MODUS Asia-Pacific Edition | Q1 2019 by ROF Media

OUT OF THIS WORLD CONSTRUCTION 32

Q1/19 ASIA-PACIFIC EDITION

IT’S TIME TO REINVENT RETAIL 16

US-CHINA TRADE WAR: WHO WINS? 12

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ew of history’s greatest achievements have been made by a sole person working completely alone. Most have been accomplished through collaboration, as people combine their individual talents to achieve a greater purpose.

As experts in the built and natural environment, surveyors are the go-

to professionals when there is the need to reshape the world around us. FOR RICS Rory Tufano and Jeanie Chan (Asia Pacific)

Building, valuing, and managing complex projects is what we do best,

Stephanie Bentley (UK)

but we are not doing it only for ourselves. Through our hard work and

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high standards, we are improving the lives of millions around the world.

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Rapid technological developments are changing the way people value professional services – including surveying – as the digital revolution drives down consumer costs and reduces the need for humans to perform more routine tasks. It is therefore critical that we keep evolving as a profession, in order to remain relevant and ensure that the public continues to benefit from our commitment to high standards, trust and technical expertise. That is why RICS is currently carrying out an important piece of work

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looking at the future of our profession. This work is about ensuring that,

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despite major challenges, chartered surveyors are well placed to

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Ultimately, this is a significant opportunity to leave a positive legacy for the next generation of surveyors. Your insight is therefore vital in readying our profession for the future. Please vist rics.org/ futureprofession to find out how to get involved.

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CHRIS BROOKE FRICS RICS PRESIDENT

INTELLIGENCE

FEATURES

Re-thinking / How smart building technology can transform later-life living

Opinion / Akihiko Katayama hails the transparent benefits of blockchain

Chartered territory / Are smart cities the future or just the latest passing trend?

Deconstructed / Infrastucture-led development and the political decisions that support it

US-China trade war: winners and losers / Whose real estate sectors will benefit from the fallout between the two superpowers?

How to … / … start your own business, as told by the surveyors who’ve done it

RICS news and events /

What if … / Will artificial intelligence really replace property valuers?

Retail 2.0 / Real-world retailers are embracing tech and taking the fight to their online competitors

EXPERIENCE

Make space for green space / What does it take to create new public space in the heart of a densely developed city?

A bridge too far / Comparing Asia and the Americas’ infrastructure funding challenges

Boxing clever / We meet RICS’ Cities for our Future challenge winner, Earl Patrick Forlales

One giant leap / How the construction industry is conquering the next frontier in space exploration

Second life / Profiling five projects that prove the only limit to adaptive re-use is your imagination

INTELLIGENCE

Senior living / Akihiko Katayama on blockchain / Smart city technology / Infrastructure-led development /

RETHINKING

SILV ER SERVICE

ILLUSTR ATION BY JENNIFER TAPIA S DERCH

While its buildings look to the future, the way Asia cares for its elderly is rooted in tradition. Our senior living developments need to reflect both, says Yen Chong

By the 2030s, Asia is expected to be home to more than 60% of the world’s total population aged 65 and above. One in four Singaporeans will be at least 65. The concerns of an ageing Asia are very real. The seniors of tomorrow are very different from today. People in their 50s lead active lives. As retirement looms they want to remain independent, with their own space. They already apply technology to most aspects of their daily lives: booking taxis, ordering food and paying for parking through mobile devices. That’s in contrast to Singapore’s “pioneer generation,” who are now enjoying their silver years in the homes that they built. They’ve only recently come to terms with technology. Yet the two generations share one common trait. Filial piety and a focus on family are underlying cultural qualities in Asia. The same culture values emotional and financial support for seniors. That’s a value that’s still very much alive in younger generations. In Singapore’s 2018 National

Values Assessment, they selected values such as family, friendship, caring and compassion as the qualities that best describe themselves. They also defined their ideal society as one where there is care for the elderly. So it’s likely that housing estates where young and old live alongside each other will remain popular. Our latest project, JadeScape, focuses on this aspect, giving seniors the option to live alone yet benefit from proximity to their family. Sixty-three units are being purpose built to enable active agers to live independently through intuitive design, smart technology and social networking (box, right). We do not want seniors to grow old in isolation. The community platform should be particularly helpful in this regard, fostering a communal spirit. Smart living is where homes are headed, and our lives are increasingly digitised. It stands to reason that our homes should be digitised, too. But the technology must be integrated intelligently to ensure that the

housing design and way of life is functional and holistic. We can expect to see smart features that are typically now only found in commercial developments making their way into the senior-living sector, such as facialrecognition technology in the lift lobbies. JadeScape’s residents will be granted access just by scanning their face. This improves security and safety, which should appeal to seniors, as well as saving the hassle of carrying, finding, then tapping an access card. Behind the scenes, estatemanagement systems will monitor every aspect of the development. Facilities managers can use smart devices to detect blown bulbs, leaking pipes and even fires, replacing the inefficient system of manual monitoring and reporting. The systems can also send out remote updates, which will save on manpower costs. We often overlook technology’s ability to bring communities together. As well as enhancing liveability through in-home features, technology enables us to look beyond the individual unit and facilitate community living. Especially in Asia, where the community is celebrated and familial bonds are cherished, multigenerational living in a technology-enabled residential development might be the answer to senior living. Yen Chong is deputy general manager of Qingjian Realty (South Pacific) Group, Singapore

STANDARDS FOR L ATER LIVING Qingjian Realty’s JadeScape will offer a “Gold Standard” to its elderly residents. Its three key features offer an insight into the future direction of tech-enabled senior living.

OLD HANDS Units are designed to meet the needs of “active agers,” with features such as pull-down hydraulic racks and simplified smart control panels.

DUT Y OF CARE Tenant partners offer services such as health screening, 24/7 medical care and nutrition planning.

ALL TOGE THER NOW Residents will be able to participate in social activities via a community platform on which they can book classes with likeminded neighbours, trade goods, and share updates on local events. Q1 2019 / MODUS APAC / 7

INTELLIGENCE

“ BLOCKCHAIN CAN BE THE BEDROCK OF A TRANSPARENT REAL ESTATE MARKET ” AKIHIKO K ATAYAMA DIRECTOR, PWC, HONG KONG

Picture the real estate industry as a marketplace, with free-wheeling, highvalue transactions of assets and services. These all take place in a chaotic bazaar where the identity of investors can be very difficult to pinpoint; funds can be obtained from illegal origins; payments could be sent to fund crime or terrorism. All these elements leave the real estate market very vulnerable to abuse by money laundering. Blockchain can solve many of these problems. We typically think of the technology as a way to eliminate friction in global financial transactions. But the real estate industry can also benefit: from the way it enables the highly efficient transfer of assets and services, and as a means of combating money laundering. Blockchain provides a firm foundation for the trusted exchange of assets and services. It is the bedrock of a better-organised market with easily identified, sourced and tracked parties on all sides of a deal. At its root, blockchain is an immutable digital ledger. But it can also go far beyond basic record-keeping. The ledger can be an extended inventory of anything of value. The most obvious comes in the form of digital assets such as cryptocurrency, but it could also include the digital identities of buyers, sellers and intermediaries; digital land records and property specifics; digital funding sources from financial products such as securities or debt; the footprint of conditions on transactions; and “smart contracts” that also provide a record of the time and exact nature of exchange. Money laundering basically amounts to bad people moving bad money through what look like good transactions. Trying to separate the good from the bad is difficult when so many deals are opaque or hidden on papers that get pushed between parties. Put that information through a blockchain, and you get a clearer view of what happens between buyer and seller. Obscure identities can be revealed, the origin and destination of funds made clear, and complex activities recorded for future reference.

Of course, this assumes that we can create the right kind of digital identities and records in the first place. This puts a big burden on the due diligence done by on-boarding parties and the quality of their digital wallets – where parties store their assets. We already have reams of existing records documenting licensing, the exchange of titles, and so on. Once digitised, advances in artificial intelligence will enable us to verify the digital representation of an identity, asset or service automatically. These identities, however obscure, will then remain as information for future reference. We cannot clean up a market if the information isn’t trusted as immutable. Once it is, we can work to identify and address the issues. This will help counteract the continued use of offshoreregistered corporations, tax havens and domiciles that don’t ask any questions. Yet there are transparency questions to ask ourselves. Do we want every detail to be recorded, such as our bank balance when we apply for a mortgage? What happens to concepts like the “right to forget”? These are difficult questions to answer. But it is likely that the future benefits – a trusted marketplace, a smoother exchange of goods and services and a clear inventory of identity – will outweigh the concerns. Looking further ahead, blockchain also promises innovation in the structure of real estate itself via tokenisation, whereby assets are converted into smaller digital chunks to be distributed among different buyers and sellers frequently and instantly. It will surely also give rise to new real estate investment vehicles and services that we can’t currently imagine today.

ILLUSTR ATION BY DANILO AGU TOLI

OPINION: TECHNOLOGY

CHARTERED TERRITORY

FUTURE SMART CITY T E C HN O L O G Y. IT’S…

15% E VERY WHERE ALRE ADY

The idea of an interconnected smart city where services, utilities and even traffic are coordinated seamlessly. Is it a good thing, a threat, already happening… or mostly just talk? We asked Modus readers on Twitter via @RICSnews – here’s what you had to say…

#RICSMODUS ON T WIT TER @WARNERCHIEF RE Carillion article in #ricsmodus retention is rose tinted. In-cash retentions until the end of a scheme following checks for defects is fair in theory. In my experience retentions are very difficult to get in the bank even if projects are handed over 100% to tier one firms.

@SLINGERSHARON

A THRE AT TO FREEDON

30% MOSTLY HYPE RIGHT NOW

So @iemanet deliver their monthly magazine without a plastic wrapper. I wondered if @FM_World @economiamag and @RICSnews #RICSModus fancied doing the same. That way we reduce plastic waste.

