THE AGE OF EXTREMES / 24
SURVEYORS VS THE PANDEMIC / 18
DODGING DISASTER IN ASIA / 12
®
Q2/20 ASIA-PACIFIC EDITION
WOULD YOU BLOW THE WHISTLE? / 40
RICS CONTACTS
INTELLIGENCE
Contact centre For enquiries, APC guidance, subscriptions, events and training: modusasia@rics.org Regulation helpline
04
Rethinking With a surge in e-commerce during the coronavirus lockdown, are last-mile logistics due for an overhaul?
06
+852 2116 9713
Economist’s column The negative impact of Covid-19 will be felt, but our economy can weather the storm, says Sean Ellison
Confidential helpline +44 (0)20 7334 3867 Dispute Resolution Services +44 (0)20 7334 3806 UK switchboard
08
+44 (0)20 7222 7000
President’s column RICS has a key role to play in these difficult times, and it will rise to the challenge, says Timothy Neal FRICS
10
What we can learn from … Property managers will need to adapt quickly to new technology and new ways of working post-Covid-19 FOR RICS Jeanie Chan (Asia Pacific)
FEATURES
Toni Gill (UK) FOR SUNDAY Editor Andy Plowman Contributing Editor Alex Frew McMillan
12
What did we do right? How did some Asian countries escape the worst during the pandemic, and how will our cities be reshaped?
18
Designer Robert Hearn
Covid-19 responders Surveyors on their contribution to the global response
Deputy Editor Louise Banbury Art Director Wes Mitchell Account Director Karen Jenner Senior Account Manager Jonny King
24
Asia Advertising Bryan Chan
Against the elements As the planet becomes more hostile to human life, how can building design help us to adapt?
Production Director Michael Wood Managing Director Toby Smeeton Cover Dust
32
Building something special Three industry leaders explore how the industry will redefine itself in the face of a changing environment
Published by Sunday, 207 Union Street, London SE1 0LN wearesunday.com Advertising enquiries Bryan Chan,
40
ROF Media, +852 3150 8912
Whistleblowing Cultivating a positive whistleblowing culture has huge benefits. But it’s much easier said than done
48
High cost of living Tall buildings are less energy efficient and produce more emissions, so why are we building more of them?
Views expressed in Modus are those of the named author and are not necessarily those of RICS
54
or the publisher. The contents of
Fit for the future How to build infrastructure in an age of uncertainty
this magazine are fully protected by copyright and may not be reproduced in any form without the prior permission of the publisher. All information correct at time of going to press. All rights reserved. The publisher cannot accept liability for errors or omissions. RICS does not accept responsibility for loss, injury or damage or costs that result from, or are connected in any way to, the use of products or services advertised.
EXPERIENCE
58
Upgrade clinic Prepare to comply with data handling regulations
62
Problem...solved? Tackling homelessness in Australia
INTELLIGENCE
Speeding up the last mile / Covid-19: economic view / Remote working / Property post-pandemic /
A delivery robot on the job at one of JD.com’s smart stations
RETHINKING
DELIVERING THE GOODS
WORDS BY ALE X FRE W MCMILL AN *SOURCES: NOMUR A AND STATISTA .COM. FIGURES FROM APRIL 2020
With a surge in e-commerce in Asia under lockdown, bottlenecks often arose getting goods to the front door. Is it time for a structural change in last-mile logistics?
During the Covid-19 pandemic, there was growth spurt in online grocery shopping, a sector that hadn’t previously been popular in most Asian countries. Once lockdowns have been lifted that growth rate will probably fall, but the way people in Asia shop is likely to have changed for the long term. The surge in online demand has put pressure on manufacturers and brands, many of which have found last-mile logistics – getting the goods to the customer’s door on time – a challenge. “During the pandemic, logistics space was running at full capacity. But if you don’t have stock, it takes you longer to deliver the goods,” says Henry Chin, head of Asia Pacific and EMEA research at CBRE. “That has a profound impact for manufacturers and brands. They want to keep inventory closer to the consumption point, which implies keeping relatively higher stock levels.” Manufacturers have typically held stock in “big-box” mega-distribution
centres hours outside major cities. This is going to become outdated. “With artificial intelligence, we can predict consumption levels quickly and accurately,” Chin explains, “so it’s possible to put the daily-basis stock in last-mile logistics centres. They will store and deliver the goods.” Investors are beginning to look at the potential to upgrade older warehouses closer to the city centre into modern high-spec logistic centres. “After Covid-19, we are encouraging our clients to think about brownfield sites,” notes Chin. “Knock it down and redevelop it. That could be another structural change.” Another possible solution to the last-mile problem is more automation, such as “robot” delivery vehicles and drones. JD.com, China’s biggest retailer, began testing drones in remote Chinese villages in 2016 and, during the peak of Covid-19, carried out a feasibility study carrying goods by drone in Hubei Province. The first delivery was across Baiyang Lake to a village normally
served by boat. JD.com also used robot vehicles to deliver goods to Wuhan’s Ninth Hospital, at the centre of the outbreak, as well as serving three communities on two routes. Chin believes that Covid-19 will accelerate the development and adoption of this technology. “There’s been a lot of testing for autonomous vehicles to deliver goods in the US and continental Europe on wide highways. Because of Covid-19, I think this will accelerate quite fast. It is unlikely to happen in Asian cities because our roads are relatively small and narrow. But using drones is feasible.” The Covid-19 crisis is leading some businesses to rethink their entire supply chain, with many of them reshoring, according to Chin. “This is going to be very, very interesting to watch. We are talking to a lot of organisations about rethinking the design of their supply chain to avoid a Covid-19 kind of event. They want to reduce the risk of over-relying on one single production base.” Vietnam has emerged as a hotspot for industrial and logistics, with Malaysia, Thailand, Indonesia and India also offering the advantages of cheap labour and land. “You are going to see companies build more and more modern logistics in Vietnam,” says Chin. “Their facilities are B grade, but they are still managing to achieve double-digit rental growth because they don’t have supply.”
