we had around 20,000 active listings – from corner shops to office blocks – as well as 200 clients who provide us with up-to-date property information every day. We haven’t tried to reinvent the technology, but rather keep to our principles: we never scrape listings from other sites, and we make sure to engage with people to bring their properties on board. This ensures that the 60,000-plus visitors to the site each month see an accurate listing of availability.
How did you build your team? It’s so important to get a great team mix. We are a blend of young, specialist IT and website developers alongside older, experienced staff who have the in-depth knowledge of the property industry. It’s crucial to be wholly connected, too, so the team functions together at all times, no matter where any one of us might be. You don’t actually have to be in an office to be part of a business, and you don’t have to be tied to one city – our team is highly mobile and active across the UK, spending hundreds of hours speaking to people about how our business can benefit them. What advice would you give to other entrepreneurs who want to build an idea into a business reality? First, get a good idea of what it’s all going to cost – what are your main expenses? People lose control of money very quickly. Plan a period of what you’ll be spending and when you expect to start making money, but don’t be frustrated if you’re not making as much as you first imagined. Try to be creative in advertising how your business offers something different in the marketplace. We first marketed Proplist at MIPIM by handing out smartphone power packs branded with our company name. It was a kind of guerrilla marketing that allowed us to make face-to-face contact with hundreds of industry professionals, who walked away with a lasting memory of what our company was about. Even though our business is online, it’s important to remember that people buy from people. PropList – Simple Commercial Property Search. Start your search at proplist.com
XXXXXXXXXXXX MARCH 2018 2019 / MODUS / 39
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NEWS IN BRIEF
FIND OUT HOW WE ARE SHAPING THE FUTURE OF THE PROFESSION We’re continuing our conversations with you about the future of our profession. Understanding how we manage and assure the quality of data to aid decision-making has been identified as a critical challenge for all of us. Does our profession need to own the data, or should we entrust it to the companies developing the technology that collects it? How can we ensure our professionals have the correct skills to capitalise on the opportunities being presented to us? How can we build truly connected, intelligent cities using the latest sustainable building methods? Visit rics.org/futureprofession to explore the challenges, opportunities and possibilities that lie ahead. ALL-NE W L AND JOURNAL FOCUSES ON NATURAL ENVIRONMENT
IMAGE BY S D ’ HALLOY/IMAGE & CO
This month’s Land Journal is dedicated to the topic of natural capital. It features a range of articles which highlight the importance of both preserving and enhancing our natural environment to ensure it can continue to deliver a range of goods and services and the prosperity of current and future generations. Visit rics.org/journals to read the relaunched suite of Journals, which feature a new, fresh, cleaner design. JOIN US AT THE WORLD BUILT ENVIRONMENT FORUM SUMMIT The RICS World Built Environment Forum reconvenes in New York on 13-14 May to debate “the future of investment in real assets”. Key topics include how we harness technology to mobilise the private capital needed to meet the growing demand for new
TRAINING & EVENTS
infrastructure, new real estate and the renewal of existing assets. Headline speakers include: author Parag Khanna; former US senator Jeff Flake; Brookings Institution senior fellow Jennifer S Vey; and entrepreneur, author and 2020 Democratic presidential hopeful Andrew Yang. Book your place at rics.org/wbef. ICMS SECOND EDITION TO INCLUDE LIFECYCLE COSTS The International Construction Measurement Standards Coalition has released the first public consultation on the second edition of ICMS to incorporate lifecycle costs. Since the publication of the first edition in July 2017, ICMS has achieved wide adoption for capital cost reporting. The second edition responds to feedback suggesting that construction stakeholders will benefit from a reporting system that provides internationally comparable lifecycle cost data. ICMS 2 will expand the scope and include renewal, operation, maintenance and end-of-life costs, together with expanding the civil engineering scope to include mines, quarries, dams and reservoirs. The consultation runs until 22 March. Visit rics.org/icmsconsult to take part. TAP INTO A NE T WORK OF TECHNOLOGY PARTNERS RICS’ Tech Affiliate Programme aims to increase engagement between the technology and property sectors. As well as an increased profile, members of the programme benefit from shared market insight and guidance in supporting RICS data standards. It is open to any business providing data and technology solutions within the built and natural environment. Visit rics.org/tap to find out more.
