MODUS Asia-Pacific Edition | Q3 2018 by ROF Media

MODUS ASIA-PACIFIC Q3/18

ASIA-PACIFIC EDITION Q3/18

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150TH ANNIVERSARY ISSUE

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MODUS ASIA: THE 150TH ANNIVERSARY ISSUE

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n 1868 a group of distinguished surveyors came together to address what they knew was a risk to the profession. Cities were growing rapidly but the interests of the public

were not being well served. Professional standards and ethical behaviour were inadequate. The bold response was the establishment of what became RICS. Our foundersâ&#x20AC;&#x2122; far-

FOR RICS Rory Tufano and Jeanie Chan (Asia Pacific) Stephanie Bentley (UK) FOR SUNDAY Editor Oliver Parsons Art Director Sam Walker Deputy Editor Andy Plowman Contributing Editor Alex Frew McMillan Designer Katie Wilkinson Creative Director Matt Beaven Account Director Karen Jenner Advertising Sales Director Emma Kennedy Asia Advertising Bryan Chan Production Manager Michael Wood Managing Director Toby Smeeton Repro F1 Colour Printers ROF Media Cover Image Sawdust

sighted initiative has defined the profession for 150 years. As the world has evolved, RICS professionals have played a significant role in shaping the transformation of the built and natural environment. Our Institution has grown to become a highly regarded and influential global organisation. Today, as in 1868, cities once again face daunting challenges. Climate change, rapid urbanisation and resource scarcity must be addressed if cities are to succeed in becoming places of enjoyment and creativity. As part of RICSâ&#x20AC;&#x2122; Cities for our Future

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Views expressed in Modus are those of the named author and are not necessarily those of RICS or the publisher. The contents of this magazine are fully protected by copyright and may not be reproduced in any form without the prior permission of the publisher. All information correct at time of going to press. All rights reserved. The publisher cannot accept liability for errors or omissions. RICS does not accept responsibility for loss, injury or damage or costs that

competition, over 1,200 young professionals from around the world have shared their ideas to tackle those challenges. We are now at the dawn of another revolution, this one driven by digitisation. But by maintaining our commitment to standards during this period of change, I have no doubt that RICS will be here to serve the public for another 150 years.

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JOHN HUGHES FRICS RICS PRESIDENT

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INTELLIGENCE

FEATURES

Re-thinking / Attracting private finance to China’s Belt and Road Initiative

An end to core beliefs / What is an acceptable level of risk for Asian investors in their search for value for money?

16 Now and then / The built environment breakthroughs that defined an era, and their modern equivalents

Opinion / Will Myles on the challenges of valuing a building’s sustainability

Chartered territory / Which sections of the profession stand to gain the most from BIM?

What we can learn from … / … the shifting demographics of Sydney’s population

The Brühl book of risk / Martin Brühl FRICS on the work of RICS’ Real Estate Investment Risk Forum

10 years that changed surveying / What are the key events that have shaped the Institution’s 150-year history?

Which city will win? / With cities now competing on a global scale, we look at those destined to come out on top

Pride in the profession / Profiling the RICS professionals who have made significant contributions to society

EXPERIENCE

How to … / … deliver an Olympic Games, as told by those who’ve done it

RICS news and events /

What if … / Lars Hesselgren on eliminating vehicle emissions from cities

INTELLIGENCE

Belt and Road and private finance / Will Myles on valuing sustainability Who benefits from BIM? / Sydneyâ&#x20AC;&#x2122;s fluctuating population levels

RE-THINKING

ONE BELT, ONE ROAD, MANY PARTNERS

infrastructure assets. The Chinese Investment Corporation sovereign wealth fund bought a 20% stake in the Port of Melbourne for $1.2bn in 2016, while last year Chinese subsidiary Yancoal Australia purchased $2.69bn in coal mining assets from Rio Tinto. In Singapore, e-tailer Alibaba has made several investments in Singapore Post, while ride-sharing platform Didi Chuxing has pumped venture capital into its Singapore-based equivalent Grab Taxi. China International Marine Containers, meanwhile, took over the airport equipment manufacturer Pteris Global. Other governments are also investing along the Belt and Road pathways. There is German financing in the 2.2 km2 Xinjiang International Logistics Park in Ürümqi. The Rhine river port of Duisburg – the largest inland port in the world – owns 20% of the company that is developing the park, which ultimately could grow to 120 km2. A cargo train service that runs from Chongqing to Duisburg, now via Ürümqi, has cut delivery times from 36 days by sea to 13 days by rail. There’s increasing interest in how private capital such as insurance companies and pension funds can be tapped for investment. Institutional investors usually look at individual economies and projects, so there is the potential for products such as funds that link these trillion-dollar pools of capital with Belt and Road projects. Clearly, politicising an investment is not in the interests of the big funds. Their ultimate goal is to maximise their return. They look at factors such as the governance of that project, its sustainability and its transparency. If you could design a portfolio that looks at all 87 countries – and China – and picks out the top-performing Belt and Road projects, then that would be very attractive to investors.

IMAGE BY GE T T Y

Why has private finance been so slow to get on board with China’s flagship policy? As Jinny Yang argues, it’s all a matter of presentation

Launched by President Xi Jinping in 2013, China’s Belt and Road Initiative has not yet been around long enough for most of the major infrastructure projects it kickstarted to be completed. The financing channels are yet to be established. The official Belt and Road web portal lays out five top-level principles for a project to be considered part of the scheme. They must foster peaceful coexistence, be open for cooperation, harmonious and inclusive, market-oriented and be for the mutual benefit of all parties involved. It’s not a rules-based strategy – it’s a long-term vision. There’s no requirement for who needs to finance projects. For China, if there is any involvement from a Chinese entity, it’s part of the initiative. We have identified 1,100 projects in 87 countries that are already benefiting from Belt and Road investment to the tune of $750bn. Transport and logistics has been the biggest beneficiary, with projects worth more than $330bn announced. The energy sector is next at $266bn. The three Chinese policy banks – the China Development Bank, the ExportImport Bank of China and the Agricultural Development Bank of China – have led the initial financial commitment. They act as conduits to finance projects that the government is encouraging. So far, 86% of Belt and Road projects have been financed by Chinese corporates,

the three policy banks and the “Big Four” lenders: Agricultural Bank of China, Bank of China, China Construction Bank and Industrial and Commercial Bank of China. At a corporate level, state-owned enterprises are a key source of funds. Insurer Sinosure has provided $1.3bn to finance the Abadan Oil Refinery in Iran, while the China National Nuclear Corporation has provided loans to build a nuclear power plant in Pakistan. Joining the party This is the initial phase of financing, but China is not going to be able to pick up all the tab. Ultimately, Belt and Road will likely require at least $8tn in investment, so it’s imperative to attract third-party financing. Chinese banks will form syndicated loans with multilateral development banks, such as the Asian Infrastructure Investment Bank or the Asian Development Bank. There’s also a role for private capital. For instance, commodity companies may invest into preliminary rounds of resourcerelated infrastructure projects. Merger and acquisition activity also falls under the remit of Belt and Road. China has been purchasing shares in foreign companies and buying rights to operate infrastructure and energy assets. In 2013 the State Grid Corporation of China paid just over $2bn for stakes in two of Singapore Power’s Australian energy

Jinny Yan is the chief China economist at ICBC Standard Bank in London. Read ICBC Standard Bank’s Belt and Road reports at bit.ly/ICBCSB_BRI

Q3 2018 / MODUS APAC / 7

INTELLIGENCE

“ IS IT POSSIBLE FOR A VALUER TO DETERMINE THE SPECIFIC IMPACT THAT SUSTAINABILITY HAS ON VALUE? ” WILL MYLES RICS REGIONAL MANAGING DIRECTOR, ASIA PACIFIC, SINGAPORE

Are we any closer to being able to quantify the financial value of a building’s sustainability? These days, most corporate tenants insist on green features in the buildings they occupy. Many real estate appraisers would argue that this demand is reflected in transaction prices. But there are dozens of variables affecting the value of property that could be grouped under the umbrella of sustainability. Does the market factor these into the transaction price? Specifically, is it possible for the valuer to determine the specific impact that sustainability – however defined – has on value? To what extent is the valuer’s role simply to reflect what’s in the market, or to preach what could be? The case is more complicated for residential properties. In a lot of countries, people won’t pay more for a house solely based on its green credentials. But the RICS information paper Placemaking and Value, published in 2016, found that house buyers in the UK were willing to pay more for homes with “good placemaking.” This term covers factors such as quality, connectivity and amenities, as well as sustainability. Of the new-build developments assessed, the good placemaking premium ranged from 5% to 56% over the average new-build value in the same area. That’s a large spread, and it’s questionable how much is pinned to sustainability of the asset or its location. The trouble is, there is no direct or consistent way of measuring the impact of sustainability on value. Researchers have, in recent years, sought to reverse-engineer a solution. The October 2017 EeMAP report Creating an energy-efficient mortgage for Europe, together with research from David Lorenz FRICS of the Karlsruhe Institute of Technology, offer a snapshot of the impact on sales prices over the last decade. This shows a LEED premium of 11% in the US, a Minergie premium of 4.9% in Switzerland, and a Greenmark premium of 4%-6% in Singapore. Studies have shown that sustainability has a varying but quntifiable positive

impact on rental prices, occupancy rates, and the amount of time a property is on the market, but the issue remains that data for most of the factors that could affect a property’s value is generally not available on standard transaction databases. What’s more, there are problems in the way data is stored, and whether it is compatible with other data. Other obstacles include access to and disclosure of the appropriate data, poor quality, the lack of operational cost data, and the absence of adequate property transaction data. Market comparators currently do not provide enough information for sustainability to become a hard-wired component of standard valuations. For this to happen, the industry needs to gather data from a wider variety of sources, and make it more easily available. We will also need to adopt more complex valuation techniques. Arguably, as green features become the norm for new assets, any “premium” becomes less prevalent. We must watch instead for discounting in the absence of such features. Indeed, some practitioners are starting to talk of a “brown discount” for unimproved or less sustainable properties, rather than a “green premium.” Whether such a discount would be based on performance data, or is more linked to the cost of improvement works, is unclear. What is obvious, though, is that the industry would benefit from an internationally consistent approach to measuring and understanding the effects sustainable features have on a property’s value. But in an era of tightening budgets for valuations, would anyone be willing to pay for such a service?