@TWDLIMITED

48%

New Year New #RICSModus looking forward to reading all about the future of our profession in the next edition @RICSnews #lovesurveying

A GOLDEN OPPORTUNIT Y

Q1 2019 / MODUS APAC / 9

INTELLIGENCE

DECONSTRUCTED

IF Y OU B UIL D I T, WILL THE Y COME? The growth of megaregions such as the Pearl River Delta owe more to political willpower than the new infrastructure that enables their development, argues Arup’s Neil Walmsley

The whole idea of infrastructure-led development is a reverse justification of accommodating demand, and how the world works. There will always be demand to develop land to house people, and 101 different potential reasons why a piece of land is good or not. I wouldn’t jump to the conclusion that the bridge and high-speed rail will make everything magically different. The Chinese central government’s agenda is to leverage Hong Kong and Shenzhen’s international power across a wider area. Building the Hong Kong-Zhuhai-Macao Bridge (pictured, opposite) helps it do that. But there are still several competing cities: Shenzhen, Hong Kong, Zhuhai, Macau and smaller towns. Although there’s an overall recognition of the greater good, those motives are not driving everything. These jurisdictions produce unpredictable results. More often than not, you end up with an insular economy and pockets of development. The constraints that made Hong Kong and Shenzhen popular still exist, whether quality of life, education or liveability – good hospitals, public spaces, public services, ease of movement. There’s a time cost in travelling from one centre of economic gravity to another. I don’t think there’s a direct connection between infrastructure-led development and liveable cities, unless there is a plan in place. Well-planned infrastructure should be designed to serve well-planned development land (case study, right). When you move from Singapore to Johor Bahru in Malaysia or Batam – the nearest Indonesian city – the cost base changes completely as you cross a line. If you wanted to live cheap and work in Singapore, then commuting from Batam is quite an interesting option. If that market exists, then it exists as a consequence of the economic disparity and cost of living. But Singapore doesn’t plan its future on that basis. Singapore has a 50-year plan, a 20-year plan, a 10-year plan and a five-year plan for the city. The long-term vision for land use and population growth is all set down. The release of land for development is controlled centrally, so if the government wants to create a new centre of gravity in Jurong, it can hold back land anywhere else. It can tell investors that, if you want to move into Singapore in the next five years, you’ve got to invest in Jurong, because that’s where the high-speed rail link with Kuala Lumpur is terminating. At least it was until the Malaysians put the project on hold last May. No high-speed rail, no unique selling point. But Singapore’s Transport Authority is still moving to Jurong. The government has regulatory powers and a huge workforce. If they decentralise that workforce to an area like Jurong, it gives people an incentive to be there. Unless there’s a bigger entity that decides what’s in the best interest of everybody, these projects don’t happen. It’s not infrastructure unlocking development, it’s the vision of the overall picture of the future that allows the development of real estate. Neil Walmsley is cities and planning leader for Arup in Singapore, Malaysia and Indonesia

CASE STUDY: THE DIS-UNITED ARAB EMIRATES The United Arab Emirates has some quite interesting, divergent tales of planning. When you cross the border from Sharjah to Dubai, rents go up by 30%-50% in no more than a few kilometres. On a map, you couldn’t explain it. But there are cultural differences and quality of life differences. Sharjah has a reserved Islamic culture. It hasn’t pursued a global city agenda. To a large extent, it has become the affordable adjacent dormitory town for Dubai. Half a million people commute into Dubai from Sharjah on a daily basis. So it would make sense for Dubai to extend its metro into Sharjah. But it hasn’t. Dubai claims it will get congested before it reaches the people it was built to serve. That’s an example of a lack of cooperation in regional governments that has led to a lack of equity in adjacent areas. Abu Dhabi, on the other hand, is a long way from any other significant settlement, and therefore it has a much more exclusive development zone. Under one entity, the Abu Dhabi Urban Planning Council, the city has been able to decide how it wants to grow. The regulation is in place to define the land uses, and in principal at least, a strategy over a 15- to 20-year period. There’s a very strong element of direct control. Infrastructure projects can be tiered to unlock the next phase of development, which has been planned in a joined-up way. Q1 2019 / MODUS APAC / 11

GLOBAL MARKETS

WORDS BY ALEX FREW MCMILLAN

Whose real estate sectors stand to gain most from the economic uncertainty caused by Trump’s trade spat? How might these emerging markets develop, and what opportunities does this bring for property professionals?

nited States foreign policy used to have little significance to Asia’s real estate professionals. That, however, has changed as the war on terror has made way for the war on trade. Battle lines have been redrawn, and businesses in China and the US in particular are trying to get out of the line of fire. So who wins when these superpowers face off? China-based manufacturers have already been hit. When surveyed by the American Chamber of Commerce in South China, 64% of US companies said they were considering moving production out of China. The effects are being felt in headquarters on both sides of the Pacific. Around 85% of US companies in China said they were already suffering from the higher tariffs imposed by both countries, while 70% of Chinese companies said they had been hurt. Besides higher duties, companies are also experiencing bureaucratic delays on paperwork, and slower processing times at customs. Yet US president Donald Trump’s bid to lure US producers back home is failing. Only 1% of US companies in China say they intend to establish a manufacturing base in North America. Takeshi Akagi FRICS, head of Japan research for JLL in Tokyo, believes the worsening global economic environment will temper real estate valuation gains in Asia. Although he is still optimistic about Japan, and doesn’t envision a deterioration in Asian markets, “expectations of rental growth might be smaller than before, and the value growth should be limited compared to previous years”. In terms of direct impact, there have been gains for both industrial and warehouse space in emerging Southeast Asia. They benefit as manufacturers relocate supply chains away from China, and set up new production bases. “Although the US-China trade war has yet to produce a clear winner, there are signs that south-east Asia is emerging as a major beneficiary,” says Desmond Sim, head of research, Singapore and South East Asia, at CBRE. Concern over tariffs is one of an array of factors causing manufacturers to shift production out of China. Rising labour costs have become prohibitive for low-cost industries, while tougher environmental protections have eaten into margins. China’s currency controls and insistence on joint ventures in many industries also encourage manufacturers to look farther afield. Q1 2019 / MODUS APAC / 13

“This has been in the making for many years,” says Stephen Wyatt FRICS, the country head for JLL in Vietnam. “What the trade wars have done is accelerate that process.” Indonesia is carving out a role for itself as base for manufacturers in low-cost goods like toys. At the other end of the income chain, Malaysia has seen surging interest from high-end production in industries such as electronics. Both Singapore and Malaysia may also gain from regional headquarters for manufacturers with operations in Asia. Vietnam sits somewhere in the middle – and shares the advantage of a border with China, as well as some cultural and demographic characteristics. But it’s no “miniChina”, and has a government that is far more pro-business and pro-trade. “While we have America going one way and becoming more ‘America First’and protective, we’ve got Vietnam almost going the complete opposite way and being very open and integrated,” says Wyatt. “There’s a window of opportunity and they’re grasping it with both hands.” For real estate, the industrial sector has seen the greatest gain. The number of inquiries that property brokerages report has at least doubled, if not tripled, with interest from Europe, the US and other parts of Asia. The uptick is significant enough that JLL has, as of 1 January, set up a service dedicated to industrial clients looking for industrial space in Southeast Asia. Capital values in Vietnam have increased around 7% per year over the last five years, reports Wyatt. Other sectors are less directly affected by USChina trade tensions but gain from Vietnam’s economic advance.“Logistics

GLOBAL MARKETS

is still very immature in Vietnam, but there’s a lot of interest on the investor side,” he says. “The market is adapting and evolving very, very quickly.” China is not necessarily always a “loser”, however. The country is moving up the skills ladder, concentrating on industries that have greater added value, and developing domestic consumption. Vietnam is becoming more export-oriented, and more concentrated in labour-intensive industries such as textiles and apparel. Of course, it is not just China that has incurred Trump’s wrath – he’s at war with the world on trade. Property professionals in Vietnam are aware that it too has a significant trade deficit with the US, and would suffer should Trump take it to task. Japan has come under attack principally for its automobile industry. Trump likes to play both roles in the typical good cop/bad cop routine. He says Japanese prime minister Shinzo Abe is “one of the people I’m closest with”, and Abe was the first world leader to visit Trump Tower after the US president was elected. Trump says he has bemoaned Japan’s trade deficit frequently to Abe’s face, adding, “don’t feel lonely, because you aren’t the only one.” So Abe likely felt betrayed when Trump made pulling out of the Trans-Pacific Partnership his very first action on taking office. But the Japanese economy is now more linked to China than the US. In that sense, what’s bad for China is also bad for Japan. “It used to be that most foreign direct investment came from the US, but it’s now less and less,” says Hideaki Suzuki FRICS, head of research and consulting in Japan for Cushman & Wakefield. “There’s an increasing correlation with the China market because Chinese power is increasing. A lot of the power shift has already happened.” Again, that is particularly true with production. In January Apple issued a revenue warning for the first time in almost 12 years, citing poor sales in China, where it makes most of its phones, for the flagging sales. But Apple’s woes also extend to Japan, where most of its iPhone screens are made.“Many Japanese component manufacturers are exposed to Chinese manufacturers, so it may have a negative impact on those corporates,” Akagi agrees. Delayed reaction The feed-through from Trump’s tussles on trade has yet to make itself felt in Japanese real estate markets. But Suzuki notes that the global financial crisis had no initial impact, either. It was only 12 to 18 months later that the crisis hit the Japanese office market. Suzuki believes Japanese office space will once again feel the full force of trade disruption on a delayed basis.“This kind of significant impact in the economy tends to have a lagging impact on the real estate market,” he says. But the selloff in stock markets, a leading indicator, suggests that rents and capital values will eventually suffer. For now, Japan is enjoying its new-found economic and political solidity. With not only the trade war but also Brexit and geopolitical tension between Russia and the West, Japanese citizens are happy to have their longesttenured post-war leader. “In such a dynamic macroeconomy, it’s very fortunate that Japanese citizens have Abe offering strong and stable leadership,” says Suzuki. Beyond just trade, Trump has introduced a whole level of unpredictability that upset many of the norms. Geopolitics, once brushed aside as of little concern to a long-term asset like property, is an issue that is here to stay. There are no real winners from trade wars. As governments impose higher taxes and put up barricades, suppliers and above all consumers lose in the end. Even if a truce in the trade war holds, it’s likely that tensions between the world’s top two economies will continue. Those flare-ups will continue to produce unpredictable and far-reaching effects. “We, as a real-estate industry, have to be pretty aware of the impact from Trump, Brexit and other factors,” cautions Wyatt. He hopes those tensions subside. “I don’t think this is good for anyone.” n Q4 Q1 2018 2019 / MODUS APAC / 15

In the face of continued online competition, the high street is now fighting back by utilising the advanced technology that has long underpinned its fiercest adversary. It’s time to check out …