THE RISE OF E-COMMERCE*
27.9%
E-commerce share of total retail sales in China, April 2020
16%
E-commerce sales year-on-year growth in China
37%
Online food and beverage sales year-on-year growth in China
$1.3BN
Forecast of e-commerce revenue in China in 2024
$102M
Estimated market value of e-commerce logistics in Vietnam, 2018
$906M
Estimated market value of e-commerce logistics in Vietnam, 2022
Q2 2020 / MODUS APAC / 5
INTELLIGENCE
“ I BELIEVE OUR ECONOMY HAS THE POTENTIAL TO BE RESILIENT ” SE AN ELLISON SENIOR ECONOMIST, ASIA PACIFIC, RICS
6 / MODUS APAC / Q2 2020
“Gradually, then suddenly.” What began as whispers of a pneumonic virus in central China rapidly spread to all corners of the world, bringing activity to a standstill. The coronavirus pandemic has exposed weaknesses in our economic system. As bad as this crisis is, it is not a repeat of the global financial crisis in 2008. That was a result of profligate lending by banks. Weakness in the mortgage market quickly exploded through a fragile financial system and the overly cautious response from policymakers amplified the negative effects on corporations and households. This crisis is the reverse, with pressure emerging from the corporate sector rather than spreading to it. Banks are generally in a better position than they were in 2008, and policymakers have acted decisively. The rapid rise in corporate debt over the past decade means that risks surrounding corporate financing are still significant. In China, for instance, policymakers have had to restrain stimulus to avoid exacerbating the elevated levels of corporate debt that have accumulated since 2009. The idea that the Chinese economy will spur an immediate recovery in Asia (or the world) is nothing more than a reverie. The immediate outlook for real estate in Asia is similarly uncertain. RICS data shows that rental and capital values are expected to take a hit as demand from occupiers and investors has evaporated. The rise of e-commerce at the expense of retail pre-dates Covid-19. Geopolitical risk was already prompting supply-chain diversification. Although there may be more urgency, these are medium-term trends. Consumer preferences change slowly, and altering supply chains is incredibly complicated. Asia has been slow to adopt flexible working, but the coronavirus has forced a change. Anecdotal evidence suggests employers have not seen a substantial dip in productivity due to remote working. Companies may shed overheads by occupying less workspace, and, while
this has led to speculation about a structural decline in office rents, the reality is more nuanced. Flexible working will incentivise more women to join the labour force and this will provide an economic boost and long-term demand for offices. In the near term, central-city locations are still sought after. I believe prime office rents are unlikely to see a structural decline, but the yield spread between prime and secondary assets will widen. Occupiers in secondary locations will upgrade to prime space as it becomes available. Most global macroeconomic forecasts now expect some permanent loss of output, though growth will eventually return to pre-crisis levels. Because of heightened uncertainty, organisations such as the IMF have also planned for severe scenarios. Besides further outbreaks, austerity could be the primary risk to a speedy recovery. The urge for austerity is based on ideology rather than economics, given that evidence shows that austerity in “bad times” does more harm than good. Households and businesses will emerge with enormous debt loads, and are likely to retrench to repair their balance sheets. This will result in a dearth of demand. The government will need to fill the void. The quote at the start of this column comes from Ernest Hemingway’s The Sun Also Rises. A theme of the novel is the resilience of a generation deemed lost after World War I. I believe that, with the right policies, a regulatory review of corporate funding structures and tax policies and investment in infrastructure, education and health, our economy has the potential to show similar resilience.
ILLUSTR ATION BY DANILO AGU TOLI
OPINION: HOW ASIA BUILDS BACK
CHARTERED TERRITORY
HO W H AV E YOU COPED WORKING REMO T ELY IN LOCKDOWN? With many people currently working from home, not through choice but necessity, we asked RICS’ followers on social media how they are finding the enforced transition to working away from the office during lockdown. Here’s what they had to say.
