MODUS Q1.14 // RICSASIA.ORG/MODUSASIA
Q1.14 // THE WAY TO GO Creating the transit systems of tomorrow p14 YOU KNOW THE DRILL Opportunities for surveyors in oil p18 AND THE WINNER IS... The 2014 RICS Hong Kong Awards p26
THE CROWDED ISSUE
MAKING SPACE FOR GREEN SPACE P38
N O 12 Q1.14 //
LOOKING AHEAD What will cities be like in 20 years? By 2030, most of the world’s population will live in cities. By then, kids at school today will form the backbone of the urban workforce, while working adults will augment an increasing elderly population. The way we live, work, play, commute and communicate will change, just as it has already from 20 years ago. Future cities will not be ‘smart cities’ per se, but they will be inhabited by technologically savvy ‘smart urbanites’. These and other interesting notions challenge conventional thinking on urbanisation and city-making, prompting the need for paradigm shifts, innovative solutions and structural changes to effect the desired outcomes. Policy-makers, surveyors, planners and experts now have at their disposal the technological know-how, experience and best practice to tackle important issues of rapid urbanisation, such as rural-urban integration, and food and water security. If we want to leave a positive, long-lasting legacy for future generations, holistic, robust and inclusive long-term strategies need to be developed with strong leadership, and we need to act now, with foresight and confidence. JASON HO RICS NORTH ASIA DIRECTOR
Regulars 04_FEEDBACK Your views on Modus and the surveying profession 06_INTELLIGENCE Global news, plus opinions, reviews and reactions 35_BUSINESS ADVICE Best practice guidelines for managing staff performance 43_LAW ADVICE Exploring the design and build procurement process
Features 14_GETTING THERE? Innovative transport solutions to keep our crowded cities moving 18_WHERE NEXT? A look at the opportunities for chartered surveyors in oil
24_BLACK GOLD Global data on oil reserves, production and consumption
26_RICS AWARDS 2014 Nominations for the 2014 RICS Hong Kong Awards 36_MEMBER PROFILE Nick Seaton MRICS discusses corporate real estate in Asia 38_GREEN ON GREY Why we should fight for green space in fast-growing megacities
Information 45_RICS NEWS News and updates from RICS 48_EVENTS Training and conference dates 50_THE MEASURE Global population densities
Q1.14 // MODUS ASIA
Feedback // land for the first time and, secondly, Myanmar (Burma) is emerging on to the world stage without a hint of the rural majority being able to prove land ownership. The outcome of gaining land rights is not just about the ability to farm the land, but also the ability to sell it. In Myanmar, the government offers little, if any, compensation for exploiting natural resources or instaling infrastructure. In China, they expect a wave of farmers to trade in their property and move to cities – which suits the government’s wish to move an investmentheavy economy towards more consumption. A tough call on the environment, but providing new markets for the rest of the world’s farmers. Rob Yorke FRICS, Wales
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10.13 // YOU KNOW THE DRILL Opportunities for surveyors in oil p20 GROWING PAINS Do biofuels do more harm than good? p30 LOCAL WARMING Life with the Renewable Heat Incentive p34
THE OIL ISSUE
THE LIE OF THE LAND The potential input from professionals in dealing with land tenure issues is well highlighted by Andrew Hilton in the November global edition (page 8). Two immediate scenarios come to my mind: firstly, China is anticipated to enable farmers to register their
MODUS 10.13 // RICS.ORG/MODUS
DOWN TO EARTH I read with interest the debate on whether or not surveyors can make good building designers (November global edition, page 5). I would say the answer is yes – provided the project is within the resource pool of the firm and the capabilities of the professional. As a building surveyor, I’ve been lead designer on several complex redevelopment projects, including a city centre hospice, a new-build research centre, and large-scale commercial offices. A common view among clients on some of the projects I have carried out is that they find some architects intimidating, particularly when they are seeking a more pragmatic approach to the project – while the design is important, it is not the driving force behind the development. There is no doubt that design requires imagination, and in my opinion this cannot be taught. However, you can guide someone towards a solution that will meet the project brief – but whether the solution achieved under such a process is regarded as good design is another matter. Alistair McIntyre MRICS, Scotland
A tanker collision blocks the Persian Gulf. Oil doubles in price. What happens next?
BACK TO SCHOOL In the October global edition of Modus, I read with interest – albeit tinged with a little alarm – the responses to ‘One big question’ about the most efficient pathway into surveying (page 9). The response from London: ‘Nothing beats experience. Surveying is a practical profession, and training for it cannot be achieved in a university.’ The response from Devon: ‘I also find that those who train on the job naturally learn how to behave like a professional – which cannot be taught by academic study.’ I suggest that medicine is also a practical profession, perhaps even more so than surveying, and yet the standard preparation
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for a doctor is a five-year university degree course. Thankfully, the third response from Oxford (which championed university study) was a bright light shining in the gloom. When I joined the profession as an apprentice quantity surveyor more than 60 years ago, the route to qualification was a combination of day release, evening classes and a correspondence course. Since then, there have been vast strides in the educational provision for those entering the profession, and thankfully my experience is now a thing of the past. In 1971, Ahmadu Bello University in northern Nigeria launched the first honours degree in Black Africa. The course attracted a highly qualified cohort of students with a thirst for learning. After graduation, the majority rose to senior positions within their own country, as well as with international organisations and international companies. Having worked with UNESCO and other international agencies, I know the additional barriers that have to be overcome by those who do not possess a university degree. In order to continue to attract bright young people to surveying, the profession must continue to work with the universities to provide an attractive educational experience, as well as a stimulating training programme in practice, to produce well-educated professionals able to compete in the international world. Thomas Inglis FRICS, Fintry, Scotland
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Intelligence :NEWS :REVIEWS :OPINIONS :REACTIONS
:PALM OIL PLANTATIONS BORNEO From chocolate and margarine to chewing gum and lipstick, palm oil is found in a wide array of supermarket products. What’s more, this wonder oil, produced from oil palms grown in the tropics, is now finding its way into petrol tanks too, as a biofuel. As the highest-yielding vegetable oil crop, palm requires less than half the land of other crops, such as soya bean or rapeseed, to produce the same amount of oil. This makes it cheap, and in many countries, including Nigeria, Thailand and Brazil, palm oil trade has the potential to contribute significantly to economic growth. However, the environmental cost can be devastating. In Indonesia and Malaysia, where around 85% of the world’s palm oil is produced, thousands of hectares of wildlife-rich rainforest have already been hacked away to make room for plantations – particularly on the island of Borneo, the only remaining habitat of orangutans. But to feed the ever-growing demand for palm oil – predicted to double by 2030 – widespread deforestation is set to continue, displacing many thousands of endangered species and indigenous communities in its wake.
01.11 // MODUS
CHINA NEEDS A BETTER PLAN FOR ITS SMALL TOWNS Dr Wei Yang Wei Yang & Partners
n China, there are 1,578 county towns and more than 20,000 towns. For the first time in 60 years, the recent Chinese national policy reform has drawn significant attention to the role of small and mediumsized towns in the future development of the country. As a result, people from rural areas are being encouraged to move to nearby urban areas to secure better access to public services, and these will be the fastest growing areas in the coming years. While I applaud the determination of the Chinese government to resolve the long-standing problem of urban-rural segregation, I’m also nervous about the physical consequences. Recently, I reviewed the strategic masterplans for several rural towns, all of which overlooked issues of urban scale and ecology. Towns were designed like mini versions of metropolitan cities, with rigid grid road systems, and I struggled to find any physical features, reflections of the historical urban fabric or ecological connections with the natural environment. Instead, I could see only the cold representation of land-use classes and estimates of predicted populations. China’s hierarchical administration system has generated a bias towards smaller towns, so it’s now more important than ever for decision-makers to change their mindset. These 20,000+ towns are the foundation of China’s future ecosystem and social infrastructure, so they have to be right – China can’t afford any mistakes. I believe that in the light of the Chinese government’s urban-rural integration agenda, reform is urgently needed in the Chinese planning system and masterplanning process. Few other areas of
activity have such a major impact on people’s day-to-day lives, and the integration of the physical and social spheres is vital in attaining truly sustainable places. ‘Placemaking’ and ecological considerations must be brought forward to the strategic masterplanning stage to ensure that the physical characteristics of a site, such as topography and existing water courses, are an integral part of the masterplan. Furthermore, the current system, which comprises separate strategic masterplans, indicative control plans and construction control plans, should be replaced with just one masterplan. It’s also important for decision-makers at a national and local level to recognise the value of good design and robust design procedures. Good design doesn’t have to correlate with a higher cost – in fact, bad design is likely to cost more, with the extra expense met in the long term by society. Good design creates places that work well, last for generations and attract investment over long periods of time. DR WEI YANG is managing director of Wei Yang & Partners in London. She is also the UK principal planning expert in the Chinese Ministry of Housing & Urban-Rural Development.
Sustainability PROPERTY SECTOR CUTS ENERGY CONSUMPTION
The global real-estate sector is reducing its environmental impact, according to the 2013 report from the Global Real Estate Sustainability Benchmark. Based on sustainability data gathered from some 49,000 properties, owned by 543 property companies and funds worldwide, the report found
THE URBAN IDEAL China’s smaller towns could be at risk if they are redeveloped insensitively, without appreciation for scale and natural landscape
energy consumption in the sector decreased by 4.8% over the 2011-2012 period, while water consumption reduced by 1.2% and greenhouse gas emissions were down by 2.5%. Furthermore, strong regional differences in energy reductions were found – for example, the property sector in Europe saw
only a small decrease in energy consumption (-0.7%) compared to North America, which had the largest reductions globally, with a decrease of -6.6% for energy consumption and -4.8% for greenhouse gas emissions. ‘It’s encouraging to see progress made by global market leaders, but this doesn’t cover the whole
sector,’ says Ursula Hartenberger, RICS Head of Sustainability. ‘More efforts are needed by all stakeholders to improve data collection and management in order to optimise overall building performance across all market segments, not just the top tier portfolios.’ Read the report at bit.ly/GRESB_2013.
THE COST OF LOGISTICS SPACE
China has the three least expensive markets for logistics space in the world: Shenyang, Chengdu and Wuhan, finds DTZ’s Global Occupancy Costs Logistics 2013 report. By contrast, other Asian markets, such as Hong Kong and Singapore, rank in the five most expensive locations. In Europe, London Heathrow remains the world’s most expensive market, while some secondary cities are now beginning to offer more affordable space: ‘Marseille, Antwerp, Brussels, Lyon and Budapest will continue to offer the lowest occupancy costs in Europe to 2017,’ said Rob Hall, head of CEMEA Logistics at DTZ. The five-year outlook for Europe is for a 1.4% annual average increase in occupancy costs.
What’s your view?
SHIPPING CONTAINER HOMES
AN ALTERNATIVE TO GDP? GLOBAL BUILT ENVIRONMENT ASSET WEALTH (US$ trillion)
UK Spain Italy Germany Japan US
This is India’s first recycled shipping container home, in Bangalore. Four containers from the docks at Chennai were stacked in an L-shape to increase ventilation, and the entire 84m2 home was completed in just four months, for around £10,000. Designer Kameshwar Rao has since created a company to construct more buildings using containers and advise others on how to build container homes. Is this a good housing solution for India? Email your thoughts to email@example.com.
18.3 China India France South Korea Russia
Source: EC Harris’ Global Built Asset Wealth Index 2013
:ONE BIG QUESTION WHAT MEASUREMENT AND ESTIMATING SOFTWARE DO YOU USE FOR SURVEYING? Hertfordshire We use a combination of Excel, Masterbill, Laxtons Building Price Book (SMM or NRM) and in-house elemental estimating programmes. Price books have both detailed and approximate pricing information, which can be added to Excel and other programmes. Peter Judd FRICS, V B Johnson LLP
HK: THE MOST COSTLY PLACE TO BUILD
Hong Kong is the world’s most expensive construction market, followed by Switzerland, Denmark, Sweden and Macau, says EC Harris’ 2013 International Construction Costs Report. Meanwhile, the cheapest locations to build are India, Indonesia and Vietnam. According to Simon Rawlinson, head of strategic research and insight at EC Harris, currency fluctuations have had a substantial effect on relative construction costs, particularly the appreciation of the Chinese Yuan. Visit bit.ly/construction_costs.