RETAIL

WORDS BY CHARLES ORTON-JONES ILLUSTRATIONS BY MARIO WAGNER

RETAIL

Q1 2019 / MODUS APAC / 17

ould this be the end of the shopping queue? MishiPay lets customers buy goods in store, using nothing more than their smartphone. Download the app. Scan in the item using the camera. Pay via the app with a click. And then walk out with your new cashmere jumper. No need to go anywhere near a cashier. No standing in line. No waiting. The clever bit is the security. The app disables a tag the moment the payment clears, so there’s no drama at the exit. French DIY chain Leroy Merlin is offering MishiPay to customers, and reports a 96% reduction in checkout time – and no increased theft. It’s exactly the sort of innovation the retail world has been waiting for. While online shopping has exploded with clever tech, the physical world has been stuck in the 1950s, with clanging tills and world-weary shop assistants. And we all know the calamitous impact of the internet on retail space demand. But change is here at last. After an aeon of delays, Retail 2.0 is coming to a store near you. It’s made up of AR (augmented reality), VR (virtual reality), in-store apps, new payment methods and artificial intelligence. AR and VR lead the way. The hype began about 10 years ago, but progression stalled as a result of poor-quality headsets and lagging issues. But, in the past year, both technologies have finally hit retail. In April 2018, Spanish fashion chain Zara launched an augmented reality app, which allows customers to point their phones at store windows or clothes displays to trigger the on-screen appearance of a model clad in the desired items. The app offers the chance to buy with a click, and recommends items to complete the look. Meanwhile, French retailer Coty is going one better, with a Magic Mirror that modifies the reflection of the customer. When they hold a lipstick, the chosen colour instantly appears on their lips, and by pressing an on-screen button to take a photo, a Polaroid is printed of their new look. Naturally, Alibaba in China is pushing AR considerably. In August 2018, it launched an augmented reality experience via the Microsoft Hololens headset. Shoppers see the retail space around them overlaid with 3D holograms, then can beckon goods closer with a gesture, or dismiss them with a wave. It’s undeniably next generation, but is it enough to revive offline retail? “It is difficult to assess the value of new technologies,” admits Andrea Ometto MRICS, asset and finance manager of Sonae

“ VIRTUAL REALITY IS A MUST-HAVE. IT IMPROVES THE CUSTOMER’S EXPERIENCE AND BUILDS LOYALTY ” ANDRE A OME T TO MRICS SONAE SIERRA

ONLINE SUCCESS PROVES ILLUMINATING FOR BL ACKPOOL BUSINESSES

Sierra, which operates 81 shopping centres across 14 countries. “We are testing VR for our visitors, and we do it for free. But to establish clear value is difficult.” But Ometto is convinced retailers need to experiment with new technology. “Virtual reality is a must-have. You need it to be competitive and on the [cutting] edge. It increases the leisure experience of the customer. It builds loyalty. And, potentially, if the stores sell more, they can sustain higher rent, which is important for landlords.” And that’s the real point for the real estate world. If Retail 2.0 can increase footfall by even a few percentage points, then land values will be affected. “The biggest thing [that would improve footfall] could be payment,” says Ometto. “For example, food courts are busy at lunch

A 2017 survey by Offigo, a UK-based marketing and advertising company, of 167 empty properties in the coastal town of Blackpool, north-west England, found 118 had no signage on them to attract tenants. Of these, only 49 were listed online, leaving 69 with no obvious way to find occupants. In response, Offigo developed an online portal for local shops to help retailers – some of whom might not have much technical ability – market to customers and find new business opportunities. Last year, the concept won an award from Geovation, a technology programme backed by the UK Land Registry and Ordnance Survey. The hub provides consumers with a single place to find discounts and offers from local retailers, plus events listings. The pilot version received 1.2 million views a year, and today lists more than 1,200 Blackpool businesses. “Offigo promoted our Christmas show and, when they showed us that 956 people had clicked through to the advert, I thought, ‘Wow – that would have cost us nearly £2,000 on Facebook,’” says Nicola Stott, business development manager of Viva Blackpool, a cabaret venue in the town. The sole purpose of the portal is to drive footfall to physical shops – there is no online shopping. It’s an outstanding example of how retail can be revived in struggling towns where digital expertise may be limited.

RETAIL

BUYING INTO THE FUTURE As in-store retail evolves, so too does the technology that influences its development. But how aware are shoppers of these innovations, and are they prepared to welcome them into their in-store experience? These recent figures (from a low 0.0 to high 10.0) represent the extent to which in-store customers are embracing various new elements of tech

0.9 1.2 1.4 2.2 2.3

ROBOTIC S

2.9 3.1 4.5

VIRTUAL RE ALIT Y

4.8 5.3

ARTIFICIAL INTELLIGENCE

VOICE INTERFACE AUGMENTED RE ALIT Y

PERSONALIS ATION

SOURCE:HIGHSTREE T X.COM, Q3 2018

MOBILE NOTIFIC ATIONS

IN-STORE WAYFINDING

MOBILE INTERFACE

CUSTOMER DATA TR ACKING

Q1 2019 / MODUS APAC / 19

Using AR headsets, shoppers are already able to see the retail space around them, overlaid with 3D holograms of goods

times. There are long queues. We need a way for customers to pay instantly. That would be a fundamental change.” Payment companies sense the potential of Retail 2.0, hence the profusion of creative new payment methods. At US department store Kohl’s, it is possible to pay by snapping a QR code at the checkout, and discount offers are automatically applied. The app stores transactions, so returning goods is easier – plus, there are no paper receipts to hold on to. It’s not a game changer, but a useful incremental improvement. Catering for foreign buyers is yet another crucial piece of the jigsaw. Chinese and Arab tourists are a critical market for city centre retailers, but until now it’s been hard to offer the exotic payment methods that they enjoy

using. Payment provider Adyen calculates that £422m was lost in the past year in the UK alone, as a result of retailers not offering preferred payment methods. Traditional payment terminals are getting a makeover to solve this. A popular new format is smartphone-style tills, such as the Axium, made by Ingenico, which marries tablet screens with an Android operating system. Now the retailer can install a new payment method by downloading an app, so providing AliPay and WeChat Pay for Chinese customers is made simple. The same is true for NFC (near-field communication) payment methods, such as Google Pay and Apple Pay. The Android operating system enables retailers to offer 200 payment types via the same payment terminal. It’s a big deal, as terminals have

RETAIL

barely advanced since barcode scanners were introduced in 1974. For retailers leading the industry, the goal is to eliminate all payment steps. The frontrunner in achieving this is Amazon Go – a cashier-less store that allows customers to literally pick and go. Shoppers scan the Amazon Go app on their smartphones as they enter, triggering a chain of AI-driven automated processes. Computer vision (a science that allows computers to view, recognise and process information as a human would), sensor fusion (when data from a range of sources merges to offer higher accuracy), and deep learning technology (when computer networks use algorithms to learn and problem-solve from reams of data) track the shopper and the items they bag during their visit. When they leave, the bill is automatically calculated and debited to their Amazon account. “When Amazon Go was announced it stunned retailers and shoppers,” says Shane Finlay, chief value adviser at SAP, a German business software group. Amazon believes the concept has the power to shift the way shoppers behave, and liberate acres of space taken up by cashiers. The company’s CEO, Jeff Bezos, is reportedly planning 3,000 cashier-less Go stores in the US by 2021. That’s more than half the amount of superstores that Walmart owns in the region.

“ AI CAN IDENTIFY THAT A BASKET CONTAINING PEAS, CHICKEN AND SOY SAUCE COULD MAKE A STIR FRY ” ADAM HORNSBY DUNNHUMBY

1/ SMALLER STORES Smaller units can become a more attractive proposition for retailers. French sports chain Decathlon, which has more than 1,400 stores in 45 countries, is using virtual reality in city centre locations. “In cities, there is less space to offer experiences,” says real estate and development director Rohan Uijlings. “We can use VR in the smaller sites to show what it’s like to be inside a tent. We know that when customers experience tents we see an increase in turnover, so this has real potential.”

2/ BE T TER LOCATIONS Big-data techniques are central to finding profitable sites. Spatial analysis platforms such as Esri and Caci enable retailers to build models with hundreds of geographic layers of data to find the best spot. Shoe retailer Clarks in the UK, and the Shopping Center Group in the US, each use a store locator platform to factor in demographic data, such as: income by street, age and household density; travel times; utilities; mobile signal strength; footfall; crime; and proximity of rivals, to help retailers understand the commercial case for sites.

3/ EFFICIENT USE OF SPACE

Thinking outside the box

At the heart of Retail 2.0 is artificial intelligence. The early impact of AI on retail is well documented, as the technology has transformed back-office functions such as demand forecasting and automated ordering. In fact, Peak, a retail AI specialist with its headquarters in Manchester, UK, claims retailers using AI are growing 30% faster than those that aren’t, and enjoy a 50% higher median gross profit. And fresh applications are appearing all the time. Dunnhumby, the UK data firm that invented the Tesco Clubcard, is using AI to optimise the way products are presented. One of its models is able to group inventory into affiliated categories, as lead researcher Adam Hornsby explains: “For example, it automatically identified that a basket containing snow peas, raw chicken and soy sauce formed a group, a ‘stir fry’, despite not being similar in terms of their appearance.” When so-called “missions” are identified, retailers can rejig the store to make it easier for customers to complete more of them.

SHOP SHAPE – HOW TECHNOLOGY IS CHANGING OUR RE TAIL SPACES

“The first golden rule is to ensure each store caters to as many of these missions as possible,” Hornsby continues. “It sounds simple, [but] is actually often forgotten by retailers. Instead, they fall into the trap of only keeping and selling their highest-selling products. But this rarely works alone. A shoe shop needs to sell more than just black leather shoes, even though these may be the best-selling item.” This work would exhaust an army of humans. Only algorithms can find the patterns in millions of data points. For now, all many retailers can do is adopt these new strategies and wait in hope that Retail 2.0 translates to Revenue 2.0, turning the tide against purchasing online. Whatever happens, there’s no denying that we’re looking at a reinvention of shopping as we know it – and it’s only just getting started. n

Individual stores can boost revenue and free up space in the stock room simply by holding and supplying the right products. Supermarkets including Morrisons in the UK and Otto in Switzerland use an algorithm created by retail intelligence company Blue Yonder that uses AI to calculate the likelihood of a product selling out during the day, and runs automatic fulfilment to ensure no empty shelves. Morrisons claims product availability has improved by 30% as a result.