ILLUSTRATION BY DANILO AGUTOLI

OPINION: VALUING SUSTAINABILIT Y

CHARTERED TERRITORY

BIM’S A REAL GAMEC H A N G E R ... FOR WHOM? One of the great selling points of building information modelling (BIM) is the way it opens up access to data for all stakeholders on a project. But which professions within the sector get the most out of this set-up? We took to Twitter to find out.

#RICSMODUS AT A GL ANCE @DAZCUN BIM process should be aiming to provide benefit to all stakeholders/ disciplines at the right time. Not just one group who benefits most, ie clearer brief and reduced risk for client at start, better collaboration during design and improved FM at end.

34%

QUANTIT Y SURVE YORS

@EMPROPEXPERT Good article in #RICSmodus – 16% of London street space is for parking

40%

@JONSPENCERHALL

FACILITIES MANAGERS

#TIL that the future is almost here thanks to latest #RICSmodus article on intelligent cities – esp Maas Global’s (serious!) aim to “make it unnecessary for any city resident to own a private car by 2025” #wow

14%

L AND OWNERS

12% RICS will host a BIM Conference in Malaysia on 19 September. For more information, go to p49

@ATAMVERDI Automation article in #RICSmodus on #AutonomousVehicles skirts over social and political effects of loss of low-skilled jobs

L AW YERS

Q3 2018 / MODUS APAC / 9

INTELLIGENCE

W H A T W E C A N L E A R N F R O M …

SYDNEY’S YO-YOING POPUL ATION

IMAGE BY GE T T Y *MEDIAN HOUSE PRICE DIVIDED BY MEDIAN HOUSEHOLD INCOME

How is the city coping with trying to balance the needs of its residents in the face of rising migration?

Sydney is in the unusual situation of seeing its population rise at a record rate, while simultaneously losing its longer-term residents, who are moving elsewhere in Australia. So its population is both shrinking and expanding. An extra 101,558 people were living in Sydney in the year to June 2017, according to the Australian Bureau of Statistics – the first time growth has hit six figures. Just less than 35,000 of this figure can be attributed to a natural increase in births minus deaths. The rest – 84,684 – is a result of high net-overseas migration. Sydney is currently the preferred destination for both permanent and temporary migrants, with just over onethird of Australia’s 240,000 annual overseas arrivals settling in the capital. This concentration in Sydney – and, to lesser extent, Melbourne – partly reflects the decline in net international migration to the resource-rich states of Western Australia and Queensland since the end of the resource construction boom in 2012.

The capital attracts a high proportion of Australia’s permanent immigrants, whether arriving as skilled workers, to join family or on humanitarian programmes. It also receives a large proportion of migrants on temporary visas, particularly overseas students. This attraction persists despite Sydney’s cripplingly high housing prices. When measured on the metric of median house price to median household income, they are just about the most expensive in the developed world. Only Hong Kong is less affordable. This extraordinary level of unaffordability is being driven by overseas investors, but also by existing owner-occupiers upgrading their properties. They are motivated by the prospect of capital gains, as well as tax concessions on these gains, topped off by low interest rates. And they also think they cannot lose, in part because successive governments have assured them that there will be no contraction in Australia’s migration influx. The belief is well founded because about

two-thirds of Sydney’s rapid growth in households can be attributed to the very high number of overseas immigrants in the city. Each new household needs a new home. Some older Sydneysider households are cashing in and relocating to less crowded areas. Others are moving to find affordable family-friendly housing. Sydney lost 18,120 residents to net internal migration in the year to June 2017, the statistics bureau figures show. Their places are being taken by younger people between the ages of 15 and 24, drawn by the city’s educational and employment prospects. This new influx is managing to find accommodation – with difficulty. How could this be? The fragmentary data available indicates that they are the main occupants of Sydney’s new raft of high-rise residential towers. Hardly any young families are opting to live in these high-rise blocks, instead taking advantage of government subsidies to move to smaller, cheaper housing in the outer suburbs. Sydney’s solution to addressing the lack of affordability has been to relax zoning constraints, thereby encouraging developers to increase the supply of more housing. Given this strategy precipitated the recent highrise development boom, you might argue this is what caused the problem in the first place. Bob Birrell is president of the Australian Population Research Institute at Monash University

VITAL STATISTICS

53%

Share of households in Sydney in 2016 headed by a 30-34-year-old that were being rented

5,000

Number of additional new homes needed each year to cope with Sydney’s projected population growth

64%

Percentage of Sydney’s annual requirement for new dwellings that is due to the increase in overseas migrants

A$1.3m Median price of a detached house in Sydney in 2017

12.9

Sydney is only second to Hong Kong (19.4) for unaffordability using Demographia’s median multiple* SOURCE: THE AUSTRALIAN POPUL ATION RESE ARCH INSTITUTE, 2018

Q3 2018 / MODUS APAC / 11

AN END TO CORE BELIEFS

“核心为王”时

代走向终结 WORDS BY ALEX FREW MCMILLAN ILLUSTRATIONS 图 THOMAS HEDGER

Investors in Asia’s real estate markets are having to travel further up the risk curve in search of value. But as fund managers rush to meet demand, are they in danger of going too far?

wept along by a flood of central bank liquidity, the price of core real estate – the category that includes blue-chip buildings with blue-chip tenants – has risen to record highs over the last 10 years. The lofty valuations mean that safeas-houses core investment is now, perversely, an increasingly risky proposition: the easy money may already have been made. That leaves core buyers at risk of purchasing at the peak of a“toppy”market. “We are close to the cyclical peak in terms of core yield pricing,” says Shaowei Toh, head of research and strategy for Asia at UBS Asset Management. He is“almost certain”that property will deliver worse returns over the next economic cycle than it has in the past decade. RICS’Global Commercial Property Monitor for the first quarter of 2018 also indicated that, in many places, respondents feel the market is at the peak of the cycle or the start of the downturn. The pressure on property prices and yields will only increase if central banks follow the US lead and start a consistent pattern of interest rate rises. Returns on property funds are now at their highest level since the global financial crisis. Total returns from non-listed real estate funds in Asia jumped from 10.3% in 2016 to 14.3% in 2017, according to an annual index compiled by Anrev, the group that represents non-listed funds in Asia. This was the index’s strongest showing since 2007, when funds raced ahead a clearly unsustainable 22.5%, only to crater into losses the following two years. Will the pattern repeat? “Despite the focus on seeking growth, investors would be wise to maintain a keen watch on risks at this point of the market cycle, particularly asset-level risks that can be managed,” cautions Benett Theseira, the head of Asia-Pacific at PGIM Real Estate. Just as individual buyers need to beware markets at their peak, institutional investors should no longer count on capital gains as their main source of returns, some market participants believe. “Value-add” propositions, such as improving the tenant mix, repositioning of properties and investment in unusual asset classes, may be a better approach. Instead of seeking out“the next shiny asset that could be ‘flipped’ to the next investor on higher valuations, investors should focus on active management of the undervalued aspects of their properties”, adds Toh. Value-added funds gained 17.7% in 2017, the Anrev index shows, and are currently outperforming core funds – a situation that last occurred in 2007 as the Lehman Brothers bankruptcy brewed. Theseira agrees that active management of properties is now key. Overhauling buildings to keep them competitive to attract tenants with strong covenants is“critical to sustain high occupancy”, he says, particularly in the case of an unexpected change of market conditions. Value-add is now the most attractive strategy in terms of performance prospects for the next two years, in the eyes of

INVESTMENT

亚洲的房地产投资者在投资获利的道路上正面临更大的风险。但随着基金管理方为满足投资需求不断推出新项目，投资者的风险是否愈发严重呢?

随

随着各国央行大幅释放流动资金，核心房产项目—即具备优质的建筑和租户—其价格正创下近10年来的新高。居高不下的估值表明，核心项目的投资风险正在变大。投资者或许已经快赚一笔，但也使得买家目前必须直面正处于高位的市场中潜在的买入风险。 “从核心资产收益水平来看，我们已经接近了周期性峰值。” 瑞银集团亚洲资产管理部研究与策略负责人Shaowei Toh认为，现在可以基本认定，相比过去十年房地产投资回报在下一个经济周期里将会变得糟糕。 RICS发布的2018年第一季度全球商业地产调研同样显示，在许多地区受访者认为当前的市场已经达到周期性最高点，回落之势板上钉钉。如果各国央行继续与美国一样持续加息，那么对房地产价格和投资收益的压力只会不断增加。房地产基金项目的回报率已达自全球金融危机以来的最高水平。根据亚洲非上市房地产投资协会按年收集的数据显示，2016 年至2017年间，亚洲投资于非上市房地产公司的基金项目的总体年化收益率从10.3%大幅上升至14.3%。此数据在2007曾一度达到22.5%，这显然是不可持续的。众所周知的是，在随后的两年，房地产市场惨淡一片，如今这种情况还会重演吗？ PGIM Real Estate亚太区负责人Benett Theseira警告说： “尽

Q3 2018 / MODUS APAC / 13

respondents to Anrev’s Investment Intentions Survey 2018, who represent an aggregate $2.3tn in assets under management. Of the 320 participants who have allocations in the Asia-Pacific region, 50% favour value-add as the most attractive strategy for the year ahead. That compares with 26% for core and 24% for opportunity plays. To see core supplanted as the top choice, after being the preferred strategy for three years running, is a sea change. Anrev also asked respondents to rank their preferences for non-listed property funds for 2018, beyond where they expect the best gains. Value-add was still selected by more investors (54.7%) than core (45.3%) or opportunistic (47.4%). Fund managers are starting to introduce opportunistic and alternative investment products to match that strong demand. For instance, LaSalle Investment Management said in April it had raised $1.1bn in equity for the LaSalle Asia Opportunity Fund V, exceeding its initial $750m target. The fund will look to take advantage of any mispricing of properties in target markets such as Australia, China, Hong Kong and Japan. Based on the equity raised, the fund will have a buying power of $3.3bn once it deploys leverage.