Barbados A custom-written and not-tooconvoluted set of spreadsheets will probably be more effective than proprietary software – unless you’re involved in a narrowly focused function. But be sure to put in some validation and other automatic checks to avoid errors. Eric Butcher MRICS, Project Support Partnership
Dubai For estimating, I’d recommend CATO with a Word/Excel front-end for the main summary, narrative, graphs etc. I hate Excel for estimating, as it needs to be manually checked every time, and any changes to a particular page can throw the whole thing out. Lione Dore MRICS, Faithful + Gould Take part in discussions by joining the RICS group at linkedin.com.
Q1.1401.11 // MODUS // MODUS ASIA
HOUSE PRICES: WOULD ‘SPEED LIMITS’ WORK? Simon Rubinsohn, RICS Chief Economist
he Reserve Bank of New Zealand (RBNZ) has been a pioneer in the past, and recent interventions suggest that it remains unafraid to push the boundaries when it comes to policymaking. Under the leadership of Donald Brash back in 1990, RBNZ was the first central bank to introduce a formal inflation target (if we ignore the Swedish government’s experiment
some 60 years earlier). Over the next decade, most of the other major central banks around the world followed suit. Scrolling forward to a speech in August this year, the current governor, Graeme Wheeler, announced the introduction of what he termed ‘macro-prudential tools’ to help maintain financial stability in the country. Specifically, from 1 October this year ‘speed limits’ have been put in place on residential property-lending based around high loan-to-value ratios (LTVs). Under the ‘speed limit’, banks are required to restrict new residential mortgage lending at LTVs of over 80% to no more than 10% of the dollar value of their new lending flows. There are some exemptions to this general rule, but the RBNZ governor was quite explicit in stating that the measures ‘are designed to help slow the rate of housingrelated credit growth and house price inflation’. He also put the new measures in a broader context, highlighting the advantage of using such an approach over a more traditional response – for example, a rise in interest rates – when‘escalating house prices are presenting a threat to financial stability, but not yet to general inflation’. Now, to be fair, other central banks around the world, particularly the Bank of Canada and banks in Asia, have adopted broadly
similar strategies in recent years. However, I would contend that none have articulated the message quite as clearly and definitively as RBNZ. Significantly, the governor of the Reserve Bank has also made a point of putting the approach in the context of an ongoing supply shortfall in New Zealand, arguing that the latter does not negate the benefits to be gained by targeted constraints on lending in the current circumstances. Meanwhile, just across the Tasman Sea conversations are also taking place about the relevance of macro-prudential tools with regard to the housing market. The discussion here is not so far advanced as in New Zealand, partly because Australia’s residential market doesn’t yet appear quite so stretched. That said, the Reserve Bank of Australia was still minded to hold an event on this subject under the rather auspicious title ‘Taming the Real Estate Beast’. Whether this approach will succeed in supporting financial stability without creating a raft of unintended consequences remains to be seen. But it’s clear that after housing booms wreaked such havoc in the US, Spain and Ireland, where supply was not in any sense constrained, increasing attention will be paid to the role of credit in driving house prices, whatever the underlying dynamics in the market.
REAL ESTATE MUST KEEP PACE WITH E-COMMERCE GROWTH
The logistics property sector in Asia Pacific will need to adapt to the huge growth in the e-commerce market over the next five years, says a report from Jones Lang LaSalle (JLL). China is predicted to be the world’s second largest business-to-customer e-commerce market by 2017, and although Asia Pacific has four of the top 10 countries with the highest number of internet users globally, many economies lag behind developed markets in the way online goods are bought, stored and delivered. ‘As more retailers establish websites and established retailers look to improve distribution, we’re seeing increased demand for warehouses and modern logistics capabilities,’ said Michael Fenton, head of industrial, JLL Australia.
App of the month
THEODOLITE HD It is: An augmented reality app that turns your iPad into a working theodolite. Who’s it aimed at? Surveyors, geologists, architects or engineers with a 3G- or 4Genabled iPad can use the app for on-the-go land surveying, the triangulation of landmarks, or even accident investigations. Also, a nifty optional in-app purchase allows users to share location data with up to 20 people on a shared ‘team’ map. Search ‘Theodolite HD’ at the app store (US$3.99).
Images Passive House Institute; Ramada and Days Hotel Singapore
SKYTRAN What’s that? It could be the world’s first magnetically levitating mass transit system, if the proposal for a network in Tel Aviv, Israel goes ahead. Designed to reduce traffic congestion, skyTran is a point-to-point service of personal ‘pods’ that travel to specific destinations via a user’s smartphone request. Sounds very ‘space-age’... It is – the system has been co-developed with NASA engineers, and architectural consultancy Jenkins/Gales & Martinez has been appointed to advise on the technology. The pods, which are made from lightweight composite materials, run, in part, on solar energy along a guideway 6m above ground, which is built using modular construction methods to reduce build time and cost. A full-scale test network is currently under construction in California. Watch a video of the concept at bit.ly/skyTran.
WORLD’S FIRST PASSIVE HOUSE HIGH-RISE
The world’s first Passive House office tower has been recognised in Vienna, Austria. The Passive House Standard is applied to buildings that require little or no extra heating or cooling, and the 80m-high Raiffeisen-Holding Group tower is the first high-rise office to not only meet, but exceed the standard. The building produces its own energy from a solar photovoltaic system and a combined heating, cooling and power plant. Even the waste heat from the data centre is reused. Water from the nearby Danube Canal is also used for the cooling system, and the façade’s highly efficient shading system helps reduce heating and cooling demand by 80% compared with conventional high-rise offices.
CHINESE ARE THE MOST INFLUENTIAL BUYERS IN THE GLOBAL PRIME NEW-BUILD SECTOR
Chinese investors are the world’s top luxury new-home buyers, according to Knight Frank’s Q3 2013 Global Development Insight. In terms of billionaire population, Asia is now second only to North America, while the number of high net worth individuals in China is forecast to rise by 137% over the next decade, placing greater demand on the prime residential sector. The survey found the most popular locations for Chinese property investors to buy are New York, Hong Kong and London, with 47% of respondents stating ‘the safe haven effect’ as the biggest draw for their market.
This guide explains how to meet the technical design and construction requirements of the Building Regulations. rics.org/shop: 19409 £49.95
This new edition of the Red Book complies with the updated International Valuation Standards (IVS), which are effective from January 2014. rics.org/shop: 19750 £220
SINGAPORE’S FIRST HOTEL IN A PARK
An innovative new scheme that combines commercial property with green space has opened for the first time in Singapore. Rider Levett Bucknall provided quantity surveying services on HH Properties’ S$300m (£150m) development, which comprises two independent hotels, a shopping mall and a commercial tower. The design, by DP Architects, also includes a 4,600m2 public park, built and managed by the developer, where a series of gardens and water features are interweaved between the buildings.
Comprehensive guidance on all of the technical competencies involved in estimating throughout the precontract stages of a construction project. rics.org/shop: 19448 £37.50
With sharp observations and real-world examples, Jeff Speck argues that improving the ‘walkability’ of our cities would solve many of our problems. ISBN: 978-0865477728 RRP £10.99
Q1.1401.11 // MODUS // MODUS ASIA
WHY GREEN CITIES ARE WEALTHIER AND HEALTHIER
The South African government is to invest US$100.8bn (£64bn) in infrastructure projects, and also push property development, over the next four years, under its National Infrastructure Plan. Both road and rail infrastructure sectors are predicted to increase at a compound annual growth rate of more than 11% to 2017.
Claire Bonham-Carter Aecom
his year, 110 cities around the world responded to the Carbon Disclosure Project (CDP) global cities survey. The results provide strong evidence that climatechange action strategies are helping to increase resiliency, improve the health of citizens and support long-term economic competitiveness. As a goal for a policy directive, greenhouse-gas (GHG) reduction can be a hard sell for city mayors, despite significant evidence that our climate is changing – 88 of the cities cited temperature increase and heatwaves as a climate-change impact that’s being felt right now. However, a story about improving health and increasing economic competitiveness is much more compelling. The analysis that Aecom carried out for CDP compared the economic output of cities per tonne of GHG emitted to show which regions are, essentially, creating wealth most efficiently. The results showed that the European cities reporting produced more than double the amount of GDP per tonne of GHG emitted compared to North American cities – evidence that decreasing emissions does not make a city economically less competitive. In fact, the CDP Wealthier, Healthier Cities
report, based on the survey results, finds that 91% of the reporting cities think climatechange action presents an economic opportunity – for example, through the development of new industries, investment in infrastructure or increased attention to environmental concerns. As cities plan and implement strategies to combat climatechange risks, they not only ensure the protection of citizens, but also create a safer place for businesses. The improved health of citizens is another unlikely benefit of climatechange action: of the various mitigation activities reported, 55% directly or indirectly encourage cycling and walking, which leads to fitter people and an improvement in air quality. The survey data and report can be used by cities as a positive message to their constituencies regarding climate-action planning. It can also help with private investment in cities by encouraging companies to relocate to places that provide an attractive, healthy environment for their workers as well as being resilient to future climate change.
The property buying restrictions in Vietnam for overseas investors could be relaxed this year, under a new government ruling. The considerations include allowing foreign investors to purchase and own both apartments and landed property in Vietnam with a maximum land plot area of 500m2.
The Sing Yin Secondary School in Hong Kong has been named by the US Green Building Council as one of two ‘greenest schools on Earth’. Mostly attended by low-income students, the school’s sustainable features include the use of two green roofs, solar panels, sun shading, energyefficient lighting and an on-site organic farm.
CLAIRE BONHAM-CARTER is Aecom’s director of sustainable development. cdpcities2013.net
TOP 5 ‘VANITY HEIGHTS’ % OF NON-OCCUPIABLE SPACE Source: Council on Tall Buildings and Urban Habitat
29% One thing I know...
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Lance Taylor FRICS, CEO, Rider Levett Bucknall ‘Key sectors for those entering the African market include commercial, residential, energy generation, infrastructure, and transport and logistics – and development is needed on a significant scale. The market is dynamic but tough, so it’s essential to utilise local knowledge and expertise.’ What’s your business tip? Email firstname.lastname@example.org.
Bank of America Tower, New York
Zifeng Tower, Nanjing
Burj Khalifa, Dubai
Emirates Tower One, Dubai
Burj Al Arab, Dubai
An innovative car ‘vending machine’ system has been launched in Hangzhou, China. For around US$3 an hour, a person can rent a compact electric vehicle from one of two multi-storey car parks in the city. Launched by Kandi Technologies, the company has plans to add another 10 stations this year, as well in Beijing and Shanghai.