4/ A TAILOR-MADE EXPERIENCE In the future, the role of a store may change entirely due to technology. Patent lawyer John-Paul Rooney, partner at UK-based intellectual property firm Withers & Rogers, sees some genuinely ground-breaking innovations on their way: “Based on what we know of these patented technologies, it is not too far-fetched to imagine a time when the shopping experience might involve entering a blank store which is configured using AR overlays to augment and highlight the products that individuals are most likely to want to buy.” Q1 2019 / MODUS APAC / 21

BOXING CLEVER RICS’ Cities for our Future competition pitted young innovators across the world against each other to offer compelling solutions to some of the biggest problems facing cities today. We meet the winner, Earl Patrick Forlales, whose modular housing system, Cubo, could help improve the lives of the millions of people living in informal settlements today

WORDS BY STUART WATSON PHOTOGRAPH BY AMANDA KHO

hen he was a child, Earl Patrick Forlales (pictured, opposite) would visit his grandfather on his small farm in the provincial Philippines and stay in a traditional bamboo dwelling.“I loved going to our bahay cubo there,” says the winner of the RICS Cities for our Future challenge.“It is an essential part of the Filipino childhood experience.” The 23 year old’s competition-winning project goes back to the future to address the problem of rapid urbanisation. That youthful memory is the inspiration for Cubo, a modular housing system made from bamboo that aims to provide an affordable alternative to informal slum housing for impoverished workers in the burgeoning megalopolis of Manila. In January 2018 RICS challenged young professionals, start-ups and students involved in surveying, urban design, architecture or engineering to share their ideas on how to tackle three big issues:

climate change, resource scarcity and rapid urbanisation. The Cities for our Future challenge offered the winner £50,000 ($65,000) in prize money to help turn their concept into reality. Cubo won out ahead of entries from around the world, including Team Heat Island’s Evaporous cooling system, which was highly commended by the judges. The group of young designers proposed replacing energy-guzzling air conditioning systems in arid cities in Africa and elsewhere by retrofitting buildings with locally manufactured porous ceramic panels, designed to reduce the air temperature through the process of evaporation. However, it was Cubo’s innovative approach to reducing slum dwelling that most impressed the judges. One-third of the 12 million people who inhabit the main urban area of the Philippine capital, known as Metro Manila, live in inadequate housing, exposed to air pollution and without proper sanitation or access to fresh water.

CITIESXXXXXXXXXXXXX FOR OUR FUTURE

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CITIES FOR OUR FUTURE

Many slum dwellers are construction workers who come to the city to take up short-term contracts on its numerous big projects. It is ironic, observes Forlales, that the workers who flock to Metro Manila to build towering housing blocks lack dignified homes of their own. Housing cost is a major issue for these people, who on average earn the equivalent of only $7 a day and typically spend $1.80 of that on transport. Some purpose-built public housing is available, but rents are regarded as expensive and a long waiting list makes it practically inaccessible for many. Most end up renting tiny informal units of no more than 43 ft2 (4 m2), often at extortionate rents and without the protection afforded by a formal tenancy. “Relocating people outside the city is not an option because it adds to their expenses by moving them away from areas of opportunity,” says Forlales.“I wanted to combine the service provisions offered by national housing with the availability of slum housing.” He proposes establishing small co-housing communities on sites in the city centre, to be composed of modular prefabricated units that will recall the design of the bahay cubo, and will be built using a plentiful and cheap supply of bamboo from the farms outside Manila. Cubo units will feature an enhanced version of the traditional building material, though, because the design draws upon Forlales’ expertise as a graduate of chemistry, and materials science engineering. Instead of using the material in its raw state, the units will be constructed out of laminated bamboo, which is hardier, less flammable and more resistant to rainwater. “Recent advancements in materials engineering have made bamboo a viable and low-cost material for creating cities,” he claims.“I am a materials engineering chemist by education, but an architect by heart.” Modules will be manufactured off-site, and will take around four hours to put up. They are designed to link together into a community with a communal kitchen and eating area, showers, toilets and other shared facilities. The cost for a standard 129 ft2 (12 m2) unit is kept down to 26¢ a day thanks to the revenue generated by collecting the community’s waste for reprocessing. A 4,300 ft2 (400 m2) site has been identified for the first pilot community in Makati, Manila’s financial centre. “The prize money will go towards seed money to set up the operating company and create architectural and life-size prototypes,” says Forlales. “I have been in contact with people who can supply the raw material and a potential partner to process that into laminated bamboo. I have also applied to work with development banks to fund machines for the manufacturing process. Hopefully, after making the prototypes, we can create some extra publicity and draw in more investors.” Forlales aims to house 10,000 workers and their families in Cubo units in the Philippines by 2023. He believes the concept could be exported to other parts of Asia, as well as Africa and South America, where bamboo is already used as a building material. “It is a longterm solution that, although low cost, is sturdy and durable, and it provides dignified housing in areas close to the sources of work and to facilities,” he argues. “A future city with a Cubo co-housing community in it is a sustainable city.” n 24 / MODUS APAC / Q1 2019

Modelled on traditional Filipino bamboo dwellings, each 12 m2 Cubo unit is designed to stack together to form communal spaces such as kitchen and dining areas, made possible by the durability of the laminated bamboo construction, which is stronger, less flammable and more water resistant than regular bamboo

Looks idyllic, doesn’t it? But what city has the space to accommodate a new park when land for development is at such a premium? They’re going to have to think outside the grey, concrete box to …

MAKE SPACE FOR GREEN SPACE

GREEN INFRASTRUCTURE

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WORDS BY GEORGE BULL ILLUSTRATION BY LEONIE BOS

Regularly 1-9ºF cooler than its surroundings, Klyde Warren Park offers respite from Dallas’ high summer temperatures

ad you been working in an office overlooking the Woodall Rodgers Freeway in Dallas, Texas, in the 1990s, you might have been puzzled by what was going on down below. Over the course of a decade, a huge section of the road was capped over. Where once you would have seen lanes of traffic, there were now trees, flower beds and pathways. By 2002, when the space opened to the public, people could be seen eating lunch by the fountain plaza, children running around on the great lawn. From nothing had come 5.2 acres (2.1 ha) of something. That something was Klyde Warren Park. Delivered as a public-private partnership at a cost of $110m, it is the world’s largest suspended park infrastructure – maintaining the freeway below while supporting the weight of the greenery above. It is also a fundraising feat, drawing on a mixed pot of municipal bonds, highway and stimulus funds, and $50m in private donations to fund construction and supplement ongoing maintenance. More remarkable still has been the impact of the park. One million people visited it in the first year it opened. On hot days the park is 1-9ºF cooler than the average for its zip code. A 2013 case study by the US Landscape Architecture Foundation projected it will generate $312.7m in economic benefit and $12.7m in direct tax revenue for the city. Adjacent commercial rents have increased 32% on average. Klyde Warren Park is not an isolated story. Two years before it opened, New Yorker Robert Hammond was starting to think about how he could save an old elevated freight railway on Manhattan’s West Side. Hammond and his neighbour, Joshua David, launched a community campaign that would lead to what is now the city’s most popular tourist attraction after the Museum of Modern Art – the High Line. This park in the sky, some 7.3 acres (3 ha) in total, attracts more than 5 million visitors a year and has been central to the regeneration of the area. Built for $150m, it is predicted to generate $1bn in tax revenues to the city over the next 20 years. Highway shrubbery The success of the High Line and Klyde Warren Park has opened the door to green-space-strapped cities to think differently about their old infrastructure. One of those cities is Seoul. In May 2017, it opened Seoullo 7017 “the Skygarden” on an elevated highway that had been declared unfit for use three years earlier. Instead of demolishing the structure – which runs for almost 1km through the centre of the city – the mayor of Seoul, Park Won Soon, decided to run a design competition to recreate it as a public park. Dutch architect MVRDV won and was given just two years for design and construction. Committing around $52m to a public space project is a hard sell for any mayor – 65% of the budget was spent on simply stabilising a structure that could have been knocked down. Kyosuk Lee, senior project leader at MVRDV, believes the firm won the competition for two reasons: “First, we saw the Skygarden not only as a park but as a pedestrian network, so we added new connections – stairs, lifts and escalators – to make it more accessible. Second, we worked out a way to put trees on top of the bridge.” The mayor wanted a forest-like experience, but the bridge was so weak that if Lee’s team had applied the same planting methodology as on the High Line, it would have collapsed. So instead of layering soil everywhere, they found a way to concentrate it in the areas they needed it, which made the structure lighter. “We couldn’t afford to add any extra layers of paving. We reduced the depth of the floor to 25cm with a lighter, stronger concrete, and within that 25cm we added irrigation and drainage systems for the trees,” says Lee. This innovative engineering enabled MVRDV to plant 24,000 plants and trees from 228 species and subspecies. “Normally,

GREEN INFRASTRUCTURE

IMAGES BY KLYDE WARREN PARK, OS SIP VAN DUIVENBODE

To grow trees on Seoul’s Skyline, architect MVRDV had to develop a method of planting that wouldn’t compromise the bridge’s structure

landscape designers in Korea use around 20 species,” says Lee. “We wanted to use the Skygarden as an exhibition space to show that all kinds of trees can survive in our system. Because if these species can survive here, they can survive being planted on rooftops all over Seoul.” One year on, 95% of the species had survived, Lee claims. The Skygarden received 1.2 million visitors in the first year. Lee says there have been enquiries from developers interested in adding new connections to the bridge from their properties. Other benefits come down to priorities: one transport study found that the journey from one end of the old highway to the other on a busy morning is now 2.5 minutes quicker by foot than it would have been to drive. “So the question is: ‘what is more important for the city?’” asks Lee. “The mayor wants to make it greener and more pedestrian friendly. Convincing citizens that the city didn’t need to enhance the car network was difficult – there were a lot of complaints – so it was a strong political decision. The High Line helped to achieve that.” Back in New York City, another ambitious park project is aiming to build on the success of the High Line, only this time it isn’t reusing transport infrastructure, but waste. For 53 years, the wetlands of Freshkills on Staten Island had been used as a municipal rubbish dump. Landfill from all over the city was piled high across an area three times the size of Central Park. In 2003, landscape architect James Corner Field Operations won an open competition to turn it into a 2,200 acre (890 ha) park. The masterplan was “elemental, wild, romantic”, says Tatiana Choulika, principal at James Corner Field Operations. “The site is overwhelming – you have city views and ocean views, you have

“ IF THESE SPECIES CAN SURVIVE BEING PLANTED IN THE SKYGARDEN, THEN THEY CAN SURVIVE ON ROOFTOPS ALL OVER SEOUL ” K YOSUK LEE MVRDV

