MODUS Asia-Pacific Edition | Q1 2020 by ROF Media

Q1/20 ASIA-PACIFIC EDITION

ARTIFICIAL INTELLIGENCE, REAL IMPACTS / 12

A LOCATION OF A CAPITAL / 18

CITY CLUSTERS SANS FRONTIÈRES / 22

THE BIG TECH LEAPFROG / 36

RICS CONTACTS

INTELLIGENCE

Contact centre For enquiries, APC guidance, subscriptions, events and training: modusasia@rics.org Regulation helpline

Rethinking With the continuing rise in flexible co-working space, what is the best way to value such assets?

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President ’s column To survive a period of change you need to anticipate and adapt, argues Timothy Neal FRICS

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CEO ’s column Sean Tompkins on how the profession must adapt to meet the demands of the future

What we can learn from … Silicon Valley is the template of a successful city cluster that Asian cities should to aspire to replicate

FOR RICS Rory Tufano and Jeanie Chan (Asia Pacific) Stephanie Bentley (UK)

FEATURES

Race against the machine We investigate the impact that AI and automation is already having on the industry

FOR SUNDAY Editor Andy Plowman Contributing Editor Alex Frew McMillan Designer Robert Hearn

Creative Director Sam Walker

Asia’s capital conundrum Overpopulated cities are restricting growth and ageing infrastructure cannot cope. Is it time to relocate?

Account Director Karen Jenner Senior Account Manager Jonny King Asia Advertising Bryan Chan Production Director Michael Wood Managing Director Toby Smeeton

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Cities unbound We explore three megaregions that are crossing the traditional cultural, administrative and international borders that once constrained them

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The ageing city The global population is getting older. Are we building cities that can’t cope with this elderly demographic?

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Catch us if you can How mobile technology is helping cities in the Global South to leapfrog ahead of more-established rivals

Views expressed in Modus are those of the named author and are not necessarily those of RICS or the publisher. The contents of this magazine are fully protected by copyright and may not be

reproduced in any form without the

How to teach the next generation Fresh ideas, innovative teaching methods and bold, new approaches from three of the most forward-thinking educators in the industry.

prior permission of the publisher. All information correct at time of going to press. All rights reserved. The publisher cannot accept liability for errors or omissions. RICS does not accept responsibility for loss, injury or damage or costs that result from, or are connected in any way to, the use of products or services advertised. All editions of Modus are printed on paper sourced from sustainable, properly managed forests. This magazine can be recycled for use in newspapers and packaging. Please dispose of it at your local collection point. The polythene and paper in this pack are recyclable.

EXPERIENCE

Way to go Josephine Lee, Knight Frank, Singapore

What if? Instead of throwing away waste plastic, why don’t we build roads with it?

INTELLIGENCE

Valuing flexible office space / President’s column / CEO’s 2020 vision / Successful city clustering /

Co-workers at WeWork Sanlitun, Beijing

RETHINKING

HO W W E VA L UE CO-WORKING SPACE

IMAGE BY VRX ST UDIOS

The rise of flexible shared workspaces continues, but which valuation model reveals its true worth as an asset?

Last year I went on a flexible workspace journey. It began with a discussion with some valuers and resulted in an RICS crossindustry forum. By autumn, I’d launched a global RICS insight paper on the subject. From London, I’ve been able to discuss flexible workspace with colleagues in Japan, Singapore, China, Australia and Korea. The Asian market has grown sharply recently. In 2018, the total space occupied by flexible workspace operators increased by 35% in Hong Kong and more than 40% in Shanghai, according to Colliers International’s Flexible Workspace Outlook Report 2019. In Singapore, it has tripled since 2015. Growth brings challenges, and as the 2019 Instant Group report suggests, the increase in co-working in the Asia-Pacific region has led to, for example, a focus around pricing in China. But many new industries experience similar teething problems, and there were similar growing pains in Europe and America when the flexible-workspace sector was developing. The issue comes down to valuation first principles: what is the entity being valued, what is its purpose, and on what basis is its valuation reached? The value of a business and the value of the real estate in which it is situated can be very different, as can the value of the operator and its value in the market. There is strong competition in more mature markets such as Singapore and

Shanghai. There, quality of design, fit-out and services blur the lines between the tangible and intangible – the space and the services sold. This is something that the hotel market has grappled with for many years, but the principle of finding market value by looking at hypothetical income based on sound evidence stands. A recurrent theme in my research was optimistic operators saying that the best guide to value is the current and potential income of business at the property, while cautious lenders preferred the vacantpossession value, or the value the property would achieve as a standard office. For professionals such as appraisers, the valuation may be somewhere between the two, looking at things such as transaction evidence, estimated income, and so on. A business can change overnight, as can contracts, management agreements and customer sentiment. When valuing a flexible workspace, its intrinsic qualities that make it capable of delivering a sustainable lease or operational income offer the best insight into an accurate value where transactional evidence isn’t available. What makes a property suitable? Does it allow for the easy use of different spaces for different purposes, such as example small offices, co-working space, meeting rooms or large corporate rentals? What is demand in that location? How has evidence of income been benchmarked? Has it been

properly considered, to avoid an inflated figure based on intangibles such as goodwill, brand and other issues that matter to an operator but don’t relate to the real estate? Recent negative news about co-working has led to suggestions that the flexibleworkspace market was a bubble that has burst. But any market that has grown naturally for many years will, at some point, reach maturity. Flexible space is also not immune to wider economic factors – one reason why an explicit income model may not be suitable to value flexible workspace. Co-working is relatively easy to enter, meaning increased competition, heightened customer expectations and a squeeze on profits. There was an argument that fast growth in the market was indefinite – a structural shift had occurred in favour of the flexible model. However, flexible workspace has increased steadily globally as a share of the wider market, rather than taking it over. How will flexible workspace develop in 2020? Traditional real estate companies are catching up – developers are building and running flexible workspace operations, adding flexible provisions to their letting models and undertaking joint ventures with specialist operators. A traditional landlord-led, serviced-office market has always been a small part of many Asian markets. Ironically it has taken growth and international competition to reinvigorate interest. Will we see a revival of operations owned by landlords and developers? Traditional property companies will be working out the best mix of flexible space in their properties – whether traditional or flexible models are better for them. That decision will need a case-by-case analysis of the market and stock. Valuation based on sound principles improves accuracy and hopefully reduces investment risk. Charles Golding MRICS is associate director for tangible-assets valuation at RICS, and the author of the RICS insight paper: Valuation of flexible workspace. Download the paper at rics.org/flexibleworkspace Q1 2020 / MODUS APAC / 5

Southeast Asia Following the success of 2019, the coveted RICS Awards Southeast Asia will return to Singapore this year on 9 July.

2020 award categories Team awards • Agency Team of the Year • Construction Team of the Year • Facilities Management Team of the Year • Innovation Award • Project Management & Building Consultancy Team of the Year • Property Management Team of the Year • Quantity Surveying Team of the Year • Sustainability Award • Valuation Team of the Year Individual awards • Construction Professional of the Year • Lifetime Achiever Award • Property Professional of the Year • Women of the Built Environment Award • Young Achiever of the Year Awards

Deadline for nominations: 17 April 2020

Submit your nomination at rics.org/SEAawards

INTELLIGENCE

PO RP EI NS II ODNE :N TX ’XSX CX OX LXUXMX NX X

For more than 150 years, chartered surveyors have helped create towns and cities, managed land, fostered communities and been expert stewards and protectors of the built and natural environments. We have made, and continue to make, an overwhelmingly positive difference in the world, living our charter commitment: to act for the public advantage. This is why I am proud and excited to have taken on the presidency of RICS, and I look forward to being a positive voice for our profession at a critical moment in our history. My tenure occurs at a defining time for our profession. From the global movement of people to cities, to the impacts of the climate emergency, the need for sustainable transformation of the built environment to respond to and anticipate both has never been greater. Importantly, our clients face multiple new challenges as they work to succeed in this changing world. While significant, these challenges present our industry and profession with a chance to prove itself as one of the world’s greatest agents of sustainable progress. It is within our gift to create sustainable and dynamic cities and communities, XXXXXX XXXXXXXXXXX finance their construction, connect them XXXXXXXX XXXXXXXX to public services, and efficiently manage their built assets. I am therefore incredibly thankful to my predecessor, Chris Brooke FRICS, who led a programme of vital reforms to RICS’ governance structures, particularly around how RICS channels market insight into the standard-setting and regulation processes. Those changes aim to unlock the full potential of our profession to help shape the world in ways

ILLUSTR ATION BY DANILO AGU TOLI

“ XXXXXX XXXXX XXXXXXXXXX XXXXXXX XXXXXXXX XXXXXXX XX ”

that people, society and the planet. Epresbenefit nullabo repudiam, et ad quatioria Like theet built and quammany fuga.professions Ipic temporacross re as eum volorep natural chartered surveying rendionenvironment, comniam quata nonempedit atur? is undergoing a period of reinvention. Quis eate provitio ent aut as enimagnitio. As we remain committed in our duty tocus Itatium as sitaque culparum coriberro professionalism andexplige the public advantage, venis sinvero quam nimilla pre all otherumetur, technical and processmolut elements of volorer qui repudipis our practices are undergoing atisiminim quiamus, iduciat radical ibuscietchange. With dolupit our Futures programme – where litaquis aeceresto estet, tem re we seek advice from vanguardeos of our mintibus quat id qui the culparuntia ducia profession have discovered doluptatur – autwe laborup tatibusamnumerous qui as ways in which digital technologies, cum quat volore, quodicimet acerrum in sustainable methodologies and agilequi everia volupti aestrum nulluptatiae business practices haveporecae armed chartered blate ipsant es volupta provitisqui surveyors approaches and ullo essimi,with samnew evenit hit, autem et tools fugitis to deliver far greater in real as versperrorem cum,confidence cus andisquatios estate markets. This is demonstrating sumqui aut est es eoswork rendunditia con ea that profession is ateos theeaque forefront of culpaour volupta speditias nosanda change inporro the built natural quaturis qui and as quam as environment. con cum Technological for instance, asperrum, solore adoption, vel ipsantius volupta is enabling mil professionals to veriam, deliver with consequas molessecus, greater insight understanding consequaccuracy, atiore into corioand dolupid quiam for their clients. It is important that RICS hitate molupit platur, ut omnis arum re captures these developments niaesseque lab technical il mos pellat voluptatem to shape the ongoing reinvention of RICS atat eiumqui omnis esequi odios dolore vel standards and services. idellabo. Dunt preptum This eat utisetcrucial, arum as these willnectur? continue to provide a relevant aspeditia baseline forItasperia members of the profession Ectorae. vendandam, ommos to practise in real construction and num ex expero velestate, et ipsae di iminum res natural environment markets globally. eumquate comnim que offictem voluptis RICS hasquis a vital to play in ensuring nonsequis ad role magnihiciunt facest our members have the skills experience eaquam, comnimin cume sit,and ipide nihitam, to guaranteeeles ourverio communities thrive in our il idestrum expero debis uncertain world. We must dolorporpor apienim at. confront the need to reinvent our professional advice. Upturit, sed modisit adio es pa sequiatur, Fortunately, changereium is in our profession’s odictatus, verspedi sitatem DNA. And asalicaecti the pacecoremquam of change within olorrovitius int ea society andplitatia the natural world continues ditisquunt vel mo et aut laborer to accelerate, is only right that we anticipate natur, quasitdoloriatest, sequissum quias the need to reinvent ourselves multiple sequi ut qui odis aut porro consed quia times the span of adolorent, single career. perumwithin alis exceatat optas to I therefore forward revealing beatur simus look quamus es inttovolupta the extent of praerspera RICS’ latestnumque Futuresestem. insight volorita non very soon,dentior along with our assessment Udignam emquia cusanditia of its implications on the wider profession, everumquo in coreriorerit eicab is et and theFernatur next round of reforms that RICS quatio. secepta dolupta turions will pursue in response. To ra make sure errovitatus, quibus comnit quos sector you thesema important anisdon’t modiamiss velectur veliquia Futures voluptasit announcements, see rics.org/futures. as modiam nessuntio. Ximolore nonseque

perchil igenienis volecturio con nem ea inti blacerf erorpos dis andaectotae comniscit ommoluptur assum simi, cus, core nis velliqui sitat volut aligenteni sitiasi magnat que conseque inveribus magnientur? Et eius net omnis es con consecuptasi unt eari volutat de volutet mi, volo cusanto et faceati oressim rera delit laut vollaut fugit adi dolupid modis providunt, utectatent as aut aborem et plitempore samus aut fugias et liqui imet que prem vite es in pe iditaqui sedi te dolorum quassim agnimi, conecus voles debit assi dipsum veres aligent autest que con preptas eaquat qui dolore vendio. Et aut volor sent erestis quam, quas verum nonsecerum non enditatesed molupta eceriorest, ut eum quiam lam ratur, eos excerum quiaspe llectur aut omnihictur, cusa nimi, nimpore ssediciis ulpa nimpore ptibus inum quos magnihi lloratur? Ciasi qui cullabo. Onseria cum fuga. Sed quas sitasped que sit iuscienimus enim re, sa pedi ditatur? Quam is exerum hilis as eos volori aut undem sam latur, nihillam experfe rnatio. Pis es eum lamus qui delesti rat. Ratiust iundani minusande aspelib usciur? Omni re doluptis adigend iscium faccabores qui quia nobitium, occus. Sedicitae TIMOTHY NEnumquam AL FRICS quid est molestem voluptur, quasit, quodia diatum ea aut RICS PRESIDENT dolorem ex ea perecepudita nusae non eum del exerum rerat autempo ruptame nimagnam venimus amusandis mo moluptate imagnis esed qui officiis aut que lacepta tibusa quosame sunt volut magnis cum quas dem eatendis quiatis quunt. Lecerio nsequat enemque pelenditas isquiduntus.