15.5%
A FE W TEE THING ISSUES
32%
PRE T T Y E ASY/ALRE ADY WFH
7.8%
LOGISTICAL NIGHTMARE
44.7%
OK, BUT I MISS THE OFFICE
Q2 2020 / MODUS APAC / 7
INTELLIGENCE
PRESIDENT’S COLUMN
8 / MODUS APAC / Q2 2020
“ SOCIETY EXPECTS US TO DELIVER, AND WE MUST RISE TO THIS CHALLENGE ” TIMOTHY NE AL FRICS RICS PRESIDENT
ILLUSTR ATION BY DANILO AGU TOLI
There can only be one topic on everyone’s minds today: Covid-19. It spread across our world at an alarming rate. We have seen disruption to every facet of our lives, whether going to work, visiting friends, buying essentials or enjoying time outdoors. But the human tragedy caused by the virus eclipses these concerns, and my thoughts are with everyone who has suffered loss or hardship in these times. Our politicians and officials are doing what they can to respond, but it will take effort from all of us to do the right things to see us through this global emergency. We must keep ourselves and loved ones safe and healthy by following advice, and invest in our ability to work together more effectively while apart. Everything we do must contribute towards our common good. I have witnessed astonishing bravery and generosity from colleagues, friends and strangers, convincing me that we will emerge from this crisis stronger and more united than when it began. When events shake our communities, professionals have a unique role to play. As sources of trust and expertise, professionals can be role models and leaders, using their skills and dependable methods to inspire confidence in others. Even in these times, professionals can build trust across our societies through their example, enabling decision-making and other human activity that relies on their judgements to continue. This is especially true in the built environment. The need for homes that keep us sheltered, work platforms that help us collaborate and infrastructure that enables the delivery of essential services remains. As does the need for a more responsible and future-focused relationship with our
natural environment. Built environment professionals and their dedication to the public advantage are needed now more than ever. Society expects us to deliver, and we must rise to this challenge. Whenever I speak to new professionals, I remind them that throughout their careers, RICS will be at their side. Today is no exception. RICS is assisting professionals where it matters, with a suite of resources to help them navigate these uncertain times. It is continually updated, and covers all areas of practice, ranging from professional guidance through development to sources of benevolent support. Visit rics.org/ coronavirus for the latest updates. These are the immediate priorities, but we must also be responsible by looking forward. There will be a long period of recovery from this pandemic, but we can begin readying ourselves to rebuild right now. Today’s challenges are spurring innovation and productivity, creating new networks and fostering collaboration through digital working. We must continue to expand our knowledge and skills so that we are equipped to face the future with confidence. A vast collection of insight, webinars and resources is available on RICS’ public web pages, and I urge you to find time to focus on your development. It will lay the foundations for a positive legacy from this testing time. I’m excited to read the upcoming RICS paper on the digital transformation of the built environment. It will explore a future where building information modelling (BIM) will enable professionals to add value in previously unimagined ways. Developing our ability to make the best use of these tools will make us a force for positive social impact in the future. I highly recommend the paper, when it publishes. We will not let the present dictate our future or limit our ambition. By raising our sights, we can build the resilient future we keenly need. I urge you to look forward to that future with hope and confidence.
Southeast Asia Awards dinner: 12 November 2020 The RICS Awards Southeast Asia showcase the most inspirational initiatives and developments in land, real estate, construction and infrastructure in the region and recognise outstanding achievement, teamwork and their impact on local communities. This year, there are 14 award categories that demonstrate how professionals use their skills to develop, regenerate and conserve the environment in which we live and work. Be among the first to hear who will bring home the awards and join us as we celebrate the best our industry has to offer. #RICSawards
Tickets on sale at rics.org/SEAawards
INTELLIGENCE
SK Telecom’s object detection and tracking technology
WHAT WE CAN LE ARN FROM…
MANAGING THE NE W NORMAL
IMAGE BY GE T T Y
The coronavirus crisis has had a major impact on the property sector in China and around the world. Professionals will have to adapt to new technology, new ways of working, and a new urban environment
The effects of the Covid-19 outbreak have been felt across society, the economy and the property market throughout China. Surveyors and operations teams involved in property management are going to see far greater vigilance on building health and safety. We are going to have to learn, adopt and implement smart technology. For instance, infrared body-check sensors are currently operated in isolation by staff members. The sensor isn’t linked to any smart building system. That whole system can be automated, so there’s always a temperature-check thermometer in the lobby, and all the readings are automatically sent to security. If a person who has a higher temperature than normal enters the building, the sensor alerts the system. Security can then trace that individual, and quarantine that person in a secure area. Office landlords in China that provide effective health and safety protection measures are more likely to gain the trust of their existing and potential tenants. Properly equipping their buildings with thermal imaging, air-conditioning filtration and sterilisation systems will improve tenant retention and attraction rates, and strengthen the business viability of the buildings. Property appraisers, meanwhile, will need to get their heads around the latest smart technology. The more a building has installed, the greater its value.
We’ve all also been getting used to this new experience of remote working. Although the technology to do this has been around for many years if not decades in Asia, a huge number of companies have always gone down the traditional path: everybody needs to be in the office. But now firms are starting to recognise that there are individuals, departments and business lines that can still be productive working from home. They may then reassess their current office footprint. New ways to use space If some departments can work remotely, what do they do with the space that they currently occupy? Do they downsize? Do they put in a hotdesk collaborative space? Do they reconfigure the space so that it becomes a more attractive place to work, helping attract and retain talent? We are social animals; we will always need face-to-face interaction, so the office is not going to disappear completely. The likelihood is that in the long term most employees will work from the office most of the week, taking a day here or there for remote meetings and to work from home. There’s also an alternative “hub-and-spoke” scenario. Instead of a big headquarters downtown, you might downsize the headquarters and open up spoke offices in the suburbs. Employees living in the suburbs could then choose to
commute to a hub office instead of all the way to the headquarters. There are city-planning issues to consider, however. If remote working takes off, more people could choose to live and work in the suburbs than close to city centres so we might need some reconfiguration in terms of city planning. Do we need fewer amenities downtown and more commercial space in the suburbs? Office landlords might also need to incorporate more co-working spaces and communal areas into their buildings, providing their tenants with greater options and flexibility. Wellness and wellbeing will also become more important. The work environment –lighting, acoustics and temperature – needs to be comfortable. Smart technology can help by reacting to changing climatic conditions outside. Property professionals will have to get around technology if they are on the sales or leasing side, for residential property or commercial space. In the pre-Covid world, they took the client to the physical space, and they would only get that one viewing. Over the lockdown, many agents quickly adopted online viewing, taking videos of the space and uploading them online. The client can view those videos or take virtual-reality walk-throughs multiple times and get a more solid understanding of which space they’re most interested in. They can then view the actual property and decisions can be quicker and better. Whether building values are the same after the crisis depends on the market. People have returned sooner and in higher numbers here in China than in other countries, not just to work but also to shopping malls. Just how much this will affect occupancy and rental rates and the valuation basis throughout the next few years remains to be seen. By Shaun Brodie FRICS, head of occupier research for Greater China, Cushman & Wakefield Q2 2020 / MODUS APAC / 11
W H AT 哪些
DID
事
PUBLIC HEALTH
W E 我们
DO 做
RIGH T? 对了？
The coronavirus looked set to decimate Asian nations but thanks to fast and, often voluntary, actions they escaped the initial onslaught
W WORDS BY ALEX FREW MCMILLAN
hen a mystery virus in Wuhan first became public knowledge in January, its timing was particularly dangerous. China was about to celebrate the Lunar New Year, with 400 million people expected to move around China alone. The Asian communities around China braced for impact. When SARS struck in 2003, it was mainland China, Hong Kong, Taiwan, Singapore and Vietnam that posted the highest case counts, as well as Asian populations in Canada and the US. But the impact was cushioned with this new iteration, the SARS-CoV-2 virus and the Covid-19 disease it causes.