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huge marshes and hills. The strength of our proposal was to embrace that big landscape feeling, not to try to make it look like a town garden.” After all, Freshkills is the largest green space in the city of New York – it’s just that nobody knew about it. Choulika was also captivated by the mounds of trash themselves. “In the city, there’s no space outdoors where you can see everything without being in a building. From the top [of the mounds], there is this breathtaking view of the city. We decided to work with that.” Soaking it up The plan for Freshkills isn’t to return the site to its original landscape but to restore ecological processes, hoping that life finds a way back. “In the 20th century, wetlands like Freshkills were considered dumps. Now we’ve realised they do many things and the entire psychology has changed,”explains Choulika.“When Hurricane Sandy hit the east coast [in October 2012], for example, the wetland absorbed a lot of the flood surge, proving its essential function to coastline cities.” It has taken almost 20 years for the land rights, which were owned and maintained by the Department of Sanitation, to be transferred to the New York City Department of Parks & Recreation. But that still left one group that needed convincing of the project’s merits: Staten Island’s residents. The community might have been living with the stink of garbage for half a century, but even with the smell gone, they were still angry at the city:“When the park was announced people felt like the city was dictating their fate again,” says Choulika. We had to get out there and convince them that it was also for them.” Although the first phases of the park are due to open this year, it will take another 20 years for the whole site to be “finished”, because some of the methods used to cap the older mounds no longer meet current regulations. As a result, the site is being opened up in stages as each mound is signed-off as safe. Communities cannot always be persuaded. London’s Garden Bridge floundered and eventually failed in large part due to public outcry at

“ FRESHKILLS IS OVERWHELMING — YOU HAVE CITY VIEWS AND OCEAN VIEWS, YOU HAVE HUGE MARSHES AND HILLS ” TATIANA CHOULIK A JAMES CORNER FIELD OPERATIONS

Freshkills’ wetlands absorbed much of the storm surge from Hurricane Sandy that devastated other areas of New York City in 2012

LITTLE WONDERS THERE NEEDN ’ T BE A TRADE-OFF BET WEEN BIG, SHOWCASE PROJECTS AND WIDESPRE AD GREENING. THESE SMALL-SCALE SOLUTIONS CHALLENGE THE WAY CITIES THINK ABOUT OVERLOOKED SPACES

NE W YORK ’ S FLOATING FOREST

Gravel will be excavated from beneath Rectory Farm in west London, while above ground a public park will be opened in phases.

IMAGES BY AL AMY, VOGT L ANDSC APE LTD

the £60m in taxpayers’money that was committed to what ultimately would have been only a quasi-public space. Whereas Seoul’s Skygarden connected up a fragmented part of the city, the Garden Bridge, as critic Rowan Moore described it in the Guardian, “would have been a cherry on the already rich cake that is the centre of London”. James Harris, policy and networks manager of the UK Royal Town Planning Institute, says if you’re thinking about the most efficient way to spend a lot of money on green infrastructure, you’ll get much bigger bang for your buck using it elsewhere. “There are areas of London crying out for investment in good green infrastructure.” Winning on aggregate Councils are open to ideas. In 2017, the London Borough of Hounslow won the Mayor’s Award for Innovation in Planning for Rectory Farm, a scheme that will create a 110 acre (45 ha) public park out of a disused patch of greenbelt land. The site, which was farmed until 1996 before falling into disrepair, sits on top of a valuable supply of gravel. Landlord Formal Investments worked in partnership with the council over a 10-year period to come up with a radical concept. “You could think of it as the largest roof garden in the world,” says Des Mahood MRICS, director at Gleeds, project manager for Rectory Farm. He explains that the gravel – enough to meet Hounslow’s share of minerals required by the London Plan – will be excavated from under the site creating a 2m ft2 (185,800 m2) underground warehouse. This will then be let to logistics companies attracted by the site’s proximity to Heathrow Airport, while the public park above is maintained by the rental income from the occupiers below. Mahood explains that with the project running over a 15-year period of extraction, construction and landscaping, the park will be opened in phases so that the local community can start to enjoy the benefits.“As greenbelt land, this could have been a contentious site, but the team were able to show that in its current form it was a missed asset, it wasn’t accessible to the community.”Bearing Mahood out are the results of a 2016 public consultation, which revealed that 95.7% of the 664 people surveyed approved of the proposals for the project. At the heart of our cities is a conundrum: they grow if they can create jobs and the vibrancy that comes from a dense melting pot of cultures, but they must offset this against the green spaces, transit and amenities that much of their residents value. Being able to achieve this balance in the 21st century requires us to see the potential of every bit of land, and how it can contribute to something bigger. n

The South Bronx is one of the largest food deserts in the US, which means that communities have limited access to fresh produce. So in 2016 artist Mary Mattingly launched Swale – an advocacy project for public land in the city to be given over to food growing. A floating 5,000 ft2 (465 m2) barge was planted with fruit trees and vegetable crops that are forageable by the public. In its first year, almost 60,000 New Yorkers set foot on Swale as it made its way along the waterways between the Bronx, Brooklyn and Governors Island.

LONDON ’ S PARKLE T London’s streets account for around 80% of the city’s total public space. In July 2017, Arup and local business group the Fitzrovia Partnership piloted “FitzPark”, converting a delivery bay on Windmill Street into an urban green space with seating and planters. Arup dubbed the temporary space a “parklet”, and the firm believes this type of installation offers a low-cost way to test public space designs with users, and encourage investment via proof of concept. FitzPark was monitored throughout summer 2017 and studies were carried out to measure people’s movement, dwell time and activity – the results of which are pending publication.

PARIS IS BLOOMING In 2016, Paris mayor Anne Hidalgo launched an initiative to green 247 acres (100 ha) of the city. Parisculteurs allows residents to apply for permits to vegetate plots on the city’s streets, walls and roofs. Permits last for three years and come with starter kits of seeds and soil. Applicants must sign a charter that commits them to using indigenous and bee-friendly plants, and to maintaining the plots. The programme will deliver 74 acres (30 ha) of public gardens, 200 re-vegetation projects and the planting of 20,000 trees. By April 2018, 74 companies and public institutions had signed up to partner with the city government on the initiative.

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With the first human off-world habitats proposed and potentially on site within a decade, construction technology and expertise are now the driving force behind our adventures in the solar system ONE GI A N T L E A P WORDS BY STEPHEN COUSINS

umanity has long been dreaming of colonising other planets, and what was once a sci-fi fantasy is now close to becoming a reality. Thanks to advancing rocket technology, improved knowledge of extraterrestrial environments and innovative construction technology, scientists and engineers are now working to create the first off-world habitats. Building on another planet is a cosmic challenge, but not an entirely alien one to construction teams on Earth, which is why NASA, the European Space Agency (ESA) and private companies such as Space X and Mars One have sought input from architects and other consultants when preparing designs for settlements. Advanced and resilient new structures will be required to deal with the different states of gravity and atmospheric conditions, as well as more unique dangers such as meteor strikes or dust storms.

Jeffrey Montes is space architect at New York-based design agency AI’s SpaceFactory, whose “Marsha” (MARS HAbitat) concept is a finalist in the latest phase of a NASA competition to build a 3D-printed habitat on Mars. He tells Modus: “When designing skyscrapers on Earth we have to think about the impact of earthquakes, hurricanes, wind and gravity, but when designing a habitat on Mars they are not driving factors for design. Instead, it’s all about the huge temperature differences between night and day, which threaten to shrink or expand the building fabric, and the internal air pressure, which is greater than the thin atmosphere and threatens to expand the envelope. The physics is the same on other planets but it plays out very differently.” Marsha envisions a series of vertical egg-shaped pods, each with a hard protective outer casing, able to contain the internal atmospheric pressure, and a disengaged

The domes of Foster + Partners’ Moon base would be strong enough to withstand a meteorite strike

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inner shell filled with mission-focused rooms and living spaces. In its submission for the same challenge, Team Kahn-Yates, from Mississippi, designed smaller individual volumes with sleek oblong forms intended to minimise the impact from dust storms. Turning its attention to the Moon, a consortium led by Foster + Partners worked with the ESA to propose a dome-shaped facility, strong enough to withstand the effects of a meteorite strike, and solar gamma radiation that can penetrate the dusty surface. The huge distances involved in space travel impose severe constraints on the logistics and cost of transporting equipment and construction materials. Mars is 140 million miles from Earth and, given about 90% of the mass of a typical rocket is propellant, space for additional payload is limited (box, opposite). In most scenarios this will require building using local natural resources, a process

known as in-situ resource utilisation (ISRU). Habitats would likely be 3D printed by robots using minerals found in regolith, the loose soil and dirt found on the Moon and Mars. Microwave oven-ready In a winning proposal for phase two of the NASA Mars Habitat competition, Foster + Partners proposed using two types of semiautonomous robot: one that processes regolith and one that uses microwaves to fuse the material in place. A series of connected inflatable modules would be protected by a separate self-supporting outer shield 3D printed from a mix of locally sourced basalt fibre and high-density polyethylene, imported from Earth. Apart from soil, the anticipated abundance of water in certain regions of Mars could lead to the creation of 3D-printed “ice habitats”, such as the one proposed for the NASA competition by Space Exploration

Architecture and Clouds Architecture Office. Arkansas-based Team Zopherus’s proposal, meanwhile, would involve printing a collection of hexagonal structures using a composite Martian concrete made from ice, calcium oxide and local aggregate. But ISRU doesn’t entirely rule out the shipment of structures from Earth. In July NASA and Autodesk announced they had been experimenting on printing humanhabitable structures made of lightweight materials that can be easily hauled into space and reassembled on other planets. The first construction projects on the Moon or Mars will run very differently from their terrestrial counterparts, replacing human labour almost entirely with robots to avoid the hazards associated with cumbersome space suits and low gravity. NASA has stipulated that habitats should be completed, with life-support systems in place, before humans arrive. Machines would

IMAGES BY AI SPACEFAC TORY/PLOMP, FOSTER + PARTNERS

“Marsha”’s pressurised pods would be 3D printed in situ on Mars using locally sourced materials