“ OUR CLIENTS FACE MULTIPLE CHALLENGES AS THEY WORK TO SUCCEED IN THIS CHANGING WORLD ”

XXXXXXXXXXXX Q1 2020 / 2018 MODUS / MODUS APAC / 7

INTELLIGENCE

“ ONE THING IS CERTAIN: CHANGE IS THE NEW NORMAL ” SE AN TOMPKINS CEO RICS

8 / MODUS APAC / Q1 2020

A member of the profession qualifying in 2020 could reasonably work for 40 to 50 years in the built environment – imagine the changes we might see in that time. Qualifications that seemed cutting edge when they were undertaken could become outdated. Maybe new skills will be required to see an individual through their professional life. One thing is certain: change is the new normal. Changes won’t just affect the newly qualified. Those midway through their career will also need support to remain competent and relevant. As technology allows the profession to move up the value chain, we also know that non-technical competencies such as resilience, emotional intelligence, communication and influence, and the ability to collaborate are likely to become increasingly important. Indeed, many have questioned traditional paths into professions. More than ever people are challenging how they learn and how learning is applied in the workplace. Is a standalone degree preferable to structured learning and qualification while employed? The industry is developing a broader demand not just for qualifications, but for qualified individuals. Since launching our 2015 Futures report, much of our focus has been in these areas, falling under three broad areas of activity: talent and skills; data and technology; and sustainability. The digitisation of the built environment, collection and manipulation of big data and development of artificial intelligence and machine learning have the potential for the profession to expand its services, improve quality, better meet client needs and reduce costs. It presents both an opportunity and a challenge. Through this period of change, you can be assured that RICS is with you. We will ensure you have access to any new competence development you might need, the benefit of respected professional standards and a regulatory environment that maintains society’s trust. These are all key ingredients that will enable the

profession to keep succeeding and remain relevant in an ever-changing market. We are also addressing our sector’s wider impact. RICS is committed to supporting the UN’s Sustainable Development Goals as a signatory to the UN Global Compact, and I was proud to present our thinking on responsible business in the built environment to the UN. Our research shows an increasing expectation from consumers and employees that companies should be socially and environmentally responsible. Although there are codes and standards in place, we know it can be difficult to balance commercial reality with ethical obligations. So, we are considering new standards to encourage firms to improve governance and mitigate risk on everything from supplychain management to whistleblowing, which are all tangible areas where RICS can deliver positive social impact. These drivers of change mean that we must review and evaluate our education, qualifications and CPD framework to ensure they are relevant now and in future. Responding to the changing world will continue to be our primary focus in the years ahead. Our own Futures report foresees a growing demand for businesses to demonstrate environmental, social and ethical governance, so I hope you find our thinking in these areas a positive and practical contribution to the debate. Our 2020 Futures report made it clear that our sector is in a period of significant transition. Our challenge is to remain trusted by society and all end-users of professional services. We will do this by ensuring we help all members of the profession navigate change and handle the opportunities and challenges it brings.

ILLUSTR ATION BY DANILO AGU TOLI

OPINION: FUTURES 2020

INTELLIGENCE

Fukuoka has courted start-ups with a range of financial incentives

WHAT WE CAN LE ARN FROM…

SUCCESSFUL CITY CLUSTERS

IMAGE BY GE T T Y

Asia is home to some of the most innovative cities in the world – but can the region take the next step and create city clusters as profitable as their Californian rivals?

Silicon Valley is an enviable model of city cluster success. And although it’s not easily emulated, there are steps Asian governments can take to help develop similar city clusters. San Francisco and San Jose are number one and number six respectively in terms of innovation globally, according to JLL’s Innovation Geographies report. Tokyo came second, with Singapore third and Beijing fourth. But while these cities hold a competitive edge in today’s technology-driven world, they are yet to replicate Silicon Valley’s economy. How can a country build a cluster? As with Silicon Valley, a gathering of talent encourages entrepreneurship, as does mobility of human capital, information and resources. Education, investment in high-tech industries, and expenditure on research and development are also key. Based on this, China is making steady progress. Its super-city clusters in the Greater Bay Region, BeijingTianjin-Hebei, and the Yangtze River Delta are focused on great

universities in Hong Kong, Beijing and Shanghai. And to enable easier mobility of talent, the Chinese government has built a high-speed train line linking Guangzhou, Shenzhen and Hong Kong, further integrating these cities and cutting commuting time. The proliferation of smart cities presents an opportunity to create infrastructure for a city cluster. In this case, the technology companies that occupy these cities can use their know-how to enable them. In Silicon Valley, public-private partnerships make cities more liveable and more attractive to corporations and startups. For example, tech giant Facebook and start-up Common Networks are providing 5G wifi to the rural suburbs of San Jose. The private sector will also be essential in Asia. India’s 100 Smart Cities initiative is born from a need to cope with rapid growth in the urban population. But only 16% of India’s cities are able to self-fund the projects, according to Deloitte. This creates opportunities for real estate and technology

companies to work together. For example, Indian developer M3M has reportedly signed a deal with Swedish engineering firm Urban Systems urbs AB to develop India’s first climateneutral smart city project in Gurugram. If successful, it could pave the way for similar projects across the National Capital Region around Delhi. Cities with strong innovation capabilities and concentrations of talent have outperformed economically over the last two decades. It also reveals a robust link between innovation, talent-rich cities and real estate performance. If a city gets it right, it will achieve economic growth by attracting investors and companies. Fukuoka is a good example. Driven by mayor Soichiro Takashima, Japan’s fastest-growing city in terms of population has a burgeoning tech start-up scene. It wooed start-ups from Tokyo through tax incentives, investing in infrastructure and creating spaces for new companies. The city is now expanding its reach, with its rail network extending to serve a wider population. Physical and technological infrastructure combined with access to talent and liveability will allow more city clusters to emerge in Asia. Corporations and investors should act now before the maps are drawn. Jeremy Kelly is the cities research team head at JLL. We’re seeking to learn lessons from successful city clustering, through the exchange of ideas and expertise. Join us: rics.org/wbef

STRENGTH IN NUMBERS

POPUL ATION OF SILICON VALLE Y

$275 BN SILICON VALLE Y ’ S ECONOMIC OUTPUT

$128K SILICON VALLE Y ’ S GDP PER CAPITA

112 M

POPUL ATION OF BEIJING-TIANJINHEBEI REGION

10%

PROPORTION OF CHINA ’ S GDP GENERATED BY THE BEIJING-TIANJINHEBEI REGION

PUBLIC-PRIVATE PARTNERSHIPS UNDER WAY IN SILICON VALLE Y Q1 2020 / MODUS APAC / 11

THE FOURTH INDUSTRIAL AGE HAS WELL AND TRULY ARRIVED, WITH AI APPEARING IN EVERYTHING FROM AUTONOMOUS VEHICLES TO INFRASTRUCTURE MANAGEMENT. BUT THE MACHINES ARE FAR FROM TAKING OVER – THE TRUTH IS, THEY JUST CAN’T DO IT WITHOUT US…

Race against the machine Q1 2020 / MODUS APAC / 13

In addition to the exponential increase in investment levels, adoption of AI will be facilitated by the roll-out of 5G. “Connectivity is at the heart of it,” says Whitten. “We will effectively have wifiquality connectivity both within and outside the built environment, and it’s starting to arrive on our shores and on many shores.” The combination of 5G connectivity and advances in AI will have a profound impact on transport. Most of the big car manufacturers are already partnering with technology firms to develop autonomous vehicles (AVs) that require no input from a human driver. Downtown Phoenix, Arizona, already has a fleet of self-driving taxis. With privately owned cars reportedly sitting idle for as much as 96% of the time, it is clear that AI-driven AVs have the potential to significantly improve the efficiency of how journeys are made, at least within urban environments. That will have profound implications for the design and construction of cities, with far less space needed to park private vehicles.

WORDS BY ADAM BRANSON ILLUSTRATIONS BY DOUG JOHN MILLER

Man and machine On the flipside, built environment professionals will need to plan for ever-more data centres – ironically, given its ethereal nature, data still requires a substantial physical presence. “Some of the big data centre owners are saying that you are going to need mini data centres to cope with everything that is coming down the track,” says Phil Ratcliffe, managing director at construction and engineering consultant Drees & Sommer UK. From a transactional perspective, AI is already being used to develop investment strategies. A prime example is US firm Skyline AI, which uses advanced analytics to pull together 200 data sources and 10,000 asset attributes to determine which assets should be traded and when, in order to optimise returns. Such technology has the potential to fundamentally change the way in which investment agents do their jobs, even if they’re not cut out of the picture entirely. “[The technology] looks at market anomalies and different forms of risk and reward,” says Whitten. “It’s not all AI, but it is using AI to augment human decisionNick Whitten making. In the next five to JLL 10 years you will see that – AI augmenting human behaviour rather than taking over. It might suggest a decision, but the human makes the decision and the human has the ability to change the areas it is exploring.” Similarly, AI is already being used to value properties automatically. That shouldn’t come as a surprise, given that valuers have to adhere to strict rules: AI is particularly adept at automating rule-based activities. However, such tools have the potential not just to augment

“ AI might

suggest a

decision, but

the human has

or some it is exciting, for others downright terrifying. But whatever your perspective, there can be little doubt that the fourth industrial age is upon us, with all the potential for revolutionary change that entails. It is still early days, but it is already clear that technological advancement will fundamentally change the way we live and work, with artificial intelligence (AI) in particular automating many tasks traditionally done by human beings. So what impact is AI already having on the built environment, and how might it change the sector in the future? First, it is important to define terms. In a sense, AI has been around for decades. The pocket calculator, for instance, is a classic example of what is known as narrow AI – technology dedicated to performing a single task better than most humans can. General AI, on the other hand, relates to technology that can perform multiple tasks well. And then there is super AI, with machines effectively being able to think and act autonomously. To date, general AI has had a limited impact on the economy as a whole. However, change is coming, and coming fast. According to Nick Whitten, director of UK research at JLL, annual investment in AI is predicted to reach $250bn by 2025, leading to a step change in the use of the technology by 2030.

the ability to change what

it is exploring ”

DIRECT FACILITIES MANAGEMENT

DEVELOP LAND USE PLANS

COORDINATE OPERATIONAL ACTIVITIES

COLLECT RENTS AND CHARGES

ASSET MANAGEMENT PLANNING

ASSEMBLE EQUIPMENT

APPRAISE PROPERTY VALUES

ACQUISITIONS & DISPOSALS

PERCENTAGE %

VULNERABLE NOW

PREPARE REPORTS

TESTIFY AT LEGAL OR LEGISLATIVE PROCEEDINGS

STRATEGY DEVELOPMENT

SPACE MANAGEMENT

RISK MANAGEMENT

REVIEW PLANS OR PROPOSALS

PURCHASING EQUIPMENT, SUPPLIES & SERVICES

PREPARE SERVICE CHARGE BUDGETS

Q1 2020 / MODUS APAC / 15

PERCENTAGE %

SURVEY CONDITION OF PROPERTIES

CLEANING

MONITOR MARKET CONDITIONS & TRENDS

SELL REAL ESTATE TO CLIENTS

SURVEY CONDITION OF PROPERTIES

TROUBLESHOOT EQUIPMENT OR SYSTEMS OPERATION PROBLEMS

VULNERABLE IN NEXT DECADE

PREPARE CONTRACTS

POLICY DEVELOPMENT

PLAN MAINTENANCE

OPERATE LIFTING EQUIPMENT

OPERATE HELPDESK

OBTAIN PROPERTY INFORMATION

NEGOTIATE PROJECT SPECIFICATIONS

NEGOTIATE PRICES

MEASURE PROPERTY

MANAGE LEASES

MANAGE HELPDESK

MANAGE CONSTRUCTION ACTIVITIES

MAINTAIN WORK EQUIPMENT OR MACHINERY

MAINTAIN WORK AREAS

KNOWLEDGE MANAGEMENT

EXAMINE FINANCIAL RECORDS

EVALUATE CONDITION OF PROPERTIES

ESTIMATE COSTS FOR LABOUR OR MATERIALS

DIRECT PROPERTY MANAGEMENT

DIRECT ORGANISATIONAL OPERATIONS, PROJECTS OR SERVICES

SOURCE: RIC S, 2017

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THE ROBOTS ARE COMING… OR ARE THEY?