新 冠 病 毒 似乎 势必 会 重创 亚 洲 各国，但得益于快速且通常为自 发的行动，这些国家逃过了最初 的一刼
当
武汉在一月份爆出不明原因病毒时, 适逢农 历新年，仅中国就预计有4亿人次的人口流 动。中国周边的亚洲国家亦承受冲击。 2003年SARS来袭时，病例最多的地方是中国大陆、香 港、台湾、新加坡和越南，以及居住在加拿大和美国的 亚洲人群。但是对比新一代的SARS-CoV-2病毒及其 引发的COVID-19疾病，当年SARS引发的冲击就显得 温和多了。 毫无疑问，上一次疫情的经验教训有助于亚洲社会 应对这一次挑战，亚洲感染率的降低即是明证。例如， 最早爆发新冠疫情的韩国和日本，至截稿时已经控制 住了疫情，日本确诊病例尚未突破20,000例，韩国则在 Q2 2020 / MODUS APAC / 19
Undoubtedly, the lessons learned from the earlier epidemic helped Asian societies respond to this new challenge. The outcome is now clear in the reduced infection rates in Asia. South Korea and Japan, for instance, were the first two nations to experience major Covid-19 outbreaks. But at the time of writing, they have them contained, Japan yet to breach 20,000 cases and South Korea under 12,000. What lessons can we learn from how Asia responded? And how will Asia set itself up to cope with the next health crisis (which will surely come)? It is increasingly likely that Asian cities and nations will have to develop a way of living and working that accommodates the virus as a persistent threat. Even optimistic doctors caution that it could take 12 to 18 months to develop a vaccine for the new virus. One was never found for SARS. Asian consumers shifted their social and purchasing patterns voluntarily, whereas workplace shifts have often been mandated. The personal adaptations made in East Asia, where wearing surgical masks quickly became a social norm, averted disaster. Lunar New Year was generally small in scale and scope, as people started the process of distancing and curbed non-essential activity. Brokerage company Nomura, in analysing mobilephone data in Japan, found that the number of weekend and holiday visitors to Shinjuku, one of Tokyo’s busiest districts, fell sharply in mid-March. This shows Japanese citizens changed their personal behaviour rapidly, and by choice. But the number of workers visiting Shinjuku on weekdays did not fall substantially until mid-April, after the government declared a state of emergency. Working from home and staggered working-hour shifts only gained headway in Japan after the government directive. But Nomura has calculated that companies need to accommodate such working styles if Japan is to stave off a second wave of Covid-19 cases. Will change have to be forced on Asian companies? It is an issue that is as-yet unanswered. They have typically been more hierarchical for longer than their western counterparts. Services companies that could easily allow
“ WILL CHANGE HAVE TO BE FORCED ON ASIAN COMPANIES? IT IS AN ISSUE AS YET UNANSWERED ”
Tokyo metropolitan government employees in the city’s Kabukicho entertainment district hold signs urging people to stay at home 东京都政府职员在该市娱乐区歌舞伎町手举标志牌，力劝民众居家防疫 万。2020年1月的雅加达洪灾造成53人死亡，40万人流离失所洪灾。
12,000例以下。从亚洲应对疫情的方式中，我们可以得 到哪些经验？而亚洲又该如何为应对下一次卫生危机 （必然会来临）未雨绸缪？有一种可能性越来越高， 就是亚洲城市和国家将被迫发展一种与病毒长期共 存的生活和工作方式。再乐观的医生也都提醒说，新病 毒的疫苗研制可能需要12到18个月。而SARS根本不需 要疫苗。 亚洲消费者自发改变了社交和购物模式，然而工作 场所出现的变化却通常是强制性的。在东亚地区，佩戴 外科口罩迅速成为一种社会常态，个人的适应性调整 避免了灾难性局面。随着大众开始保持社交距离并且 限制了非必要的活动，农历新年的庆祝规模和范围也 普遍比往年小。 日本经纪公司野村证券（Nomura）对日本手机数据 进行分析时发现，新宿区作为东京最繁忙的区域之一， 周末和节假日游客数量在三月中旬出现锐减。这表明 日本国民快速且自发地改变了他们的个人行为。但是直 到四月中旬，在政府宣布进入紧急状态后，工作日新宿 区的职员人数才有了实质的下降。 在政府发布规定后，居家办公和错峰上下班才在日 本取得了进展。但根据野村证券的测算，如果日本要避 开第二波新冠疫情，企业需要采用这样的工作方式。 亚洲公司必须要靠强制才能做出改变吗？这个问题 尚未有答案。相对于西方的公司，亚洲公司一般层级更 为分明，而且阶级观念更根深蒂固。服务型企业本来可 轻松实现员工居家办公，但一直以来它们并不愿意这么 做。长时间的强制居家办公也许可以促进企业重新思 考。在东京、香港以及新加坡等城市，市中心的办公空 间的成本水平达到或接近世界纪录，企业也许可以实
PUBLIC HEALTH
“ 亚洲公司必须要靠 强制才能做出改变 吗？这个问题尚未得 到解答。 ” 行“去中心化”。正当谷歌和苹果率先推出“校园模 式”的写字楼建筑和设计风格之际，脸书和推特却宣 布，后病毒时代，所有员工均可以自主选择居家办公。 这一规定同样适用于他们的亚洲员工。 亚洲公司可选择缩减昂贵的总部空间和市中心办公 面积，改为采用相对较小的办公室作为总部，配以多个 位于次中心区的小型区域办公室。这样的办公空间布局 兼具功能性和科技应用，而且由于分布在城市郊区，可 以降低租金压力。 这样的去中心化结构在通勤时间较长的城市中也特 别有效，例如东南亚以交通拥堵著称的首都城市。去中 心化可节省时间并且充分利用日间工时，进而减少碳足 迹。另外，这还能带来一个额外的好处，团队之间可以 保持“工作场所距离”，以防未来发生疫情。
IMAGES BY GE T T Y
employees to work from home have been loath to do so. The enforced long periods of home-office work may encourage a rethink. In cities such as Tokyo, Hong Kong and Singapore, where downtown space commands rates at or near world-record levels of cost, companies may engage in a process of “decentralisation”. Whereas Google and Apple pioneered the “campus model” of office architecture and design, Facebook and Twitter have announced that, in the post-virus world, all of their employees will be able to work from home, should they choose to do so. That will equally apply to their staff serving Asian nations. Asian companies might decide to reduce their headquarters and downtown office footprint