SOURCE: E X TREME TECH.COM

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therefore be sent in advance to quarry the Martian landscape and then 3D print homes. Due to Earth radio signals being delayed by up to 20 minutes, the robots would need to work autonomously. Proposals for Moon bases have tended to focus on sending up a few robots to carry out printing, but the complexity of landing on Mars, and the operational risks, would probably mean building in more redundancy. “It’s all about having a system that can build autonomously and reliably from a distance without human control,” explains Reinier Zeldenrust, associate and part of the specialist modelling group at Foster + Partners. “It is safer to have multiple robots doing the same job. If a few of them break, the others can take over the work. This form of distributed technology is the way to go, although it could be a bit further away in terms of technological development.” Once the habitats are built, next comes the challenge of running and maintaining them to support life and produce their own power, food, oxygen and water. Possible operational scenarios are being explored through the Mars City Facility Ops Challenge, an educational project set up by the National Institute of Building Sciences (NIBS), NASA, and the Total Learning Research Institute, which places high-school students in a virtual reality simulation of a Mars base where they use software to complete facilities maintenance tasks. “On an environment like Mars you are forced to think in terms of sustainability and resilience. You can’t go to the DIY store if you need parts. There aren’t any additional energy sources. It means thinking holistically about the project and maintaining systems,” says Ryan Colker, vice-president of NIBS. A key concern is the life-threatening nature of extraterrestrial environments, and monitoring pressure seals, air filters, scrubbers used to produce oxygen and hydroponic food production. “Mars demonstrates the importance of a preventative-maintenance regime,” says Colker. “Upfront design in BIM will likely be crucial when planning the design of habitats and testing out maintenance scenarios and training simulations before the first lander touches down.” If SpaceX’s CEO Elon Musk is correct, then the first Mars settlers will land on the Red Planet in 2020, so initiatives like Mars City could be crucial to encourage the current young generation to live and work off-world. “If we can inspire and engage them now, who knows where it will take us in future,” Colker concludes. n

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ELEVATOR TO THE EXOSPHERE Scientists in the US and Japan have proposed an ambitious alternative solution to using expensive rockets to thrust astronauts into space. The Space Elevator would see spacecraft launched from the end of a giant tether that extends from Earth to a counterweight in a geosynchronous orbit up to 36,000km away, outside the planet’s atmosphere. Battery- or solar-powered climbers would move up and down the cable, transporting spacecraft or satellites to launching positions from where they would be “flung out” towards the orbit of different planets. The success of the concept largely hinges on the strength and durability of the cable. A material made from super-strength carbon nanotubes was first proposed, but only small samples have so far been produced in the laboratory. The development of single-crystal graphene seems to hold the greatest potential for success, says Dr Peter Swan, the International Space Elevator Consortium’s president: “Building a single molecule long and strong enough for the specific needs of space elevators now seems possible and, so far, a 50cm long and 10cm wide single crystal has been produced. This material will enable [further progress on] the space elevator.” XXXXXXXXXXXX Q1 2019 / 2018 MODUS / MODUS APAC / 35

More than half of the worldâ&#x20AC;&#x2122;s infrastructure demand comes from Asia, and nearly half of the funding for projects across the Americas is yet to be secured. Who on earth is going to pay for all of this?

A BRIDGE TOO WORDS BY SAKSHI SHARMA ILLUSTRATION BY FERNANDO VOLKEN TOGNI

PROJECT FINANCE

he McKinsey 2017 report Bridging Infrastructure Gaps states that the world spent $2.5tr, or 14% of global GDP, on economic infrastructure such as transport, power, water and telecoms in 2015. But huge as this number is, it’s not enough: $3.7tr is required every year to 2035 – and to meet the UN’s sustainable development goals, this could increase by up to $1tr annually. However, perhaps the most compelling issue with the world infrastructure gap is not its size, but how it plays out across the globe. Asia, hungry for new rail, roads and power stations, predictably dominates global demand, accounting for 54% of the global picture, while the Americas represents 22%. But the difference in how successful these two regions have been in attracting or allocating the investment needed is striking: Asia’s infrastructure gap stands at 10%, while the Americas’ is significantly higher at 47%. A primary reason for this is the US’s ageing and poorly maintained infrastructure. The American Society of Civil Engineers (ASCE) produces an infrastructure “report card” every four years, which assesses how each sector has fared over the period: in 2017, most sectors scored a“D”grade, except rail, which scored“B”. Infrastructure veteran Joseph Aiello, a former partner and now senior fellow at infrastructure investment company Meridiam, says it has been very clear over the past 15 years that the “US federal government is reluctant to step in and raise funds for infrastructure investment.” Aiello continues: “The federal government is unlikely to spend a large chunk on infrastructure as it is already dealing with a large deficit and needs to manage social security, medical care, etc.” Another factor is that much of the US’s infrastructure fundraising takes place at state and local level, through an increase in petrol taxes and other regional funding sources. “The US is a more fractured

market, as a lot takes place at the regional agency level,” says Aiello. “The federal government has a limited voice in what is built locally. There are a lot of local agencies, like transit or port authorities, which also means it can take a long time to get a project approved.” Meanwhile, in Asia, many of the biggest markets are comparatively successful in allocating and attracting investment. China is expected to spend $26tr on infrastructure in the years up to 2040, against a requirement of $28tr. India’s gap is $526bn against a 2040 target of $4.5tr, while Japan’s shortfall against the target for the same year of $3.8tr is a mere $91bn, according to Global Infrastructure Hub data. “Across Asia, the ASEAN countries present the biggest challenge and a huge need for infrastructure. They have massive populations and are at different stages of economic development. Large-scale infrastructure development is essential to improve connectivity, support continued economic growth, and generate improvements in living standards,” says Julian Vella, partner and Asia-Pacific regional leader for global infrastructure at KPMG in Hong Kong. “There has to be greater collaboration between the government and private sector for the gap to be closed. There is unquestionably a need for more private capital in the construction, financing, and operation of infrastructure,” Vella continues. “It is important for governments to understand what is required, and to create the conditions to attract that investment. There is plenty of capital seeking to invest in the infrastructure sector, but the owners of that capital will only seek to invest in markets and projects which will generate acceptable returns for the associated risks.” The cost of repairing and maintaining infrastructure itself will present a massive challenge to governments such as the US in the coming years, and only widen the investment gap further. Standard

FAR Q1 2019 / MODUS APAC / 37

& Poor’s Between A Budget And A Hard Place: The Risks Of Deferring Maintenance For US Infrastructure report highlighted this in May 2018, alerting of the costs of deferred maintenance, and how this could hurt state and local government budgets. Due in part to the lack of a standardised reporting methodology, the ratings agency commented, it can be extremely hard for prospective investors to quantify maintenance backlogs. Better defined and more transparent disclosure would allow credit rating agencies and municipal bond investors to have more visibility into the relative ranking of state and local governments’ deferred maintenance levels. On the other hand, Asia’s need for greenfield infrastructure requires a significant amount of capital, and investor confidence. “The main challenge [in funding] is that the markets carry a relatively high level of institutional risk, so investors tend to look very carefully before they invest here,” says Vella. He points to the fact that investing risks are high in many Asian countries due to relatively weak institutional frameworks. In turn, these create significant risk in key areas such as contractual enforcement, dispute resolution, regulatory uncertainty, financing or currency risks and lack of procurement transparency. This is combined with the next level of risk at project level: are the right ones being selected, have they been subjected to financial feasibility, and are they being structured well. Whether projects are being de-risked, and is the procurement process fair, transparent and easy for international investors to participate in, are all questions investors have to deal with when deciding to invest in any project. Although the role of development banks in Asian infrastructure projects is quite prominent, the cost of capital remains relatively high thanks to the underlying political risk. Vella believes that

investors view most emerging markets as high risk due to regulatory uncertainty, weak institutional capacity, lack of procurement transparency, and inadequate project prioritisation and preparation. This is also the case with countries in Latin America, where infrastructure investment is hurt by market and projects risk, as well as non-standardised infrastructure procurement practices. Steve DeWitt, senior vice-president of business development at global construction company ACS, says: “The infrastructure issues across the US and, I imagine, across the Americas in general, are very likely the same – wherein there has never been enough money for infrastructure, either for new construction or for asset maintenance.” This is true regardless of whether these assets are in urban or rural areas, DeWitt comments. However, in urbanised areas, no matter which asset class they belong to, the costs of maintaining and repairing these assets are well beyond current funding streams. “The key thing is that there isn’t necessarily a financing gap,” says Martin Haran, professor of real estate and urban studies at Ulster University’s Built Environment Research Institute in Northern Ireland.“There is a huge volume of capital earmarked by institutional investor community for infrastructure which is [waiting] to be invested in real assets.” Over the past few years, there’s been significant progression from large equity investors. Blackstone Infrastructure announced a $40bn infrastructure fund, while Global Infrastructure Partners and Brookfield Infrastructure Partners raised $15.8bn in 2016 – no doubt all these investors will be seeking investment-worthy assets in the coming years. “A lot of those funds are struggling to invest, as there isn’t a visible project pipeline. The gap hasn’t been translated into actual investable projects on the ground,” Haran comments.

Seattle’s Alaskan Way viaduct (above) was damaged by an earthquake in 2001. Experts warned in 2007 that the structure needed to be demolished within a fouryear timeframe. Its replacement, a double-decker tunnel (left) finally opened last month, 10 years after plans were first approved

XXXXXXXXXXXXX PROJECT FINANCE

PRIVATE PARTY During the first half of 2018, $43.5bn was invested by the private sector in 164 infrastructure projects across 34 countries. The top five countries – China, Turkey, Vietnam, India and Brazil – accounted for 66% of the total,

N 1.