The 2017 RICS Insight Paper The Impact of Emerging Technologies on the Surveying Profession

identifies the percentage change of various tasks being automated now and in 10 years’ time

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but to replace human valuations given the huge number of variables they are able to consider, although the selection of those variables is still a human endeavour. What’s more, AI has the potential to change the role of property agents in the commercial and residential sectors. Back in 2016, for instance, US-based real estate news website Inman ran an experiment where it pitted AI against a human agent in trying to understand buyer preferences. The test was run three times, and in each case the software came up trumps. Again, however, the technology is best used alongside human intelligence. People, after all, will still need to view a property and negotiate a deal. As James Paine, founder of US investment firm West Realty Advisors, puts it: “The good news is that AI is actually at its most effective when it’s working alongside humans instead of replacing them, and the most successful real estate companies are likely to be the ones that accept this.” Face time It is also increasingly clear that the distinction between a built environment company and tech business is breaking down. The acquisition of American offsite housing manufacturer Plant Prefab by Amazon in October 2018 is a case in point. “The reason they did that was to be able to embed the Amazon core product of essentially voice-enabled purchasing,” says Whitten. There are already concerns about the way in which voice recognition technology processes data, but in China facial recognition is being used to change human behaviour in ways that could be viewed as downright sinister. As has been widely reported, the Chinese state is trialling the use of the technology in several cities. “Every citizen goes in and has their photograph taken from 47 different angles,” says Andrew Waller MRICS, partner at Remit Consulting in London. “That information is used to track what people do, so if you jaywalk you get a social demerit. And if you get six social demerits, you’re not allowed to leave the country and your children can’t go to university.” As Argent recently learned to its cost when it was revealed the company was Andrew Waller MRICS using facial recognition at Remit Consulting King’s Cross in London, the use of such technology can be highly controversial. Accordingly, landlords and developers will have to think long and hard about how they balance the benefits with the potential reputational damage. However, Waller believes its use is inevitable in a property context, whether that means employers overseeing workers, or shopping centre owners observing customers’ movements and behaviours. “Whichever way you look at it, Big Brother is watching you, and this is the future.”

“ Whichever

way you

look at it,

Big Brother is watching

you, and this is the future ”

Asset management AI is also already having a significant impact on the way in which built assets are maintained. Arcadis, for example, is three years into a “digital transformation journey”, according to partner Ben Senior MRICS. The consultancy recruited its first chief technology officer in 2016, and now has a team of around 2,000 data analytics specialists in its 27,000-strong workforce. Then, in 2018, the company acquired the Sheffield-based tech business Seams, which specialises in prescriptive and predictive analytics. The investment is already starting to bear fruit. “We have started to use machine-learning models to automatically tag potholes in roads,”explains Senior’s colleague Phil Brown. “So, rather than have a manual lookout for potholes, you have an instant machine-learning model that can automatically tag them and log the exact location of the defect using GPS. It’s using image recognition and a database of pictures that you’ve built up to save time and create efficiencies.” Senior adds: “This is where Seams comes into its own. It starts applying prescriptive analytics, so if you’re working for an organisation like Highways England you can say: ‘This is your budget and these are your goals and this is how you can spend the money to

ARTIFICIAL INTELLIGENCE

THREE AI APPLICATIONS IN THE BUILT ENVIRONMENT WHEN IT COMES TO DATA-BASED MODELLING, THE MACHINES ARE MAKING THEIR MARK SE AMS Founded in 2002, Seams emerged from a need for the UK water industry to be able to justify investment decisions to the government regulator. Originally, it was a collaborative research and development project between specialist departments at Sheffield and Exeter Universities that was 10 years in the making. Its purpose is to transform client data into plans to ultimately improve business performance through predictive and prescriptive modelling techniques and outcomes.

SK YLINE AI Skyline AI is an artificial intelligence investment manager for commercial real estate. According to the company, it forms partnerships with leading commercial real estate firms to establish next-generation investment vehicles augmented by AI. It was founded in 2017 and is backed by Sequoia Capital, JLL, TLV Partners, Nyca Partners, DWS Group and others. It has offices in New York and Tel Aviv.

BUILDING SYSTEM PL ANNING

get the best return on investment.’ By combining that machine learning in terms of identifying the potholes and combining it with other data analytics, you can start to have a big impact on how assets are maintained.” Arcadis’ work isn’t limited to road infrastructure. In the US, it is applying the same thinking to the rail network by combining visual recognition technology and AI to inform preventative maintenance works by predicting which trees are most likely to fall on to the track. “Because of the vastness of the country, it was trees falling over on to the track and causing disruption that was creating the greatest issues,” says Senior. “By attaching cameras to the trains and identifying all the trees, you could categorise the trees and use that predictive analytics approach to identify which were most likely to fall over and then do some preventative maintenance. It’s made a big impact on reducing disruption to the network.” The application of AI in the built environment industry may still be at a formative stage, but it is already clear that it has the potential to both disrupt and enhance professionals’ lives in multiple sectors, from design to agency to construction. Change is inevitable and all involved would be well advised to take note. n

Headquartered in California, BSP recently launched GenMEP, an add-on to Autodesk Revit focused on the mechanical, electrical and plumbing design aspects of building information modelling. Once a 3D model is created on Autodesk Revit, the add-on can automatically design the routing of an electrical system within the building while taking into account the complexity in different building shapes and geometries.

We explore the impact of technology on the built and natural environment sectors. Find out more and sign up to be the first to hear about our next Futures report at rics.org/surveyingtechnology Q1 2020 / MODUS APAC / 17

A S I Aâ&#x20AC;&#x2122;S

C A PI TA L

CONUNDRUM

In 2018 Filipino legislators tabled a bill urging that the capital moves from Manila

MEGACITIES

Overpopulated megacities and the continuing growth of income inequality plague many Asian countries – could relocating capital cities be a solution to both? WORDS BY ALEX FREW MCMILLAN

raffic congestion is notoriously bad in some developing Asian countries. Indeed, according to satellite navigation company TomTom, the region is home to some of the worst cities in the world for congestion: Jakarta is seventh worst; Bangkok eighth; New Delhi fourth; and Mumbai top of the list as the worst of all. And it’s a problem that is symptomatic of a larger difficulty in the region: the rise of the dominant megacity. Mumbai aside, all the cities mentioned above are national capitals that politically, economically and socially dominate their country – and it is becoming clear that it may be beneficial to share some of their wealth elsewhere in their respective countries, diversifying key functions from overcrowded capitals to smaller cities or even the countryside. But could such a transfer of national capital, as well as human and fiscal capital, work? If so, how? It may be essential. In December 2019, Typhoon Kammuri ripped through the Philippines, causing the evacuation of 457,000 people from southern Luzon near Manila, and the islands immediately south. The storm was blamed for 17 deaths. Although the capital avoided a direct hit, Manila’s airport was closed for 12 hours, parts of the city flooded, and events at the Southeast Games had to be postponed. As New Year’s Day dawned in Jakarta, the heaviest rains on record to hit the city caused flash floods that killed 53 people. More than 400,000 residents, mainly from the Jakarta satellite city of Bekasi, fled their homes. Officials blamed climate change for raising the risk of extreme weather, and said rains could continue until mid-February. One of the main problems diversification of key functions would hope to address is the rural-urban divide, one of the main factors perpetuating a cycle of poverty in many emerging Asian nations. The divide and

inter-provincial gaps account for 54% of income inequality in China, and about 32% in India. And things are getting worse, says Haruhiko Kuroda, former president of the Asian Development Bank (ADB) and current governor of the central Bank of Japan, which is preventing Asian governments from raising disadvantaged people out of poverty. “High and rising inequality can undermine long-term growth by wasting human capital, increasing social tension, weakening governance and increasing pressure for inefficient populist policies,” says Kuroda. “Because the forces behind rising inequality are also the engines of productivity and income growth, options to reverse these trends become more complex,” he explains. “Disadvantaged regions must be provided with better infrastructure, not just in the form of better connectivity but also through policies and institutions that ease the flow of goods and services. Barriers to migration from poor and rural to more prosperous and urban areas should also be removed.” Asia’s rapid development is producing leaps in technological progress, increasingly integrated financial and economic markets, and greater market orientation – all of which favour urban dwellers, and often magnify inequalities in human capital. Spreading the financial gains of these trends from capital owners to labour, and bringing job, education, health and social-service benefits to all parts of a nation will help ensure that wealth creation in Asia is more inclusive. It is possible to create a capital from scratch. Brasilia was founded in 1960 to shift Brazil’s capital to a more central location than Rio de Janeiro. Nur-Sultan, formerly Astana, was installed as the capital of Kazakhstan in 1997 to diversify away from the largest city, Almaty, 1,000km away. And Australia created Canberra, with the proviso that the capital be more than 100 miles (160km) away from Sydney, the country’s biggest city. Q1 2020 / MODUS APAC / 19

Myanmar also shifted its capital, from Yangon to Naypyidaw, “the abode of kings” in 2006. Naypyidaw is in the centre of the country and Yangon is prone to flooding: Cyclone Nargis caused more than 100,000 deaths in 2008. However, Naypyidaw is a relative ghost town, a new suburb four times the size of London, tacked on to a town of 100,000 people. Indonesia has confirmed that it will also move its capital. On winning his second term in August 2019, president Joko Widodo confirmed that the capital will shift to a new city to be built near the port of Balikpapan, on the east coast of Borneo. The project’s budget is $33bn, which seems extremely low, only 19% of which will come from government. It’s hoped the rest will come from public-private partnerships. Construction is slated to start in 2021, with parts of the government moving by 2024. Moving the capital should ease the stress on Jakarta, which is due to replace Tokyo as the world’s most-populous city by 2030. It should also spread the wealth in a nation where Jakarta’s island, Java and next-door Sumatra account for 59% and 22% of the economy respectively. Jakarta will remain the financial capital of Indonesia, the fourth-largest nation in the world at 263 million people. Jakarta will retain functions like the stock market, while politicians and government departments will shift to the yet-to-be-named new city. Balikpapan is located centrally within a nation of 17,000 islands. Crucially, Borneo is not volcanic and therefore not as prone to earthquakes, tsunamis and eruptions as the rest of the island chain. It is also not sinking, while parts of Jakarta are dipping 8 inches per