in favour of a smaller head office and decentralised, smaller spoke offices. These can be more versatile and tech enabled, located in suburbs across a city, reducing rent pressure. Such a decentralised structure may also be particularly effective in cities with long commute times, such as Southeast Asia’s notoriously traffic-snarled capitals. Decentralisation would save time, and maximise daylight hours, thereby reducing the carbon footprint. It would have the added benefit of “premises distancing” teams in case of future outbreaks. Welcome to the wirearchy The decentralised office may encourage the development of a new office structure: the wirearchy. Real estate consultant JLL defines this, in its Asia Pacific report (Re) entry: A Guide for Workplace Design Considerations, as the “power and effectiveness of people working together through connection and collaboration”, with individual responsibility rather than a traditional hierarchical structure.
欢迎进入线联结构 去中心化的办公模式可能促进了一种全新办公结构的 形成：线联结构。房地产咨询机构仲量联行在其亚太区 报告《（重新）进入：工作场所设计考量指南》中将这 一概念定义为“人们通过联系和协作进行共事的能力 和效率”，即员工各自担负职责，而非基于传统的层级 结构。仲量联行在报告中解释称： “也就是说，将工作 场所的自主权和控制感交还给员工。员工可以自主选
A man wears a protective mask as he walks by shared bicycles at a main intersection during the afternoon rush in Beijing 北京晚高峰期间，戴着防护口罩的男子经过某主要交叉口的共享单车
Q2 2020 / MODUS APAC / 21
“ LOCKDOWN GIVES VIETNAM’S GOVERNMENT RESPITE TO IMPROVE THE ENVIRONMENT ” DAVID LOCK WOOD FRICS C7 CONSULTANT SERVICES
“In other words: giving autonomy and sense of control of their workplace back to the employees,”the JLL report explains. “Employees can have a choice of how, when and where they work in a hyper-connected work context.” JLL, which reopened its Wuhan office on 8 April, encourages companies to consider their office properties as “health fortresses”, with appropriate distancing barriers in public areas to avoid queuing at temperature checks and registration. Materials should be antimicrobial, non-porous and shaped in ways that make them easy to clean. To make this “fortress” less foreboding, JLL recommends biophilia principles such as the inclusion of interior plants. Natural light and fresh air should be available where possible. The better elements of healthcare sector design may be worth considering, with contactless tech such as motion sensors and hands-free bathroom fixtures. Building fitout and furniture should avoid features such as reveals, shadow gaps and cavities. East Asia has been well served by its excellent tech and telecoms infrastructure in its response to Covid-19. That suggests there is a way forward into a new world of work. South Korea has the highest broadband penetration rate in the world, with high-speed fibre to 81.7% of households. Japan, second with 79% of households wired, leads the world in terms of mobile broadband, with 177 accounts per 100 people. In other words, people on average have more than one smartphone account, likely already able to separate their work and home lives while on the move. Cities such as Hong Kong and Singapore also have high rates of digital penetration. This has helped share information about the virus and improve contact tracing. Vietnam’s new opportunities It has not always been necessary to draw on an extensive tech or telecoms infrastructure to contain Covid-19. Vietnam has successfully kept its case count low. As of the start of June it had reported only 328 cases, fewer than tiny nations such as San Marino, Malta or the Cape Verde
择他们在超连接工作环境中的工作方式、时间和地 点。”仲量联行武汉办公室于4月8日复工，他们鼓励各 公司考虑将其写字楼物业打造为“健康堡垒”，在公共 区域设立适当的距离屏障，避免测温和登记时大排长 龙。所用材料应抗菌、无孔且形状易于清洁。 为了减少这一“堡垒”所产生的不安感，仲量联行建 议采用亲近自然的原则，例如摆放室内绿植，并尽可能 地采用自然光和新鲜空气。医疗行业有一些更好的设 计元素也许值得考虑，例如运动传感器和自动感应卫 生洁具等非接触式科技产品。建筑装修和家具应避免 侧边、阴影间隙以及孔洞等特征。 在应对新冠疫情的过程中，东亚地区卓越的科技和 电信基础设施发挥了重要作用。这指出了一条通往工 作新世界的道路。韩国拥有全球最高的宽带渗透率， 高速光纤入户率达81.7%。日本以79%的入户率位列其 次，但在移动宽带上则笑傲全球，每100人中有177个账 户。换言之，人们平均拥有超过一个智能手机账户，似 乎已经能够在外出期间将工作与家庭生活区分开来。 香港和新加坡等城市还有着较高的数字技术渗透 率，对分享病毒相关信息和完善接触者的追踪管理起 到了帮助作用。 越南的新机遇 控制新冠疫情并非只能依赖大规模的科技或电信基础 设施。越南就成功地将确诊病例数控制在低位，截至
An employee of SK Telecom demonstrates a robot that will be used for disinfection and checking body temperatures at the Seoul headquarters 韩国SK电讯员工在首尔总部演示一台将被用于消毒和测体温的机器人
PUBLIC HEALTH