$1 A IN CH

$7 EY RK TU

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.4 $3

BN $3 IL AZ SOURCE: WORLD B ANK, 2018

which is still 13% lower than the World Bank’s 10-year first-half average

XXXXXXXXXXXX Q1 2019 / 2018 MODUS / MODUS APAC / 39

“Two things need to be done better,” comments Vella. “The first is for countries to work on developing their institutional framework to reduce risks. The problem is that, in many markets, these investments are not adequately compensated through higher returns, so markets need to be de-risked.” He continues: “The other thing they need to do is spend more money on experienced consultants to help undertake more rigorous project feasibility, project risk assessment, and to structure projects to make them commercially viable and more appealing to investors.” Frederic Blanc-Brude, director of EDHECinfra, a Singapore-based academic research organisation that provides a standard reference for infrastructure investment performance, suggests that “for institutional capital to find its way into infrastructure, it is essential that the asset class be well defined and that valuation reporting be done in a manner that allows investors to understand, manage and benchmark their risks.” Governments can also embark on further actions to help, states Vella. “Other interventions to mitigate specific project risks, including the establishment of funds such as the Indonesian Infrastructure Guarantee Fund, should also be considered in other markets.” Nations need to take these steps to improve their international competitiveness and business environments. Although the specific needs and methods may notably differ between the two regions, the future paths for both require serious consideration on how to optimise and prioritise investment. As populations continue to grow and the subsequent strain on existing infrastructure increases, it’s vital for governments and organisations to tackle the matter head on and confront the challenges posed, before their effects become critically detrimental. n

The Tappan Zee bridge in New York opened in 1955 and was designed with a lifespan of 50 years. Plans for its replacement were first discussed in 1999 but construction of the new structure, the Governor Mario M. Cuomo Bridge, didn’t begin until 2013. It was finally completed, at a cost of $4bn, last September

THE ROLE OF PUBLIC-PRIVATE PARTNERSHIPS With infrastructure, there will always be limits on how much funding the public sector can handle – so the need for private capital will persist. Publicprivate partnerships (PPP) offer an innovative option for effective delivery. Private investment is rising: the World Bank’s Private Participation in Infrastructure report for H1 2018 found that investment for the period stood at $43.5bn. The East Asia and Pacific region dominated, accounting for 40% of that figure. Governments can also use private sector capital for more than just building new projects, says Steve DeWitt of construction firm ACS. “Insufficient infrastructure funding is a huge issue, regardless of the delivery model. PPPs can help leverage available funding by ensuring long-term performance, lifecycle optimisation, risk transfer and long-term operations and maintenance considerations, which can provide for a more efficient project with overall better value to public owners.” Ulster University’s Martin Haran encourages partnerships, but says governments should think before committing. “There is a need for more effective matching of prospective investors with available projects. Investors differ in funding type and risk profiles, so there must be better matching [of] them with opportunities to get a better cost of finance, [and] improved sharing and managing of risk.”

ADAPTIVE START-UPS RE-USE

IMAGES BY IWAN B A AN

Hong Kong’s Tai Kwun (left and above) repurposes a prison, police station and magistracy to a design by Herzog & de Meuron

Development doesn’t get any more sustainable than finding a new use for redundant buildings. Adam Branson profiles the reinventions of five historic architectural treasures

1 / PRISON REFORM COMES TO HONG KONG At the end of May 2018, more than 150 guests, including senior government officials, gathered for the inauguration of the Tai Kwun Centre for Heritage and Arts in Hong Kong’s Central district. The opening of a new cultural institution is, of course, always cause for celebration, and it was an occasion of great pomp and ceremony. But what is more significant about Tai Kwun is that its creation involved the redevelopment of three buildings that played an important role in Hong Kong’s history: the former Central Police Station, Central Magistracy and Victoria Prison. Consultant Gleeds worked on the repurposing of the police station, and its chairman, Richard Steer FRICS, was keenly aware of the site’s past life.“In all buildings of this type, especially in an area that has the rich history of Hong Kong, it is important to appreciate cultural and

OC Q1TOBER 2019 / 2018 MODUS / MODUS APAC / 43

geographic sensitivities.” He is naturally very proud of his firm’s contribution to the re-purposing of what is hoped will become an essential community resource, describing the building as a “fantastic structure”. Tai Kwun is important in and of itself, but it is also representative of a growing trend for city authorities and developers alike to favour re-using redundant buildings over knocking them down and starting again. They are motivated by a range of factors, including a desire to protect heritage assets and environmental concerns. “In Hong Kong and also in mainland China, this is still a totally new approach to architecture – an unusual thing to do because normally old buildings and entire neighbourhoods are removed and replaced by new ones,” says Jacques Herzog, co-founder of Herzog & de Meuron, the architect behind the transformation of the police station.“In daily life we still carelessly throw away things we use every day, instead of recycling and reintegrating them in a somewhat appropriate or even creative way.”

2 / NEW MEETS OLD IN MELBOURNE Collins House, a former shipping company headquarters in Melbourne, Australia, provides another interesting example of creative re-use. Once an architectural gem, the three-storey building had, over time, lost many of its most distinctive arts and crafts-inspired features – its

“

ONE OF THE REAL CHALLENGES AROUND THE CREATIVE RE-USE OF BUILDINGS IS GETTING FLOOR LEVELS AND LAYOUTS TO WORK FOR A DIFFERENT SET OF USES

”

IAIN ROBERTS MRICS BURO FOUR

Heatherwick Studio turned a disused grain silo on Cape Town’s waterfront into an art gallery and five-star hotel

ADAPTIVE START-UPS RE-USE

large feature window replaced by previous owners and the original entrance covered over. Now, however, the building is being reinvented as a high-end apartment complex by developer Golden Age Group. With a 57-storey tower rising out of the rear of the existing structure, the design’s juxtaposition of old and new is certainly striking, but Kristen Whittle, director at architect Bates Smart, says that the two apparently distinct buildings will be integrated seamlessly internally. “The strategy for the project was that if we had to knock out floors at the back, we would integrate them at the same height and also make sure we captured all of the mouldings, column heads and features, and reintegrate them into the new building,” he explains. “We created a photographic analysis of all of the decorative features and integrated them in such a way that when you enter the new building, you wouldn’t notice the transition.” However, Whittle adds that care has also been taken to reference elements of Collins House externally in the new tower. “We’ve taken some of the motifs of the flooring in the old building and run that up the facade,” he says.“So the new building has elements of the old. It’s a sharp contrast in terms of massing but the character flows from the old building to the new.”

3 / CAPE TOWN SILO ’ S ARTFUL CONVERSION A similarly dramatic example can be found on Cape Town’s waterfront, in the guise of the Zeitz Museum of Contemporary Art Africa. Designed by Heatherwick Studio, the museum is housed within a vast former grain silo, whose rows of vertical tubes required radical intervention for them to be put to any other use. “The idea of turning a giant disused concrete grain silo into a new kind of public space was weird and compelling from the beginning,” says Thomas Heatherwick, the studio’s founder. “The technical challenge was to find a way to carve out spaces and galleries from the 10-storeyhigh tubular honeycomb without completely destroying the authenticity of the original building. “The result was a design and construction process that was as much about inventing new forms of surveying, structural support and sculpting, as it was about normal construction techniques.”

4 / RIVERSIDE REINVENTION BY THE THAMES In London, a less dramatic but nevertheless effective approach was taken by architect and interior designer Jestico + Whiles when it was commissioned to repurpose a floor of County Hall, which was left empty after the then-prime minister, Margaret Thatcher, abolished the Greater London Council in 1986. To this day, large parts of it remain unused. Given the expansive views it provides out over the River Thames, however, events space provider Etc Venues felt that it could make an excellent conference facility.“One of the things it offers you is a frontage with some of the best views of the Houses of Parliament in London,” says James Dilley, director at Jestico + Whiles. “This is a venue and events company and the days of the vanilla box don’t really apply any more. You’ve got

Numerous occupiers have failed to make a success of London’s County Hall. Etc Venues hopes to be an exception

companies coming from the US or Europe and they want to know they’re in London.” As a result, Jestico + Whiles opted to make the most of views by orienting all the events spaces on the side of the building that faces the river. “We’ve got the corridor on one side and then the event spaces towards the outside of the building,” says Dilley. “We’ve been able to strip away a lot of superfluous partitions and walls that were there from when it was all about paper pushing. Strip that away and you’ve got some truly impressive spaces.”

5 / BEHIND THE SCENES AT LONDON EMBASSY On a larger scale, the former US embassy in Grosvenor Square is also in the process of being put to a new use following the departure of consular staff to a new home in Battersea last year. Developer Qatari Diar is in the midst of converting the building into a hotel and luxury apartments, something that project manager Iain Roberts MRICS, chairman of Buro Four, says is not without its headaches. “It’s quite a unique building – it was built for a particular purpose and for a particular time. The challenge for the architect [David Chipperfield Architects], is really how to make best use of what’s there. The front facade is retained because it’s listed, which really sets the levels for the building. Obviously, if you were building something new now the floor heights would be different. “One of the real challenges around the creative re-use of buildings is getting floor levels and layouts to work for a different set of uses,” Roberts adds. “But I think we’ve been able to make a virtue of the quality of the facade.” n

Q1 2019 / MODUS APAC / 45

EXPERIENCE

Start a new business Whether you fancy being a one-man band or have dreams of expanding your business internationally, everyone will have differing opinions on how you should best approach starting out on your own. When should you make the jump? How many clients should you have to not just survive, but thrive? And how can you juggle mountains of paperwork when you need to be out meeting clients? Five surveyors share their experiences of going solo

WE WERE CONFIDENT THERE WAS ROOM FOR A MORE TAILORED SERVICE

WE WANTED TO SHAPE AND GROW OUR OWN WORK-LIFE BALANCE

Andrew Sweeney MRICS is director at property consultancy AS Jacobs in Auckland, New Zealand

Elliot Dinsdale MRICS is director and co-founder of Six Property Consulting, based in Worcester, UK

Late in 2015, my business partner Jake and I left our firms on the Friday and started up our own firm on the following Monday. After working together for many years, we were confident there was ample room within the industry for another practice, but one that would provide clients with a more tailored and dedicated service than many were perhaps used to. We wanted to rethink the way work was undertaken. We outgrew our first office within six weeks, and our second within six months. Looking back, perhaps if we had been quicker to realise the potential for growth then decisions around office and IT infrastructure would have been more strategic. But you get caught up in the excitement of going your own way. If you are thinking of going it alone, I would say keep your head down and cement good relationships in your current role. If you’re doing a good job now, people will give you a chance when you go out on your own. Once you’ve made the leap, remember even in successful projects there’s always room for improvement. It is critical to debrief and then implement positive changes for the next job. There is no magic recipe, it is all fairly simple stuff. Clients like to work with people who are passionate and able. Build a personable team, and never take any job or client for granted.

The decision to go it alone was relatively easy to make. My business partner and I felt that our level of client service was being diluted, and we became bogged down in process. Days were being spent fire-fighting rather than developing meaningful client relationships. We were also attracted by the prospect of shaping and growing our own service, workload and work-life balance; having young children, we wanted to make sure we weren’t sacrificing our home lives for our careers. We didn’t really know how the first six months would pan out and it was very much a leap of faith. Although we wrote a detailed business plan, in hindsight it probably focused too much on our target clients. Most of our strongest relationships now are with companies that were never on our radar. Having a good level of experience in business development, delivering core services and managing teams – while also supporting the needs of the wider business – will help you to understand how a business operates, and what’s important when you strike out alone. It will also help you to reflect on what you like and what you want to change. Make sure to nurture the relationships you have, whoever you deal with. Establish core values that you stick to, and don’t compromise too much early on.