“ THIS IS A SLOWONSET DISASTER THAT COULD STRETCH OUT FOR WEEKS, MONTHS, OR EVEN YEARS ” RODRIGO NAROD ECO UNIVERSIT Y OF THE PHILIPPINES

year thanks to wells drawing from aquifers in the city’s swampy surrounds. Some 40% of the capital is already below sea level, and during the typhoons and tropical storms that sweep the region, much of the city floods. The deluge that caused chaos in January was the heaviest rainfall since records began in 1866. But it’s the third such major flooding incident in the last 12 years. Jakarta has a population of 10 million. But greater Jakarta, spanning several surrounding cities, tops 30 million now. That tally should reach 35.6 million as the conurbation adds 4.1 million people between now and 2030, according to Euromonitor. Greater Tokyo, with an ageing populace, should dip by 2 million to 35.3 million over the same period. Now Thailand, too, is mulling the move of its capital. Prime minister Prayut Chano-cha, announced in September last year that the capital could switch under his watch. He has two options: a move to the Bangkok suburbs to ease congestion in the city centre; or a switch to another city that’s “neither too far nor too expensive to move to.” Former prime minister Thaksin Shinawatra also suggested switching the administrative capital during his tenure. Shinawatra, who drew much of his support from rural constituents, wanted to move the capital to Nakhon Nayok, an agricultural province 100km north-east of the capital, nearer his base. The government has also explored a move to Chachoengsao, an agricultural hub 80km due east of Bangkok. In 2018 two legislators in the Philippines filed a bill advocating moving the capital from Manila to Davao City, hometown of president Rodrigo Duterte. Although his supporters say the move is to “address the

MEGACITIES

IMAGES BY GE T T Y

Myanmar’s purpose-built capital Naypyidaw (top) is six times larger than New York City but has a population of just under one million. Flooding in Jakarta (above) in January 2020 was the worst on record: 53 people died and 400,000 people had to leave their homes

issue of Manila imperialism,” they also have in mind to decongest Metro Manila and spur development in other parts of the fragmented island nation. Manila was found to be sinking by around 2.5 inches per year between 2003 and 2018. Like Jakarta, the extensive extraction of groundwater is largely to blame. The aquifer reserves are being used at a faster rate than nature can replace them. This puts some 40% of Metro Manila’s 12.9 million people at risk of flooding. To make matters worse, suburbs such as densely populated Quezon City and upscale Makati lie on earthquake fault lines. Rodrigo Narod Eco, author of a University of the Philippines report on land subsidence, says this merits as much attention as an

earthquake or volcanic eruption. “This is a slow-onset disaster that could stretch out for weeks, months, or even years,” he told the publication Eco-Business. His co-author Mahar Lagmay, head of the Resilience Institute at the University of the Philippines, says Manila “seems like a dying city.” Overpopulation makes it disasterprone and difficult to manage. The southern island of Mindanao is a strong candidate for a relocated capital, Lagmay says. It would facilitate trade with neighbouring Indonesia and the rest of Southeast Asia. Should Indonesia’s attempt to spread wealth in a more equitable way be a success, it is highly likely that the Philippines and other countries will follow suit. n Q1 2020 / MODUS APAC / 21

San Diego-Tijuana conurbation

With more than 5 million people the largest binational economic cluster between the United States and Mexico

$230 billion GDP

Worldâ&#x20AC;&#x2122;s busiest land border crossing Crossing, back and forth traffic every day 120,000 passenger vehicles 63,000 pedestrians 6,000 trucks

Grid North

sphere of action

United States Mexico

Tijuana Municipality

Economic linkages

San Diego International Airport

San Diego

District 4

International calling 01152664 to call Tijuana

Coastline

20km2

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418,300 workers

identity

Port of San Diego

er volu me 82 3,560 An nua lv eh icl es im p

Industrial Cluster

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San Diego Bay

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Local authorities

Pacific Ocean r

Border Crossing

Tijuana

almost 11% of manufacturing companies in Mexico are located in Tijuana

identity

Field of interest

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echolines

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0 ,00 50 4 to up tr ed

The mega-regionâ&#x20AC;&#x2122;s co-producing manufacturing supply chain accounts for $2.5 billion in trade!

1km2

CROSS-BORDER CLUSTERS

Cities:

classification

Industrial Cluster

44km2

32.57844, -116.91901

$ 46.7 billion imported/exported

echolines

Economic linkages

Brown Field Municipal Airport

Otay Mesa

4,8km2

Expansion

Local potentials

Direct access from the US to Tijuana airport

Interdependency

Supply

Tijuana International Airport

Garita de Otay

CD Industrial

Economic linkages

Local potentials

Knowledge Transfer

unbound sphere of action

ILLUSTRATIONS BY ALEXANDER DAXBĂ&#x2013;CK

Otay Mesa Border Crossing

Cross Border Xpress

Local authorities

WORDS BY GEORGE BULL

Universidad Autonoma de Baja California

author

Expansion

layered objective subjective

rts Outside expe

Tecate

United States Mexico

Campo

Border Crossing

Tecate

ational Boundary

In a globalised society, economic growth canâ&#x20AC;&#x2122;t be contained by traditional borders. We profile three megaregions that are pushing the boundaries

observer

Economic linkages

interpretation subjective

Q1 2020 / MODUS distanceAPAC / 23

The established market: San Diego-Tijuana

very day, some 120,000 passenger vehicles, 6,000 trucks and 63,000 pedestrians cross back and forth between San Diego in California and Tijuana in Mexico. It is the world’s busiest land-border crossing and one of the continent’s most significant binational economic clusters, with a GDP of $230bn and a population of more than five million people split across both municipalities (main image, p10-11). In the gravity model of trade, the San Diego-Tijuana megaregion is something of an inevitability: two large economic centres in close proximity to each other tend to be strongly tied. In addition, deep cultural links – about 25% of San Diegans are native or fluent Spanish speakers – have helped to ensure a steady migration of labour and skills. But it was 1994’s North American Free Trade Agreement (NAFTA) that accelerated the commercialisation of the megaregion, particularly its specialisation in advanced manufacturing.

The land-border crossing between San Diego (left) and Tijuana (right) is the world’s busiest, and this year a third vehicle crossing point opens to further improve links between the US and Mexico

Today, Tijuana is home to the world’s largest medical device cluster. It also hosts Mexico’s aerospace, defence, semiconductor and audio and video equipment manufacturing industries. Many of these firms – such as Solar Turbines, Kyocera International and Taylor Guitars – are co-located on both sides of the border, with their administrative and operations facilities in the US. In San Diego, where 8.5% of the workforce is concentrated in STEM-specific occupations (more than 1.5 times the US average), biotechnology, pharmaceutical, software and communications clusters provide R&D that drives innovation, effectively “offshoring”production to Mexico. NAFTA enabled both San Diego and Tijuana to benefit from the competitive advantage that comes with being “co-producers”, fuelling huge growth in support and ancillary businesses. Integrated supply chains mean that a medical device or automobile may cross the border many times before it is finished. What’s more, this trade in intermediate inputs means that 40% of US imports from Mexico are actually “American-made”. Research by World Trade Center San Diego estimates the value of this co-producing manufacturing supply chain at $2.5bn. “Because of this, San Diego-Tijuana is really driving the whole of the Cali Baja megaregion [which includes San Diego County, Imperial County in the US, and the State of Baja California in Mexico],” says Max Bouchet, research analyst at the Brookings Institution. Bouchet, who has conducted research on the international relations of cities, says that the megaregion challenges the US government’s protectionist narrative of “‘win-lose trade relations’. The US economy is heavily reliant on imports to supply US producers with the materials and parts they need. The binational economy of Cali Baja is a good example of this interdependency.” Tim Gifford FRICS, senior managing director, capital advisers for Latin America at CBRE, says that the USChina trade war is actually one of the reasons demand is going up in the region: “We’re seeing more and more demand for industrial space in Mexico for manufacturing and logistics. Lots of it is organic. But more integration between the US and Mexico is inevitable because it’s easier than China – lots of businesses operating in these areas are coming to the conclusion that there’s less risk of those networks becoming disrupted.” Gifford believes that Trump’s proposed border wall, if it is realised, will have little effect on the regular flow of business between San Diego and Tijuana. In fact, the region already has an entry point that literally crosses above the border fence: the Cross Border Xpress. Funded by private American and Mexican investors, this 390ft footbridge opened in 2015 and connects Tijuana International Airport to a terminal on the US side of the border. A third vehicle crossing point is also due to be completed this year at Otay Mesa East. Both the public and private sector seem to think binational infrastructure projects will pay off in the future. Despite rising US-Mexico tensions, the renegotiated NAFTA – now the United States-Mexico-CanadaAgreement (USMCA) – may benefit San Diego-Tijuana as its services sector evolves. Some 51% of trade in the Cali Baja megaregion is in the services sector, from

CROSS-BORDER CLUSTERS

software to data processing and scientific research, an important aspect of which is R&D patents. “USMCA modernises NAFTA, in particular on data and IP protection. Both sides were looking at this,”says Bouchet. And if the trade war continues? Bouchet believes that being a binational region should position San DiegoTijuana to be more resilient, “allowing it to access more competitive markets and provide flexibility for firms on both sides of the border to find ways to mitigate the effects of [retaliatory] tariffs”.

Greater Bay Area conurbation (GBA) Pearl River Greater Bay Area This area accounts for 12% of China’s GPD

West Coast

GBA population: 69.6 million Integrated economic powerhouse 300 industries 112°48’E

113°49’E

114°50’E

$1.5-2 trillion GDP

Hong Kong – Macau Region Guangdong Province

POI 01

Point of interest

East Coast

Productivity cluster

°52’N

Guangzhou Huizhou

Dongguan

Zhaoqing Foshan

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258,000 invention patents

Shenzhen Jiangmen

Zhongshan

Hong Kong

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in 2017

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$ 209 billion imported/exported

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Section 116km

$342 billion GDP

广州市

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Port of Shenzhen

Cargo throughput: 240.97 million tonnes Container throughput: 25.7million TEU 4th busiest container port in the world

East Coast

rld

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°50’N

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Revenue $ 33.5 bill ion in gam more tha n five tim blig es that of Las Vegas the Strip

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$54 billion GDP

澳門

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#1 #1

$363 billion GDP

深圳市

Tier 1

$362 billion GDP

香港

4 Core Cities

Tier 1

South China Sea

2014 - Pilot free trade zone (GFTZ)

lans for China’s Greater Bay Area (GBA) were mooted as early as 2005 as part of the Pearl River Delta concept. It faltered again in 2011 due to a lack of coordination between the large number of regions and cities involved. But in 2017, the People’s Republic of China stepped in: “The government sees that forming a huge area here would create a market and the capacity for innovation. Now, we have a central planning function over the whole area,” says Clement Lau FRICS, director and head of development and valuations, commercial property, at Hongkong Land. The plan is for the GBA, which will link nine mainland cities in Guangdong province, as well as the two Special Administrative Regions of Hong Kong and Macau, to be a globally competitive megaregion by 2035. The core cities of Hong Kong, Macau, Guangzhou and Shenzhen

will be “productivity clusters”, which the others, Zhuhai, Foshan, Huizhou, Dongguan, Zhongshan, Jiangmen and Zhaoqing, will support by specialising in high-valueadded manufacturing, pharmaceuticals, energy and other industries. “The beauty of this integration is that one plus one no longer equals two; but two and a half or three,” says Lau of the potential spillover effects. With a combined urban population across 11 cities of 54 million – the UN forecasts a 30% increase between 2015-2035 to almost 70 million – the GBA dwarfs the US’s Northeast Corridor and the San Francisco Bay Area. As part of China’s Belt and Road initiative, the GBA is intended to serve not just an internal market but also neighbouring countries, and to compete with these megaregions: the high-tech cluster at Shenzhen with Silicon Valley, for example. As Lau explains, the GBA differs from the traditional Chinese model: it will be the private sector that will come up with the ideas and business policies; government will invest in the infrastructure projects, such as the Nansha Bridge, which opened in April 2019, that will provide the high-speed connective tissue. It will also have to balance the differences in the currency, tax, legal and financial systems in the cities. “The first thing the government is trying to do is enable the free movement of capital, information and talent in the region,” says Lau. Research published by RICS and Colliers International in a September 2019 report, Greater Bay Area: A 2030 Outlook, found that an additional 21m m2 (226m ft2) of office space could be needed by 2028 given the GBA’s forecasted economic growth (infographic, p15). And as infrastructure improves, activity that crosses administrative boundaries becomes more possible: 14% of Hong Kong occupiers indicated that they would like to expand into the other GBA cities. Given the relative high rents in Hong Kong, emerging office markets across the border could serve as more affordable alternatives to Hong Kong for incubators and start-up companies. The close proximity of the GBA cities means travel times between them are already lower – it takes less than an hour to travel between Hong Kong and Guangzhou, compared with more than three hours between New York Q1 2020 / MODUS APAC / 25

and Washington, for example. But it’s more expensive than travelling within your own city, so the next step is to bring down the cost. The biggest challenge, however, is attracting and retaining talent. “The skills gap among different cities in the GBA is big, with talent concentrated in the core cities. This can lead to unbalanced development,”says Alva To MRICS, vice-president and head of consulting, Greater China, at Cushman & Wakefield. He adds that progress is being made in the “demonstration zones” of the GBA, notably Qianhai, Hengqin and Nansha. “These new areas adopt special policies that are not enforced in the rest of China. For example, in tax and currency, or with incentives to attract talent such as special housing programmes.” Hong Kong citizens working in the GBA get a rebate for local tax so that their tax position, which is more favourable in their home city, stays the same on balance. There are also discounted office rents for companies in the innovation and technology sectors, or restrictive terms in the sales of properties that ensure real estate is for industrial development instead of speculation. Making the GBA as attractive as, say, Silicon Valley, New York or London for high-skilled talent is something the government is “very conscious of”, says Lau. Without it, the megaregion faces a considerable challenge.