RICS at MIPIM 2019 12-15 March, Cannes, France MIPIM gathers the most influential players from all sectors of the property industry for four days of premium events, conferences and exhibitions. Join us there. To see the full range of activities and to book your place, visit mipim.com
CONFERENCES RICS Hong Kong Annual Dinner and Awards 15 March, Hong Kong CPD: 3.5 hours HK$2,800 (£272) rics.org/hkdinner2019 RICS Cayman Islands Construction & Property Conference 15 March, George Town CPD: 6 hours $150 (£115) rics.org/ caymanconference RICS Recruit Live 25 March, RICS HQ CPD: 1-4 hours ricsrecruit.com RICS Valuation Conference 26 March, London CPD: 5.5 hours £215 rics.org/ valuationconference
RICS Summit Africa 2019 29-30 May, Maslow Hotel, Johannesburg, CPD: 6 hours From R1,850 (£100) rics.org/summitafrica RICS Planning and Development Conference 25 June, London CPD: 5.5 hours rics.org/plandev
BLENDED LEARNING Expert Witness Certificate Various locations from 11 March Duration: 12 weeks CPD: 26 hours £1,580 rics.org/ expertwitnesscertificate All prices exclusive of VAT or local taxes
For details of conferences, training sessions and CPD seminars near you, go to rics.org/events MARCH 2019 / MODUS / 41
OBITUARIES Please email obituary notifications to firstname.lastname@example.org or call +44 (0)247 686 8555
John David Baxter FRICS, 1928-2018 Essex
Clifford A Beebee FRICS, 1927-2018 Beaconsfield
Mark Christopher Gregory MRICS 1965-2018 Welwyn Garden City
Cyril AW Chambers MRICS, 1930-2018 Kent
Eric Frank Martin MRICS, 1923-2018 Hertford Harold Norman Ratcliffe MRICS 1929-2017 Cambridge Arthur Ernest Wallace MRICS 1924-2018 Cambridge Norman Victor Webb FRICS, 1929-2018 Chelmsford
EAST MIDLANDS Larry Bell MRICS 1927-2018 Lincolnshire Frederick Livermore MRICS, 1919-2018 Lincolnshire
LONDON William Killick FRICS, 1947-2018 Hampton
NORTH EAST John Durie FRICS 1935-2018 Cleveland
NORTH WEST Keith Lyon FRICS 1937-2018 Prescot
John David T Davis MRICS, 1927-2018 Bexhill-On-Sea Stuart Farrant FRICS, 1938-2018 Aylesbury John Haynes MRICS 1932-2018, Kent Robert Lindsay Murdoch FRICS 1952-2018, Surrey Peter Neal FRICS 1927-2019, Kent Colin Irwin Packington FRICS 1928-2018, Surrey John Mercer Phillips FRICS 1942-2018, Kent Walter Purvis Smith FRICS, 1920-2018 Hampshire Clive Francis Walker MRICS, 1931-2018 West Sussex Hugh C Woodrow FRICS, 1935-2018 Hampshire Geoffrey R Worth FRICS, 1928-2018 Oxford
SOUTH WEST Alan Edgar Brothwell MRICS 1926-2018, Bristol Brian G Foster MRICS 1929-2018, Dorset
Christopher Alan Fuller FRICS 1926-2019, Dorset
Robert William Bryan FRICS, 1944-2018 Droitwich
Michael Gibson FRICS, 1931-2018 Cheltenham
John Thomas Carter MRICS, 1936-2018 Staffordshire
Stanley Hardman Pickett FRICS 1922-2018, Dorset
YORKSHIRE & HUMBER
John Arthur Renshaw FRICS, 1929-2018 Salisbury George Frederick Simpson MRICS 1923-2018, Wiltshire
WEST MIDLANDS Christopher Michael Arnold FRICS 1956-2019, Worcester
Hugh Greville A Lindsey FRICS 1925-2018 Doncaster Christine Rutter MRICS, 1954-2018 West Yorkshire Anthony Wright MRICS, 1934-2018 West Yorkshire
John Anderson FRICS, 1927-2017 Aberdeen
Peter Andrews FRICS 1949-2018, Canada
David A Rugg MRICS unknown-2018, Perth
AUSTRALASIA Paul Faulkner MRICS Sydney, 1973-2018
NORTHERN IRELAND Charles Leslie Neill FRICS 1923-2018, Belfast Brian Harrold Smith FRICS 1930-2018, Belfast