Q1.1401.11 // MODUS // MODUS ASIA
GETTING THERE? HOW TO BUILD SUSTAINABLE TRANSIT SYSTEMS FOR TOMORROWS’ CITIES Words by Roxane McMeeken Illustration by Radio
Urban transport //
wenty years ago, the Swedish city of Malmö was deep in recession. The heavy industries on which the city was based fell victim to the economic crisis of the late 1980s, causing mass unemployment – and they were never to recover. Today, however, Malmö has reinvented itself as a thriving centre for sustainability research and development. The former industrial city’s transport system is now one of the greenest in the world: car journeys fell from 52% in 2003 to 41% in 2008, buses run on biogas from food waste, and every fourth journey is made by bicycle. So, although Malmö only has a population of 300,000, its fresh air and cycling culture are exactly what many larger urban centres around the world are striving to achieve. As cities face mushrooming populations and pollution levels, becoming greener, cleaner and economically sustainable is the only way to avoid transport gridlock and disastrous overcrowding. So how do we create more Malmös? A wide range of initiatives and technologies are already being put into action in a bid to overhaul transport systems around the world – but reaching the Swedish city’s standards won’t be easy. Alternative means of transport compete with the car in terms of cost and convenience, and also have to overcome all kinds of obstacles, from the planning process to public attitudes. There is no one-size-fits-all solution. Looking at transport improvement initiatives worldwide – both underway and planned – it’s clear that each solution must be tailored to the location. In a compact, densely
populated city such as Hong Kong, a high ratio of public transport usage can be achieved fairly easily. However, for cities covering larger geographical areas, developing cost-effective public transport operations is more challenging. A good example is the metropolitan area of Atlanta, which is expected to see its population grow from five million to eight million over the next three decades.‘The city is low-density, with considerable urban sprawl and long distances to travel, which leads to reliance on the car, and the view that public transport is just not viable,’ explains Andy Southern, director of Atkins’ transport planning team. To accommodate three million additional people, it’s likely the city will look at masterplanning rather than just improving public transport, as creating mixed-use developments will allow people to reside and work in the same part of the city, which will reduce commuter travel. SMART SOLUTIONS Regardless of their size, almost all cities share a common need to make public transport easier to use. Alain Flausch, secretary general of the Brussels-based International Association of Public Transport, sums up the common perception: ‘With a car, you just jump in and go without thinking, whereas public transport requires more thought because you need to choose the mode that best fits your needs, and check timetables.’ Worldwide, technology is being employed to tackle this problem via Smart City initiatives. The idea is to manage journeys made on mass transit by integrating different transport systems and sharing information – for example, how congested a traffic junction is, which trains are running late and where pool cars are parked. All this data is then fed into improved communications that make real-time information more available. At the same time, passengers are increasingly able to access this information via apps on their mobile devices. With the perceived unreliability of public transport being another issue that can put people off, technology is also being used to improve punctuality. Automated vehicle technology controls guided busways and driverless trains, such as the Docklands Light Railway in London. ‘Driverless transport reduces delays >>
Q1.14 // MODUS ASIA
Urban transport //
DRIVERLESS TRANSPORT REDUCES DELAYS DUE TO HUMAN ERROR AND ALLOWS SERVICES TO BE FASTER AND MORE FREQUENT
due to human error and allows services to be faster and more frequent, because anti-collision systems reduce the size of the gap we see between manually controlled vehicles,’ explains Flausch. Intelligent Transport Systems (ITS) – such as sensors on traffic lights that respond to the volume of vehicles – are already used widely to tackle traffic congestion and will increasingly become integral to the sustainable development of cities. Paul McCormick, director of transport EMEA at Aecom, says that we’re starting to see more sophisticated ITS in UK cities such as Birmingham and London:‘Many local authorities are using telematics systems to monitor buses so that traffic lights change to green for the bus, preventing it from being delayed.’ Another change set to take the sting out of using public transport is simply the improvement of interchange points. According to Joseph Ma FRICS, urban planner at Sun Hung Kai Properties, one of the best systems in the world is in Hong Kong, where he is based: ‘Multimodal interchanges are provided throughout the city, and major transport hubs connect conveniently to retail, office and residential developments,’ he explains. Areas that are not close to the city’s mass rapid transit stations are connected to the network via shuttle bus services. Crucially, switching between transport modes is easy for passengers due to Hong Kong’s Octopus travel card, which is similar to London’s Oyster, and can be used on all forms of transport without the need to insert it into a machine or queue for tickets. When it comes to encouraging greater use of public transport, one of the biggest barriers may prove to be high costs. ‘Public transport will always be expensive,’ says McCormick, who suggests that the problem could be mitigated if businesses commit to having more staff working from home. ‘If we don’t have to travel as much, cities won’t need to grow so much per head, and
you’ll have more tax coming in to fund transport systems.’Furthermore, there is also something of an image problem to overcome, explains Southern.‘People need to see public transport as genuinely attractive, rather than something just for people who don’t have a car. You can tackle this by providing higher-quality vehicles with facilities such as wifi and desk space, and by introducing light rail and trams, which tend to be perceived as more upmarket.’ Meanwhile, improving ITS will be easier in some cities than others. Fraser Sommerville, divisional director at Atkins, says: ‘ITS will be a key element of the smarter city, but developed economies have legacy systems, which will be a challenge given the investments already made, whereas emerging economies will be able to adopt open platforms and new technologies from the outset.’ A final key element in improving transport in cities is the widespread use of bicycles. McCormick says the logic is undeniable:‘Cycling doesn’t pollute, it promotes better health and you tend to arrive when you want to.’ However, making a city bicycle-friendly is not easy. For a start, cities will struggle to pull off a major shift towards increased cycling without adding new
infrastructure, and significant investment will be required to construct new cycle superhighways – segregated roads reserved for bicycles to protect cyclists from cars and allow them to proceed faster. In London, for example, Mayor Boris Johnson plans to invest almost £1bn in a new 24km cycle route running across the city. Hearts and minds will also have to be won over. In Malmö, the switch to cycling was achieved largely through the No Ridiculous Car Trips campaign, which went beyond advertising billboards to include talks in businesses, public offices and schools, as well as ‘eco driving’ courses organised by the council, where drivers learned how to drive in a way that uses less fuel. However, adds Björn Wickenberg, project partner at the city council,‘Our campaign started seven years ago – it takes a lot of time and persistence to change behaviour.’ But whether road, rail or cycle superhighway, all major infrastructure projects must also face the inevitable array of political hurdles. This is demonstrated starkly by the present wrangling over the UK’s proposed High Speed 2 rail link between London and the North, with ongoing questions about the route, the accuracy of the government’s £42.6bn cost estimate and whether it will deliver the economic benefits that have been promised. However, despite these challenges, most transport experts are optimistic about the future. ‘There is growing awareness that the world’s cities cannot go on as they are,’ says Flausch. ‘The business case is there – for example, in Japan, trains are on time so no one is ever late for work – and the environmental case is very clear, too.’ Flausch believes the urban environment is about to change significantly, and that in the future we can look forward to less polluted and more pleasant cities.
FUNDING MODELS FOR TRANSPORT INFRASTRUCTURE
Lack of money is often one of the main obstacles blocking projects to improve urban transport – whether it’s a dearth of capital funding or the inability of an operator to secure a sufficient income stream from a new mode of transport. ‘Coming up with ideas isn’t difficult, but getting funding for implementing them is,’ says Michele Dix, managing director of planning at Transport for London. But while there is no easy fix, some new approaches are emerging. One method, pioneered by Crossrail, is to fund the project – at least partly – by charging the businesses that benefit from it. Some £4.1bn of the total £14.8bn project cost will be funded in this way, including income generated from the Crossrail Business Rate Supplement. Dix says that there are schemes being considered that charge additional funds to such businesses through stamp duty, as suggested in the London Finance Commission’s report, published in May, which was commissioned by the London Mayor. Instead of going to the Exchequer, the property tax would go to the transport operator, explains Dix. Institutional investors are also increasingly financing transport infrastructure projects around the world. David O’Brien, global head of KPMG’s Cities Center of Excellence, based in Canada, says: ‘Transport is becoming an attractive area for investment funds to invest in because they provide a steady, predictable income, as well as diversification away from the stock markets’ poor performance in recent years.’ For example, the Ontario Municipal Employees Retirement System, where O’Brien is a board member, even has its own special infrastructure investment arm.
Q1.14 // MODUS ASIA
OIL: WHERE NEXT? WHERE WILL WE FIND OUR OIL AND GAS OVER THE NEXT DECADES? AND WHAT ROLE CAN SURVEYORS PLAY IN HELPING TO UNLOCK NEW RESERVES? Words by Roxane McMeeken
il has been described as a ‘sunset industry’: the future, we’re frequently told, will be powered by wind and waves, solar farms and geothermal energy. But actually, the oil industry is in the midst of a boom, with record-high oil prices giving rise to a worldwide push to extract previously untouched reserves using cuttingedge technology. This means that oil will continue to be the world’s primary power source for decades to come, say industry insiders – however, the sector’s focus is shifting. Oil and gas companies are digging for fuel in new places, digging deeper in traditional locations and energetically pursuing the promise of ‘unconventional fuel’, such as shale gas. And all this activity has sparked a recruitment drive, including a high demand for RICS members. A glance at the investment intentions of oil and gas companies hardly paints a picture of an industry in its dying days. Ernst & Young surveyed more than 1,600 of the sector’s executives worldwide for its May-October 2013 Global Capital Confidence Barometer report, and found that capital investment by the world’s oil and gas firms is due to rise by 8-10% in 2013. Although the price of gas >>
Oil and gas //
Oil workers on a derrick in Salym, Russia â€“ one of many areas in Siberia currently being explored for their shale oil potential
What’s the potential? According to Ernst & Young, the Arctic could provide up to 20% of the world’s recoverable oil, and the large size of the fields in the Arctic makes them economical to develop. What’s the catch? The costs of setting up the infrastructure in such a remote location will be huge, and freezing temperatures and darkness for long periods present technical challenges. Also, if something goes wrong, spills have more severe implications as oil takes longer to disperse in very cold water, and as numerous countries own parts of the Arctic, cooperation could be difficult. Will it work? The rewards are so high that capital investment will definitely be found, but it will be a number of years before we see significant production.
will be supplied. Although it acknowledges that renewables and nuclear will play a growing role, EIA predicts that by 2040, fossil fuels will continue to supply 80% of demand. So where will the oil and gas come from? As the traditional sources become exhausted, the industry is being forced to turn to sources that are either technically or politically challenging – which it can currently afford to do because of the higher price of oil. The result is the creation of ‘new reserves’ – or newly viable sites – both in traditional oil and gas regions, and in brand-new regions for the industry, such as the deepwater sites in Brazil. The most talked-about hotspots, globally, are the deepwater sites in the South Atlantic, offshore reserves in Alaska, Greenland and Russia, and unconventional fuel in North America, such as shale gas oil. The industry is also booming in the UK, where, on top of the high oil price, a more favourable tax regime introduced in the 2012 Budget is further encouraging investment. In the North Sea, more difficult-to-reach sites are being tackled, such as the Mariner and Bressay fields, which Norwegian oil company Statoil is spending billions of
A fleet of offshore oil drilling ships sink exploration holes in the Beaufort Sea, Canada, on the far edge of the Arctic
has been in a long-term slump, the buoyancy of oil prices is also fuelling widespread investment in gas firms – which energy forecasts suggest is justified, as oil and gas will continue to be in demand for the foreseeable future. The US Energy Information Administration (EIA) projects world energy consumption will increase by 56% by 2040, with demand driven by emerging markets: according to the EIA, non-OECD countries will increase their consumption over the period by 90%, led by the fast-growing mega populations of India and China. Most significant of the EIA’s forecasts is how the world’s rocketing demand for energy
Oil and gas // pounds developing. Meanwhile, basins to the West of Shetland, which were previously deemed too slow and expensive to exploit, are now of interest. Norman McLennan FRICS, global head of supply at Sasol Petroleum International, believes that this is very big news indeed: ‘The developments to the West of Shetland could be equal to a whole new North Sea,’ he says. Mostly, these developments are being made possible by new technology, such as deepwater drilling and horizontal drilling. ‘We can now drill deeper and further, and no longer straight downwards only,’ explains Stephen Mckinlay, oil and gas management lead for Mott MacDonald’s cost consultancy business.‘Also, we can use remotely operated vehicles, so we don’t have to send divers down and can now go into fields that we’ve known about since the 1960s, but that have always been too difficult to work.’ There are also decommissioning projects throughout the oil and gas world. According to Roger Esson, managing director of Aberdeen-based Walker Technical Resources, around £30bn will be spent in the North Sea alone on decommissioning over the next 30 years.