Investment in infrastructure is key to the Greater Bay Area’s success. From West Kowloon station in Hong Kong (pictured), high-speed trains can reach Guangzhou in China in around 50 minutes

Railway

STRING population: 12.6 million

5 cities; 3 metropolitan areas

23 8,0 00 TE U

Akershus County

ton ne s;

Local potentials

in 2018: 295,000 dled han es icl eh

OECD Tl3 Regions

North Sea

Railway

Oslo to Copenhagen Fastest journey time: 7.5 hrs Potential high-speed rail journey time: 2.5 hrs

The embryonic plan: Scandinavia’s String D Partnership

Region Halland

Regional

Copenhagen

Region Skane

Malmö

Border crossing

500km

Inclusive labour market

Site

Timescale: hours

Øresund Region Baltic Sea

SchleswigHolstein

Region Zealand

Fehmarnbelt

Boost productivity 6

Cross-border transport

Coastline

POI 08

Coastline

Economies of scale

identity

Border crossing

Hamburg

94,000 km2

National boundary Elbe

Malmö

Traffic in 2018: 6.947m personal vehicles; 497,427 cargo vehicles 10.809m rail passengers; 8,745 freight trains

Gothenburg

Crossing between Denmark and Sweden

Region Västra Götaland

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Oslo

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Expansion

303,0

Western Scandinavia Population (1/3 of Norway + 1/3 of Sweden) = 5 million

Population: 1.4 million

layered objective subjective

author

candinavian cities tend to have small, dispersed populations. Notable concentrations are only found around the four metropolitan areas of Oslo, Gothenburg, Copenhagen/Malmö and Stockholm. Since the Øresund Bridge opened in 2000, linking the Danish capital with the Swedish port city of Malmö, a small number of projects have emerged making the case for how the success of the cross-border crossing could be extended on a Scandinavian scale. “The lesson we learned from Øresund is that physical infrastructure – in this case the bridge – forms the basis for integration,” says architect Floire Nathanael Daub, partner at Oslo-based Spacegroup. Until 2014, Daub led a three-year EU-funded project called the Scandinavian 8 Million City: a high-speed train link that would connect Oslo with Copenhagen via Gothenburg and Malmö, cutting the journey from eight hours to two-and -a-half, and creating a cross-border labour market of

CROSS-BORDER CLUSTERS

STOCK OF THE BAY The total combined grade A office stock of Hong Kong, Shenzhen and Guangzhou is around 212m ft2 (20m m2). To keep pace with forecast GDP growth, this will need to double by 2028

KEY

2,452 TOTAL STOCK (M2)

2028 2027

NEW SUPPLY (M2)

2026

GDP ($BN)

2025

2,279

2024 2023 2022 2,115

2021 2020

1,954

1,797

1,649

2,739,375

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4,13

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1,8

,864 2,233,165

Q1 2020 / MODUS APAC / 27

28 / MODUS APAC / Q1 2020

We’re seeking to learn lessons from successful city clustering, through the exchange of ideas and expertise. Join us: rics.org/wbef

Opened in 2000, the Øresund Bridge connects Copenhagen in Denmark with Malmö in Sweden. Nearly 7 million personal vehicles and 500,000 cargo vehicles crossed the bridge in 2018

PHOTOS BY GE T T Y

8 million people, 29 universities and an additional 44,000 companies every year, based on Spacegroup’s analysis. The goal was to mirror the cross-border planning approach used for the Øresund Bridge to obtain a collective agreement from the Scandinavian governments for the financing and development of 600km (373 miles) of double-track railway for intercity and high-speed trains on the Oslo-Gothenburg-Copenhagen route by 2014. When this was eventually derailed – by local resistance to the cost and the location of the line, says Daub – Spacegroup initiated a roundtable of private and public companies to see if a business case could be made without depending on state funding. Model forecasts, carried out by Atkins on behalf of 8 Million City, showed that high-speed rail in Scandinavia could be carrying 9.4 million passengers a year by 2024, comparable to the 9.7 million that Eurostar carries between Paris and London. “The Oslo-Copenhagen passage is not just important for the residents and companies – it also functions as an important gateway to and from Europe for the rest of Scandinavia,” says Daub. For example, most goods transported by land in Norway go via this route, and one-third of Swedish foreign trade passes through Gothenburg port. Analysis by 8 Million City showed that pathways for goods trains have already reached maximum capacity, as have – in places – the region’s motorways. Daub says: “If Scandinavia is to continue to develop, while also achieving its climate goals, we must create the conditions for green alternatives to passenger and freight transport.” However, he says the 8 Million City’s biggest challenge was always “aligning political interest across national borders and [making the respective governments] allocate the budgets needed to implement the project”. Unfortunately, no such agreements had been negotiated by the time the funding expired, and the project ended in 2016. Enter the String Partnership. Originally a lobby group for the Fehmarn Belt Link – a road and rail tunnel that will connect Germany with Denmark under the Baltic Sea – String, which has 13 members made up of mostly city and regional government bodies, has now turned its attention to regional development and green growth.

Building on 8 Million City’s work, it has expanded the high-speed rail corridor to include Hamburg, creating a potential megaregion of 12.6 million people, and doubled down on the narrative around green growth. “We asked our members: what do you want to do with this connectivity?”says String’s managing director, Thomas Becker. “We want to define what we are going to live off in the future, when the old industries are disappearing.” With a disproportionate number of green industries and engineering talent in Europe based in this region – from world-leading solar cell manufacturers in Norway to powerhouses such as Volvo, which is now only producing hybrid and electric cars – String created a new strategy: to become the green industrial hub of Europe. Although vague attempts to do the same have been made in the Netherlands and Belgium, Becker says its main competitor is Singapore, “which has invested heavily to be able to make this claim”. Nevertheless, he believes the String corridor has a competitive advantage: people in the region tend to be well educated, it has a high GDP and there are few cultural differences between the countries. Now it needs the infrastructure. String has signed an agreement with the Organisation for Economic Co-operation and Development (OECD) to conduct a costly mapping project of the strengths and weaknesses of all the regions involved. The report will provide a set of actions that need to be met for the project to achieve its goal. “This is not a done deal,” says Becker. “You need governments to make a treaty at a national level for the String area to become a green investment hub. But it would be a pity to miss this opportunity.” n

FEMALE (% INCRE A SE)

5.7

6.1

5.9

5.7

5.5

5.3

5.2

5.0

4.8

4.6

4.5

6.8

7.4

7.9

7.7

7.6

7.4

7.3

8.2

55-59

50-5 4

45-49

40-4 4

35-39

30-3 4

25-29

20-24

15-19

10-14

5-9

0-4

AGE 9.4

8.9

1950

8.2

8.4

8.3

7.7

6.9

7.1

7.2

20 45

6.1

6.2

5.7

6.1

5.9

5.7

5.4

5.2

5.0

4.9

4.5

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85-89

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7 5-79

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70-74 6.2

THE AGEING CITY

2.9

3.8

4.2

4.7

5.8

6.1

60-6 4

65-69

6.2

6.1

4.9

4.0

3.3

In 1950, the proportion of people living in the developed world over the age of 65 was 8%. By 2045, it will be 25% (see left). Coupled with a rapid rate of urbanisation, it’s clear a seismic shift in global demographics is under way. But with today’s cities growing to serve the needs of their largely young, working populations, are we in danger of creating places wholly unsuited to their older, future residents?

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WORDS BY STUART WATSON

Q1 2020 / MODUS APAC / 31

he developed world is facing an unprecedented demographic change. While Africa, the Middle East and South Asia experience a youth boom, among OECD countries the trend is going the other way. The proportion of people aged 65 and above will rise from 16% today to 25% in 2045, as an additional 146 million people join the age group. The redrawn demographic picture will pose a challenge in many areas of the economy and society, not least the built environment. Over the past decade, policymakers in many countries have begun to favour “ageing in place” solutions, which encourage people to remain in their homes for as long as possible as they get older. The trend has been driven partly by necessity, because of the increasing cost of providing sufficient residential care places, and partly by the growing preference of older people to remain in their own homes. “Ageing in place puts a premium on making sure their environment is fit for purpose,” says professor Chris Phillipson, a director of the Manchester Institute for Collaborative Research on Ageing. “People are ageing in neighbourhoods that undermine their independence and that has to be sorted out, both inside their homes and in terms of mobility and access to services and resources outside the home.” Many existing homes are too poorly designed to be adapted for older people, which is why there is a strong case for new homes to be built to “lifetime home” standards, offering features such as space for wheelchair access and the installation of stairlifts, argues David Sinclair, a director at London-based thinktank the International Longevity Centre. “The vast majority of older people live in generalneeds housing across the world. If you are talking about improving housing you can have the biggest impact and address the biggest need by helping the millions of people who will stay in their own homes.” In the Netherlands all new houses are now built to such standards, and in some parts of the country that is beginning to influence the long-term value of properties, says Joël Scherrenberg MRICS, principal of specialised valuation practice Scherrenberg Groep.

“ TODAY’S ELDERLY DO NOT WANT TO RETIRE TO AN ISLAND OF OLD AGERS AS THEIR PARENTS DID ” SCOT T ECKSTEIN ACTIVE LIVING INTERNATIONAL

“The ability to use the home for as long as you need it is an element of sustainability more broadly and where the market is in balance, sustainability is becoming increasingly important to buyers. Whether the house can be adapted for older people is one of the elements that they take into account, and therefore has an impact on value,” he argues. Meanwhile, technology could play a role in facilitating a better quality of life for people ageing in place, suggests Scott Eckstein, the Los Angeles-based MD of senior accommodation consultant Active Living International. “Digitalisation and the shared economy will make it easier for seniors to make connections with people like stayat-home moms who want to earn money by caring for them.” Young at heart Earlier generations have chosen to retire to the seaside or country, or in the US to large purpose-built retirement communities. But today an increasing number of older people are favouring an urban lifestyle because they want to stay close to their existing family and social networks, amenities such as shops, and healthcare and cultural facilities, says Eckstein. “They do not want to retire to an island of old agers as their parents did. They will want to be around things, to volunteer, to see their kids, to go back to school, to travel.” However, many cities are poorly designed for an older population, as Sinclair explains: “Part of that is because the urban fabric takes a very long time to change, but another aspect is that a lot of economic imperatives for investing in the built environment are associated with work. For instance, transport networks are focused on getting people to and from work quickly.” The World Health Organization (WHO) has attempted to address the issue by founding a global network for age-friendly cities. Since 2015 participating cities have introduced measures such as better access to public transport, street seating and public toilets, clearer signposting, and initiatives to keep pavements free of obstructions. Enabling mobility is a crucial element of age-friendliness, says Phillipson: “When you ask older people what would most improve the quality of their life, transport is the thing that often comes up, usually access to a bus service where they have extra time to get on and off.” Meanwhile, Eckstein suggests that if the predicted advances in autonomous vehicles eventuate, driverless cars will provide a more user-friendly, personalised means of transport for the elderly. Graham Parry, group research director at property company Grosvenor, and author of the 2018 Silver Cities report on planning for an ageing population, says that while some property investors understandably choose to target their equity on growing cities with younger populations, inevitably those markets tend to be much higher-risk and less mature in terms of institutional capital requirements than established markets with ageing populations. He argues that investors who fail to grasp the opportunity presented by well-heeled senior citizens could be missing out: “The baby boomers will be the richest generation ever to retire. They have enormous spending power and they are probably going to be enjoying a longer period of retirement than previous generations.” That could be a boon for declining town centres if they can adapt to serving the needs of older people, suggests Sonia Parol, head of

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GREY AREAS By 2030 there will be a high proportion of elderly people in over 30% of the OECDâ&#x20AC;&#x2122;s top 100 largest cities. In Berlin, Hong Kong, Milan and Tokyo, more than 25% of residents will be over the age of 65.