“ INVESTORS WOULD BE WISE TO MAINTAIN A KEEN WATCH ON RISKS AT THIS POINT OF MARKET CYCLE ” BENET T THESEIRA PGIM RE AL ESTATE

M&G Investments, the real estate arm of British insurer Prudential, is already looking to include value-add strategies for its separately managed accounts with major investors. That’s a potential precursor, M&G Real Estate’s Asia CEO Ng Chiang Ling has indicated, to an Asia-focused value-add fund. It has already launched a UK value-add fund that has attracted interest from Asian investors, and is looking for mispriced British properties. Further along the risk curve, PAG Real Estate last year raised $1.9bn for an opportunistic property fund to buy into distressed debt and property in Japan. It is also on the hunt for opportunistic plays in markets such as China, Hong Kong and South Korea. Catch the drift? But as the number of products catering to this demand increases, so does the risk of style drift, warns Sean Ellison, RICS Senior Economist for the Asia-Pacific region. Whereas“core-plus”funds were initially envisioned as core funds that add the “plus” of leverage, “core-plus” products are increasingly characterised by investing a minority of the portfolio in value-add or opportunistic assets. Although both the use of leverage and investment in riskier assets are strategies designed to boost returns, they have different risk profiles, Ellison notes. The riskier assets would surely be harder to sell or otherwise exit in times of market stress, while core assets should retain the bulk of their value. The nature of“core”is also changing. At the Urban Land Institute’s Asia Pacific Summit in early June, investors said they believe banks need to change the way they value properties. Co-working is so mainstream now that flagship buildings in Hong Kong’s Central district are increasingly tenanted with 70% on traditional long-term fixed leases, and 30% flexible office space. Since flexible space is higher margin, it may well generate 50% of the rental income. But banks do not recognise the higher yield and penalise landlords for offering it – even though it is something that many high-end tenants expect, as they outsource features such as conference rooms to third parties, to cut down on their own footprint and office space costs. Conventional but less-common asset classes such as industrial and logistics are increasingly commanding attention, as are leisure properties such as hotels and resorts. Asian investors are also targeting alternative sectors such as student accommodation, healthcare and data centres. They typically prefer assets with readily made cashflow. But investing in unusual sectors can yield returns equal to core office space. In a market like Australia, there is both local and Asian interest in niches such as student housing, particularly from China. Because demand is strong, these alternative sectors could ultimately become core assets – if their performance remains steady. The lack of a formal definition of core contrasts with sovereign or corporate bonds, which have external ratings that help provide an underpinning for their value. Ellison notes that it would be possible to rate property assets in a similar way. Formal breakdowns that classify 70% of a portfolio as well-defined“A-rated”real estate, while rating the other 30% “B or below” would be much more useful for risk management than the vague “core” and “opportunistic”. That would certainly remove the guesswork from what exactly constitutes the riskier asset categories of value-add, opportunistic, or “develop to core”. Whether their performance – however they are defined – justifies the faith placed in them despite a potential turn in the property cycle, will soon be clear. Read our interview with Martin Brühl, chair of the RICS Real Estate Investment Risk Forum, on p24

INVESTMENT

管投资者的关注点始终是寻找新的增长点，但鉴于市场的周期性变化，需密切关注风险问题，尤其是资产风险的管理。” 许多业内人士认为，个人和机构投资者都应对当前行情处于高位的情形加以重视，不应继续仰赖资本利得作为主要盈利来源。Shaowei Toh补充道： “改善租户构成，资产重新定位，尝试新的投资类型，这些都是实现资产增值的不错方式。投资者不应坚持寻找下一个在将来可能带来高估值的投资机会，而应重视通过积极管理目前持有的资产来实现价值提升。” 亚洲非上市房地产投资协会的指数显示，2017年地产基金项目总体实现盈利17.7%，这一水平目前远超一些核心项目的回报率。同样的情况曾在2007年发生，当时雷曼兄弟正在酝酿破产清算。 Benett Theseira认同积极的资产管理会对增值起到重大作用这一观点。他指出，对房屋进行翻新并推出更优惠的租赁产品，是吸引租户，保持高入住率，提升市场竞争力的关键。这一点在如今市场环境变化莫测的情况下显得尤为重要。亚洲非上市房地产投资协会调研了总计管理了2.3万亿美元的资产的众多投资机构。2018年发布的投资取向报告显示，未来两年内实现资产增值将是最有吸引力的业绩增长点。总计320家在亚太地区有所布局的机构中，50%认为资产增值是来年的首选策略，相较于 26%和24%分别希望通过核心和投机资产来获取收益。核心资产在过去三年一直是实现增值的第一选择，这一点将发生巨大变化。除此以外，亚洲非上市房地产投资协会还请参与调研的机构在 2018年对各非上市房地产基金项目的偏好程度进行排序。资产增值项目同样以54.7%排在首位，选择核心和投机资产的机构分别为45.3%和47.4%。目前，鉴于市场的强劲需求，不少基金经理正在向投资者推广投机性以及特殊投资项目。比如，领盛投资管理 ( L a S a l l e Investment Management)于四月表示，他们已经为其亚洲股权基金五号项目募集了11亿美元，远超原计划的7.5亿美元。该基金将以澳大利亚，中国大陆，香港和日本市场上一些出现错误估价的资产为主要目标，一旦出现了杠杆效应，将产生33亿美元的购买力。英国保诚保险集团旗下的房地产投资公司M&G Investment向其大客户推出了为分开管理的账户提供的增值策略。该公司亚洲房地产业务首席执行官 Ng Chiang Ling指出这将是推出专为亚洲市场设计的增值基金的前奏。这种基金中包含了一些在英国的增值项目，引起了亚洲投资者的极大兴趣。 PAG地产集团在去年也为其地产投机基金募集了19亿美元，买入在日本市场境况不佳的债务和资产，他们同样希望在中国大陆，香港和韩国找到类似机会。顺从大势还是持币观望？ RICS亚太区高级经济学家Sean Ellison警告说，尽管为满足市场需求不断有增值型产品推出，相应的周期性风险也在不断积累。虽然“核心+”基金最初被看做是加杠杆产品，但随着时间推移， “核心+”产品的主要特点更偏重在整个投资布局中仅安排一小部分的增值性或投机性资产。尽管杠杆和其他风险型投资工具都是以提高收益为策略，风险的类型有所不同。当市场行情出现逆转时，风险较高的资产与市场上的其他产品相比，买入或出售必然更难，但核心资产却更保值。核心资产的本质也在发生变化。在城市土地协会于六月上旬举办的亚太峰会上，投资者称银行需要改变其一贯的对地产的估值方式。联合办公已成大势，目前在香港中区的旗舰大楼，联合办公所占面积比例已达30%，传统租赁方式为70%。灵活的方式带来了更高的利润，同时期多产生50%的租金回报。尽管联合办公满足了不少高端租户的需求，他们将一些会议室外包以减少自身办公空间成本。但银行并不认同这种带来高回报的模式，甚至对出租方施以惩罚。一些传统却目前并不多见的资产形式，例如工业厂房和物流驿站，正引起更多的关注。酒店和度假村也同样如此。亚洲投资者更偏好能够带来稳定现金流的资产。他们瞄准了诸如学生宿舍，医疗设施以及数据中心等作为备选投资目标，尝试投资一些非常规领域可能获得与核心办公空间相当的回报。在澳洲，本地和亚

明智的投资者需紧盯当前市场周期所处阶段的潜在风险。

“

”

BENET T THESEIRA PGIM RE AL ESTATE

洲学生对学生公寓需求极大，尤其是中国大陆学生。由于需求庞大，如果这些资产能够有稳定的回报表，那么原本作为次要投资目标极有可能在未来处于核心地位。与核心资产相比大不相同的是，人们对主权债券和公司债券的认知非常清晰明确。因为有外部机构对其进行评级，对它们的估值非常有根据。Ellison提出，对房地产资产可以用类似的方式进行评级。比如，有70%的房地产项目被评为A级，其余30%为B级或更低，这显然比“核心”或“投机”这样含糊的表述更能给风险管理带来帮助。有了这样的评级机制必然能给消除人们对资产质量的疑虑，将具有较高风险的资产明确划分为增值型、投机型、或即将成为核心的类型。不论这些资产会有怎样的表现，至少它们有了清晰的评定，说明了机构对它们的信心高低。尽管地产市场存在周期演变，但形势很快就将明朗。

Q3 2018 / MODUS APAC / 15

Empire State Building

Forth Rail Bridge

NOW

London Underground

Shanghai Tower

Hong Kong-Zhuhai-Macao Bridge

Crossrail

College of Estate Management

Bazalget teâ&#x20AC;&#x2122;s sewer system

RICS School of Built Environment

Thames Tideway Tunnel

The buildings are bigger, the distances larger, but the intent remains the same. We salute five iconic built environment projects, and talk to the people behind their modern equivalents

& THEN

Q3 2018 / MODUS APAC / 17

EMPIRE STATE BUILDING

SHANGHAI TOWER

1931

2015

ome skyscrapers have such a distinctive shape, they become world famous. In 1931, New York’s Empire State Building became not just the tallest building in the world – a title it held for nearly 40 years – but also a cultural icon. And with hundreds of skyscrapers popping up in China in recent years, one more than most stands out from the others. When it topped out in 2013, the Shanghai Tower became the tallest building in China,

and the second tallest in the world. As it gets higher, the elegant 632m (2,073ft) structure twists, as if turning its head around to look over its shoulder. I was involved in designing the tower – from preliminary planning, to design and programme management. It was a unique challenge to have to coordinate the collaboration of Chinese and foreign design consultancies, where quality, schedule and costs were all critical factors.