RECRUITMENT DRIVE All this activity means that oil companies are looking for staff. Ernst & Young found that in April 2013, 54% of oil and gas companies planned to recruit in the next 12 months and, interestingly for RICS members, surveying skills are in particular demand.‘The oil and gas business is essentially a massive construction project, so for surveyors with construction, project and commercial management experience, it’s a great playground,’ says Bill Sutherland MRICS, operations manager at Rider Hunt International. Although the sector is seeking a wide range of surveying competencies, quantity surveyors are perhaps most in demand. ‘QSs are being sought out as they possess a number of the skills we need for constructing and running oil rigs, such as cost engineering, contracts engineering, preparing budgets and estimates, contracts management and claims management,’ explains Sutherland. Their expertise is needed for dismantling rigs as well, adds Esson: ‘Cost control is particularly important when you’re decommissioning, as neither the operator of the installation nor the taxpayer are getting any return for the work, so it needs to be done as economically as possible.’ And while you could argue that non-chartered surveyors can carry out some of these functions, Sutherland prefers to hire accredited professionals: ‘If someone’s chartered, you know they’ve reached a certain standard and they work to a code of ethics set by RICS, whereas non-professionals might not,’ he says. Geomatics surveyors are increasingly sought-after, too. Richard Wylde FRICS is a global geodetic adviser at ExxonMobil: ‘There’s huge demand for the acquisition of spatial data, the positioning of which is done mainly through GPS,’ he says. ‘However, the majority of mapping is still required in local 2D geographic coordinate reference systems, so there’s a need for surveyors with geodetic knowledge to transform the >>
‘The oil and gas business is essentially a massive construction project, so for surveyors with construction, project and commercial management experience, it’s a great playground’
What’s the potential? From the Arctic to Brazil, new technology is allowing us to drill deeper than ever before in offshore locations. ‘Deepwater oil has huge potential worldwide,’ says Norman McLennan FRICS, global head of supply at Sasol Petroleum International. ‘In the UK, the fields to the west of Shetland have enough oil and gas to last for decades.’ What’s the catch? Getting the infrastructure in place to access deepwater oil and gas is difficult and very expensive – which, says McLennan, will make it hard to channel capital investment into projects. Will it work? The exploration companies will make investment possible by working in consortiums, allowing them to spread risk between them – for example, the deepwater project at the Rosebank field in the Faroe-Shetland Channel, where Chevron has teamed up with Dong Energy, OMV and Statoil.
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Oil and gas //
What’s the potential? The US currently produces around 7.5m barrels of crude oil a day (July 2013 estimate), and shale oil (also called tight oil) represents 27% of the nation’s oil production, according to geoscientist David Hughes, president of Global Sustainability Research Inc. The Energy Information Administration forecasts that shale oil production via hydraulic fracturing (fracking) in the US will peak in 2020 at 2.8m barrels a day – which would then represent 38% of total US production. What’s the catch? In the US, only two out of 21 areas producing shale oil – Eagle Ford in Texas and Bakken in North Dakota and Montana – account for 80% of the country’s total production. ‘This shows that high-productivity plays are rare,’ says Hughes. Moreover, the productivity of these two sites will decline rapidly: ‘The sweet spots are drilled first and then the attention turns to the more difficult areas, which require so much effort to work that the economic case rapidly goes downhill.’ Will it work? Despite the environmental concerns, it’s likely that shale will really take off worldwide. ‘Shale will certainly be important in the short term but it’s not a long-term solution,’ says Hughes.
role in construction,’ says Sutherland. And if you are willing to work in a high-risk location, you could earn even more: ‘In somewhere like Nigeria, for example, you could be looking at three times an average construction salary.’ Pay in oil and gas is on the rise, too. A 2013 salary guide published by recruitment agents Hays found that the average pay packet in the sector increased 8.5% compared to 2012. According to the guide, the average day rate for an intermediate-level employee in Northern Europe is £317, while senior staffers earn an average of £465 and managers £549. But don’t expect a career in oil to be easy. You could find yourself working in a politically unstable country, such as Iraq, or facing major technical challenges. Wylde’s work in the northeast Caspian Sea is a case in point: here, the oil reservoirs are very deep,
‘Renewables and nuclear will play a growing role, but by 2040, 80% of energy demand will still be supplied by fossil fuels’
GPS data – and not many people have this knowledge.’ And as the oil industry increasingly looks to new locations or revisits existing sites that were mapped decades ago, the demand for geomatics experts grows. As well as oil rigs, pipelines also require the expertise of surveyors. For 1,400-strong Canadian consultancy Focus, surveying pipelines is a major part of the business, and the firm now informs the construction, maintenance and improvement of pipelines throughout western Canada by capturing data via field visits or GIS (geographic information system) technology. The business is growing fast – in 2012, Focus hired 300 people and it still needs more. Steve Vickers MRICS, manager of laser scanning at Focus, says:‘We had one position open for eight months in Canada. In the end, we recruited someone from Spain, and we’re currently recruiting from Portugal.’ Following the wider corporate trend of focusing on the core competencies, oil companies are using surveyors in new ways – especially for peripheral elements of their projects, which can extend way beyond energy infrastructure. Tim Goodson MRICS, senior consultant at Aecom, says that the majors are outsourcing a raft of competencies that surveyors are perfectly placed to handle, such as real estate management, programme management and value management. ‘Oil sector projects can involve masterplanning and large-scale residential projects, which means building surveyors and project managers are needed.’ The same goes for the roads, water treatment centres and even airports that may need to be built alongside oil rigs. Sam Preece, Aecom’s oil and gas business development director, adds that oil giants are outsourcing elements of risk management, too:‘They’re asking companies such as Aecom to deliver risk management services to help them improve certainty and manage the flow of activity,’ he says. Such is the demand for surveyors in the oil industry that there are not enough to go around. McLennan says this is not only down to the current growth in the sector, but also the ageing profile of its workforce: ‘Many people are in their 50s, so there’s a lack of resource in less senior roles, and a huge amount of staff only have 10 years or so left of working life.’ Sutherland adds that the skills shortage is partly a factor of the downturn of the past five years: ‘Before now, we had a long period of lower oil prices and declining activity, so there was less recruitment. In fact, for university leavers, oil is probably still not seen as attractive because we’re not recruiting enough.’ As a result, surveyors have their pick of both jobs and salaries. ‘The rates of pay are 25-100% more than for the same types of
highly pressurised and have a high hydrogen sulphide content. What’s more, the water depth is quite shallow and subject to very rigid environmental protection because it contains the main breeding grounds for sturgeon, whose eggs are harvested and sold worldwide as caviar.‘You’re not even allowed to pour a bottle of Evian water into the Caspian, so you have to be extremely careful,’ Wylde explains. Work can also be further complicated by changes in the wind direction, which can alter the water level by up to a metre, while the local climate means the lake is frozen for a third of the year, as well as being subjected to temperatures below -40oC in winter and above 40oC in summer. Finally, few in the sector work close to their homes. ‘To have a long-term career in oil and gas, you have to be prepared to be internationally mobile and potentially work
ARE YOU away from home for many WORKING IN THE years,’ explains McLennan. OIL AND GAS However, most oil and gas SECTOR? surveyors believe that the We’d like to hear your challenges are worthwhile: views. Email editor@ ‘Working in this sector is ricsmodus.com hugely varied,’ says Sutherland. ‘You get to work in some fabulous places around the world, as well as some pretty grotty ones. My guys could be investigating a claim in Monaco one day, and then looking at a shipyard in Korea the next.’ But above all, the sector is dynamic. ‘It’s a really interesting place to work,’ says Wylde. Syncrude Aurora tar ‘A lot is about to happen in the industry, and sand mine in Alberta, right now there is a golden opportunity for Canada, which produces high-quality crude oil by surveyors to get involved.’ Spurred along by mining, extracting and new locations and a flurry of innovation, it upgrading the bitumen seems the sun has far from set on the oil and contained in the vast gas sector. Athabasca Deposit
What’s the potential? The vast majority of tar sands oil is imported into the US from Canada. According to geoscientist David Hughes, the fuel accounted for 24% of US oil imports in 2011 and more than half of Canadian oil production. ‘Tar sands are very low risk and we know exactly where they are,’ explains Hughes. What’s the catch? ‘It takes a great deal of investment and energy to mine and upgrade tar sands (also called oil sands) to turn it into synthetic oil,’ says Hughes. And the deeper you go, the higher the financial and environmental costs: with the upgrading process, even surface mineable resources require the oil price to be around US$100 per barrel in order to be financially justified, but actually, 80% of tar sand deposits are too deep to mine, and require even more energyintensive methods to recover. Will it work? According to Hughes, tar sands provide high-cost, low-netenergy oil. And so, as the easier-to-reach resources are exhausted, we’ll see lower and lower profits, with an increasingly high level of environmental damage.
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ESSENTIAL FIGURES ON THE WORLD’S FAVOURITE FUEL SHARE OF PROVED OIL RESERVES
TOP FIVE OIL RESERVES
(Billion barrels, end of 2012)*
Middle East 807.7
Africa 130.3 Asia Pacific 41.5
North America 220.2
(Million barrels per day)
Asia Pacific 8.3
Middle East 28.3
North America 15.5
Ru ss ia
bi ra iA
TOP FIVE CONSUMERS
GLOBAL CONSUMPTION (Million barrels per day, 2012)
South & Central America 7.4
Europe & Eurasia 17.2
TOP FIVE PRODUCERS
GLOBAL PRODUCTION (Million barrels per day, 2012)
ue ez Ve n
South & Central America 328.4
Europe & Eurasia 140.8
of the world’s oil reserves
(Million barrels per day)
Middle East 8.4
Asia Pacific 29.8
Europe & Eurasia 18.5
Ru ss ia
a di In
pa n Ja
North America 23.1
South & Central America 6.5
Includes crude oil, shale oil, oil sands and natural gas liquids (NGLs). Excludes liquid fuels from other sources such as biomass and coal derivatives *Proved reserves of oil are generally taken to be quantities that geological and engineering information indicates with reasonable certainty can be recovered in the future from known reservoirs under existing economic and operating conditions. Reserves include gas condensate and natural gas liquids (NGLs), as well as crude oil. Source: BP Statistical Review of World Energy 2013
Land of Success Built on a 125-year tradition of partnership, integrity and excellence, our prestigious commercial and luxury retail properties are landmarks of success in Asiaâ€™s leading cities. www.hkland.com
02.13 // MODUS
LIGHTS AHEAD OF THE 2014 RICS HONG KONG AWARDS CEREMONY, WE MEET THE NOMINEES, WHO HAVE ALL MADE AN EXCEPTIONAL CONTRIBUTION TO THE LAND, PROPERTY AND CONSTRUCTION INDUSTRIES IN THEIR REGION
he hotly contested annual RICS Hong Kong awards aim to recognise excellence within the industry. Modelled on the awards that have been established by RICS elsewhere in the world, the objective is to reward outstanding performance by companies, teams and individuals across the broad surveying industry, and to celebrate the talent and team spirit of surveyors, property developers, cost consultants, project managers, planners and property owners. Once again, the competition is intense for the 2014 Awards. Reflecting the role of our profession in society, this year we have introduced two new community awards – both of which will be voted for by members via an online system. The submissions for all the award categories, which are presented over the following pages, are truly outstanding, and we hope that you’ll be able to join us at the RICS Hong Kong Annual Dinner in March, where the awards will be presented to the winners. DAVID EDWARDS FRICS Chairman of the RICS Hong Kong Awards 2014 organising committee
PROPERTY MANAGEMENT TEAM OF THE YEAR JONES LANG LASALLE
The JLL team had another exceptional year in 2013, winning 43 new contracts to add an incredible 3m ft2 (279,000m2) to their management portfolio. Their diverse skill-sets and ability to solve problems helps them build lasting relationships with major clients. One of their standout projects involved providing a fitter service for Link REIT, where the responsibilities included installing 80 fitters and managing the daily repair and maintenance across the client’s portfolio of shopping malls, car parks, markets and food stalls. By introducing state-of-the-art technologies, the team improved the operational efficiency at each premises, thereby lowering costs.
At the start of every project, the CBRE asset services team ensure they meet a set of key performance indicators to deliver a high standard of service. This dedication was central to property managing the Agricultural Bank of China Tower in 2013, for which the team developed a marketing and leasing strategy that complemented the building’s strengths and guaranteed an excellent tenant mix. Thorough preparation, including training front-of-house staff, also helped market the project.
Emphasising the importance of sustainability, the Great Eagle Property Management team has introduced a series of green initiatives at one of the its flagship properties, the Citibank Plaza, since 2012. This has included building an on-site organic eco-farm, adding green areas to improve air quality and installing a more energy-efficient air-conditioning system – factors that have not only improved the energy efficiency of the property, but have also made it more customer-friendly, too.