Islands. It has accomplished that through very broadbased contact tracing, which sought to identify carriers and their contacts through four degrees of separation. The Vietnamese government also launched a campaign to alert the public on testing and quarantine measures through traditional media. Vietnam has been one of the biggest beneficiaries from the desire by multinationals to diversify their supply chains. It is often the first nation that springs to mind if a company is deploying a “China + 1” approach. That is encouraging the rapid development of sectors such as logistics space, which was completely lacking in terms of modern properties that were able to operate to international standards. High-spec industrial and warehouse space is likely to sprout across Asia. The enforced shift to e-commerce has sped up the structural change already under way. Companies want to avert the supply-chain disasters that many have encountered early in the outbreak, an effort aided by greater ability to track and ship goods. The enforced inactivity during the lockdown period has given Vietnam a pause to address some of its infrastructure and social needs. It’s an opportunity not often afforded a developing nation with a breakneck pace of economic growth. “On a positive note, it does allow the government a much-needed respite through less footfall, air and road traffic and pollution in general to improve the environment,”says David Lockwood FRICS, founder of Ho Chi Minh City-based quantity surveyor C7 Consultant Services. When it comes to the cities around us in Asia, however, the real-estate world will experience its own version of “Only the strong survive”. Nuveen estimates that half a million Chinese companies folded in the first three months of 2020 alone, mainly small to mediumsized enterprises. East Asia is emerging first and fastest from coronavirus restrictions, and in places such as South Korea never entered any form of lockdown. In its index of social distancing, Nuveen noted in April that South Korea, Taiwan, Japan and Hong Kong led the world in social freedoms, the earliest to emerge into post-virus life. It is likely to be well into 2021 before economic growth recovers but Asia can pride itself in its early response to the Covid-19 crisis. In terms of the way its cities and offices operate, it now has a chance to review and improve. n
IMAGES BY GE T T Y
“ 政府得到喘息时间， 可借机改善环境环境。 ” C7咨询服务公司 DAVID LOCK WOOD FRICS
Workers and vendors from Long Bien market in Hanoi queue to take a coronavirus test. Tests were carried out at markets throughout the city 河内龙编市场的工人和摊贩排队接受新冠病毒检测。全市所有市场均进 行了检测
六月初报告病例仅为328例，低于圣马力诺、马耳他或 佛得角群岛等小国。取得这样的抗疫成绩得益于越南 开展了非常广泛的接触者追踪，能够通过四度分隔识 别病毒携带者及其接触者。越南政府还发起了一项活 动，旨在通过传统媒体向大众宣传检测和检疫措施。 一直以来，越南都是跨国公司追求多样化供应链的 最大受益国之一。如果某个公司正在部署“中国+1”战 略，那么越南常常是他们第一个想到的国家。这一形势 正在刺激物流空间等行业的快速发展，因为此前越南 完全缺少能够对标国际标准的现代物业。 高规格的工业和仓库空间有望在整个亚洲遍地开 花。强制转向电商加速了正在进行中的结构性变革。疫 情初期，很多公司都遭遇了供应链灾难，它们希望通过 更好地追踪和运输货物，避免这些灾难的发生。 封锁期间无法开展任何工作，使越南得以停下来处 理一些基础设施和社会需求。在经济飞速增长的发展 中国家，这样的机会并不常有。胡志明市工料测量机构 C7咨询服务公司创始人David Lockwood FRICS表 示： “好的一面是，人流量、空中和公路交通以及污染 的整体下降使政府得到了急需的喘息时间，得以借机 改善环境。” 不过，就我们周边的亚洲城市而论，房地产界将经历 自己的“强者生存”法则。根据纽文房地产公司的估 算，仅2020年前三个月，中国就有50万家公司倒闭，主 要为中小型企业。 东亚正在率先快速从新冠病毒的限制中突围出来， 而且诸如韩国等地方从未进行任何形式的封锁。在其 社交距离指数中，纽文房地产公司四月份指出，韩国、 台湾、日本和香港在社会自由方面领先全球，也是最早 进入后病毒时代的几个国家或地区。虽然经济增长可 能要到2021年才会恢复，但是亚洲可为及早应对疫情 危机而感到自豪。从亚洲城市及写字楼的运作方式来 讲，现在是检视和改进的良机。 Q2 2020 / MODUS APAC / 23
As the coronavirus began to tighten its grip on countries around the world, RICS professionals stepped up to offer their skills and expertise in the global response to the pandemic, from building temporary hospitals to developing virus-tracking technology. We spoke to eight of them from their lockdown, photographing them via their webcam, about how they have contributed WORDS BY STUART WATSON PHOTOGRAPHY BY DAVID VINTINER
FACING DOWN COVID-19
COVID-19 Rynor Jamandre photographed via webcam in the repurposed portable cabin at the medical centre in Santa Rosa
POP-UP MEDICAL CENTRE RYNOR JAMANDRE MRICS, CEO, QUANTIT Y SOLUTIONS, MANIL A, PHILIPPINES
E
arly this year, just as people in the Philippines were becoming aware of the coronavirus pandemic, Rynor Jamandre MRICS was playing golf with the CEO of the Medical City private hospital. Over their game they discussed whether the portable cabins used at Jamandre’s surveying firm could be repurposed as dormitories for hospital staff. By Easter the hospital’s priorities had shifted. Covid-19 sufferers needed urgent treatment, but the hospital could not open its doors because of the risk of contamination. A plan was hatched: use the cabins as a temporary medical centre on the parking lot, quarantined from the rest of the hospital in Santa Rosa, about 30km south of Manila. But there were enormous challenges. The hospital could take no new patients and had no income or state help, so its budget was effectively zero. Meanwhile, the region was in strict lockdown with movement severely restricted and every hardware store and material supplier closed. “I said: ‘I think we can still do this’,” recalls Jamandre, and little more than two weeks later the 12-bed facility, complete with staff housing and negative-pressure isolation rooms, took in its first patients. His strategy was a simple one. “We didn’t ask for money. We posted an architect’s image of what it would look like and the bills of materials and quantities, so it was easy for people to cherry