To achieve the concept, we not only needed to use new technology and methods such as BIM and sustainable construction, but also increase our regulation standards. In fact, the Shanghai Tower helped to more closely align the different design practices and regulations used in China with the rest of the world. Holly Ying MRICS is deputy director at Shanghai Xian Dai Architecture, Engineering and Construction Co, Shanghai, China

“ THE ELEGANT STRUCTURE TWISTS, AS IF TURNING TO LOOK OVER ITS SHOULDER ”

SHAPING THE WORLD

FORTH RAIL BRIDGE

HONG KONG-ZHUHAIMACAO BRIDGE

1890

2018

Hong Kong’s international airport. Our role was to design a comprehensive integrated facilities management strategy. It was a huge challenge, because at each stage the interfacing arrangements required testing with end users – including government departments, the emergency services, customs, and third parties such as tenants – prior to finalising the plan. I’m proud to have helped create an energyefficient, aesthetically pleasing facility that will help to bolster the region’s economy.

hen it opened in 1890, the Forth Rail Bridge in Scotland was the longest single cantilever bridge in the world. It was a wonder of its day, and it is now a Unesco World Heritage Site. More than 100 years later, innovative bridge building continues – with the Hong Kong-Zhuhai-Macao Bridge (HZMB) a perfect example. At 34 miles (55km) long, the HZMB is now the world’s longest bridge over water, and includes a 4 mile (6.7km) tunnel. The Hong Kong Border Crossing Facility provides clearance facilities for goods and passengers, on a 320 acre (130ha) island reclaimed from the sea to the north-east of

Dave Hallam MRICS is executive director, head of business advisory, Hong Kong & Macau at Arcadis

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LONDON UNDERGROUND

CROSSRAIL

1863

2018

he birth of the London Underground 155 years ago remains one of the most remarkable infrastructure achievements in the UK’s history. Its engineers brought radical new thinking to engineering and tunnelling techniques. In a sense, the baton has been passed on to Crossrail, because the west-east railway project through London continues to literally and figuratively break new ground. I joined the project in 2011, jumping in at the deep end to manage one of the most complex compulsory purchase order (CPO)

schemes ever undertaken in the country, involving the acquisition of some 370 acres (150 ha) of land at a value of £850m. After the Crossrail Act was passed in 2008, we had an extremely tight timescale of five years to serve all the CPOs to the thousands of existing landowners. We managed it, albeit with only 48 hours to spare before the deadline. At present, all the land needed for the project has been acquired and the majority of compensation claims are settled. But Crossrail is not just an underground project – 3.5m ft2 (325,160 m2) of commercial

and residential development is taking place above ground at more than 12 core sites, as well as 190,000 ft2 (17,650 m2) of public realm improvements outside the stations. Furthermore, much of the 10,000 m3 (353,146 ft3) of spoil that’s come out of the ground has been shipped to the UK’s south-east coast, where we are creating new wetlands and a nature reserve with the Royal Society for the Protection of Birds. Ian Lindsay MRICS was land and property director (2011-2018) for Crossrail, London

IMAGES BY GETTY, © CROSSRAIL LTD

“ WE HAD A VERY TIGHT TIMESCALE TO SERVE THE CPOS – AND MADE IT WITH ONLY 48 HOURS TO SPARE ”

SHAPING THE WORLD

Q3 2018 / MODUS APAC / 21

RICS SCHOOL OF BUILT ENVIRONMENT

1919

2013

ollowing the First World War, there was a shortage of trained surveyors to help manage the UK’s assets. To address the shortfall, in 1919 the College of Estate Management (CEM) was founded – with the support of RICS – to specifically serve the property-related estate management and construction sectors. Almost 100 years later, in 2013, the first RICS School of Built Environment (SBE) was set up, in New Delhi. Similar to the aims of the CEM, our ambition was to create a generation of future professionals embedded within India’s property and construction industry, who would adhere to and promote RICS’ values of ethics and standards. In the five years since its founding, the SBE has trained 1,158 professionals, who

have graduated in RICS-accredited MBAs such as construction project management, construction economics and quantity surveying, and real estate and urban infrastructure. In the long term, these are the graduates who will lead and transform India’s construction industry. There is always huge demand for our unique programmes, and managing the growth of the SBE, while maintaining quality, is one of our biggest challenges. To cope with this demand, a new branch of the SBE was set up in Mumbai in 2017, and another will open in Bengaluru in 2019-2020. KT Ravindran FRICS is dean emeritus of the RICS School of Built Environment at Amity University, Noida, India

INTERVIEWS BY BRENDON HOOPER; IMAGES BY GETTY, TIDEWAY

COLLEGE OF ESTATE MANAGEMENT

SHAPING THE WORLD

BAZALGETTE’S SEWER SYSTEM

THAMES TIDEWAY TUNNEL

1865

2023

ir Joseph Bazalgette was a visionary. His underground sewer system for London, completed in 1865, not only improved sanitation and health for Londoners at that time, it was also designed to cope as the city grew. Indeed, Bazalgette’s tunnels still form the backbone of London’s sewage system, but there is currently a serious capacity issue. In dry weather, the old system copes well transporting sewage across the city, from

I started on the project with Thames Water in 2008, and since then have been involved with more than 300 external consultations and public meetings on the £4.2bn scheme. To think, there were seven of us at the original meeting – there are 2,000 now, and there will be up to 4,000 working on the project before its completion in 2023.

the west to treatment works in the east. But London’s population is close to 9 million, and after more than 1-2mm of rain, sewage overflows straight into the River Thames – about 18 million tonnes per year. Instead, the Thames Tideway Tunnel will intercept 95% of this discharged sewage, taking it through a new 15.5 mile (25km) tunnel network, up to 66m below ground, to Beckton in east London. It will have a huge impact on making the Thames cleaner.

Phil Stride FRICS is strategic projects director at Tideway, London

“ THE TUNNEL WILL HAVE A HUGE IMPACT ON MAKING THE THAMES CLEANER ”

Q3 2018 / MODUS APAC / 23

INTERVIEW

MARTIN BRÃ&#x153;HL FRICS PHOTOGRAPHED AT THE RICS WORLD BUILT ENVIRONMENT FORUM SUMMIT, LONDON, APRIL 2018

Q3 2018 / MODUS APAC / 25

↑ Martin Brühl FRICS is managing director of Union Investment Real Estate and the global chair of RICS’ Real Estate Investment Risk Forum, the members of which collectively represent more than $1tn in assets under management. Ten years after the onset of the global financial crisis, does he think the industry has learned from its mistakes?

INTERVIEW BY STUART WATSON PORTRAITS BY DAVID VINTINER

Why is real estate investment risk a burning issue right now? When I took office as RICS President in 2015 we were in a very hot market. It was the perfect moment to create an investment risk forum in which top decision-makers, all of whom are trying to deploy other people’s money responsibly in today’s market, could meet and share best practice. Three years later we are still in an unusually long cycle, which shows no immediate signs of slowing down nearly 10 years after the global financial crisis. Assets are extremely expensive and the risks increase the further up the curve you go in search of a higher investment yield. That is a phenomenon all of the forum members have observed, and it is caused by the scarcity of stable, core product. In today’s marketplace you have to be extremely prudent not to repeat the same mistakes as 2005-6 in taking risks that you have mispriced.

Does that mean a downturn is imminent? Real estate cycles usually last eight to 10 years at most. But I see several clear signals that indicate how late we are in this current cycle. Historic record prices have now been exceeded. We are beyond the stabilised long-term averages in whatever we do. The danger of price correction and devaluation is imminent, yet the music keeps playing. There are people who are starting to dance closer to the exit, and it is this awareness of the risks surrounding us that the forum debates among its members and encourages in the wider fund management industry. Investment managers whose strategies mandated the buying of core properties in prime markets are moving into secondary and regional markets, and therefore up the risk curve, because properties in the global gateway cities are scarce and expensive. If people take that to an extreme we call that “style drift”, which we are seeing all over the place at the moment. Managers are also taking on more operational risk because they are buying alternative asset classes such as student housing, where they are exposed to the risk of the operator going bust. Meanwhile, more investors are moving to debt rather than equity investment. Foregoing the higher returns of the latter for the safety of the former is a late-cycle phenomenon. The lateness of the cycle is also reflected in the way many transactions are now being carried out. In some cases investors have to shortcut due diligence in a way they would never have done in 2010, because they know if they take too long they won’t get the deal. In the late stages of a cycle, good business practice sometimes gets thrown overboard. What potential shocks pose a danger for property markets? If we knew what they were, they would not be a “shock”. Joking apart, I believe “black swan” events are often used as an excuse for poor risk management. As fiduciaries to our investors we need to make sure that our portfolios are as weather-proof as possible. There are numerous geopolitical risks that could bring parts of the world economy to a temporary standstill. The earth is getting warmer, wetter and wilder and the risks resulting from climate change need to be priced into investment decisions. Online retail is a real threat to shopping malls that are neither pure convenience nor a dominant destination. And tenants’ desire for greater flexibility and better service is beginning to marginalise traditional bricks and mortar landlords in the office sector.

INTERVIEW

OLD HABITS DIE HARD On the whole, members of the RICS Real Estate Investment Risk Forum are not particularly convinced that attitudes and behaviours have improved sufficiently over the past 10 years.

HOW HAS THE REAL ESTATE INDUSTRYâ&#x20AC;&#x2122;S APPROACH TO RISK MANAGEMENT CHANGED SINCE THE 2008 GLOBAL FINANCIAL CRISIS?

WHAT MEASURES ARE USED TO QUANTIFY RISK IN YOUR ORGANISATION?

LIKELIHOOD/ PROBABILIT Y 81%

IMPACT 76% 60

SCORING MODELS 52%

IT HA S IMPROVED SOME WHAT BUT APPE ARS TO NOT HAVE LE ARNT FROM THE PA ST MISTAKES 57% 40

STANDARD DE VIATION 43% FREQUENCY 38%

VALUE-AT-RISK 33%

E XPECTED SHORTFALL 29% IT HA S IMPROVED MARKEDLY TO ENSURE RISKS ARE BE T TER UNDERSTOOD, MANAGED AND MITIGATED 33%

IT HA S SHOWN LIT TLE SIGN OF IMPROVING 5%

TR ACKING ERROR 19%

SHARP R ATIO 5% 0

Q3 2018 / MODUS APAC / 27

We therefore need to build, manage and continuously improve property portfolios that are resilient to these imponderables. To achieve this, we need to collaborate across professional silos – something RICS has been promoting for many years. Is the industry better prepared for a downturn than it was in 2008? After the global financial crisis, regulators took action to try to avoid a repeat of the events of 2008. That wasn’t always the most productive approach. Regulation has made business more complicated and expensive, and there is a danger this may increasingly draw the attention of senior management away from what is happening in the market. Part of the purpose of the forum is to reassure regulators that the real estate industry isn’t running like lemmings in the same direction that it was in 2007. We are definitely better prepared than before. Companies have introduced risk management functions and officers who have licence to scrutinise and veto purchases and asset management decisions. A culture of thinking about risk and how to mitigate it has developed. For example, investment managers look far more rigorously at their buy-sell analysis. They are using good phases in markets to sell off the bottom 25% of their portfolio. That makes the whole portfolio more risk-proof because if something negative happens you are selling good properties, not problematic ones. The mix of tenants is also important. You wouldn’t want only financial tenants in the City of London at the moment with the concern over Brexit negotiations. It is about risk management at the asset level and at the portfolio level. To get diversification in your portfolio you have to look closely at interdependencies and covariance. What can be done to further reduce investment risk? We need to make sure the experience of forum members is shared with people entering the industry, so they learn how to identify the indicators of an overheating market and respond to them. Some of the younger professionals in our businesses started their careers after the financial crisis and have only seen 10 years of a rising market. We can’t take that for granted. We work in an industry where people with short-term memories are making longterm investment decisions. The market will come down at some point, and we need to look at how we prepare our portfolios so they are ready for the inevitable downturn.