INTERVIE WS BY BRENDON HOOPER; ILLUSTRATIONS BY RADIO

HOW TO…

JUDGE YOUR BUDGET BY FIGURING OUT WHAT CAN BE DONE BY YOURSELF

IF YOU LOOK AFTER YOUR CLIENTS, THEY WILL LOOK AFTER YOU

GET A BUSINESS LOAN IF POSSIBLE, RATHER THAN RELYING ON AN INVESTOR

Candy Chan MRICS founded Hong Kong-based heritage consultant Property Conservation in 2014

William Trinick MRICS is owner of rural surveying firm Trinick Davey, based in Cornwall, UK

Joanna Watts MRICS is founder of Guernsey-based commercial agent Watts & Co

I’m from an estate surveyor background originally, later switching to the building heritage conservation field. I wanted to combine my expertise, but I couldn’t find a position suitable in the market at the time. So, I thought, why not make my own? The great thing about owning a small business is that I can take whatever job I like. But to start with, in order to build up a track record from scratch, I took up valuation jobs and planning applications that were not related to historic buildings. My previous experience really helped. In the beginning, there are so many things to get sorted out. Registering the company, establishing a business bank account, designing the company logo and website, and deciding what type of office space we needed. Judge your budget by figuring out what can be done by yourself, and what you need to pay for. Before making the jump, you should have a decent amount of industry experience and a good idea of how you are going to add variety to the market. If you offer the same as a big firm, there will be no competitive advantage. But don’t always think offering a lower price to a client is the way forward. You can sometimes have a higher chance of gaining jobs via word of mouth in your network than bidding by tender. Don’t isolate yourself, get out to know people – they may become your client one day.

For almost 10 years, I had a great job managing an estate in Sussex. It was a busy and diverse role, but because of a change of owner, I was made redundant. It made me totally re-evaluate what I wanted to do next. I’d reached a stage in life, after being an employee for a long time, which felt like the ideal time to be my own boss. The independence and flexibility seemed very attractive. However, first I spent a couple of years at a couple of firms in the region I wanted to be in, Cornwall. This helped me become more established in the area, and gave me vital experience in the day-to-day running of a small firm. Because I had a lot of experience behind me, I was confident I could make a success of it alone. But starting from zero is pretty daunting. It’s like climbing a steep rock face – you just need to get hold of one or two clamps to get going. If you have one or two clients under your belt already, then you are off to a head start – and I wish I had started like this. It is a crucial time, so be completely honest and straightforward, and be sure to focus more on providing an excellent service for your clients rather than your own ambitions. If you look after your clients they will look after you – a good reputation spreads through word of mouth. This is particularly vital if you are setting up in more close-knit, rural communities.

We’re celebrating our 10-year anniversary this year. I’d previously worked for a large commercial developer but felt the market at that time would benefit from an independent firm that provided a professional, responsive and friendly service. I think having a clear vision of the type of company I wished to create proved critical to our success today. Looking back now, I do wish I’d worried less. In the first years, you are working night and day to make the business work, and panicking about where the next instruction is coming from, but now I see that it was exactly that fear that drove me on – so I would say try and enjoy the journey, and look at all positive and negatives as gained experience. To give you more control in the early years, I’d strongly advise getting a business loan rather than relying on other investors. After a while, corporate governance will become very important – we have a nonexecutive chairman who makes sure all decisions are for the benefit of the company. I guess this helps balance against the ambitions of an owner that might not always be best for everyone. Before you open your doors, make sure you have proper procedures in place as this will make it easier to grow your reputation, gain work and recruit staff. Don’t go hunting fees, go hunting relationships.

JUNE-AUGUS Q1 2019 T/2018 MODUS / MODUS APAC //477

Hong Kong Annual Conference 2019 Resilient and sustainable Putting the green revolution at the forefront of our future Friday 24 May 2019, Grand Hyatt Hong Kong The increasingly frequent occurrence of extreme weather conditions has put sustainability to the centre stage. The Conference will explore the impacts and risks of climate change to the built environment and how professionals can mitigate it.

Book your place today: rics.org/hkconf2019

EXPERIENCE

NEWS IN BRIEF

FIND OUT HOW WE ARE SHAPING THE FUTURE OF THE PROFESSION We’re continuing our conversations with you about the future of our profession. Understanding how we manage and assure the quality of data to aid decision-making has been identified as a critical challenge for all of us. How can we ensure our professionals have the correct skills to capitalise on the opportunities this brings? How can we build truly connected, intelligent cities using the latest sustainable building methods? Visit rics.org/futureprofession to explore the challenges, opportunities and possibilities that lie ahead. GLOBAL L AUNCH FOR ANTIMONEY-L AUNDERING GUIDELINES The International Monetary Fund estimates that the amount of money laundered globally in one year could be 2-5% of global GDP, equivalent to $0.8tr-$2tr. The risks of bribery and corruption, money laundering and terrorist financing cut across our profession, regardless of geography or industry specialism. To help the profession identify and manage these risks, RICS has introduced a draft professional statement on Countering Bribery and Corruption, Money Laundering and Terrorist Financing. To find out more, visit rics.org/moneylaundering. APPLICATIONS OPEN FOR NEX T ROUND OF RESE ARCH FUNDING The RICS Research Trust encourages applications for up to £20,000 of research funding under five specific “defined call” subjects, details of which can be found online. The trust will also consider “open-call” research applications outside the scope of

EVENTS

these subjects but still within the disciplines of land, real estate, construction and infrastructure. The board meets to consider awards twice a year, and the closing date for the next round of proposals is the first week of October. Visit rics.org/ researchtrust for more information. FACILITIES MANAGEMENT ’ S SE AT AT THE EXECUTIVE TABLE Rapid technological disruption and the blurring of geographic and sector boundaries are forcing organisations to optimise their workforce and workplaces to stay competitive. Far-sighted companies are placing a premium on facilities management (FM) as a key differentiator to enable this transformation. To better understand the future opportunities and challenges facing the FM industry, RICS recently convened sector stakeholders at two roundtable events in Hong Kong and Singapore. Read the key insights from the gatherings at rics.org/strategicfm. L AST CHANCE TO HAVE YOUR SAY ON ICMS 2 CONSULTATION International Construction Measurement Standards (ICMS) are principles-based international standards that set out how to report, group and classify construction project costs in a structured and logical form. Since the publication of the first edition of ICMS in July 2017, the standard has achieved wide adoption for capital cost reporting. The second edition responds to industry feedback suggesting that construction stakeholders will benefit from a reporting system that provides internationally comparable lifecycle cost data. To take part in the consultation, visit rics.org/icms2.

RICS Hong Kong Annual Conference 2019 24 May, Grand Hyatt Hong Kong This event will address the regional and global need to take a more aggressive shift towards sustainability, examine sensible city planning for professionals and policymakers, and explore how Hong Kong can place itself at the heart of the green revolution. CPD: 7 hours HK$2,200 rics.org/hkconf2019

RICS Land and Urban Development Summit Forum 22 March, Mandarin Oriental, Guangzhou CPD: 8 hours From ¥980 ($185) rics.org/ landurbanforum

RICS Summit Africa 2019 29-30 May 2019, Maslow Hotel, Johannesburg, CPD: 6 hours From R1,850 ($136) rics.org/summitafrica

RICS Building Confidence Conference 2 May, Sofitel Wentworth, Sydney CPD: 8 hours From A$456.45 ($322) rics.org/ buildingconfidence

RICS Awards 2019 Join other professionals and firms across Asia Pacific as we announce who will take home trophies from this year’s awards in each region. 26 April, Shanghai rics.org/chinaawards 6 June, Melbourne rics.org/auawards 11 July, Singapore rics.org/seaawards 25 July, New Zealand rics.org/nzawards

World Built Environment Forum Summit 2019 13-14 May, Conrad New York CPD: 11+ hours $995 rics.org/wbef

AWARDS CEREMONIES

All prices exclusive of VAT or local taxes

For details of conferences, training sessions and CPD seminars near you, go to rics.org/events Q1 2019 / MODUS APAC / 49

EXPERIENCE

WHAT IF…

AI could value property for us? Think of it more as a tool to help you make better decisions, rather than replace you outright, says Eldred Buck

50 / MODUS APAC / Q1 2019

Because property firms will be able to respond to data much more quickly – and with fewer overheads – AI will undoubtedly have an impact on job numbers and the types of jobs we do. But, in a property world full of data, you are going to need many more people to interpret it and see the “patterns in the snowstorm”, as the danger for businesses lies in being unprepared to deal with the deluge. Consequently, fears over people being automated out of a job are about as unfounded as worrying if an accountant is going to be made redundant because of the existence of a spreadsheet. Ultimately, somebody has to take responsibility, and just because a good tool becomes available, it doesn’t make the professional signing it off any less valuable. Eldred Buck is CEO and co-founder of houseprice.ai

“ An AI-enabled camera will be able to perform all exterior checks and measurements on a building ”

The valuation profession is likely to change significantly in the coming years. Find out how at rics.org/futureofvaluations

INTERVIEW BY BRENDON HOOPER; ILLUSTRATION BY RADIO

Most mentions of artificial intelligence (AI) come with some sort of warning about how “the robots are coming for our jobs”. But this is to misunderstand what the current limitations of AI are, particularly in its realworld applications, and how, ultimately, AI is just another tool to help us work smarter. Say you are a doctor in a hospital. By using a stethoscope, you can only do so much for a patient. But if you use a modern CAT scanner it doesn’t diminish your professionalism – the tool is there to enable you to make improved decisions. We can apply the same principle to property. When we think about how AI might help value buildings, what we’re really dealing with is a more prosaic application of a “supervised learning set”. Data already drives our decisions in real estate, so why not let a machine take care of the vast amounts of data around valuations? As long as we feed it trusted data sets, we can use AI to automatically process all the other factors that are responsible for creating value in an area – and let it rapidly crunch through it all to give us a fair-value price outcome. And why stop there? AI could also be used to automatically process the visual factors of a house. Pretty soon, a surveyor could set up an AI-enabled camera or drone outside the building and let it perform all the exterior checks and measurements, similar to how facial recognition software works. Although a property professional can do all this, it is far less time consuming and potentially more accurate for a computer to do it instead. Although AI can be helpful in residential cases, it is more difficult to employ in the commercial sphere, because the data is not as readily available and is often more opaque. How would we get AI to evaluate a building’s appearance, or the quality of a tenant?