pick what they could donate. Lo and behold, in 24 hours we were able to get 70% of what we needed by just texting among friends.” Jamandre’s firm, Quantity Solutions, employs more than 100 professionals, and has provided cost engineering and project management for more than 300 construction projects. Jamandre, a quantity surveyor by training is also CEO of another six companies in sectors as diverse as energy, tourism, apparel, infrastructure, water and defence. Jamandre donated half of the cabins, a large contractor donated the rest. Some contacts
sent pipework, roofing or toilets. Others sent money or seconded workers, who were grateful for the employment after a period of enforced inactivity. “Faced with constraints of time, budget and materials availability is where the value of being a QS came in. Solving problems and connecting the dots of the supply chain to make contact with people who could help was critical,” says Jamandre. “It was overwhelming; even without government response we can come up with solutions just by helping each other.” Q2 2020 / APAC / 19
Ian Levers FRICS, Associate, Mott MacDonald, Sheffield, UK
Duncan Boughton MRICS, Associate, Mott MacDonald, Cardiff, UK
COVID-19
BUILDING FIELD HOSPITALS IAN LE VERS FRICS, ASSOCIATE & DUNCAN BOUGHTON MRICS ASSOCIATE, MOT T MACDONALD, SHEFFIELD, UK
T
he UK’s Nightingale field hospitals have been the most visible element of government attempts to prevent the National Health Service (NHS) from being overwhelmed by a flood of coronavirus patients. Seven of these critical care facilities, built within large public buildings, have been opened in England, as well as one in each of Wales, Scotland and Northern Ireland. Ian Levers FRICS and Duncan Boughton MRICS are associate quantity surveyors at consultant Mott MacDonald. Their cost-management duties for the NHS Nightingale Hospital North West in Manchester and Dragon’s Heart Hospital in Cardiff, Wales, respectively began with a flurry of calls and text messages one Friday. They then barely had time to catch their breath over the weekend before plunging into projects considered so urgent that construction had already begun. Levers did all of his work on Nightingale North West from his home in Sheffield, while quantity surveying apprentice Callum Alexander was on the site at the Manchester Central Convention Complex. Work had already begun without a contract in place, and it was a week before the contractual structure was decided. But, within days, Levers had to produce a valuation so cash could flow to the contractor. “Usually the contract is in the bag, you are completely familiar with the design, and you know every single element. We were trying to estimate the project from day one on the basis of a single general arrangement drawing and a design that had not been finalised and was changing day by day,” he says. Meanwhile, Boughton had the advantage of living in Cardiff city centre almost within sight of the Principality Stadium, where the Dragon’s Heart was being established within temporary structures on the pitch. “The scale of expenditure is such you would usually do a project like this over two years,” he says. “It has been incredibly complex compared with some of the other Nightingale schemes. We have had to create heated and ventilated spaces. It’s quite amazing to go there and see what has been put on the pitch – I think it’s the largest open tent in Europe.” Levers says that, despite the challenges, the level of collaboration between contractor and consultants working on behalf of the client was “really refreshing”. Boughton adds: “It has been very intense and highpressured, long hours building and designing and delivering on the hoof, but even so, the general attitude has been one of care and consideration. The people on the site knew what they were building and what they were building it for, and it bonded a lot of people because of that.”