WHAT’S WORRYING RICS’ REAL ESTATE INVESTMENT RISK FORUM MEMBERS?

GLOBAL CYBER-ATTACK

Liquidity management is vital if you are to defend yourself against shocks. Some of my peers in the forum manage open-ended funds with billions of euros of assets under management, much of which is redeemable on short notice. It is also important to be disciplined in terms of the money you allow into your business. Too much liquidity not only causes a dilution of performance, but you can also come under pressure to deploy that capital on assets with inflated prices. Portfolio analysis tools that are used in other asset classes like bonds and equities can be adapted for real estate, but to do that effectively we need to gather high-quality, comparable real estate market data across borders. Moreover, any professional within any of the real estate disciplines can contribute to mitigating risk by putting the client first rather than their own selfish motives. The average quantity surveyor, valuer or building surveyor can contribute by adhering to high professional standards to avoid exposing their clients to risk. There is a need for better direction and thoughtleadership to spread best practice in this area, and RICS professionals are perfectly placed to be a driving force behind that. Our clients pay us to take risks on their behalf. These days a risk-free investment is also a return-free investment. You have to aim for a satisfactory risk-adjusted return. In this uncertain world the crucial factor to avoid is mispricing risk, which leads you to think that you’re safe when you’re not. n

Increasingly hostile relations between Russia and the West has stoked fears of a largescale cyber-attack. Last year the WannaCry and NotPetya malware attacks cost businesses hundreds of millions of dollars, and the proliferation of interconnected devices only serves to increase the potential scope and impact of an attack.

IRRATIONAL EXUBERANCE Forum members are concerned that the real estate investment market may be becoming complacent that the trend of constantly increasing asset values, which has been underpinned by cheap money, will continue indefinitely. Overconfidence was a hallmark of the years leading up to the global financial crisis of 2008.

DIGITAL DISRUPTION Investors are on the alert for technological trends that could revolutionise other real estate sectors the way ecommerce has retail and co-working has offices. However, the difficulty of predicting outcomes has led risk-averse investors to focus on acquisitions in global cities where demographic trends seem to protect long-term value.

CMY

years that changed surveying It’s been 150 years since the Institution of Surveyors - which in time became the Royal Institution of Chartered Surveyors – was established. Here we pick out 10 key years that shaped its history and the role of the surveyor

ILLUSTRATIONS BY JAMIE PORTCH

1868

RAILWAY MANIA SWEEPS THE UK Britain was gripped by an epidemic of rail development, as the new technology reshaped communities and made cities on an entirely new scale possible. Industry journal Estates Gazette reported: “Never before in the history of England has there been such a boom”. With big money to be made, all comers were happy to sell their services as a surveyor. In Professor FML Thompson’s 1968 history, Chartered Surveyors – the Growth of a Profession, he refers to a “swarm of charlatans” consisting of undertakers, wine merchants, linendrapers, ironmongers, builders and plumbers getting in on the act. A reliable and trustworthy guarantee of professionalism was required, so in 1868 a group of 20 railway-oriented surveyors met at the Westminster Palace Hotel in London to found the Institution of Surveyors.

RICS @ 150

1881

QUEEN VICTORIA GRANTS THE ROYAL CHARTER The Royal Charter was granted on 26 August 1881 by Queen Victoria, prompting a name change for the Institution of Surveyors, which became the Surveyors’ Institution. The charter reinforced the Institution’s original objectives: “to secure the advancement and facilitate the acquisition of that knowledge which constitutes the profession of a surveyor, to promote the general interests of the surveyor, and to maintain and extend its usefulness for the public advantage”. Forty years later, a supplemental charter was granted by King George V, who became patron – a tradition continued by every sitting British monarch since.

1895

A CONVENIENT NEW HOME FOR THE PROFESSION

1914 THE GREAT WAR EFFORT

After 27 successful years, the Institution decided it needed a permanent address, and launched a competition in order to select the architect. The winner was Alfred Waterhouse, who had already built London’s Natural History Museum. The design pleased the building committee in every way, except that it had omitted to include toilets, which Waterhouse duly built into the plans. Finishing in 1899, the building cost £34,198. By the time of Queen Victoria’s death two years later, Britain was transformed: 100 years earlier, London had been its only city with a population over 100,000; now 49 more had grown up to join it. But urbanisation had led to squalor. Charles Booth’s Survey into Life and Labour in London shifted attitudes toward the poor, and housing became a priority.

The First World War brought the Institution into service, with surveyors working to maximise production of food, and timber for army camps, railway sleepers and trench boards. They were also called upon to act in cases of land requisitions, and in the construction of temporary buildings. The Institution also lent its premises to prime minister David Lloyd George’s government for wartime meetings. In the fields of France and Belgium, surveyors plotted lines of trenches and mapped positions from the air – the first time that aerial photography was used to capture survey information. Members of the Institution were recognised with 136 British medals, 11 foreign ones (including three Croix de Guerre) and at least 38 instances of civil recognition, while 247 members lost their lives.

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1939 REBUILDING BRITAIN

The outbreak of the Second World War took members of the now-renamed Chartered Surveyors’ Institution back to the front, at which point their numbers had reached 9,000. In 1940 the bombing of Britain began, damaging or destroying more than a million houses within 10 months. In response, prime minister Winston Churchill’s War Damage Compensation Bill promised government-funded compensation for the owners of property damaged by bombing. This led to perhaps the greatest exercise in the profession’s history, as the specialist skills of the surveyor were vital in costing and valuing building works in relation to claims.

1946

JUST ONE FINAL CHANGE OF NAME… Following the war, the Institution was granted the title “Royal” by King George VI and, in July 1947, it became the Royal Institution of Chartered Surveyors and adopted a coat of arms. Its Latin motto, Est modus in rebus, means “there is measure in all things”. That same year, the Town and Country Planning Act was introduced in Britain. Together with the New Towns Act, it was a bold attempt (in the words of 1949 RICS President, John Watson) “to combat the cancer of urban congestion and overcrowding which since the Industrial Revolution has increasingly menaced both the body social and the body politic”. Meanwhile, more than 9.5m ft2 (882,500 m2) of office space had been lost due to bombing in London alone, which meant there was a huge onrush of new building.

1979 EVERY THING GOES BOOM

After a brutal recession, Margaret Thatcher became prime minister in 1979 and the 1980s property boom years began, fired by recession-fuelled inflation. By 1983 almost 60% of British people owned their own homes, and by 1984 well over 500,000 localauthority-owned properties had been bought by their tenants. This was also the decade during which computer-aided design (CAD) made an impact: not just as a quicker and more flexible alternative to paper drawings, but as the starting point for today’s building information modelling (BIM) technology. Using a 2D or 3D computer model that can be continuously altered, tested and updated has made a huge difference to the way buildings are created, and has had major implications for cost planning and management.

RICS @ 150

2000

2012 STANDARDS FIT FOR THE WORLD

EVERY THING IS THE SAME, ONLY DIFFERENT

The new millennium marked a series of changes, as RICS transitioned to being a global organisation. Over the course of the century, the worldâ&#x20AC;&#x2122;s population had risen from 1.5 billion to 6 billion, and RICSâ&#x20AC;&#x2122; membership had grown from 2,717 to more than 100,000, with professionals now found in more than 100 countries. One year on, RICS produced its Global Manifesto which, as well as championing sustainability, recommended collaboration with governments to ensure that land rights are settled fairly in areas where formal title is unclear; and that detailed ownership data should be transparent and available to everyone. RICS also identified the importance of safeguarding the rights to property of women in developing countries.

The growth of an international standards movement in land, property and construction saw RICS begin to collaborate with organisations to agree on international standards for property measurement and valuation, land measurement, construction cost measurement and ethics. The first to be implemented was the International Property Measurement Standard (IPMS), which addressed the many inconsistencies worldwide in what is included in measurements of buildings. Such inconsistencies were estimated to be responsible for variations as high as 24% between markets. By providing a single reference point, IPMS increased transparency, reduced risk for investors, and facilitated easier and simpler international property transactions.

As RICS celebrates its 150th anniversary, there are parallels and contrasts that demonstrate both how the role of the surveyor has changed, and how much it has remained constant. Urbanisation is still happening at breakneck speed, but this growth is now happening in new markets across Asia, Africa and the Americas, presenting significant challenges for housing and planning. Meanwhile, transport infrastructure is developing quickly in such markets, at a rate and scale that makes the original railway mania of the 19th century seem quaint. However, the demand for trustworthy, skilled professionals to facilitate this growth has arguably never been stronger.

GLOBAL LIF T OFF

2018

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Like never before, world cities are competing with each other directly for success, and facing a number of social, economic, geographical and political challenges that stand in their way. So which ones are forging ahead? We ask a variety of experts for their take on what constitutes success in the makeup of the 21st-century city, and which one they think is in pole position.

WHICH CIT Y WILL WIN?

INTERVIEWS BY DAVID ADAMS

Q3 2018 / MODUS APAC / 35

LOS ANGELES THE CIT Y IS NO LONGER ONLY NAMECHECKED FOR RIOTING AND GAS-GUZZLING CARS, SAYS SARAH ICHIOK A, BUT AS A BE ACON OF RENE WAL

“ AT LEAST ONCE A MONTH SOMEONE WILL TELL ME THEIR FANTASY ABOUT MOVING TO LA ”

or me, Los Angeles offers the appeal of a certain kind of redemption. The city epitomises the stereotype of bad urbanism, but there are now many promising initiatives under way aiming to turn that around. If, 20 years ago, anyone had said Los Angeles would have the fastest-growing public transit system in North America, they would have been laughed out of the room. Now, the city is a useful model for retrofitting urban landscapes that may have developed to serve the car. Today, Los Angeles is looking to double the size of the region’s mass transit network – $120bn has been committed to do that, raised by an increased sales tax that voters said they wanted to fund urban improvements. Cycling has also picked up at a tremendous rate, in part because Los Angeles is, mostly, incredibly flat. The topography and the year-round good weather make it a cycling paradise. Partly through its proximity to Latin America, and it being a Pacific Rim city, Los Angeles is a beacon of diversity. Something like 30% of business start-ups are created by international immigrants. It has amazing civil society organisations – the city is a great case study in bottom-up neighbourhood initiatives. One example of sustainable urbanism is a neighbourhood scheme called the Los Angeles Eco-Village, in an area that was devastated by the riots during the early 1990s. They have a community support agriculture scheme, and have done an incredible job of maintaining affordability while other neighbourhoods gentrify. Land under the village is now owned by a community land trust, and the main residential buildings at the core of the community are owned by a limited-equity housing cooperative. Everyone owns shares, which allows flexibility for dwellers across their life-cycle. You could start off single, then become a couple, then a family, then your children leave – and you maintain your equity in the cooperative while changing the unit you use. That’s creating the mixed-age communities that so many people strive for. The city will also be hosting the 2028 Olympic Games. I know that hosting the Olympics can be an incredible catalyst for getting projects along that last mile, so I think that winning the right to host the Games has come at a really good time (How to, p46). Without exaggerating, at least once a month I have a conversation with someone who has a fantasy about moving to Los Angeles. I think that tells you something about the city. Sarah Ichioka is an architect and urban strategy consultant, based in Singapore