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OFFICE TEAM OF THE YEAR SAVILLS
Appointed by Swire Properties as the lead leasing agent for 28 Hennessy Road, the Savills team were faced with a challenge: convincing clients of the property’s positive aspects despite its location in a non-traditional Grade-A office district between Wanchai and Admiralty. However, the team realised that Swire’s strong brand would attract new tenants, and therefore sought to change the general perception of the district by actively targeting tenants who had previously been unable to relocate to Hong Kong Island. By the end of the year, around half of the building was leased through Savills, with an occupancy rate of more than 80%.
In an extremely successful year, CBRE’s office team concluded more than 1.8m ft2 (167,000m2) in leasing transactions and 1m ft2 (94,000m2) in acquisition transactions. The team of 50 property professionals deliver value to clients by identifying creative realestate solutions. This was evident from their advice to Manulife on the acquisition of the 21-storey One Bay East, which became one of the largest owneroccupier deals in Asia in 2013. It was a significant milestone for the client, who had previously been unable to secure a large space in Hong Kong.
JONES LANG LASALLE
The JLL team achieved a record performance in 2013, growing revenue by 36% on 2012. Overseeing more than 2.5m ft2 (232,000m2) in office transactions, they advised on some of the highest profile transactions in the banking and finance sectors, such as delivering a 550,000ft2 (51,000m2) strategy review for JP Morgan, and assisting global law firm Baker & McKenzie consolidate its office space, which was spread across three buildings, into one premises in Central. The team were also involved in the largest sub-lease seen in the market for years, between Credit Suisse and Banco Bilbao Vizcaya Argentaria, and they continue to drive forward, with prospects for 2014 looking strong.
COMMUNITY BENEFIT PROJECT OF THE YEAR KWONG WAH HOSPITAL
Kwong Wah Hospital (KWH) installed a food waste liquefying decomposer in 2012, which has reduced the volume of waste by 240kg per day and, importantly, can also process herbal residues from the on-site Chinese medicine clinic. In liquid form, the waste product can be discharged into the sewage system, but KWH is also undertaking research into transforming it into useable substances, such as organic fertiliser. The comprehensive training of catering staff in the correct segregation of wastes has been key to the project’s success.
HONG KONG BAPTIST UNIVERSITY
The four-storey tong lau Lui Seng Chun (LSC) was transformed into a modern Chinese medicine clinic, which opened in 2012. In order to retain the building’s unique design, glass panels were installed to convert the verandas into indoor space, while the lift and fire escape were placed at the back of the building. As well as providing the local community with affordable medical and healthcare services, LSC has created more than 50 jobs and an education platform.
JONES LANG LASALLE
Just three years ago, the Jones Lang LaSalle team didn’t even have a tenant representation business. Today, they represent 38 high-profile international brands – almost half of which were acquired in 2013 – including Brooks Brothers, Lush, Volcom, La Perla, Jack Wills and the Richemont Group. Against strong competition, the team were appointed to act as American Eagle Outfitters’ sole real-estate adviser, and acquired exclusive franchise rights to restaurant chain Jamie’s Italian for its roll-out in Hong Kong. The team also helped to successfully identify appropriate space for luxury watch label IWC Schaffhausen’s Hong Kong Island’s flagship store on Yun Ping Road.
RETAIL TEAM OF THE YEAR CBRE
While expanding their capabilities to include project leadership and consultancy, the CBRE team’s clientfocused ethos, commitment to innovation, and excellent market knowledge helped them transact more than 750,000ft2 (69,700m2) during 2013, which included agency and consulting projects. In a standout transaction for OROGOLD Cosmetics – which required a prime location in central Hong Kong with an affordable rent – the team proposed an innovative and rare shop layout that utilised the basement area for private consultations with a smaller ground-floor shop for sales, which both maximised brand exposure and saved the client a significant amount of money.
CUSHMAN & WAKEFIELD
The C&W retail team’s creative approach and professionalism were crucial to delivering quality realestate solutions over 2013. The team pride themselves on their ability to draw on specific skill-sets and knowledge from C&W’s other global retail teams, which enables them to assist clients from planning to completion. The team further displayed their cooperation skills by liaising with architects, engineers, consultants and government departments during complex transactions for Deluxe Cuisine and Choi Fook Enterprises. They have also developed an innovative social-networking platform for sharing business development opportunities throughout the group.
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SOCIAL RESPONSIBILITY AWARD OF THE YEAR WHEELOCK PROPERTIES
YOUNG ACHIEVER OF THE YEAR
With a multibillion-dollar financial commitment and the input of hundreds of staff members, Wheelock Properties’ Project WeCan is the largest community educational support programme ever undertaken by a private organisation in Hong Kong. Now in its third year, the scheme has already benefitted more than 25,000 students in underprivileged schools by bringing them face to face with new ideas, technology, learning experiences, overseas visits, mentorship programes, life-goal planning, visits to corporations and scholarship incentives. Wheelock also has a range of environmental initiatives in place to encourage energysaving and emission-reducing behaviour among its staff, and to reduce the environmental impact of its property portfolio.
CBRE In just six years, Rocky has made considerable financial contributions, expanded client strategy vision and supported knowledge growth in trainees and junior staff. Being collaborative with his colleagues at all levels is key to his ongoing success.
JONES LANG LASALLE
Jones Lang LaSalle raised more than HK$205,000 for its 2013 chosen charity, Feeding Hong Kong, which supports the fight against hunger and food waste. Staff, clients and their families also took part in Bread Runs and other food drives, in which surplus bread, cakes and other perishables are collected from shops and restaurants and distributed to those in need. Furthermore, JLL has embraced urban farming and, in collaboration with Sowers Exchange and Time to Grow, set up a rooftop farm above the office premises at the Bank of America Tower.
In May 2013, following the disastrous earthquake in Sichuan, Savills collected a staggering HK$2.3m in donations. Savills also took part in a further nine charity events throughout the year, including the Central Rat Race, where a team of eight dressed in Dragon Ball costumes raised HK$60,000 for the mental health charity MINDSET. A highlight was the Corporate Sevens – an event that Savills has organised for the past 29 years – which raised a tremendous HK$515,000 towards the cost of a new multisurface pitch for children in Yuen Long.
MRICS EC HARRIS Since relocating to Hong Kong in 2012, Keith has overseen major renovation work at Shatin and Happy Valley racecourses. Also, as an RICS member, he helps to organise networking events and acts as a counsellor to APC candidates.
MRICS JONES LANG LASALLE As manager in the markets team, Rory has played a vital role in numerous successes in tenant representation, winning several high-profile appointments. He is also co-founder of Dragon Dash, which raised HK$65,000 for charity in 2013.
BEST DEAL OF THE YEAR CBRE
INDUSTRIAL TEAM OF THE YEAR CBRE
Following several unsuccessful searches for the right property to match its growth needs, one of the world’s leading financial services companies, Manulife, appointed CBRE in 2011. The brief was to advise on the acquisition of a substantial amount of new space in an existing building or new development that would provide Grade A office specification, while at the same time matching Manulife’s lease expiry profile. The 21-storey One Bay East was chosen, and the acquisition became one of the largest owneroccupier deals in Asia in 2013, a landmark transaction for the Hong Kong market and, importantly, a milestone for the client.
A leading telecoms provider had been searching for a new data centre for more than a year without success – and was running out of time. The Knight Frank agency services team approached the company and quickly drew up a shortlist of options. The Cargo Consolidation Complex in Kwai Chung was chosen, but the extensive technical requirements, existing tenants and time pressure presented an exceptional challenge. However, Knight Frank’s general practice surveyors secured a life-time waiver to permit use of the premises as a data centre in record time and a 12-year lease was agreed – all in the space of just four months.
Due to the low supply, large warehousing deals were hard to come by in 2013, but by building on their long-term client relationships, the CBRE industrial and logistics services team (ILS) were still able to complete a number of highprofile client relocations. One of their biggest challenges came from NEC Logistics, which was eager to source an alternative business location with 117,000ft2 (10,800m2) of warehouse space, all within a tight timeframe. The ILS team found an ideal location after collaborating with the CBRE Japan Desk to identify ‘grey spaces’ – areas where tenant lease expiries were imminent and renewal unlikely. Similarly, the ILS team collaborated with the CBRE Office team to uncover suitable space for Sew Group, after it was forced to relocate.
JONES LANG LASALLE
In 2013, two separate JLL Hong Kong markets teams collaborated on the biggest sub-lease in the market for years. Banco Bilbao Vizcaya Argentaria (BBVA) wanted to consolidate its operations without paying double rent, while Credit Suisse held a large amount of surplus space under a 12-year lease. The teams worked together to secure the best possible result for both, with BBVA sub-leasing Credit Suisse’s space below market rate on a seven-year commitment.
With just six members, the Savills team achieved the outstanding sale of the Success Centre in Kwai Chung in 2013, while also renovating the building so that it abides by current fire regulations. The client wanted to use the Success Centre as a benchmark for the sale of other properties in its portfolio, so the Savills team had to achieve an above-market price. As the sole agent, the team used a private treaty approach, followed by a public tender to attract more investors and buyers, and the property was sold for 16% higher than market expectations.
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PROJECT MANAGEMENT TEAM OF THE YEAR EC HARRIS CBRE
As specialists in the corporate fit-out sector, the CBRE project management team advised and completed more than 750,000ft2 (70,000m2) of projects worth around HK$500m during 2013. When international brand Wrigley decided to set up an Asia headquarters in Hong Kong, they looked to CBRE to fit-out a sustainable and LEED-certified work environment. Managing the project from inception to completion, the team met all the requirements for the office to achieve LEED Silver certification, while still remaining under-budget and within schedule. Plus, by using an innovative online sharing platform, they were able to improve collaboration between project managers and other team members.
Increasingly, corporates in Hong Kong are exploring alternative workplace strategies to reduce space requirements, save rent costs and drive staff productivity. In 2013, the EC Harris project management team were appointed by HSBC to advise on a major relocation project in Tai Kok Tsui. The team helped the client release around 54,000ft2 (5,000m2) of leased office space, resulting in an annual saving of US$4.7m, and assisted them in adopting sustainable development principles to reduce energy use.
RESIDENTIAL TEAM OF THE YEAR KNIGHT FRANK
In 2013, Knight Frank’s residential team demonstrated a high degree of professionalism and superb cooperation skills. On top of a vast number of local residential lease/sales transactions, the team achieved 235 international sales transactions and rolled out 17 international projects, concluding 235 deals in excess of £175m total gross sales value. One particular project involved working closely with their London counterparts to successfully source a high-end home in Opus Hong Kong for a private client from the UK. Listening and responding to the client’s requirements, the team advised on all aspects of the move including extensive decoration works.
JONES LANG LASALLE
As the appointed agents on the Regent Hill development in Happy Valley – located in one of the most sought-after residential areas in Hong Kong – the Savills team handled the complex assignment superbly. Regent Hill is the first residential project to be launched on Hong Kong Island following the introduction of the first-hand sales ordinance, so the team had to ensure that sales arrangements, show flats, sales brochures and price lists met the exact requirements as set out in the ordinance. What’s more, the team used iPads and electronic photo albums to rapidly garner interest from clients. Site ambassadors also underwent training to assist sales procedures – and were later recruited by renowned developers.
Despite a quiet market, the residential team at JLL excelled in 2013, gaining a number of high-profile wins. One of the highlights was being appointed consultants and sole leasing agents on the Skyla luxury serviced apartments portfolio by Thousand World Limited, who had only just entered the market and needed to heighten their profile. When the apartments were completed in April, the JLL team organised a grand opening media event, which attracted a significant amount of press coverage. By the end of the year, they had achieved an outstanding 90% occupancy rate.
PROFESSIONAL SERVICES TEAM OF THE YEAR KNIGHT FRANK
Knight Frank’s diverse team of surveyors and consultants are able to offer comprehensive and forward-looking advice. For example, in 2013 the team were appointed on the revitalisation of 12 older industrial buildings, which were converted into around 3.3m ft2 (300,000m2) of modern commercial space.
CUSHMAN & WAKEFIELD
The C&W professional services team achieved great success last year in delivering savings to clients’ businesses. As well as effecting the single largest reduction in rateable value for an office building in Hong Kong, the team changed the way large tenants are valued for rating purposes and how complex lease structures should be analysed – and co-authored a RICS guidance note to promote awareness of this area.