SUB-SAHARAN AFRICA Derek Osborne MRICS, 1937-2018 Pietermaritzburg
If you are facing hardship after the loss of a family member, or considering leaving a legacy, please contact LionHeart, the charity for RICS members and their families. Call +44 (0)24 7646 6696, email info@ lionheart.org.uk, or visit lionheart.org.uk.
CONDUCT rics.org/conductcases MR THOMAS KE TLE Y MRICS , ESSEX, CM9 APPE AL PANEL – 03.12.18 Mr Ketley appealed the decision of a Disciplinary Panel and this was heard by an Appeal Panel. The Panel allowed Mr Ketley’s appeal and varied the sanction imposed to a Caution and a Fine of £500. It also ordered Mr Ketley to contribute towards RICS’ costs. MR RICHARD WILSON , LEICESTER, LE7 APPE AL PANEL – 03.12.18 Mr Wilson appealed the decision of a Disciplinary Panel and this was heard by an Appeal Panel. The panel allowed Mr Wilson’s appeal and
varied the sanction imposed to a Caution and a Fine of £500. It also ordered Mr Wilson to contribute towards RICS’ costs. MR DAVID ROGERS ACIOB MASI AND DAVID ROGERS (THE FIRM), SWINDON, SN1 DISCIPLINARY PANEL – 17.01.19 A Disciplinary Panel heard four charges against Mr David Rogers and seven charges against his Firm, David Rogers. The Panel found all 11 charges proved. The Panel expelled Mr Rogers from membership of RICS and ordered the removal of the Firm’s registration. The Panel also ordered Mr Rogers to contribute towards RICS’ costs.
25th March 2019 RICS HQ, London Join us and meet leading employers face to face at RICS Recruit Live: • Exhibitors include Mott Macdonald, Arcadis and Transport for London. • Have the opportunity to attend our careers advice surgery and get tips from the professionals. • Network with some of the industry’s top employers and give your career prospects a boost.
To register for the event please visit ricsrecruit.com/live
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FITTING YOUR IDEAS TOGETHER FROM START TO FINISH DISCUSS YOUR FUTURE PROJECTS CONTACT US NOW
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RICS RECRUIT R IC S R E C R UI T.C OM / T O A D V E R T I S E , E M A IL S A MG @ W E A R E S UND AY.C OM OR C A L L + 4 4 (0)2 0 7 10 1 2 7 7 9
Feeling Undervalued? RESIDENTIAL SURVEYORS & VALUERS Full and Part Time, employed & self employed. All the best jobs with all the best employers, including lenders, financial organisations, large corporate and smaller non-corp surveying firms. If you are AssocRICS/ MRICS/FRICS and a registered valuer, ideally with relevant experience then contact us to discuss your career aspirations. Immediate vacancies exist across London/M25 and UK counties, particularly Avon, Beds, Berks, Birmingham, Bucks, Cambs, Cheshire, Derbys, Devon, Dorset, Durham, Essex, Hants, Herts, Kent, Lancs, Leics, Lincs, Gtr Manch, Mersey, Middx, Norfolk, Northants, Notts, Somerset, Staffs, Suffolk, Surrey, Sussex E, Teesside, Tyneside, Wales, Warks, W Mids, Yorks. Also immediate “Staff Surveyor positions”, and “Private Survey Only” opportunities. Email your CV to email@example.com or speak to the industry’s most experienced recruitment team, Jeff Johnson 07940 594093 or Graham Johnson 07821 708131
The next issue of Modus will be published on 5 April 2019
RECRUITMENT COPY DEADLINE: 15 March TO BOOK, PLEASE EMAIL SAMG@WEARESUNDAY.COM
IT’S TIME TO PUT A SPRING IN YOUR STEP.