MANCHESTER GLOBALLY AND IN THE UK, MANCHESTER LEADS THE WAY AS A TEX TBOOK RESILIENT CIT Y, SAYS DIL ANTHI AMARATUNGA FRICS

reater Manchester covers 493 square miles (1,276 km²) and has urban, suburban and rural areas, so it is exposed to a very wide range of climate and extremeweather-related risks, including flooding, storms and snow. It also has the UK’s third largest airport. Bearing in mind its importance to the region, it is vital that the city is able to take action to mitigate the risks to which it is exposed. In 2014, the city became the first in Britain to join the UN’s Making Cities Resilient Campaign, and was recognised as a “Role Model for Total Resilience” after it implemented all the campaign’s 10-point checklist for building resilience. It created a textbook model of a multiagency civil contingencies service for emergency planning and responses to disasters. Two years later it became one of the 100 Resilient Cities pioneered by the Rockefeller Foundation, meaning it is a city that is prepared to face disaster, rather than only being able to act in the aftermath of a disaster. But Manchester’s strengths go far beyond its resilience. It has great cultural diversity – there are a lot of different communities living in the city region, getting on well together. It also has a strong education system, with excellent schools and several renowned universities – indeed, the city has one of the largest populations of students in the UK. Its economic strength and cultural diversity have made it a great place to live. Dilanthi Amaratunga FRICS is professor of disaster risk management at the University of Huddersfield

WORLD CITIES

ULAANBAATAR VISHA AN CHAKRABARTI ARGUES THAT THE MONGOLIAN CAPITAL IS A RESERVOIR OF UNTAPPED POTENTIAL

It is very trade-dependent, mainly selling coal, copper and other materials – but this is not dissimilar to many of the cities in the Persian Gulf: think of Saudi Arabia and the UAE, where you have extraction-based economies that have transformed themselves into services-based economies. It does have problems related to coal and pollution. But I believe that this country will transform itself into a technology, education and cultural hub. China has an enormous national security incentive to create renewable energy. Once that happens it will spread to Mongolia very quickly.

and Seoul; maybe four or five hours from Hong Kong and Tokyo; and not that far from Moscow. You have to remove your Western hat and understand what sits in relation to it – and the answer, it turns out, is a lot. There may be people who will read this and think “Ulaanbaatar? Get out of here!” But I remember as a kid landing in Dubai and it was a two-storey fishing hamlet. There was nothing there, and now it’s home to the world’s tallest skyscraper. Cities can transform themselves. Economies and cities can shift quite rapidly. Look at India. You had a highly educated middle class and strong broadband technology and, all of a sudden, a technological powerhouse was created. Most of Mongolia’s trade is with China, but the people have more of a social bond with Russia and the lifestyle of the steppe.

Vishaan Chakrabarti is founder of New Yorkbased architect PAU, and associate professor of practice at the Graduate School of Architecture, Planning & Preservation, Columbia University

IMAGES BY GETTY

n my travels I have found that many of the places I visit have become the same. Ulaanbaatar is completely immune to that. It’s a very different place, for a variety of reasons. Even though it’s the coldest capital in the world, it’s spectacular. It’s surrounded by a ring of mountains and the light is incredible – the city has 250 days of blue sky per year. Mongolia has a population of 3 million, and 1.3 million of them live in Ulaanbaatar. The next biggest city has a population of 100,000. The country turned into a free-market economy in 1992 when the Soviet Union fell. Mongolia has an almost 100% literacy rate, and most people have internet access. Here’s a country that’s open to business; highly literate; sandwiched between Russia and China; only a couple of hours from Beijing

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GUANGZHOU CHRISTOPHER CHOA ARGUES THAT THIS JE WEL OF THE PE ARL RIVER DELTA IS THE WORLD’S BEST CIT Y FOR CONNECTIVIT Y

WORLD CITIES

“ I WOULD BET YOU’RE USING OR WEARING SOMETHING MADE IN THE PEARL RIVER DELTA ”

BOGOTÁ COLOMBIA’S CAPITAL HAS THE GRE ATEST POTENTIAL FOR ENVIRONMENTALLY FRIENDLY EXPANSION, SAYS CRISTINA GAMBOA

any cities are trying to achieve a vision of green growth and lowcarbon development, in the context of increased urbanisation. Bogotá is a city of 8 million people and 2.97 million homes. We are going to build a further 2.89 million by 2050. Bogotá wants to lead the way in providing green, comfortable, affordable housing. Since 2015 there has been a national policy in Colombia mandating energy and water efficiency in new builds, but there have been difficulties with its implementation. To address these, Bogotá has joined the Building Efficiency Accelerator (BEA), an international programme that pairs city administrations with private sector expertise in energy efficiency best practice. This has led to the creation of a technical study and a draft strategy for Bogotá that will make the national policy enforceable, in line with the objectives of the city’s masterplan. The new green building policy is mandatory for all new builds. It means that by 2050, all new homes will be able to use water and energy more efficiently. There will be a 25% reduction in utilities costs and a 32% reduction in greenhouse gas emissions. The city is also an international exemplar of transit-oriented development. It is a very bikefriendly city: Bogotá has a 244 mile (392km) network of cycle paths – the largest in Latin America.

he four biggest drivers of change for all cities, but also the four biggest challenges, are migration, demographics, climate change and technology. It’s also important to look at demographics in the context of urbanisation, which creates wealth. Not only is Asia urbanising at a faster rate than any other region, but the global middle class is shifting there, too, from 35% of the world’s total now, to 70% by 2050. So the cities that are getting wealthier are where urbanisation is taking place and where that huge shift in the middle class is happening. If I had to pick one city for being well connected, it would probably be Guangzhou, in China’s Pearl River Delta. The delta is now one of the most densely urbanised areas in the world. It’s becoming a megaregion of 80 million people, including Guangzhou, Dongguan, Shenzhen, Macao and Hong Kong. It’s also the best-connected region in the world. Guangzhou is more affordable than Hong Kong or Shenzhen, so it’s more attractive to young people. It benefits from great transport links to both of those cities and others. It’s served by five different metro systems, there are rail and ferry links to the international airports in the delta, and you have amazing infrastructure like the Hong Kong-ZhuhaiMacao Bridge system. I would bet you are using or wearing something that was made in the Pearl River Delta. Your phone or laptop contains components assembled there. At least one of your items of clothing will have been made there. Something like 5% of the world’s goods are produced in the delta, and its GDP is larger than that of Indonesia, the Netherlands and Turkey. This whole region was also a source of emigration to Europe and the Americas in the 20th century, so there are a huge number of personal links that reach back from all over the world to this part of China. There are two kinds of cities in the world: making cities and made cities. Made cities are where you go when you’re comfortable. They tend to be dominated by tourism, such as London and Paris. Then there are the places you go to if your ambition is white-hot, where you go to make your fortune. The cities that are going to attract the next generation of wealthcreators are going to be the winners. The Pearl River Delta, if you’re a young, ambitious person in China, is where you want to live.

Cristina Gamboa is CEO of the Colombia Green Building Council in Bogotá

Christopher Choa is a vice-president and head of the urban development practice at Aecom in London, and executive board chair of the Urban Land Institute

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LONDON

SINGAPORE

BEN SMITH ARGUES THE UK CAPITAL’S ABUNDANCE OF PARKS AND GARDENS MAKES IT A WORLD LE ADER IN GREEN INFRASTRUCTURE

BY ANY FACTOR YOU CHOOSE TO CONSIDER, NOWHERE ELSE BE ATS THIS CIT Y STATE FOR QUALIT Y OF LIFE, SAYS HOSSEIN REZ AI

here are a lot of challenges facing London and you can have a sense that things aren’t going so well: we read a lot about poor air quality, the number of people sleeping rough and the shortage of affordable housing. But I feel positive because, more than ever before, I sense a real connection between local communities, borough councils and business leaders. Where you’ve got those connections, you’ve got some chance of creating real change. I’ve been volunteering as a trustee for London National Park City: the campaign to make London the first city national park in the world. That has helped me to recognise how many good things are happening here already. There are lots of great parks to protect, but 24% of London is garden space, then there are the street greening initiatives. The bigger property developers are starting to realise that if they’re able to bring forward developments that are green, they will sell faster. I’m hoping to bring some of them together in the next few months to talk about this subject. The conversation

will begin by trying to understand what type of pledge they must sign up to. There has been talk about people leaving London for other cities because of Brexit. Those other cities may have pull factors, but we want to respond to that with our vision of London as an ecologically rich place, where more people than ever are walking and cycling. There’s always a cynical outlook on new development, but walking through the Queen Elizabeth Olympic Park last summer I saw all the public barbecues being used by families of different ethnicities and cultures. I don’t dispute that this is a city with deep social problems. But around London’s parks and schools – places that are at the heart of communities – you do see families living side by side. I feel very positive that there are lots of good things happening and we need to celebrate those, as well as talk about the bits that aren’t going so well. It’s through celebrating the good things that are happening that we create change. Ben Smith is director, energy, cities and climate change, at Arup in London

s someone who has been involved with design for the built environment for 40 years, I have developed a good sense about what factors should be important to most of us to ensure a good quality of life. Based on even just a few of these – dealing with challenges of climate change; reducing inequalities between rich and poor; improving education and health – Singapore stands to have a better future than other cities. Singapore has been dealing with climate change through policies for the built environment, better management of water resources and policies around energy use. For instance, the Green Mark Scheme, which measures how sustainable buildings are, has contributed to a 700GWh drop in energy consumption between 2008-16. Government policies have enabled property ownership for around 90% of the population. This was part of the original policy of giving Singaporeans a sense of ownership of the country – to gain a closer affinity to their home. Singapore is punching far above its weight for a country of its size. The population is about 5.6 million, half of whom are foreigners. It has one of the biggest ports in the world, thanks to its strategic location between Europe, Australia and China. It is also just a few hours’ flight from Mumbai, Shanghai and Sydney. Dr Hossein Rezai is director of civil, structural and geotechnical engineering consultant Web Structures, Singapore

40 / MODUS APAC / Q3 2018

APREA-RICS Property Technology Conference 14 November 2018, Singapore A deep-dive into Singapore’s initiative to become a "smart nation" through the Industry Transformation Map. We will look at how property-technology platforms are both disrupting and enabling the country’s transformation. We will speciﬁcally focus on how businesses transact through technology and investigate how companies or individuals might break away from traditional real estate-related processes.