PROPERTY PERSON OF THE YEAR
TO BE REVEALED…
Who was Hong Kong’s most outstanding property person of 2013? Selected exclusively by the jury panel, this award will recognise one person’s exemplary contribution over their career to the built environment and the quality of life of the community. The winner will serve as a role model for all real estate professionals in Hong Kong. Find out the winner of this and the other categories at the RICS Hong Kong Annual Dinner on 20 March at JW Marriott Hotel. Find out more at ricsasia.org/awards.
ERNST & YOUNG
Despite not being a real-estate service provider in the traditional sense, E&Y’s valuation and business modelling team continue to provide highquality insights and services. In 2013, the team rolled out EY Delivers, an innovative new online platform that enables them to collaborate more effectively with clients and other third parties, raise the quality of management and improve consistency on larger engagements.
:THE JURY THE MEMBERS OF THE PANEL
REVIEW AND EVALUATE ALL APPLICATIONS IN AN IMPARTIAL MANNER
Michael J Moir director of property, Hong Kong Jockey Club (chairman of jury)
Andrew Leung chair professor, City University of Hong Kong
Jimmy C F Leung honorary professor, University of Hong Kong
Richard Price chief executive officer Asia Pacific, CBRE
Simon Smith head of research, Savills
Nicholas Sallnow-Smith chairman, The Link Management
Stewart Leung vice chairman, Wheelock and Company Limited
Christopher To executive director, Construction Industry Council
:THE CATEGORIES There are a total of 12 awards to be presented at the RICS Hong Kong Annual Dinner on 20 March at the JW Marriot Hotel, Admiralty, Hong Kong. The award categories are: Property Management Team of the Year Office Team of the Year Community Benefit Project of the Year (voted for by RICS members) Retail Team of the Year Social Responsibility Award of the Year (voted for by RICS members) Best Deal of the Year Industrial Team of the Year Project Management Team of the Year Residential Team of the Year Professional Services Team of the Year
INDIVIDUAL AWARDS Young Achiever of the Year (under 30 years old) Property Person of the Year
Robert Torrance managing director of Asia real estate, Manulife Financial
David Rees head of project management & design, Standard Chartered Bank
Francis Li international director and head of investment in North Asia, DTZ
BE PART OF THE AWARDS Find out more about the winning property firms at ricsasia.org from 20 March or in the next issue of Modus Asia. For more information on how to enter the RICS Hong Kong Property Awards 2015, visit ricsasia.org/awards.
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RICS HONG KONG AWARDS 2014 We owe our success to our clients, and the dedicated work of our team. Our experienced professionals collaborate to offer real estate solutions that truly add value to our clients’ overall business strategies. Together, great people can achieve exceptional results.
CBRE is proud to have been recognized as the RICS Hong Kong Award Winner 2013 for: • Office Agency Team of the Year • Retail Agency Team of the Year • Industrial Agency Team of the Year • Project Management Team of the Year • Best Deal of the Year • Contribution to the Community Team of the Year
www.cbre.com.hk | +852 2820 2800 | Follow us on Twitter @CBREHongKong
Business advice //
How to manage
EMPLOYEE PERFORMANCE By human resources expert Charlotte Gallagher
1. SET TARGETS The starting point for devising performance management targets should be a business’ corporate strategic goals. These should have specific departmental targets, and managers within each department should then identify what’s needed from each staff member in order to meet these targets. For example, if the overall aim is to increase business by 20%, the management team needs to decide whether this will come from new or existing clients, the skills and resources required to deliver the work and the timescales involved. Clear business goals can then be established for all staff members in terms of what they are expected to achieve, and those who meet their targets should be rewarded. Whether it’s finding new projects, delivering on time and on budget, or more detailed aims, employees will remain content and motivated if they are rewarded for their productivity, and poor performance can be more easily identified.
EMPLOYEES WILL REMAIN CONTENT AND MOTIVATED IF THEY ARE REWARDED FOR THEIR PRODUCTIVITY
2. HAVE A CLEAR FRAMEWORK Your performance management programme should be short, simple and effective. Focus on the individual employee’s skill, tenacity and opportunity, backed up by measurable data. Companies are increasingly putting these processes online to make them less time-consuming and more cost-effective, while also providing greater visibility of personal objectives and business goals.
Illustration Vesa Sammalisto
3. MOTIVATE YOUR TEAM Find out what drives your employees and give them guidance on how they could progress. This needn’t be pay-related – it may be about status or more responsibility, for example – but helping employees work towards their goals will ensure they are fully committed. 4. BE CLEAR AND EXPLICIT Avoid vague or general advice, such as ‘just do your best’. Instead, agree clear and challenging goals with your team, and be sure to provide regular feedback. Employees need to understand which elements of the job they do well and which areas need improvement. Occasionally, managers inadvertently reward the wrong behaviours, so think carefully about how your actions will be perceived. Always be sure to criticise behaviour rather than the person, so they don’t feel that they’re under attack.
5. THINK POSITIVE Don’t think of people management as just identifying poor performance: it’s also for recognising and rewarding good performance and positive contribution. Furthermore, if the same principle is applied to all staff, it will be easier to deal with underperforming employees as they won’t feel that they are being singled out. 6. CREATE THE RIGHT CULTURE Ideally, you should create a culture within the business whereby both individual employees and departments take responsibility for the improvement of their own skills, behaviours and contributions. This should apply to all staff and be linked to training and development opportunities, which will help to keep staff engaged and motivated. 7. DEVELOP GOOD RELATIONSHIPS It’s important to encourage individuals to behave in a way that fosters better working relationships. This needs to be a continuous process, not just a one-off event, and staff members at all levels need to be fully involved. Recognise and reward good behaviours, such as empathy, teamwork and support between colleagues. Address negative behaviours, such as bullying, belittling and refusal to help colleagues, in order to stop those patterns. 8. DON’T AVOID PERFORMANCE MANAGEMENT If performance management action comes as a surprise to employees, it can create an atmosphere of tension that impacts negatively on their output. It should, therefore, be permanently incorporated into your company’s ethos, with managers trained to develop a culture of continual business improvement through their staff. CHARLOTTE GALLAGHER is founder and director of human resources consultancy P3 People Management. p3pm.co.uk
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NICK SEATON Director of global corporate services, DTZ Singapore Interview by Kit Gillet Photograph by Zakaria Zainal
and corporate real estate. It’s about so much more than just brokering a deal: you have to build a relationship with your clients and partners, and then be with them through the good times and the bad to ensure they have the real estate to match their corporate requirements at any given time. On one level, we provide consulting, such as guidance on the trends of global headquarters, or whether a company should be better domiciled in Singapore or Hong Kong. Then, on another level we help clients run multiple projects concurrently across the region, such as lease renewals and lease acquisitions. Most mature multinational corporations (MNCs) have very strong views on what kind of space they want and where, so we work together to deliver global consistencies on how spaces are leased and used. With fast-growing industries such as social media, real estate can sometimes struggle to keep up with demand, and it’s that rapid growth that constantly changes the playbook. We have clients who one year need space for 15 desks, and then just six months later need space for 50 desks. In the Asia-Pacific region, the majority of MNCs’ regional headquarters are in Singapore, Hong Kong and Shanghai. As the distance between north Asia and Australia and New Zealand is so far, to cover the whole region it’s important for regional headquarters to locate in a well-connected central area that also has strong transparency when it comes to business practices. Both Singapore and Hong Kong have a natural advantage due to their geographical location, but we’re now seeing a number of companies choosing Shanghai for their headquarters to further access the Chinese market. We have a diverse team here: Malaysians, Singaporeans, Filipinos, Australians and Europeans, and we are located within DTZ’s larger business operation in Singapore, which employs around 1,900 people. While the
team’s professional experience is generally similar – focused largely on corporate occupiers – each member also brings their own varied cultural experience, which adds to the diversity of what we can offer our clients. For example, some US clients might want to hear about building efficiency and environmental compliance, while a growing Malaysian company may be more interested in density and how many desks they can get to fit in a space. There’s been a natural progression to my career. After finishing university in the mid-1990s, I joined Atkins Global, based in Oxford in the UK, and worked closely with a variety of local government authorities. From here, I moved from local government into the UK’s mainstream corporate sector, which included Europe-focused occupiers, and worked briefly for KPMG before moving to DTZ more than 10 years ago. For the past five years, I have lived with my family in Singapore. It’s a great environment to raise children, and as the city is quite compact there’s less of a commute to work. Also, because Singapore is the hub of the region, I often spend time working on projects located outside the city. Each country has its own accreditations and professional societies representing people working in the real estate industries. However, RICS still has an important role because it represents such a broad spectrum of related industries in land, property and construction, with around 8,000 members practicing in Asia. RICS offers a coherent perspective on what a surveyor does, as well as global standards and consistency – so you can use the services of an RICS-accredited surveyor in Bangkok, Singapore or Shanghai, and you know you’ll get the same quality service. RICS is also particularly focused on training and encouraging the next generation of real estate professionals, and people everywhere understand this.