SOURCE: GROS VENOR, 2018 ( THIS PAGE AND PRE VIOUS SPRE AD)

2015

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BERLIN 20 / 26

BUENOS AIRES 11 / 14

C APE TOWN 6/8

HONG KONG 16 / 27

L AGOS 2/3

LONDON 13 / 16

MADRID 16 / 22

ME XICO CIT Y 7 / 12

MIL AN 22 / 27

MUMBAI 27 / 10

NAIROBI 14 / 18

NE W YORK 15 / 20

PARIS 14 / 18

RIO DE JANEIRO 10 / 16

S AN FR ANCISCO 15 / 19

SHANGHAI 11 / 21

STOCKHOLM 16 / 18

SYDNE Y 14 / 18

TOK YO 24 / 29

VANCOUVER 13 / 19

Q1 2020 / MODUS APAC / 33

care and retirement living at east Midlands-based architect Urban Edge. “An active third age can contribute to both the economic and social life of the country and help retailers and the high street.” Not every older person will want – or have – the opportunity to age in place, so more specialist senior housing will be needed accommodate the growing aged population. “The baby boomers who are approaching retirement age now have completely different requirements and expectations to the generation before them, says Parol. “This is the right time to come up with new solutions.” Valuable lessons Because senior housing is less efficient in its use of floorspace than general housing, it requires a different viability model, argues Laurence Liauw, a director at Spada Health Concepts and adjunct associate professor at the University of Hong Kong (box, right). “You can’t value senior housing in the same way you value normal housing because of the functional and design differences,”he says. “Surveyors need to push this with governments and developers to incentivise development. That difference has to be in the valuation of a project for it to be built, and it has to be funded with a different model.” Liauw says that in most developed countries older people often choose retirement communities in preference to nursing home models of accommodation. “We see diversification towards retirement living more like a healthy lifestyle hospitality product for seniors, but with nursing care under the same roof so that there is a continuum of care for people to live well together, rather than a facility where you go to die.” These facilities are often called continuing care retirement communities (CCRCs). One of their benefits is that seniors don’t have to move as their health declines, but some older people still feel segregated from the rest of society. Eckstein predicts the emergence of more “naturally occurring” retirement communities, which he describes as “CCRC without walls”, and which would be constructed near to existing town centres, or with their own newly created town centres. He suggests that settlements could be built with features that allow them to be adapted as the inhabitants age, with more care services gradually being bought in by the community as they grow older together. Julia Park, head of housing research at architect Levitt Bernstein in London, foresees the growth of less institutional, grassroots-led co-living set up by older people who find themselves alone in later life and would prefer company – although she concedes that such schemes are difficult to deliver. Like other experts in the sector she sees the future of elderly housing in more integrated, multigenerational communities. “The breakthrough is that most of the accommodation for older people that is being built now looks like ordinary housing,”she says. “Many of us are thinking of moving into towns as we get older, so we are likely to live in apartments with lift access in a mixed-generation block. They may be located on the lower floors and be slightly bigger than those for younger people, and there will be some sort of common space. The future of housing generally is a much more age-friendly model.” n How do we create cities that can adapt to changing demographics and other global trends such as rapid urbanisation, climate change and resource scarcity? We explore at rics.org/newsmartcities 34 / MODUS APAC / Q1 2020

HONG KONG: EPICENTRE OF THE AGEING CHALLENGE Housing elderly residents in a high-rise society “China and Hong Kong are at the epicentre of the challenge of an ageing world,” notes Spada Health Concepts’ Laurence Liauw. “Japan’s ageing population is nearing its peak, but Hong Kong has the longest life expectancy of anywhere in the world and China’s curve is getting steeper. Governments must do something about this now.” While much of South Asia is experiencing a youth boom, China’s ageing trajectory is following that of the developed world, partly because of the now-abandoned one-child policy, says Liauw, threatening a slowdown in economic growth similar to that seen in Japan. Meanwhile in Hong Kong the proportion of the population aged over 65 will leap from 18% today to 30% in 2040, predicts Marco Wu FRICS, former chairman of the Hong Kong Housing Society. In recent years the public housing provider has introduced pilot projects in an attempt to show the way forward. An ageing-inplace scheme has been established for residents of its subsidised housing blocks, which funds age-friendly adaptations and provides some health and social support. For the mid- and high-income brackets, senior citizen residents’ schemes have been trialled. In a high-rise society with some of the most expensive property prices in the world, developing age-friendly housing is challenging. The supply of land in Hong Kong is insufficient to meet demand, but many older people are reluctant to leave their communities for schemes built on cheaper plots further out of the city, says Wu. He believes that Hong Kong’s culture, in which it is usual for several generations of the same family to live in close proximity, may help the city to adapt as its population ages. “In the future we need to aim to create more mixed housing with blocks for the elderly close to blocks for the younger generation, so that they can look after each other,” argues Wu. “That is easier to do in the public sector, but if we are successful, I am confident the private sector will follow.”

Smart Buildings Conference 2020 23 April 2020, Singapore Themed “Advancing into the Future: Innovate, Improve, Integrate”, the conference aims to realign and reinforce the vision to push boundaries, relearn continuously, and synergise new opportunities and insights – to transform and strengthen the future of the build environment.

Conference highlights: • Keynote Address: 5G Advancement and Smart Cities of the Future • Regional Smart Cities & Estates: A Focus on Vietnam & China • Smart Investment in Asia • Operational Efﬁciency Through Digitalisation: Asset Enhancement Initiative (AEI) Transformation • Integrated Smart City Solutions • Smart Agriculture Disruption • Advancing Towards Sustainable Development Goals • The Leadership Summit: Future of Work • Latest Legal Developments and Its Impact to the Build World #RICSSmartBuildings

Registration now open at rics.org/smartbuildings

Itâ&#x20AC;&#x2122;s estimated that as much as 75% of the infrastructure needed to support the growth in global urbanisation has yet to be built. So can fast-sprouting cities in Africa and Asia take advantage of technological innovation to leapfrog over their developed counterparts?

LEAPFROGGING

WORDS BY GREGORY SCRUGGS

The cinematic adaptation of Marvel Comics’ Black Panther was a box office smash. Among its fervent fans? Urbanists. The glimpses they saw of Birnin Zana (Golden City), the capital of the movie’s Afrofuturistic utopian nation Wakanda, were a fantasy vision of 21st-century city planning come to life. High-rise density with loose zoning allows for a mix of architectural styles and self-built housing modifications. Grade-separated rapid transit and self-driving vehicles zoom through the air with nary a private car to be seen. The bustling but verdant capital, meanwhile, is surrounded not by suburban sprawl, but by agricultural villages and preserved natural landscapes. For Aimee Gauthier, chief knowledge officer at global thinktank the Institute for Transportation & Development Policy, Wakanda illustrates an idealised form of

so-called leapfrogging: how cities in the developing world can skip over stages of infrastructure development – some of them not necessarily desirable – that characterise the legacy cities of the developed world. “Since World War II, cities have been designed around the car. What’s next, what’s post-car?”she asks. “Wakanda is a reference point for a city based on walking and transit. Leapfrogging over car ownership is the goal, and Wakanda shows us multimodalism facilitated through technology.” Answering “what’s next?” is a crucial question given the predicted increase in the planet’s urban population from 55% in 2018 to 68% by 2050, mostly in Africa and Asia. According to a 2014 report by Global Infrastructure Basel, 75% of the urban infrastructure needed to accommodate these new city dwellers has not yet been built. But

how much of what is needed can leapfrog over today’s developed cities? Experts in different sectors of urban development see the potential for leapfrogging, especially in certain institutional arrangements, but caution there are key fundamentals that no city can afford to ignore. If a comic-book-turned-film version of urbanism seems too fanciful, Gauthier puts a scene from Black Panther side by side with a photograph of Dar es Salaam, Tanzania. In the former, a streetcar powered by vibranium, the fictitious metal that fuels Wakanda’s economy, mixes with pedestrian traffic and shopfronts. In the latter, Africa’s first goldstandard bus rapid transit (BRT) line, opened in 2016, runs through a transit-andpedestrian mall in a not-dissimilar scene in downtown Dar. Although this BRT line only accounts for a fraction of commuters Q1 2020 / MODUS APAC / 37

Cities such as Nairobi are leapfrogging the exclusively centralised approach to utility provision of their legacy counterparts. The Kenyan capital is predicted to have as many as 3,000 energy microgrids by 2021, and already has more than 150 solid waste companies, helping to drive lower prices and better service

in the Tanzanian capital, Gauthier sees it as evidence of the potential for fast-growing cities in the Global South to surpass some of the developed world’s mistakes. Upwardly mobile Arguably the best example of leapfrogging also comes from Africa. Landline phones, which have gradually given way to mobiles in the developed world, simply never took hold on the continent. A 2015 Pew Research Center report, Cell Phones in Africa: Communication Lifeline, found landline penetration near zero, while mobile phone ownership ranged from a low of 65% in Uganda to 89% in South Africa, a rate on a par with the US and not far off the UK’s 95%. Mobiles, in turn, have assumed an even more central role in daily life. Services such as M-Pesa, Kenya’s pioneering mobile payment system that can send and receive money with simple SMS technology, have come to replace traditional bank accounts. Could this kind of technological leapfrogging have implications for the built environment? Antton Nordberg, co-founder of Singapore-based real estate technology platform Talox, certainly thinks so. “The nature of the problem in Asia is more ripe for mobile solutions than in the West,” he says. “In Asia, you have a few billion people who don’t have access to traditional banking

services. Will these apps go into the mortgage business as part of their service line?” Already, the Weilidai loan product offered by Tencent, the parent company of Chinese app juggernaut WeChat – a combination social media platform, messaging service and mobile payment tool – has a retail loan balance of at least RMB100bn (£11.4bn), comparable to that of major Chinese banks. However, the service does not yet offer mortgages, which comprise the bulk of traditional banks’ balance sheets. If they do enter the mortgage business, Nordberg speculates, “This might have some interesting consequences in the residential market.” For example, lower- or middleincome prospective homebuyers unable to amass large deposits may find other entryways into property ownership, which could boost demand for new formal residential developments as Asia’s upwardly mobile population transitions out of rental or informal housing. Other prognosticators of future cities see the roots of an even more ambitious leapfrog in property markets driven by the rise of the sharing economy, such as the ride-hailing services Uber, Lyft and Grab. “From an asset perspective, ride-hailing means city dwellers might not need to own and maintain a car with all the burdens of car ownership,” says Sameh Wahba, global director of the World

Bank’s urban land portfolio. “Will fractional ownership or alternative forms of housing lead to a scenario where you don’t need to own a house, which might reduce one’s economic mobility?” Such prospects might dispense with traditional asset ownership models, such as homes purchased with mortgages, that have been the bedrock of urban property markets. Along with the increasing popularity of remote working, Wahba believes the rise of a “footloose urban population” that can choose to locate not based on job is a trend with which competitive cities must reckon. Suddenly, the amount of Class A office space available in the traditional CBD is less important, he argues, than the quality of life the city offers. “With technological advances, people are less physically attached to these key assets that made the city what it is – a housing market and workplace with residents commuting,” Wahba says. “Instead, what will end up shaping the cities of the future will increasingly be access to specific types of services that cannot be substituted, such as higher education, and amenities like museums and parks that increase liveability and attract a more mobile workforce.” Whether and how rising cities become magnets for this globalised workforce, however, is a competition to be waged by

LEAPFROGGING

A roadside store in Ntulele, Kenya, offering the M-Pesa mobile-based money transfer service. Launched in Kenya in 2007, M-Pesa has revolutionised banking in Africa, using simple SMS-based technology to enable users to deposit, withdraw and transfer money, and pay for goods and services, with their phone