Find out more at rics.org/PropTechSG

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2018-07-26 04:46:11 +0000

RICS Technology Era Series: PropTech Conference 2018 23 November 2018, Hong Kong The world is undergoing a technological revolution that has disrupted every facet of human activity, and the built environment. Technology has transformed the way properties are constructed, managed and utilised. We will focus on enabling the property sector to stay ahead of these seismic changes by looking at how technology impacts the way industry must operate, and what the future holds.

Find out more at rics.org/PropTechHK

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BLUE BOX THINKING

The Daytona 500 motor race celebrated its 60th anniversary this year in a newly refurbished venue, thanks in large part to the efforts of Muldowney, who led a $400m project to improve facilities at the Daytona International Speedway in Florida, rejuvenating interest in the event.

FRANK LUND FRICS / Derbyshire-based Lund and his associates are the brains behind the Aquabox – a blue box packed with aid items for victims of human conflict and natural disasters. Incredibly, once empty, the boxes can then be reused for filtering water, helping to save lives long after the initial disaster. IMAGES BY GETTY

WORDS BY BRENDON HOOPER

SPEEDY REDEVELOPMENT

PRIDE As part of our 150th anniversary celebrations, we’ve been looking at the RICS professionals who’ve made a significant contribution to society. Here is just a small selection of their achievements

DEREK MULDOWNE Y MRICS /

RICS @ 150

Concerned at the time by the UK’s rising level of homelessness, Watts co-founded the Hyde Housing Association in 1967. Over the past 50 years, the association has helped provide affordable homes for hundreds of thousands of disabled, elderly or low-income people excluded from the mainstream housing market across south-east England.

AKINOL A OL AWORE FRICS /

MARK OWEN CLIF T FRICS / On a 59 acre (24 ha) site at Telegraph Bay, Cyberport is the Hong Kong SAR government’s flagship facility for the territory’s digital tech industry. The state-ofthe-art, 1.9m ft2 (176,500 m2) complex helps support emerging technologies and digital businesses in fields such as fintech, e-commerce, wearable technology, big data and artificial intelligence. Clift led a team of professionals that was instrumental in developing the facility and nurturing some of Hong Kong’s most innovative technology start-ups, such as Smart-Space, which launched in 2009 as the city’s first official co-working space. Under his management, Cyberport grew into a thriving innovation ecosystem, which connects technology companies and talents in Hong Kong, east Asia and globally. Furthermore, his long-term commitment and professional approach was always based on RICS standards, ethics and practice; qualities that played a huge role in the success of Cyberport and, by extension, Hong Kong’s growing digital industry. Sadly, Clift passed away in July 2017, but his contribution to the economic development of Hong Kong and the tech sector will have a hugely beneficial impact on local businesses for many years to come.

Fifteen years ago, Akinola Olawore led Nigeria’s first-ever public-private partnership regeneration project. The story begins on Ligali Ayorinde Street in Lagos’ Victoria Island, which was in a constant state of disrepair and prone to flooding. Every day, drivers would struggle to use the road. It was also having a noticeable effect on property prices and further development in the area – a planned $6m commercial project was even threatened with cancellation, unless the road was significantly improved. After submitting an infrastructure development plan to the investor behind the project, and mobilising other investors in the region, Olawore convinced the state government to try a publicprivate partnership to develop the road. Taking place in two phases across 2003 and 2008, both led by Olawore, the regeneration works included replacing the drainage network to alleviate flooding. By 2008, thanks to the success of the first phase of the project, the new road had become a catalyst for investment to the area. Since then, more than $600m in commercial and $67m in residential investment has flowed into the area. Not bad, for upgrading just 1km of road.

DIGITAL DISRUPTOR

ON THE ROAD TO RECOVERY

A PLACE TO CALL HOME

TED WAT TS FRICS /

Q3 2018 / MODUS APAC / 43

ROBERTO BANDIERI MRICS/ The earthquake that hit the Italian region of Amatrice in August 2016 devastated the area, killing 297 people. Following the disaster, earthquake relief charity Claps Furlans sought out rural development specialist Bandieri to aid them with the reconstruction effort. After consulting on how best to provide not just physical, but also sustainable economic reconstruction, Bandieri’s team began by rapidly building wooden houses for cattle breeders and repairing damaged cattle sheds. This way, the farming industry was able to recover quickly in the months after. A shared facility for production, food service and sales was also built, which helped create a culture of value within the local community and an integrated supply chain. And with an eye on the next generation, the team set up a series of classes for young people, teaching them to understand the value of rural areas. By incorporating standards and ethics into the reconstruction of Amatrice’s agricultural capability, Bandieri’s contribution will have a long-term influence on the future success of the area.

HOSPITALS RECEIVE FULL DIAGNOSIS

Commissioned on an enormously complex 3,000 acre (1,200 ha) project to extend the Panama Canal by 25 miles (40km), Bakker’s RICS qualification played a huge role in winning the tender, as he demonstrated to stakeholders that the project would be built to the highest standards and with a strong emphasis on sustainable features.

THE

PICKING UP THE PIECES

HIGH WATER MARK

ARÈNSO BAKKER MRICS/

CRAIG MACDONALD MRICS/ The safe operation of hospitals relies upon high standards of cleanliness and procedure. But these standards are particularly hard to achieve in rural Papua New Guinea. Many of the country’s hospitals were built in the 1950s out of leftover building materials from World War II. They are often dilapidated, and continually suffer seismic damage from nearby volcanic activity. The hospitals face daily struggles when it comes to the facilities available, such as running water for surgeons to adequately wash their hands before surgery. Inspired by how the surveying profession can make a difference to rural communities, last year Scotland-born MacDonald led a project to produce a thorough set of condition surveys of the dilapidated hospitals. Through a combination of building pathology, constantly evolving inspection methodology, technology and reporting, his team has produced an up-to-date review of the conditions of the hospitals. These condition reports will be essential in building a case for future investment into vital medical facilities for these remote and poor communities.

VALUATION FOR THE NATION

JIMMY OMOTOSHO FRICS/ Surveying almost 700 roads and bridges covering a distance of 427 miles (687km), Omotosho led the first full-scale valuation and identification of the infrastructure assets of Lagos, Nigeria’s largest city. The project has helped the government to be more transparent and accountable in the management of state assets.

STUART CALL ANDER MRICS/ SHONAH URQUHART/ MRICS Developed in Germany in the late 1980s, the Passivhaus (Passive House) standard helps minimise fuel costs in buildings through the use of renewable energy technologies and excellent thermal performance. In 2006, Dormont Park in Annandale became the first multi-home development in Scotland to apply the standard, which required a high level of professionalism to avoid construction risks. While Callander’s expertise was vital for assessing the risks associated with the use of the new technologies, such as triple-glazed windows and mechanical ventilation and heat recovery units, Urquhart was instrumental in making sure the plans were economically viable and within the constraints of the government’s grant scheme, which was being piloted specifically for the project. Completed in 2011, the awardwinning development is now regarded as a benchmark for sustainable housebuilding in Scotland. Each house produces only around 3 tonnes of CO2 a year – compared with an average 63 tonnes emitted by a traditionally built house. But perhaps more significant for tenants in an area not connected to a gas main: lower energy bills coupled with affordable rents are doing wonders to support the economic sustainability of a fragile rural community.

PRICELESS CONTRIBUTION

PASSIVE ACHIEVEMENTS IN HOUSEBUILDING

PROFESSION

RICS @ 150

JAMES NISBE T FRICS/ As the developer of the Elemental Cost Planning technique, Nisbet first used his ground-breaking method in 1951 to radically cut the costs of building primary schools in the UK. Later developed by RICS’ Building Cost Information Service, his idea has enabled accurate cost estimates for thousands of projects across the UK. Pride in the Profession: tell us about the people and projects you admire most at rics.org/150

Q3 2018 / MODUS APAC / 45

EXPERIENCE

HOW TO…

The Olympic stadium at Pyeongchang, the venue for the 2018 Winter Olympic and Paralympic Games, is already being dismantled, as the rural South Korean county where it is located cannot afford to maintain a 35,000-seat stadium. This highlights how the planning and construction of an Olympic Games is changing due to the cost of these megaprojects. In contrast to the bidding wars that have surrounded previous Olympics, the 2024 and 2028 Games have been awarded to Paris and Los Angeles respectively without a contest. Both events will reuse facilities from previous events, but will still require substantial masterplanning and refurbishment work. Modus spoke to surveyors and other built environment professionals involved in upcoming and previous Olympic Games to find out the unique challenges these showpiecs projects entail.

THERE COMES A POINT WHEN EVERYBODY REALISES IT’S HAPPENING

YOU MUST START WITH WHERE THE FUNDING WILL COME FROM

David Higgins FRICS worked for Rider Levett Bucknall on both the London and Rio Olympics, before taking up his current role at the 2020 Dubai Expo

Bill Hanway is executive vice-president and global sports leader at Aecom. He worked on two previous Games and is now working on LA 2028

One of the most enjoyable things about working on a big event like the Olympics is that you end up working with such an enormous range of different people. I can’t imagine a more complicated project. Here at the Dubai Expo 2020, everything is on one site. Maybe in the Olympic Park you will have multiple events but otherwise you will have another 15 to 20 venues that will need to be dealt with independently. With something the size of the Olympic Games the temporary facilities that go into the venues are quite substantial but no one wants to spend money on something that won’t be there long. Then there is a fixed deadline. You have to get things procured and in place early, but the challenge is that organisations’ needs constantly change. Overall, though, it’s a plus. It adds pressure and impetus to the team, particularly at a senior level, to make decisions and get things together. Two to three years out, everybody will be a bit relaxed and won’t see the train coming down the track. But there comes a point when everybody realises it’s happening and they need to pull in the same direction. In the weeks before, everybody drops their day job and they will be out on site hanging posters or banners to get the thing finished for the opening day.