Nick Seaton MRICS and his team advise some of the world’s leading MNCs on their real estate strategies
Corporate real estate //
‘You can use an RICS surveyor in Bangkok, Singapore or Shanghai, and you’ll get the same quality service’
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Green infrastructure //
GREEN ON GREY
IN MANY FAST-GROWING FUTURE MEGACITIES AROUND THE WORLD, GREEN SPACE IS DISAPPEARING FAST. HOW CAN WE REVERSE THIS TREND? Words by George Bull Illustration by Adam Hayes
y 2003, several decades of intense urbanisation had erased almost every trace of Cheonggyecheon River in Seoul, South Korea. Where water had once flowed east towards the Han River, now four lanes of traffic snaked their way across the city skyline on an elevated highway – making this threemile stretch one of the most congested and polluted parts of the city. But all this was about to change: the city’s mayor, Lee Myung-bak, focused his election campaign around restoring the Cheonggyecheon, and by 2005 the river had been brought back to the surface. The highway was replaced with fresh running water surrounded by public green spaces and tree-lined pedestrian walkways, attracting some 64,000 visitors a day. But an influx of day-trippers hasn’t been the only effect of the stream and trees: the temperature in nearby areas has dropped to 3°C lower than the city average, biodiversity has increased by 639% and property prices have risen at double the rates seen elsewhere in the city. In his book, What has nature ever done for us?, sustainability adviser Tony Juniper suggests the Cheonggyecheon transformation represents a growing appreciation for the essential role that ‘green infrastructure’ plays in city-building: ‘The great concrete edifice of the highway overpass, once a symbol of development, was thus replaced with a new emblem – a city-centre green space with
running water.’But as well as increasing access to public green space, could an approach to planning and development that recognises the value of green infrastructure also help to make urban areas more resilient to climate change? Nowhere are green spaces in such sharp competition with urban development as in megacities such as Seoul, and their fastgrowing counterparts across Asia, Africa and South America. China alone develops around 1bn m2 of urban space every year – almost half the global figure – and, on average, Asian cities have two-and-a-half times the population density of cities in the US and Canada. In Africa, meanwhile, the number of city dwellers is expected to double from around 412m today to 870m by 2035. Dr Neil Stuart, geography lecturer at Edinburgh University, believes there is an emerging global consensus that, as well as their traditional amenity functions, green spaces also provide environmental, ecological and social benefits to urban populations. And recognition of these wider benefits is helping to build a stronger case for them to be preserved in city plans. In January this year, Stuart published an RICS Research Trustsupported study that focused on Kuala Lumpur, looking at methods for mapping urban green space in developing cities to inform future strategies. ‘A lot of urban planners struggle to protect green spaces against developers if it’s purely an amenity argument,’ Stuart explains. ‘But the moment we started talking to planners in Kuala Lumpur about the services that green spaces can provide – reducing flood risk, for example – they were galvanised.’ THE BIGGER PICTURE Once the functional aspects are acknowledged, the traditional definition of green space as simply an area managed by a local authority to provide respite for the urban population is too narrow. Stuart and his team used satellite imagery to show Kuala Lumpur’s planners that the city had far more green space than its land parcel data showed – it just wasn’t all in parks. Rail and river corridors, cemeteries, allotments and private gardens all contribute environmental services to the city and have the potential to be enhanced to deliver further social and economic benefits. According to Duncan Moss FRICS, principal consultant at Ordnance Survey, who co-authored the Kuala Lumpur study, the distribution of green space is just as important as the amount: ‘The approach taken in Kuala Lumpur wasn’t >>
the client proposed a traditional wastewater management facility, but the team at Aecom managed to persuade them that there was a better, ‘wetland way’. This solution reduced capital and operational costs – for a private company in this case – while also delivering a public good in a city where green spaces are at a premium. ‘The aim should always be to maximise the place-making, financial and technical advantages that multifunctional green spaces offer, to provide more benefits and assist in project viability,’ explains Paul Comerford MRICS, Aecom’s director of planning and economic development. ‘But while there are clear opportunities to do this both in the UK and abroad, not enough of them are being taken,’ he adds. However, for developing cities in the rush towards modernisation, the barriers to implementing green infrastructure are diverse, argues Stephen McKenna MRICS, head of town planning at Mott MacDonald. The rapidly growing city of Kolkata (formerly Calcutta), one of India’s greenest cities, was the focus of a report he produced last year for UK Trade and Investment (UKTI), which looked at the scope for urban regeneration and development in West Bengal. McKenna found Kolkata to be at a stage of development where existing green infrastructure could be used to build resilience into the city – but to do it successfully, the planning system needs to tackle the issue in an integrated way. ‘There is increasing awareness of open-space strategies, and the role of a high-quality public realm in attracting international investors to Kolkata,’ McKenna explains. ‘There’s even a 190-hectare New Town Eco Park currently being created in circumstances where development land is at a premium. But urbanisation is often informal, and this is at odds with green infrastructure, which generally exists until it gets developed.’ McKenna believes there is huge potential for green infrastructure to work at all scales to increase the resilience of Kolkata, from urban greening through to the strategic mangrove swamps almost 150 miles away that protect low-lying farmland and urban areas from storm surges and flooding. But these
THE MOMENT WE STARTED TALKING TO PLANNERS ABOUT THE SERVICES GREEN SPACES CAN PROVIDE, THEY WERE GALVANISED
just about quantifying green space, but establishing where connectivity could be improved for pedestrians and cyclists,’ he explains. A highway or rail corridor, for example, might be 50% green, but in many cities it isn’t accessible or safe. However, a well-designed path network could reclaim some of this space for the social good, creating valuable connectivity for local people as well as wildlife habitats, suggests Moss. The challenge for cities such as Kuala Lumpur is that their green space to population ratio is falling. So where is the extra space going to come from as they continue to grow? ‘You need to be looking at your total resource,’ Stuart explains. ‘Some privately owned green spaces will be providing a number of environmental services that benefit the city even if they’re not providing amenity benefits to all city residents. If you want to maintain those existing spaces, you need to establish public-private partnerships. Similarly, planners need to be more proactive in talking to developers about the multifunctional benefits of creating new green spaces. The concept of green infrastructure is powerful because it has the potential to be the starting point for all of these interactions.’ EVERYONE WINS One of the best examples of the potential of green infrastructure comes from the most unlikely place: the Shanghai Chemical Industrial Park on the north coast of Hangzhou Bay, China. Six years ago, no one would have associated this industrial complex with a lush wetland, but by the end of 2007, industrial wastewater was being treated on site, filtered through reed beds into a network of ponds and wetland vegetation that also provides a 30-hectare natural wetland park for staff and the local community. Originally,
green networks ideally need to be built-in and then conserved as the city continues to expand – and that’s the challenge: ‘Even if you ascribe a value to it, there needs to be a mechanism to protect it from being overtaken by development,’ says McKenna. CREATING A LIVEABLE CITY The climate change agenda could, perhaps, provide the impetus to protect green spaces in developing cities. Flooding, for example, is already a huge issue for cities in the tropics: estimates suggest that five million people in Bangkok could be at risk of flooding by 2070. Faced with more sporadic, intense periods of rainfall as a result of climate change, open green spaces are able to absorb surface runoff and release it slowly, reducing the risk of flooding. Furthermore, increased vegetative cover – whether through parks, street trees or green roofs – helps to reduce the urban heat island effect and filter out pollutants, and can also provide opportunities for recreation. There is also a growing understanding of the economics of replacing this natural infrastructure if it’s lost. A recent report published by Atkins revealed that it would cost US$418m (£263m) a year to replace the services, such as water provision and flood prevention, provided by Durban’s network of green open space – which equates to 38% of the city’s total budget. Led by Manchester University, the Climate Change and Urban Vulnerability in Africa (CLUVA) project is evaluating the prospects for urban green infrastructure as a measure for adapting African cities to climate change. Findings from the work have already contributed to green infrastructure planning in Addis Ababa, Ethiopia, as part of the city’s next masterplan. The proposals emphasise multifunctional green spaces, and include afforestation in the surrounding mountain chains for storm-water management and carbon sequestration, as well as ecotourism and food production. There are also plans to include public park development for recreation at all levels of the cityscape, from regional to neighbourhood parks. Tom Armour, who heads up Arup’s global landscape architecture business, believes developers are now starting to realise the extent to which green infrastructure modifies the urban environment to create a more liveable city.‘Arup did a series of masterplans for cities in China where, instead of taking the traditional model of having two or three big parks, we split up the green spaces so that
Green infrastructure //
:SCOPING GREEN SPACE
none of the residents would ever be more than three minutes away from one,’ he explains. For the Tangye New Town masterplan, in Jinan, Arup persuaded the developer not to culvert the rivers, but instead retain the existing valleys and transform them into major city parks. The firm argued that people would pay a premium for development overlooking the parks, while extensive cycle and pedestrian links running through them would provide a safe means of getting around the city without mixing with the traffic. Armour believes that these green links have huge potential to improve people’s health and wellbeing, therefore reducing the impact on the local healthcare system. Estimates for the city of Copenhagen, for example, which has some 400km of cycle lanes, many of which run along tree-lined routes, suggest that a 10% increase in cycling alone would save US$12m (£7.5m) in annual healthcare costs. ‘It’s these connections that we’re now trying to retrofit in London with the All London Green Grid (ALGG), which aims to create a network of interlinked, multifunctional open spaces,’explains Armour.‘The ALGG is a good way of having a big vision for the city and using it to maximise the potential of the green infrastructure that you’ve got.’ The Queen Elizabeth Olympic Park in east London, which is arguably the jewel of the ALGG, has done much to change perceptions of the role green space can play in the city. Louise Wyman MRICS, area manager at the Homes and Communities Agency, says that one of the best ways of demonstrating green infrastructure’s capability is by building showcase public projects, like the Olympic Park, which challenge traditional notions of green space and, because of their public profile, can be very influential.‘Landscape-led developments such as these show that with any big infrastructure project, there’s always an opportunity to link the scheme into a much wider network of natural systems and, therefore, deliver multiple benefits – but it needs to be considered from the start.’ For many rapidly developing cities, where open space is already at a premium, a green infrastructure approach to planning and development offers a unique opportunity to get the most out of their limited land resource. And the growing consensus that green spaces are capable of delivering multiple social, environmental and economic benefits is now giving city planners a compelling argument to enhance and preserve existing spaces, as well as create new ones.
A SNAPSHOT OF GREEN INFRASTRUCTURE PROGRESSION IN KEY ASIAN, AFRICAN AND LATIN AMERICAN CITIES Figures are m2 of green space per person
SEOUL South Korea
HONG KONG China
DELHI India LUANDA Angola
MEXICO CITY Mexico
RIO DE JANEIRO Brazil
AVERAGES Africa 73.6 Asia 38.6 Latin America 254.6 Source: Siemens Green City Index 2012
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Law advice //
DESIGN AND BUILD By professional contracts specialist Eugenie Lip
‘Design and build’ continues to grow in popularity as a preferred procurement route in the delivery of construction projects. The single point of responsibility for both design and construction is very appealing, and several fine buildings have been successfully procured in this way. But for the client and the professional team to make the most of this integrated procurement system, a clear understanding of some key practical considerations is required from the outset. ALLOCATING RESPONSIBILITY The original design and build concept is simple and straightforward: based on the client’s specified requirements for the building, the contractor develops a design solution and then constructs it, taking full responsibility for the complete package from start to finish. However, variants have emerged, whereby sometimes the client invites contractors to tender under a design and build contract based on a detailed design that has already been produced by their own design team, which would require the contractor to accept responsibility for the design work of others. There are also projects that start off on the traditional build-only procurement arrangement (where the contractor has no design responsibility), but are later awarded as a design and build contract, with the design team’s appointments novated to the successful contractor. Unsurprisingly, some contractors are not happy with having the client’s design team imposed upon them, and therefore taking responsibility for designs that are out of their control. In fact, some say this is nothing more than a riskdumping exercise.
Illustration Borja Bonaque
OVERLY PRESCRIPTIVE PARAMETERS REDUCE THE POTENTIAL FOR THE CONTRACTOR TO OFFER INNOVATIVE SOLUTIONS
CLARITY IN REQUIREMENTS In a design and build contract, the design criteria and requirements should articulate clearly what the client wants in terms of what is to be built, but not how it should be done – this is up to the successful contractor. However, it is important to achieve a balance: you don’t want to give the contractor absolute freedom, but nor do you want to be unduly restrictive and prevent them from exploring alternative options. Overly prescriptive design parameters can reduce the potential for the contractor to offer innovative, and perhaps more economic, design solutions.
TENDERING COSTS Tendering for design and build projects is expensive, and this expense is inevitably borne by the industry in terms of higher construction costs. Therefore, the tender list should be limited to just three or four contractors that have a proven track record in the delivery of design and build projects. KEEP PROVISIONAL SUMS TO A MINIMUM Provisional sums provide financial cover for work items that cannot be defined in the client’s requirements, but these should be avoided in design and build tender documents to reduce uncertainties in time and price. If they are inevitable, they should be kept to a minimum. Another area of dispute are the design fees for provisional sum items. Express provisions must be included in the contract to state whether design fees are recoverable in respect of such provisional sum work. DEALING WITH DOCUMENT DISCREPANCIES With regards to the contract, this is formed of two basic documents (along with the contract conditions). These are the client’s design criteria and the contractor’s proposals, and ideally there should be no discrepancies between them when the contract is executed. Where discrepancies do occur, unnecessary disputes can be avoided if a clear and effective resolution procedure is built in. The decision to build is a major one for most clients, involving a substantial investment in time, effort and money. And as buildings become increasingly more complex, and are built within tighter budgets, on shorter time frames, and requiring better levels of quality and higher design efficiencies, choosing the right procurement method is crucial. EUGENIE LIP FRICS is a director at Davis Langdon KPK, an Aecom company, and head of the Contracts Support Group. aecom.com
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Is your C P D rec ord s till blank ?
If you havenâ€™t completed recording your CPD for 2013, log in to your RICS member account at rics.org/cpdrecord to finish recording your hours today. If you have already completed and logged your 20 hours, start to record planned activities for 2014.
Information :RICS NEWS :DIARY :BENEFITS :RESOURCES
The percentage of the world’s predicted 9bn population that will live in urban areas by 2050
IT’S A GREAT PRIVILEGE TO BE LEADING THE RICS REGULATION TEAM AS WE ENTER A NEW GLOBAL ERA FOR THE PROFESSION
Gillian Charlesworth, recently appointed RICS Director of Regulatory and Corporate Affairs
FUTURE PROOF All of us have an interest in the world of tomorrow. We want to know where the jobs will be, what the cities will look like, what professional skills sets and technologies will be needed, and how we will live well and sustain our families. In recent years, RICS has started to tackle this challenge via a series of events, publications and discussions with those working across the land, real estate and construction sectors. We want to explore what the markets, economies and societies of the world will require in 2030, and how our profession can begin to get ready to meet these needs. Join in with the debate at rics.org/futures.