Connells Survey & Valuation are seeking Residential Surveyors.
If you are interested in working for us then we would love to hear from you. Please contact:
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• Sheffield • Swansea • Swindon
or send your CV to firstname.lastname@example.org
Expansion... Growth... Opportunities Established in 1873, Tyser Greenwood Chartered Surveyors have over 100 years’ experience providing surveying and valuations across the Residential and Commercial Property Market.
Following our successful recruitment drive last year, we Following extensive recruitment drive in 2018,of are still looking our to add to our rapidly growing network we are still looking to add to our rapidly home based surveyors, to service our expanding client growing network of home based surveyors. base, utilising the latest iPad technology. We plan increase our footprint and service offering We are looking to to increase our footprint and service offering by further by expanding team with opportunities in;inNorth West further by expanding our team with vacancies opportunities in; North expanding ourour team with further North West (Manchester), SouthSouth Yorkshire, Teeside, Tyneside, Midlands, East West (Manchester), Teeside, Tyneside, Midlands (including (Manchester), Yorkshire, Teeside, Tyneside, Midlands, Hull, Cheltenham Birmingham), East Coast Yorkshire,and HullGloucester. and Kent. East Coast Yorkshire, Yorkshire, Hull, Bristol, Bristol, Cheltenham and Gloucester. There is an above average remuneration package available for There is an above average remuneration package available for successful candidates. You should be an experienced residential successful candidates. You should be an experienced residential surveyor with strong IT skills (capable of using the latest ipad surveyor with strong IT skills, who can offer high levels of expertise technology), who can offer high levels of expertise whilst being whilst being willing to develop new business across your territory. willing to develop new business across your territory. Approaches from sole practitioners could also be considered.
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A revolution in surveying. Join an innovative company that's leading the technological revolution in surveying. A growing company where surveyors spend less time travelling, more time surveying and where expertise is properly rewarded. e.surv's continued success means we're looking to recruit experienced residential surveyors as well as, SAVA AssocRICS candidates and RICS accredited conversion candidates in: Birmingham, Hereford, North London, East London, Twickenham, Croydon, Ashford - Kent, Tunbridge Wells, Dartford, Redhill, Chelmsford, Bristol, Hampshire, North & South Wales, Coventry, Leicester, Derbyshire, Herefordshire, Bradford, York, Barnsley, Doncaster, Wakefield, Bournemouth and Dudley. Contact Matt Siddons, Recruitment Manager on 07794 392858 or email email@example.com Web: www.esurv.co.uk/jobs Competitive salary | Generous incentive scheme | Flexible benefits package | Company car | Private medical care
MARCH 2019 / RICSRECRUIT.COM / 45
SELECTING THE BEST APPLICANTS AND PROMOTING DIVERSITY
Northern Ireland Valuation Tribunal – Valuation Member NIJAC is inviting applications for the office of Valuation Member of the Northern Ireland Valuation Tribunal (NIVT). It is intended to make 2 appointments. A reserve list will be maintained for 12 months from the anticipated date of the first appointment (28 June 2019). Eligibility A Valuation Member should have three years’ experience in the valuation of land. Fee: £335 per day and £167 per half day. Closing date 12 noon on Monday 1 April 2019 For further information and to apply online please visit www.nijac.gov.uk or phone 028 9056 9117. NIJAC is committed to equality of opportunity for all who are eligible for judicial office and welcomes applications from women and men from all backgrounds and sections of the community. NIJAC will appoint the applicants who appear to NIJAC to be the most suitable based on merit.