IMAGES BY GE T T Y

relatively few superstar cities. Across much of the developing world, there are still more mundane challenges to be solved, such as reliable electricity and adequate sanitation. Mini markets Even in those more traditional development fields, there is the potential to leapfrog the exclusively centralised approach of legacy cities, which built energy and sewage systems across an entire metropolitan area managed by a single public or quasi-public utility. “The ability to not be so bound by centralised, heavy infrastructure that’s not nimble or adaptable is useful, especially from a resilience perspective,”says Gabriel Pincus of Chemonics, an international development firm based in Washington DC. For example, German energy consultant TFE Consulting predicted in its 2017 report Kenya: The World’s Microgrid Lab that the country’s 65 microgrids are poised to expand to 2,000-3,000 by 2021, a market worth some $1.5bn. Meanwhile, mobile payment, the aforementioned M-Pesa platform, is driving Kenya’s rapid adoption of dieselelectric hybrids as it provides a widespread, reliable way for low-income consumers to pay for electricity on demand. Granted, much of the need for energy and sanitation is in rural areas, but as Africa and Asia urbanise, those lines become more

blurred. So-called peri-urban areas, which were farmland a generation ago but now offer cheap housing for commuters to the big city, are ripe for this kind of leapfrogging. “Where you are most likely to see leapfrogging is in peri-urban and unplanned areas of cities where centralised infrastructure doesn’t reach in a way that can meet the needs of the people living there,” Pincus explains. He points to septic systems as a type of infrastructure that can be more adaptable to the needs of a growing city. But the biggest change may come in how fast-urbanising cities manage these systems. Pipes have transported water at least since Roman times and there is no obvious way to leapfrog that technology, but how consumers pay for water, sewage and electricity is open-ended. “Moving from a centralised utility to a system where you may have multiple service providers or mini-utilities is more revolutionary than any kind of physical technology,”Pincus says, pointing to the 150plus solid-waste companies that compete in Nairobi. He believes that with the right regulation in place to ensure the poor get adequate waste collection, and providers adhere to environmental standards, such a model can reduce prices and improve service. This focus on business models squares with the rhetoric around leapfrogging observed by Pontus Westerberg, UN-Habitat

programme manager and point person for the intersection of technology and urbanism. “Many cities in the Global South may not need more regulation, but they need to get away from informal systems and have more formal governance, revenue collection and planning systems,” he says. “If leapfrogging becomes less about technology and more about deregulation, I’m not sure we’re achieving the kind of goals we want to see, which are well functioning, financed, planned, governed cities.” For Westerberg, the optimism embedded in leapfrogging masks hard economic realities. Seeing BRT as a way to leapfrog high-capacity transit is a fallacy. “We need to recognise that Johannesburg or Nairobi would love to have a subway system if they could afford one,” he says. Instead, Nairobi is stuck with some of the world’s worst traffic, driven in part by too few intersections – just 40 per km, well below UN-Habitat’s standard for a functioning street grid. To that misstep, Westerberg draws a simple conclusion: “Technology can have a big impact, but at the end of the day we can’t forget urban fundamentals.” n Through the exchange of ideas and expertise, we’re seeking consensus on how urbanisation can be managed humanely and sustainably. Join us: rics.org/wbef Q1 2020 / MODUS APAC / 39

TEACHING NEW TALENT

Filling the skills gaps faced by the built environment sectors is not simply a matter of finding more young entrants: it’s about developing a new generation that can lead in a world undergoing continual technological, economic and political disruption. But these three inspiring teachers are finding a way…

HOW TO TEACH THE NEXT GENERATION

WORDS BY CLARE DOWDY

CRE ATING THE DIGITAL ARCHITECT ASSOCIATE PROFESSOR M. HANK HAEUSLER (OPPOSITE), DIRECTOR OF COMPUTATIONAL DESIGN, UNIVERSIT Y OF NE W SOUTH WALES, SYDNE Y, AUSTRALIA

ver the next 10 years, engineering and architecture will go through the sort of transformation that Uber and Airbnb have forced on the transport and hotel sectors respectively, believes M. Hank Haeusler. And that will be down to computational design. “Architecture’s workflows will be automated and design as a production will be done by a group of computational designers developing workflows similar to apps,” he predicts. As director of computational design at the University of New South Wales, Haeusler’s teaching and research are driven by the belief that data, collected and evaluated by his faculty colleagues, provides vital information about the built environment. This data can be used as input variables for custom-made computational tools. Such tools can then be used by architects, urban planners and designers to generate advanced designs, and to optimise workflows in the architecture, engineering and construction sectors. His is the only bachelor degree in computational design. “We look to equip students with tools and techniques of the 21st century,” he says, citing digital fabrication, AR, VR, mixed reality as well as machine learning, “all in combination with strong theory background. We’re educating the 21st-century thinker.” The curriculum has only included machine learning since 2017, and Haeusler admits that three years ago, it wasn’t on his radar. He foresees that “machine learning will be a major game changer, the same as electricity was 100 years ago”. In fact, the whole course is regularly updated. “If we snooze, we stop being innovative and being careful about how the industry will move in the future, so we constantly update.” Haeusler sees the department’s role as educating students to be computational tool makers. “Everyone who’s involved in making cities [from architects, engineers and urban planners to bankers and lawyers] will have that discussion on a computational platform.” From day one, the students are taught programming skills, starting with Grasshopper – the programme in which most Zaha Hadid buildings are modelled. Students apply their learning to real-life scenarios. Recently, they were tasked with creating an artificial Q1 2020 / MODUS APAC / 41

sea wall for Sydney’s new 861,000 ft2 (80,000 m2) fish market, which is being designed by Danish architect 3XN and is due to complete in 2023. The students have applied advanced computational methods to the green engineering of coastal infrastructure to provide new habitats or “bio-shelters” for marine life. “We are mixing local oyster shells into the concrete to design a site-specific material,” he explains. The course, which has been running since 2015, takes on 40-50 students each year. Haeusler estimates that 70-80% of his graduates have found jobs in Sydney’s principal architecture and engineering firms. There’s also increasing demand from companies such as LendLease and Arup, says Haeusler, “because of the ability of a computational generalist to be trained in the practice”, in, for example, the field of transport. “I hear from the industry in confidence, that before they would have hired three architecture students, but now they hire one computational design student.” Such is the interest in the subject, that Haeusler is publishing a book about his teaching and research, Computational Design – From Promise to Practice, which is due out this month. He concedes that: “none of us really knows what the future will bring. But having design and a critical understanding of what digital technology can do, and what humans can do better – an ethical and aesthetic understanding of those ideas and what the challenges are – would enable [my graduates] to be futureproof.”

THE SCHOOLS SHOWCASE FOR SKILLS ALISON WATSON, CEO, CL ASS OF YOUR OWN, UK

lison Watson is on a mission to tackle the dearth of young talent in the industry. In the early 2000s she was a land surveyor on the Building Schools for the Future programme, a government investment scheme for secondary schools in England. Her frequent site visits led to many conversations with curious school kids. “I helped them to understand that the built environment was made up of specialists.” It struck Watson that as well as getting out on site, these children should be engaging with the built environment through digital technology. “The kids were all computer geeks.” Inspired by these experiences, Watson took some time out of work and devised a curriculum called Design Engineer Construct! (DEC). The accredited learning programme launched in 2012 and was soon expanded to include children up to the age of 18.

“ THERE’S EVERY CHANCE WE’LL SEE SKILLS SHORTAGES GET WORSE BEFORE THEY GET BETTER ” ALISON WATSON (ABOVE) CL ASS OF YOUR OWN

DEC applies pure academic subjects to the latest construction industry practices. Students work their way through an online workbook, developing their skills by undertaking a sustainable building project. And through the complementary workshops, they have face-to-face engagement with industry professionals. “The result is young people with real-world practical experience and employability skills,” says Watson. “They get to understand everything from site information to environmental surveys,” she says. So rather than just thinking of bricklaying, these students gain knowledge about built environment careers such as surveying, architecture, engineering, construction management and sustainability management. To complement the curriculum, Watson wrote a teacher training programme, because “most of our DEC teachers have no prior experience of the built environment”, she says. She believes that there are opportunities for cross-curricular learning with subjects including maths, English and science as well as with other aspects of the wider curriculum such as citizenship and personal, social and health education. To help fund the programmes she set up an adopta-school scheme for industry. To date, 45 firms, among them Arup, Balfour Beatty, Buro Happold and Mott MacDonald have committed to funding a two-year programme. The result is young people with real-world practical experience and employability skills. DEC graduates have found jobs at Arup, Laing O’Rourke,

IMAGES BY JOE WIGDAHL (PRE VIOUS SPRE AD); ROSCOE RU T TER

TEACHING NEW TALENT

Mott MacDonald, Atkins and WSP, to name just a few. Others have gone on to Anglia Ruskin, Liverpool John Moores and Sheffield Hallam universities. Such is the success of DEC, that – despite being run by a small team at Watson’s not-for-profit company Class of Your Own – it’s going international from this month. DEC is taught in schools in the US, Malaysia, Thailand, Ireland, Lithuania and Dubai. Watson and her team work closely with a handful of teachers in each country “to ensure DEC is mapped to the national curriculum and local legislation” such as planning law. Meanwhile in the UK, the DEC curriculum is being used in 71 schools. However, as government education policy transitions to T-levels for skills development, that figure will fall, “which is crazy given the skills shortage”, says Watson. “Time will tell whether English DEC schools will disappear altogether.” Launching in September 2020, T-levels are an alternative to A-levels that offer a mix of classroom learning and “on-the-job” experience. Like DEC, they’ve been developed with employers and businesses to meet the needs of industry and prepare students for work. “Given the university, industry and professional body support for DEC, I sincerely hope ministers might consider the impact DEC has on young people’s aspirations and teachers’ development, but it’s doubtful. I think there’s every chance we’ll see skills shortages in England get worse before they get better. By then,” cautions Watson, “it might be too late.”

BUILDING THE FOUNDATIONS FOR INDIA ’ S FUTURE PROF MONA N SHAH: DE AN OF RICS SCHOOL OF BUILT ENVIRONMENT, AMIT Y UNIVERSIT Y, NOIDA, INDIA

ona Shah has been working as an academic in India’s up-and-coming sectors of real estate, construction and smart infrastructure since 2000. “The construction sector when I joined was very basic, driven by brutal government contracts and undertaken with public money,” she says. “The casualties were quality and a long-term vision.” The present government’s goal is to make India a $4-5tr economy by 2024. “We will be able to raise people out of poverty,” she says. And to do that “we need better physical assets”, hence prime minister Narendra Modi’s focus on infrastructure and real estate. The trouble is that there’s a skills shortage. India has a requirement for 45 million people in construction at different levels, including 1.7 million skilled people every year, according to Shah, who admits that “we’re producing only a few thousand” annually. Q1 2020 / MODUS APAC / 43

44 / MODUS APAC / Q1 2020

“ I TAKE THE LONG-TERM VIEW, EQUIPPING [STUDENTS] FOR 40 YEARS OF PROFESSIONAL LIFE ” MONA SHAH (ABOVE) RICS SCHOOL OF BUILT ENVIRONMENT

These jobs come in part through the close contact her departments have with industry. Which is good news for not just the students but their parents. “Unlike other places where students enrolling in higher education do so by choice and are mostly self-funded, in India it’s the parents who largely influence these decisions.” Middle-class parents take a loan out, which means “our students are coming here on the basis of somebody’s asset sacrifice”. So Shah’s responsibility is to those parents as well as to Indian infrastructure. And she takes this seriously. “We are giving a person to society and we have to be extremely careful what we are sending out. It’s my job to give them the right inventory and ammunition.” n The speed of change across our sector makes it imperative that we become more agile in the way we qualify, train and develop the profession. We explore these challenges at rics.org/futures

IMAGES BY ABHISHEK B ALI

One person who can’t be blamed for that skills gap, though, is Shah. Over the last two decades, she has taught an estimated 15,000-16,000 built environment students. These graduates, she believes, have the potential to improve the productivity and standards of India’s construction and infrastructure industries. “We want managerial-level people to be the harbingers of change so that better practices are initiated.” Before she took over as dean of the RICS School of Built Environment in July 2018, Shah was dean of the National Institute of Construction Management and Research. There, she developed four new postgraduate programmes in the areas of real estate, infrastructure and smart cities. “The responsibility of having to pioneer these programmes and to enthuse students to subscribe, and the industry to accept them, meant that only innovation would help.” So she introduced some novel techniques, from using the board game Monopoly to teach about real estate transactions; to explaining project management imperatives using Sun Tzu’s The Art of War. She’s also keen to wean students off rote learning “which is typical in our culture”. These approaches are likely to be embedded in the new programmes she’s now working on at Amity. It’s not just rote learning that is in Shah’s sights. In India, students from technical backgrounds get little opportunity to develop soft skills. “Graduates can struggle with being challenged in front of an audience, or even putting points across confidently. Students come with a huge expectation of getting rid of these deficiencies when they enrol with us.” She’s also into character building. In her previous position, Shah introduced a series of leadership talks, where the top brass from all walks of life – industry, community, government, the armed forces, self-help cooperatives – were invited by the students, thereby exposing them “to various concepts and theories of leadership, ethics and values”. And Shah believes that built environment students must be sensitive to fast-depleting natural resources and challenges to our quality of life. “To that end, the culture of frugality in the use of natural resources is to be inculcated. Frugal innovation, value engineering, affordability, alternative materials and technologies are concepts that need deep embedding in their learning.” India’s built environment industries are peppered with Shah’s alumni at vice-president and general manager level, or as founders of start-ups. “When I start a programme, I take the long-term view, equipping them for 40 years of professional life.”