USEFUL NUMBERS RICS ASIA +852 2537 7117 General enquiries APC guidance Subscriptions Events Training Bookshop REGULATION HELPLINE +44 (0)20 7695 1670 CONFIDENTIAL HELPLINE +44 (0)20 7334 3867 DISPUTE RESOLUTION SERVICES +44 (0)20 7334 3806 SWITCHBOARD +44 (0)20 7222 7000
Q1.1401.11 // MODUS // MODUS ASIA
RICS news //
One standard for estate agency services Ethics, protection and expertise – these are the values at the heart of the Real Estate Agency & Brokerage Standards (REABS), the new international code from RICS that outlines how brokers and real estate agents should conduct their business. In most parts
of the world, residential, rural and commercial real estate transactions are initiated through brokers and estate agents, and there is enormous variation worldwide in regulations on how they should operate. These are the first standards ever to provide an overarching,
international best-practice framework for all RICS real estate agents and property brokers around the world. More than 110 firms across continental Europe have already endorsed the code – see who they are at rics.org/reabs.
STRATEGIC FM GUIDANCE
RICS has announced the launch of global guidance that will increase efficiency and drive up profits for businesses. Aimed at facilities managers and corporate real estate professionals overseeing the running of commercial property worldwide, the Strategic facilities management (FM) guidance note provides recommendations on developing, implementing and evaluating a strategic plan for the servicing of both individual buildings and property portfolios. The guidance is also accessible to clients and consultants, providing them with a clear idea of best practice to boost performance. ‘As property is one of the biggest business expenditures, an effective management plan is crucial,’ explains Johnny Dunford, Global Commercial Property Director at RICS. ‘It’s about much more than the day-to-day maintenance: there is the potential to improve workforce productivity, enhance customer experience and reduce costs through efficient management, all of which contribute to improving an organisation’s performance.’ rics.org/fm
FACTS, STATS & SURVEYS 08 46
200m+ buildings completed in 2013, the second most completed in a year ever
The government of Sichuan has announced a new partnership with RICS that will build domestic professional services capacity in the fast-growing construction and real estate sectors. As China’s fourth-largest province, with an estimated 80m inhabitants, Sichuan is an enormous market that will bring major opportunities for RICS, as the provincial government invests around RMB1.48tn (US$245bn) in infrastructure and development projects. Led by Jason Ho, RICS North Asia Director, the intention is to build a platform for cooperation with RICS as an international professional body for knowledge exchange and the key role RICS, as an international professional body, will play in developing a pool of top professional talents for Sichuan.
17,662m The sum of heights of all 200m+ buildings completed globally in 2013
(or 12) of the buildings completed in 2013 entered the list of 100 Tallest Buildings in the World
Illustrations Oscar Bolton Green, Bernd Schifferdecker
RICS IN SICHUAN
‘As a profession, we serve the public interest and can be proud that giving something back is part of our DNA’ Michael Newey FRICS RICS President
ollectively, as a profession, we give back a lot more than many of us realise. We serve the public interest and all members abide by a code of ethics. This is our everyday business, and together we make a cumulative difference by setting an example to others in land, property and construction. We also give clients and the public the assurances they deserve, thereby restoring faith in professionalism. Of course, there is also a self-interest of improving our own status to gain a competitive advantage – but nobody ever said that giving something back had to be purely altruistic. Across our activities, surveying is a beacon for corporate social responsibility. It’s obvious that planners, geomaticists and sustainability experts are making a positive contribution to people’s lives. For example, think of land registration in developing countries allowing poor communities to secure the title to their land, and of improved construction standards and disaster preparedness in earthquake zones. Less glamorous but no less important, a house surveyor’s professional opinion makes a real difference to every new home buyer. At an organisational level, RICS is playing a leading role with its seat at the UN table. Since 2010, we’ve been signatories to the UN Global
Compact, committing us to following its 10 principles on the environment, labour relations, anti-corruption and human rights. Our commitment is reflected in both our internal policies and in our guidance and standards for members. RICS members also have a long tradition of contributing to society at the individual level. Last month, I was honoured to host the 40th anniversary of the Chartered Surveyors Voluntary Service. The CSVS provides advice on everything from compulsory purchase to rent appeals for those who could not otherwise afford the services of a surveyor. What’s more, many of us donate to the charity LionHeart through our membership subscriptions. Since becoming RICS President, I’ve been hugely impressed by the work of LionHeart. The charity not only continues to do sterling work to help surveyors in need and their families, but they have also taken huge steps in recent months to refocus their limited staff resource as sharply as possible in order to provide front-line help rather than just administering systems, while still maintaining all the necessary checks and balances. LionHeart is our charity, and I really do encourage you to support it. We can be proud that giving something back is so much part of our DNA.
RESEARCH PAPERS FROM COBRA Over 100 delegates from 19 countries gathered in New Delhi in September for the annual COBRA conference. COBRA is one of the leading construction conferences, and academics and delegates
At 37, China had the most 200m+ completions of any nation for the sixth year running
discussed issues such as the financing of public private partnerships in Australia and job creation through the energy renovation of housing stock. The papers presented at the conference are now
available to download from rics.org. The topics covered include: an overview of the construction industry structure in India; the role of the economic cycle in a household’s mortgage
Goyang in Korea, debuted on the world skyscraper stage with eight 200m+ buildings completed
demand; and the threats, objectives, strategies and policies that UK construction companies should adopt in order to weather the ongoing economic downturn. To find out more, visit rics.org/cobra.
of the new completions were made from concrete, with just 3% all-steel construction
Highlights from the Council on Tall Buildings and Urban Habitat 2013 Tall Buildings Data Research Report. ctbuh.org
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RICS news //
Events FOR RICS EVENTS BOOKINGS AND ENQUIRIES email@example.com // +852 2537 7117
RICS Hong Kong Property Awards and Annual Dinner 20 March, Hong Kong The prestigious RICS Hong Kong Awards aim to promote outstanding achievements; identify, highlight and reward excellence; and recognise the contribution of individuals and teams in the local land, property and construction industries. A presentation ceremony will be held at the RICS Hong Kong Annual Dinner. For more details, visit ricsasia.org/ hkdinner.
RICS Future Cities Summit – Best Practice in Real Estate, Construction and City Development 17 June, Shanghai The Future Cities Summit is a truly global and inspiring event where participants will share visions about the property, construction, investment and urban issues that we are all facing. With dozens of visionary speakers, numerous business leaders and real estate influencers attending, participants will undoubtedly benefit from coming to this unparalleled high-profile event.
RICS Hong Kong Annual Conference 16 May, Hong Kong This flagship annual conference aims to encourage discussion on a range of topics relating to Hong Kong’s future, via integration with its neighbours. There will be a CEO panel discussion on business integration, case studies on regional policy integration, and a deliberation on transportation linkage integration with Mainland China. ricsasia.org/ hkconference
MALAYSIA FIG-RISM Summit 16-21 June, Kuala Lumpur This week-long summit hosted by FIG (International Federation of Surveyors) and RISM (Royal Institution of Surveyors Malaysia) will feature RICS’ President Michael Newey, PresidentElect Louise Brooke-Smith, and Past President See Lian Ong as keynote speakers. For more details, visit ricsasia.org.
RICS HK ADVISES GOVERNMENT In December 2013, RICS submitted a list of land and housing supply recommendations made by members to the Hong Kong SAR Government, for its formulation of Policy Address 2014. The key recommendations included embedding commercial elements in the development of Northeast New Territories, and expediting land premium negotiations through
a third-party arbitrator. In addition, RICS also submitted ideas concerning Hong Kong’s long-term strategic planning, and long-term housing strategy. Dr Daniel Ho, President of RICS Hong Kong, said: ‘Policy Address 2014 will have a major impact on the future development of Hong Kong. As a professional body actively engaged in Hong Kong’s affairs, RICS provides professional advice to the government every year. This year, we focused on the regulation of housing policy planning and expediting the implementation of land supply strategy as a whole. We look forward to the government’s adoption of these recommendations to build a better home for Hong Kong’s people, and to increase the competitive edge of our city.’ For more details, visit ricsasia.org.
SHARE YOUR LOCAL KNOWLEDGE We’re calling for RICS members to help strengthen our surveys. RICS’ market surveys are highly regarded across the industry, widely reported in the press and media worldwide, and have proven to be leading indicators for the property industry. The strength of our surveys is based on member input and their ‘feel’ for the market, based on local knowledge, rather than official views of company research departments. Contributions require just two to three minutes on a regular basis, and will, in most cases, ask for simple
answers (up, down or the same) to a range of straightforward questions about prices, market demand, etc, compared to the previous month or quarter. Participants all receive full accreditation in these regularly produced reports, and the time spent completing the surveys and reading the resulting report can count towards your informal CPD (continuing professional development). If you are interested in contributing to any of the following surveys, please email firstname.lastname@example.org for more information.
UK residential market UK construction market UK commercial property market Global commercial property market India construction market China construction market Hong Kong construction market Singapore/Malaysia construction markets rics.org/marketsurveys
PHILIP CHEN MRICS
Since its inception in May 2013, the International Property Measurement Standards Coalition (IPMSC) – a group of leading organisations from around the world – has been working towards the creation of a single global standard for measuring property worldwide. The IPMS is due to launch in June 2014, and a public consultation is currently underway at ipmsc.org. Here, members discuss how the new shared standard will transform the property industry. JOHN SAUNDERS MRICS HEAD OF ASIAN REAL ESTATE, BLACKROCK
‘Our investment portfolio covers real estate all over the world, and the many different ways there are of measuring space in markets can result in the distortion of true values. We would, therefore, very much welcome a set of recognised and globally consistent property measurement standards, as a common benchmark will help to create market transparency, and has the potential to facilitate global capital flow.’
HEAD OF PROPERTY DEVELOPMENT MANAGEMENT, THE HONG KONG JOCKEY CLUB
‘As a property developer with a portfolio of assets associated with the Club’s business in Mainland China and Hong Kong that cover a variety of uses, I fully support this initiative to develop an internationally unified IPMS for measuring real estate space. A common approach to space measurement is the basis for greater reporting consistency, marketplace transparency and reliability of comparative and benchmarking data. Ultimately, this will lead to greater market stability and enable more informed decisionmaking by owners, occupiers and investors.’
ALISON COOKE MRICS
MANAGING DIRECTOR OF REAL ESTATE, STARR INTERNATIONAL INVESTMENT ADVISORS (ASIA) ‘As a real estate investor and manager with a mandate covering the entire Asia Pacific region, I welcome the initiative to introduce new international property measurement standards. A consistent international standard will enable clearer communication among real estate participants worldwide, and will be a major step towards improving market transparency.’
WILLIAM LU MRICS
DIRECTOR OF ACQUISITION MANAGEMENT, CBRE GLOBAL INVESTORS
‘A continued flow of Chinese capital into the global real estate market has been witnessed recently, with a stronger appetite for office investment opportunities in major global gateway cities. The lack of knowledge of overseas markets is certainly one of the challenges facing Chinese investors, so I’m pleased to see the efforts made by the IPMS Coalition standard setting committee to standardise the measurement of offices across international markets. This is expected to play an important role in helping Chinese investors on their road to global expansion.’
FOR MORE INFORMATION on IPMS, visit ipmsc.org. The public consultation closes on 4 April 2014.
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CROWD CONTROL THE DENSITY AND LIFE EXPECTANCY OF CITY POPULATIONS Illustration by Ian Dutnall
Sources: demographia.com, cia.gov, mhupa.gov.in, londoncouncils.gov.uk, healthstats.nsw.gov.au, statssa.gov.za, nyc.gov, sao-paulo.info, ined.fr, census.gov.ph, koli.re.kr
CROWD CONTROL THE DENSITY AND LIFE EXPECTANCY OF CITY POPULATIONS Illustration by Ian Dutnall
Sources: demographia.com, cia.gov, mhupa.gov.in, londoncouncils.gov.uk, healthstats.nsw.gov.au, statssa.gov.za, nyc.gov, sao-paulo.info, ined.fr, census.gov.ph, koli.re.kr
CROWD CONTROL THE DENSITY AND LIFE EXPECTANCY OF CITY POPULATIONS Illustration by Ian Dutnall
Sources: demographia.com, cia.gov, mhupa.gov.in, londoncouncils.gov.uk, healthstats.nsw.gov.au, statssa.gov.za, nyc.gov, sao-paulo.info, ined.fr, census.gov.ph, koli.re.kr
Making Space for Green Space / 2014 RICS HK Awards