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SDL Group is an equal opportunities employer and encourages a diverse range of talent to apply.
HARGREAVES JONES RECRUITMENT 2019 Talented Quantity Surveyors (at all levels up to Director level) are sought with solid track record/experience in onshore/offshore windfarm projects Location: Scotland Base Location with Excellent Salaries + Car/Car Allowance + Generous Pension + PHI Hargreaves Jones is a commercial and Project Management Services Consultancy serving the Oil, Gas, Nuclear, Utilities, including overhead Transmission Lines, Pharmaceuticals, Fast Moving Consumer Goods sectors (FMCG) and Commercial and Traditional Building sectors. We pride ourselves on delivering commercial and project services to clients engaged in capital construction and engineering activities on both large and small infrastructure projects for Blue Chip clients, or their respective design and project management service providers. The continued expansion and success of our growing business is reliant upon finding enthusiastic and motivated professionals. We provide APC training and support & opportunities to grow in an exciting professional environment.
Please send a copy of your CV and covering email to email@example.com For further deatils please contact www.hargreavesjones.com
Unrivalled Property Recruitment Expertise.
Opportunities within the Residential Sector - UK Wide Chartered Residential Surveyors: Within both corporate and panel appointed, non-corporate practice-based environments. Remuneration includes a basic salary of £45-60k (depending on location), bonuses (based on fee income), a car (or allowance), healthcare and pension. Locations with immediate starts are available across the UK.
Building Surveyors: Opportunities to work for well-established and independent firms. For well over 20 years now, we’ve Immediate roles for professionals motivated, been placing surveying in positions across the country, at experienced Building some of the most prestigious Surveyors covering Greater companies around. London, East Anglia and Whether you’re a Chartered Surveyor other regions; undertaking or AssocRICS, a Commercial Valuer or Building Surveys and HBRs Building Surveyor – we’ve got your for high next job. average fees and We are happy to discuss and potentially excellent remuneration. offer contrast to your current situation, or provide advice on the best move to maximise your career path.
Andy Welham Consultant & Freelance Unrivaled Property Residential Surveyors: 0208 514 9177 Recruitment Expertise. Either self employed or Andyw@BBLproperty.co.uk those open to additional We currently have numerous and With many more vaccancies available James Irving instruction. immediate vaccancies for experienced please do call should you be interested surveyors those seeking 0208 514 9120 chat about the having an informat We haveand multiple clients seeking in cross-training across the UK. number opportunities in your own location. coverage across a large Jamesi@BBLproperty.co.uk Some current locations include: of postcodes UK wide. Andy Welham Residential Surveying: For our range of residential 0208 514full 9177 With many additional London & Counties / Midlands / The North Andyw@BBLproperty.co.uk (East & West) opportunities including freelance residential vacancies Staff Valuer: andour consultancy roles please For full range of opportunities available, please do call North & East London / South West London alongside helpful career & CV advice should you be interested visit: www.bblproperty.co.uk Cross-training: please visit www.bblproperty.co.uk WR / CV / B / DYan / NGinformal / NR / PL / EXchat /L in having Building Surveyor: about the opportunities in London / Leeds / Newcastle your own location.
NEW CAREER OPPORTUNITY FLEXIBLE PART-TIME AND FULL-TIME RESIDENTIAL, COMMERCIAL & DEVELOPMENT SURVEYOR OPPORTUNITY, NATIONWIDE. An exciting opportunity has arisen to join one of the UK’s fastest growing Chartered Surveyors, specialising in the bridging finance market. We provide valuation services to a large client base producing residential, commercial and development reports that the Lender can rely on and trust. GENEROUS FEE SHARE BASIS Due to significant growth in volumes of work, we are keen to recruit additional professional surveyors in all geographical areas to carry out valuation work on a very generous fee sharing basis with minimum and cancellation fees in place to protect you, the surveyor. This opportunity would probably suit sole practitioners looking to add income to their existing workload, however all are very welcome to apply.