It’s like creating a start-up that goes from a small handful of people to up to 10,000, delivering billions of dollars of work. Then after the Games, the entire company shuts down. Trying to find that level of expertise in that time constraint in each city is hard. We like to establish the city’s goals as early as possible. Historically, some Games have been expensive and spun out of control, so it’s important to understand the rationale for holding the Games and establish the benefits. Often enthusiasm for hosting an Olympics has outweighed practical thought about delivery. You must start with the balance of funding between the public and private sector and the gap funding that’s needed. Los Angeles 2028 will be the first purely privately funded Games since 1984. We don’t have to build a single new permanent venue – we will use existing venues or build temporary ones. In the process, some of the challenges we have seen with cost overruns due to land acquisition costs have been eliminated. Another advantage is that with a venue like the Staples Centre, where the basketball will be held, we can use teams who host events there, so we don’t have to train staff. It’s a very different attitude and approach: we are being constantly pushed to be liable and financially responsible.

INTERVIEWS BY DAVID BLACKMAN; ILLUSTRATIONS BY MICHELE MARCONI

Build an Olympics

IT’S IMPORTANT TO HAVE A FULL APPRECIATION OF DIFFERENT SKILL SETS

HAVING A DEADLINE REALLY FOCUSES EVERYBODY’S MINDS

FINANCIAL DISCIPLINE IS CRUCIAL ON PROJECTS OF NATIONAL IMPORTANCE

Jon Coxeter-Smith MRICS, founded the consultant Sagacity in 2011, was an adviser on Chicago’s 2016 Olympic bid and advised on the 2016 Rio Games

The Homes & Communities Agency’s Gareth Blacker MRICS was director of development for the London 2012 Olympic Delivery Authority

Tsunenari Kano MRICS is executive director of the Building Surveyor’s Institute of Japan. The country will host the 2020 Tokyo Olympic Games

I was working for Davis Langdon as an adviser to the Chicago bid on the day the company was celebrating its success as part of the London Olympic Delivery Authority (ODA) team. Everybody else was drinking champagne in the office. By the time I had finished, I ended up with the dregs of a bottle thrust into my hand. I didn’t need it though – it was exciting enough. It’s important to have a full appreciation of the different skill sets and knowledge that groups bring to the table and not be dismissive of any of them. Sometimes [outside] specialists need to get out and understand they are living in a wider world. They can be too focused on the technicalities of what they are doing and insensitive to the people side. They march in and assume everything is fixed and then get irked when they have to make modifications or spend effort bringing an important group of people up to speed. Sometimes the locals are a little bit slow to acknowledge what they don’t know. If they haven’t done something like this before or in a long time, there are a host of things that they haven’t had a chance to learn or practise. When you explain it like that they can accept it without a loss of face, whereas it can otherwise come across as arrogant.

Work on an Olympic project progresses at a pace that you wouldn’t normally see. Having a deadline really focuses people’s minds. It’s challenging, but rewarding. Having picked a complicated site with multiple ownerships, our job was to give some credibility to the London bid and show that the site was coming together into a single ownership. This involved a lot of core surveying planning and development work. We had a period of acquiring bigger strategic sites off market and trying to create alliances with public landowners. We didn’t just want to offer compensation but give all businesses, residents and Travellers opportunities to relocate. If we hadn’t done that planning, we would have a significantly higher number of objectors to the compulsory purchase process because people would have felt the need to object. There were some heated public meetings but behind the scenes there was some good collaborative working. When we got on site, we had to make sure that once the temporary facilities were removed, the bridges and green space in the Olympic Park would facilitate development after the Games. Surveyors were the unsung heroes of the Olympics: you expect the attention to be on individual iconic buildings, but RICS professionals were involved throughout.

One natural benefit of hosting an Olympics is the great opportunity to develop or update infrastructure such as national sports stadiums. However, there is no clear map for maintaining such a valuable legacy from the cost and benefit perspectives. In 2012, an international competition was held to design Japan’s new national stadium, and the bid from Zaha Hadid Architects was selected. The design was innovative, with a retractable roof so events could be held in all weather, but the construction cost was more than twice the budget. Due to the traditional way of dealing with project costs in Japan, architects are less conscious of this factor – budget overruns are typically borne by the project owner or contractor. Even the design competition for the new national stadium could not escape such an old Japanese tradition: the budget of ¥130bn ($1.18bn) provided by the project owner was not seriously considered. I expect that this aspect of construction projects will be handled differently, with more adherence to international standards, in the future. Ultimately, the original winning design was retracted, the terms were changed drastically, and a proposal followed using a design-build method. It is expected that completion targets, which were thought to be difficult to realise, can be achieved within the main contractors’ technical capabilities.

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EXPERIENCE

NEWS IN BRIEF

EVENTS

ORGANISATIONS UNITE TO SOLVE FIRE SAFET Y IN BUILDINGS

RECOGNISING SUCCESSFUL YOUNG WOMEN IN SOUTH-EAST ASIA

RICS has joined with more than 30 organisations from around the world to develop landmark industry standards to address fire safety in buildings. The group, known as the International Fire Safety Standards (IFSS) Coalition, was recently launched at the UN in Geneva. The standards aim to set and reinforce the minimum requirements to which professionals should adhere to ensure building safety in the event of a fire. rics.org/firesafetycoalition

After the success of the inaugural Women of the Future Awards Southeast Asia 2018, we are pleased to once again sponsor the Property, Construction and Infrastructure category at next year’s awards. The awards recognise women under 35 and help showcase and highlight emerging leaders. Nominations are open until 17 October and the awards dinner will take place on 21 March 2019 in Singapore. rics.org/wotfsea

CITIES FOR OUR FUTURE GLOBAL SHORTLIST ANNOUNCED

FUTURE OF THE PROFESSION CONSULTATION: HAVE YOUR SAY

In early 2018, we launched the global Cities for our Future challenge as part of our 150th anniversary, for which we asked young professionals to help solve the defining urban challenges of our time. We now have the 12 finalists who will go on to compete in the global judging process. The grand final winner, who will receive £50,000, will be announced in November. rics.org/cfofshortlist

Led by RICS Governing Council, we have launched a consultation on how we can ensure effective leadership in equipping the profession for the future. The consultation aims to explore how we can not only find ways of streamlining today’s processes, but how we can use people and technology to deliver today’s outcomes in radically new ways. To take part – and gain 30 minutes’ informal CPD – go to rics.org/futureprofession.

VIEWS SOUGHT ON INTERNATIONAL L AND MEASUREMENT STANDARDS

RICS RESEARCH TRUST CHANGES THE WAY IT AWARDS FUNDING

The International Land Measurement Standard (ILMS) aims to bring about consistency in land and real property transaction reporting standards worldwide. This is to be achieved through the creation and adoption of ILMS, which sets out a structure for describing and reporting relevant information for land transaction purposes. Consultation on ILMS is open until 31 December 2018. To take part, please go to: rics.org /ilmsconsultation.

From October, RICS Research Trust will be encouraging research in specific areas by means of “defined calls”, the topics for which will be published on our website. The trust will also consider applications outside specific areas as “open calls”, which will need to demonstrate that they have secured matching funds or otherwise convince the trustees why matching funds are hard to find. The next closing date for entries is 5 October. For more information, go to rics.org/researchtrust.

MALAYSIA BIM Conference 19 September, Kuala Lumpur When it comes to BIM implementation, what’s next for the industry? We will take a closer look at Malaysia’s Construction Industry Transformation Programme (CITP) 2016–2020 and discuss how the country’s construction projects could benefit from the implementation of BIM. CPD: 6 hours rics.org/bimmalaysia

CHINA Commercial Real Estate Asset Management Summit 11 Jan 2019, Chengdu Discussing the management of commercial real estate from the perspectives of investment, financing, management and retirement. CPD: 8 hours rics.org/commpropcn

HONG KONG RICS Technology Era Series: PropTech Conference 2018 23 November Focusing on how the property sector can stay ahead of seismic changes in the industry by looking at how

technology impacts the way it must operate, and what the future holds. CPD: 7 hours rics.org/proptechhk

SINGAPORE APREA-RICS Property Technology Conference 14 November A deep-dive into Singapore’s Industry Transformation Map (ITM), looking at how proptech platforms are disrupting and enabling the country’s transformation. With a focus on business transactions through technology, and how we might break away from traditional real estaterelated processes. CPD: 6 hours rics.org/proptechsg

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EXPERIENCE

WHAT IF…

All vehicle emissions were banned in cities? Phasing out the internal combustion engine could set in motion a mass transportation revolution

50 / MODUS APAC / Q3 2018

This would probably mean privatisation of public transport, as public bodies don’t have the necessary money to invest. Every city will approach the issue differently, of course, but I can’t see many being able to match the investment available to big manufacturers and technology firms. My practice has spent a great deal of time and energy on our Cartube proposal, which would see AV technology combined with underground infrastructure for a new form of mass transit. It would require significant expenditure, but the benefits from reduced congestion and emissions would be huge. It may be a step too far for now. But if governments set out a road map towards eradicating vehicle emissions, both municipalities and private industry would be able to deliver revolutionary change.

“ Electric autonomous vehicles will greatly increase road capacity ”

Lars Hesselgren is director of research at PLP Architecture in London

INTERVIEW BY ADAM BRANSON; ILLUSTRATION BY MICHELE MARCONI

From a political point of view, banning vehicle emissions overnight is a non-starter – whoever enacted such a policy would be voted out of office at the first opportunity. But that doesn’t mean that it can’t happen. Indeed, if climate change is to be tackled, it has to happen – intelligently, and in a phased manner over several years. If the politics are difficult, so too are the practicalities. Industry isn’t prepared for rapid change. Apart from anything else, the base materials needed to make the batteries for electric vehicles are mostly found in volatile parts of the world. The issue is slowly resolving itself, but it will take time. However, the market for electric cars has been transformed in the last two to three years, with major car manufacturers investing in a big way. Any policies announcing the phased decommissioning of the internal combustion engine would supercharge the market. The question then is one of deployment. It seems logical to combine electric cars with the rapidly developing autonomous vehicle (AV) technology. There’s a lot of synergy, but the key argument is that electric autonomous vehicles will greatly increase the capacity of road networks. Initially, that is likely to be rolled out on motorways and for freight, perhaps in a single lane. This is already being looked at on a stretch of highway between Seattle and Vancouver, and the expectation is that it will halve travel time and double capacity. The other obvious step is to combine AV technology with ride sharing to introduce a new form of mass transportation, especially in cities with poor bus networks. Once proven in one municipality, it would spread like wildfire around the world.