CPD Days

2020 Do you want to advance your professional development whilst expanding your professional network? The inaugural RICS CPD Days in Australia and New Zealand are a series of innovative events that will be changing up the way we deliver professional development opportunities. For professionals in the Quantity Surveying and Construction, Commercial Real Estate and Valuation spaces, this is a rare opportunity to receive in-depth discussion and learning and expand their network beyond their own field. Learn more by visiting

rics.org/yourcpdday

EXPERIENCE

WAY TO GO

JOSEPHINE LEE DIRECTOR, REGIONAL BUSINESS DE VELOPMENT, KNIGHT FRANK SINGAPORE

Josephine Lee won the Property, Infrastructure and Construction category at last year’s Women of the Future Southeast Asia Awards for her work as an inspiring emerging leader. After joining Knight Frank seven years ago she spent two years in China before returning to Singapore to oversee the property portfolios of global brands. How did you get started in the industry? It was around 2002. People were telling me that real estate was a sunset industry. I’d dispute that – no matter whether the economy is going up or down, you still need a roof over your head. I thought: why not give it a go? I’m very fortunate that I made the choice to study real estate at the National University of Singapore, graduated in 2007 and discovered an industry that I truly enjoy working in. You were seconded to China as Knight Frank interim head of the Beijing office services team. What was that like? It was exciting but challenging. Running a brokerage team that was hired by my predecessor was a steep learning curve. I had to adjust to a very different business culture. There were a lot 46 / MODUS APAC / Q1 2020

more social engagements and meetings with governmental officials. I have learnt that one has to be consistent, flexible and appreciate that you are in a foreign land. It was daunting, but I’ve grown tremendously, both professionally and as a person. You’ve now returned to Singapore to lead Knight Frank’s regional business development across Asia Pacific. What’s been your most rewarding project to date? I recently finalised a 1m ft2 (92,900 m2) deal in the Suzhou Industrial Park near Shanghai, which took 26 months to complete. We have been thrown many curveballs and there’s been a lot of government hoops to jump through. I’m really glad to be part of this team; we’ve worked very hard to close this deal and it’s proof that having the right people in place is vital to the successful delivery of a project. How do you get the best out of your team? By harnessing each other’s strengths, empowering the team by giving them responsibility and trusting them to deliver. In the face of challenges that a team member cannot overcome, they should be comfortable enough with each other to be open about it so we can all work together to address the matter. It’s never a solo effort. What is the most important skill or personal quality needed to succeed in a job like yours? You have to lead by example, and have integrity and humility. Arrogance will not serve you well in the long term. Being a great listener and being open to others’ perspectives is key. As a woman who’s progressed to high levels in the industry, do you feel like an outlier? Or is it becoming more the norm? I do feel like an outlier. On the whole there are still very few female leaders, particularly in our industry. The current crop are strong women who have paved the route for people like me, and I am grateful that we are having this conversation to increase awareness. Where do you feel the built environment is in terms of diversity and inclusion? It’s great that corporations are looking closer at these issues and announcing more female leadership. Places that you would assume are male dominated, such as China and Japan, are making efforts to support upcoming female leaders. But how many corporations are actually implementing the structures that allow the middle managers to develop these leadership qualities? Diversity and inclusion is not only about gender, it must also ensure that people of any sexual orientation, race and age have equal opportunities. RICS is a proud sponsor of the Women of the Future Awards. Submit your nomination at womenofthefuture.co.uk

INTERVIE W BY OLIVER PARSONS; PORTR AIT BY BOB AN JAMES

“ You have to lead by example, you have to have integrity and humility ”

XXXXXXXXXXXX 2018 / MODUS / 47

Mediation Training Programme Embracing both facilitative and evaluative approaches, the programme will prepare you to mediate the most complex disputes to the highest standards across land, property, construction and infrastructure. Kuala Lumpur: • 23 - 27 March 2020 • In collaboration with Asian International Arbitration Centre (AIAC) Singapore: • 30 March - 3 April 2020 • In collaboration with Real Estate Developers' Association of Singapore (REDAS) Entitles you to apply for admission to the RICS International Panel of Dispute Resolvers upon successful completion of the programme, which would allow you to be considered for appointment by RICS to act as a mediator. Recognised by International Mediation Institute (IMI), Singapore International Mediation Institute (SIMI), Chartered Institute of Arbitrators (CIArb) and Civil Mediation Council (CMC). Accredited by Singapore Institute of Legal Education (SILE) and funding available by Employment and Employability Institute (e2i) for Singapore's run.

Find out more at rics.org/SEAmediation

EXPERIENCE

NEWS IN BRIEF

TRAINING & EVENTS

INTELLECTUAL PROPERT Y VALUATION GUIDANCE UPDATED

UPDATES TO THE GLOBAL RED BOOK ARE NOW MANDATORY

We’re releasing our 2nd edition of the global guidance note Valuation of Intellectual Property Rights this month. It will provide guidance on tech-IP, brand-IP and artistic-IP, covered in the 1st edition, as well as guidance on data-IP, determining IP royalty rates and supporting IP debt financing. This is of particular importance to Asian markets as six of the 10 most prolific patent filers in the US are Asian companies. Also, several Asian governments actively support the development of IP ecosystems, making defensible and insightful IP valuations of fundamental importance. Read the guidance note at rics.org/guidance.

The Red Book has been updated. Changes to the International Valuation Standards (IVS), which the Red Book adopts and applies, as well as other changes made to the Red Book, reflect the growing importance of combining professional, technical and performance standards to deliver high-quality valuation advice. Compliance with the Red Book is mandatory for all RICS professionals. For more information, please visit: rics.org/redbook.

NOMINATIONS FOR THE SOUTHE AST ASIA AWARDS CLOSING SOON Nominations for the RICS Awards Southeast Asia will close on 17 April 2020, 18:00 (SGT). Teams and individuals are welcome to make nominations in 14 award categories that demonstrate how professionals use their skills to develop, regenerate and conserve the environment in which we live and work. To find out more, please visit: rics.org/SEAawards. BLOCKCHAIN: AN OPPORTUNIT Y FOR RICS PROFESSIONALS? In our recently published insight paper, we explore the application of blockchain to our profession through case studies. We assess the potential of the technology, as well as its limitations, and discuss exactly what the use of blockchain could mean for RICS professionals and regulated firms. Read the full paper at: rics.org/blockchain.

NE W CHAIR FOR OUR STANDARDS AND REGUL ATION BOARD Dame Janet Paraskeva, former Chief Executive of the Law Society of England and Wales has been appointed to lead RICS’ Standards and Regulation Board, which will have responsibility and accountability for the oversight and governance of all RICS’ routes into the profession, standard setting and regulatory activities in the public interest. The board will take up its responsibilities in March 2020. JOIN US AT THE REDAS-RICS SMART BUILDINGS CONFERENCE 2020 The third REDAS-RICS Smart Buildings Conference will take place in Singapore on 23 April. The conference, themed Advancing into the Future: Innovate, Improve, Integrate, aims to challenge traditional ways of thinking, encourage new learning and capitalise on the opportunities to transform and strengthen the future of the built environment. To find out more please visit: rics.org/smartbuildings.

RICS Awards China 2020 18 May, Shanghai Join us as we celebrate winning projects from 13 categories providing the perfect chance for professionals to demonstrate their expertise in shaping the built and natural environment. rics.org/chinaawards

MAL AYSIA

SINGAPORE

Real Estate Investment Trust Masterclass 12 March, Kuala Lumpur, Malaysia CPD: 6 hours MYR500 rics.org/SEAreit

Property Valuation Fundamentals 11 March CPD: 6 hours S$650 rics.org/ property-valuation

BIM Core Principles People, Process and Technology 2 April, Kuala Lumpur, Malaysia CPD: 6 hours MYR500 rics.org/bim-coreprinciples

Mediation Training Programme 30 March-3 April CPD: 50 hours S$2,700 rics.org/SEAmediation

ONLINE TRAINING Certificate in quantity surveying practice Start anytime CPD: 48 hours £945 rics.org/qsp

Asset Management: Asset Enhancement Initiative (AEI) 7 April CPD: 6 hours S$650 rics.org/aei 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 2020 / MODUS APAC / 49

EXPERIENCE

W H A T I F…

…w e m a d e r o a d s f r o m w a s t e p l a s t i c? Bans won’t eradicate single-use plastics from circulation, argues Rajagopalan Vasudevan. We need a more innovative response

50 / MODUS APAC / Q1 2020

Plastic tar roads have double the strength of ordinary asphalt roads and can withstand both heavy loads and heavy traffic, making them suited to rural roads and motorways. To date, there have been no permanent deformations. The roads aren’t affected by rain or stagnated water, so no potholes have formed, meaning that there’s been no need for any maintenance expenditure. The technology has piqued interest from Indonesia, Malaysia and South Africa, but it still hasn’t taken off as we’d hoped, with awareness lacking in the construction and technology sectors. If we’re able to get behind it on a global scale, we could make a radical change to how we dispose of plastic, while providing wider land-infrastructure benefits to communities.

“ Though plastic is a lightweight and versatile material, most of it is thrown away after a single use ”

Dr Rajagopalan Vasudevan is a professor at Thiagarajar College of Engineering, Madurai, India

INTERVIE W BY ROBYN WIL SON; ILLUSTR ATION BY ALEKS ANDAR S AVIĆ

Plastic has worked its way into nearly every aspect of our lives. From electrical products, fertilisers and agriculture, to children’s toys, engineering resources, domestic appliances and building materials – the list of everyday products is endless. One of its most common uses is within the packaging industry, which accounts for around 40% of plastic production. Though a lightweight and versatile material, most plastic is thrown away after a single use and, if it isn’t diverted to landfill, often collects in places such as canals and rivers, mixing with other waste and becoming a major environmental pollutant. Various governments have taken steps to ban the use of single-use plastics. The UK recently announced a ban on the use of plastic straws from 2020, while Indian states including Tamil Nadu and Himachal Pradesh have banned single-use plastics. But, with the global economy heavily reliant on plastic, simply banning the material won’t completely solve the problem. It was against this backdrop that we came up with an eco-friendly solution: a plastic tar, which can be used to construct roads. The innovation is simple, we heat stone aggregate to 160ºC, over which we spray shredded waste plastic, which then melts to coat the aggregate. We are careful to not heat the material more than this because if it gets too hot, it decomposes and produces gas that pollutes the air. This compound is then mixed with hot bitumen, which has two benefits: first, we’ve found a sustainable use for waste plastic; second, it reduces the amount of asphalt used by up to 15%. Over the past 10 years, we’ve used this innovation to lay more than 50,000km of road in India, with impressive results.

MODUS Asia-Pacific Edition | Q1 2020

Articles inside

RACE AGAINST THE MACHINE

SUCCESSFUL CITY CLUSTERS