WORKING WITH ASHWICK CHARTERED SURVEYORS Ashwick Chartered Surveyors are property specialists offering a one stop valuation service throughout England and Wales. We are looking for individuals to join our team that are able to offer quality services driven by commitment to provide excellent customer service. We believe in developing strong relationships with our broker and lender clients going above and beyond and are looking for like-minded surveyors. To work with Ashwick Chartered Surveyors you will need to be committed, highly professional and meticulous, with full RICS qualifications and registration with at least 5 years post qualification experience. We in turn supply you with full support from our experienced and friendly administration and compliance team, providing you with full and clear instructions, report templates and immediate assistance. We offer the facility to type your dictated reports free of charge.
Generous fee scales. Flexible working hours. Free dictation service. Friendly, knowledgeable and helpful team. Compliance team on hand to assist you. To discuss further please contact our Business Manager, Kate Callow, on 01934 750 203 or email firstname.lastname@example.org
MARCH 2019 / RICSRECRUIT.COM / 47
Your future is bright with Miller Metcalfe.
R e si d enti a l C har tere d S ur veyor s St e p i n t o t h e S p ri ng w i th a n e xc it i n g n e w c a reer oppor t uni ty
Nationwide Positions OTE £50k - £70k per annum • Flexible working available
Contact Us: Nicki Henderson, HR Director
• Full-Time, Part-Time & Consultancy opportunities
Tel: 01204 525252 (Opt. 4)
• Home working
• Uncapped bonus, paid monthly
(All applications are dealt with in the strictest confidence)
Miller Metcalfe Surveyors are a leading national supplier of Surveys and Valuations. We have opportunities available for home based, highly motivated MRICS/ FRICS Residential Chartered Surveyors, who meet VRS registration requirements, have experience of producing RICS HomeSurveys and want to work across a mixture of both private and lender clients. When you join Miller Metcalfe Surveyors you have the opportunity to earn; a competitive OTE in the region of £50 - £70k (uncapped bonus scheme - paid monthly). Also included; company vehicle choice or allowance, pension contributions, death in service, full administration/ technical support and much, much more. Miller Metcalfe Surveyors has a very bright future, if you want to join a team where you are valued, there has never been a better time.
We believe in investing in our people and ensuring Miller Metcalfe Surveyors is a great place to work. We want to hear from you whatever your location or work preference.
We are fully committed to developing our people and further enhancing their career.
Want to know more? Take a look at our short film (recently featured on The Telegraph Business Hub) on our website www.millermetcalfesurveyors.co.uk
Construction Project Manager Initial Salary £45k - £55k
Sea Change Sussex - the economic regeneration company for East Sussex, is delivering an ongoing investment programme of comprehensive development of major business parks and town centre locations, including offsite infrastructure, business and other premises for letting and sale. Sea Change Sussex wish to recruit an experienced, highly motivated construction project manager to join its small multi-disciplinary team based in Hastings, East Sussex. The ideal candidate would ideally have a minimum of 5 years’ experience in a construction project management role. A construction related degree, Quantity Surveyor and MRICS qualifications. Membership of the Association of Project management would be beneficial. Please email for a full job description. Applicants should submit their C.V. by email to John I Shaw, FRICS, Master of Laws, Dip. Land Econ. Closing date 25th March 2019 e: email@example.com R182 modus ad.qxp_Layout 1 07/02/2019 08:14 Page 1 w: seachangesussex.co.uk
Two opportunities with an award-winning company Technical director and Associate surveyor (part-time or full-time) Aztec West, Bristol Six figure package for Technical director and competitive salary for Associate surveyor Carterwood provide solution-focused commercial due diligence as well as handling the sale and acquisition of property and businesses throughout the UK in the health & social care sector. We are an adaptable, fast-paced, dynamic team and we’re looking for some exceptional people, which is why we are keen to find the right people and work around their needs. We are happy to discuss options around flexible hours, whether this is part-time, full-time, or indeed as an employee or on a consultancy basis. We have a track record of working well with both. The technical director position involves the independent production of market analysis reports for proposed and existing care businesses, primarily across the elderly care and retirement sectors, but occasionally including specialist care. The baseline research is completed by our team of analysts and therefore the
focus is upon interpreting and reporting the advice in written form, together with verbal feedback/client meetings, as required. A minimum of 7 to 10 years’ report writing experience and an RICS qualification are desirable, but not essential. The associate surveyor will take on the responsibility for technical proofreading across the business and must have a flexible approach to ensure that deadlines are met in a fast-paced working environment, and a track record of producing high quality work even when working under pressure. A chartered surveying (MRICS or FRICS) or RTPI qualification is essential. If you would like to find out more about either of these roles, please call us for an informal discussion on 08458 690777 or email firstname.lastname@example.org. Further details can also be found on our website: www.carterwood.co.uk
MARCH 2019 / RICSRECRUIT.COM / 49
W H A T I F…
…f o r e i g n c o n s t r u c t i o n workers left the UK? An exodus of skilled employees post-Brexit would merely compound a problem decades in the making, argues James Bryce
50 / MODUS / MARCH 2019
their existing EU staff – encouraging them to apply for settled status while offering financial support when needed. They are looking for a certainty that is not forthcoming from the government. As an island nation, the UK has relied on migrant labour for centuries. Post-Brexit, we have to remain attractive to investors and migrant workers if we are to deliver our infrastructure programmes. A crucial step would be to introduce three-to-five year working visas for elementary construction professionals, which would immediately mitigate 31,000 of the 214,000 gap. Even if these Brexit shortfalls don’t come to pass, never before has there been a greater need for action and investment. We need to do far more to look at modern methods of construction, improve productivity and reduce waste, and divert the gains into training and development.
“ British companies need to do everything they can to support their EU staff ”
James Bryce is head of strategic workforce planning at Arcadis
INTERVIE W BY BRENDON HOOPER; ILLUSTR ATION BY DENIS C ARRIER
Workforce shortfalls resulting from Brexit could hit a lot deeper than just losing a few Polish plumbers or Bulgarian bricklayers as the stereotype would have us believe. The skills gap is a structural issue within our industry, rooted in factors that were building up well before the referendum. It has been a concern for more than a decade, but Brexit has provided a lens through which to seriously analyse the precariousness of our workforce. Arcadis investigated the potential impact on the UK’s construction workforce under “no change”, “soft Brexit” and “hard Brexit” scenarios up to 2021. The predictions we arrived at were profound. Regardless of the result, the construction workforce is going to take a hit – a soft Brexit will see the industry lose out on 136,000 EU workers, while under a hard Brexit we could miss out on as many as 214,000. To put this into perspective, the UK has to recruit more than 400,000 people each year to deliver in line with our housing and infrastructure needs. Where is the urgency in recognising this? The government has been very quick to reassure the NHS and the agriculture sector that they will have access to the EU workers they need, but we have not seen a similar dialogue concerning construction. This is despite the industry being responsible for a much bigger share of GDP. It is not a matter of being negative about the UK’s ability to fill the skills gap – by adequately training and investing in the next generation we will bridge it eventually – but right now it comes down to a question of time. It will be impossible to make up this shortfall within two years. In the meantime, British companies need to do everything they can to support
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There’s no point in skirting around it. Money does make the world go round. What’s important is how? This month’s edition of Modus focuses o...
Published on Feb 27, 2019
There’s no point in skirting around it. Money does make the world go round. What’s important is how? This month’s edition of Modus focuses o...