MAKING CONSTRUCTION SITES SAFE GEORGIA BERGERS MRICS, US PARTNERSHIP AND FIELD MARKE TING LE AD, HAMMERTECH, LOS ANGELES, US
C
onstruction was listed as being an essential business in most states of the US,” says Georgia Bergers MRICS. “So it was vital to keep sites open and running so that contractors could continue to meet their obligations. But it also meant that workers were exposed to conditions where they had quite a high risk of catching Covid-19.” Bergers worked in project management in the UK for 10 years before joining Australian safety and quality operations software provider HammerTech as US partnership and field marketing lead. At the beginning of the outbreak, the HammerTech team began consulting with the construction industry on the design of a coronavirus safety functionality, adding it to its cloud-based platform within two weeks. Workers can use the application to complete digital orientations, toolbox talks and sign-on to reach their workstations while maintaining physical distance and without having to touch any paperwork. They complete a digital Covid-19 questionnaire, which can be combined with temperature testing to identify potential virus sufferers and prevent them from accessing the site, inform them of their condition and identify people with whom they have recently worked closely. Site managers can use the app to divide the site into zones to avoid overcrowding and maintain social distancing. Users can sometimes take months to adopt new functionality, but take-up of the coronavirus update was almost universal within days, says Bergers. “That is how essential it was.”
PREPARING FOR THE PANDEMIC K AM-CHUEN LI MRICS, GENERAL MANAGER, ADMINISTRATION AND SUPPORT, UNIVERSIT Y OF HONG KONG SHENZHEN HOSPITAL, CHINA
B
uilding surveyor Kam-Chuen Li MRICS had to implement an array of measures at the 2,000-bed University of Hong Kong Shenzhen Hospital. He had to make sure there were enough ventilators and supplies of personal protective equipment. He set up a three-level control to scan people entering the building for symptoms. The fever clinic was expanded and isolation wards were created; and safety measures put in place for catering services that fed up to 5,000 people a day. Li faced daunting obstacles: “Because of the outbreak, the extension of the long Chinese New Year holiday, the effective banning of inter-city personnel movement and the inability to resume business without permission, there was no labour, no material and no contractors. But, as we noticed the situation a little bit earlier than others, limited supplies were still available for necessary renovation and improvement works,” he says. He thinks a tighter focus on the fundamental precepts of the profession may be required in future. “As a building specialist, that is health and safety. All other added values might be forfeited if we are facing danger.” Q2 2020 / APAC / 21
TRACKING THE VIRUS WINNIE SHIU FRICS, HE AD, SPATIAL DATA OFFICE, HONG KONG SAR GOVERNMENT, AND PRESIDENT, HONG KONG INSTITUTE OF SURVE YORS
W
hen the first Covid-19 case was confirmed in Hong Kong in January, just like many of her compatriots Winnie Shiu FRICS was abroad on holiday for the Chinese New Year. An expert in geographic information systems (GIS), it struck her that the technology could be used to track the spread of the coronavirus. “GIS was used very successfully to trace the source of Ebola. That convinced [the government] to use GIS to capture information on the coronavirus,” she explains. Shiu qualified as a surveyor in the UK in 1989 before returning to Hong Kong to join the civil service’s Lands Department. Before the pandemic started, she was leading the development of a common spatial data
infrastructure portal for the territory due for launch by the end of 2022, a crucial step in creating a 3D digital twin for Hong Kong and enabling the use of smart city technology. When Shiu returned to the city on 30 January, she was plunged into three days of frantic work, and on 3 February the Hong Kong coronavirus dashboard was launched. The resource, available on desktops and mobile phones, tracks medical data on the progress of each case of the virus, recording whether the sufferer has been hospitalised, has been discharged, or has died. It then matches that information with geographical data from the GIS digital mapping system so you can see the progress of cases within individual buildings. Pulling together the digital infrastructure and the data for the dashboard in such a short
PROJECT MANAGING THE IMPOSSIBLE XIAOQIN DENG MRICS, HE AD OF CONSTRUCTION INTELLIGENCE DIVISION, CHINA CONSTRUCTION ENGINEERING FOURTH BURE AU INSTALL ATION ENGINEERING COMPANY, WUHAN, CHINA
P
erhaps one of the most compelling built environment stories of the pandemic so far is the two-week construction of two giant coronavirus hospitals, Leishenshan and Huoshenshan, close to the outbreak’s epicentre in Wuhan, China. Xiaoqin Deng MRICS was one of an army of workers to descend on the Leishenshan site in January. As a project manager, she was charged with recruiting 240 workers to report to the site within two days, liaising with multiple tiers of government because strict travel restrictions were in place. Her workforce then had to install fire safety facilities, water supply, electric wiring and the heating system for one of the hospital’s ward areas. “We thought it was mission impossible at first,” she says. “The key to completing such urgent projects is quick planning and response. We must also focus on systematic management and attention to details. The pre-construction teams needed to think carefully, set clear objectives, divide work and collaborate closely. “Every day, 20,000 people worked together on site at the same time. Witnessing the delivery of this grand project was an unforgettable moment of my life.”
time was an immense feat of inter-agency cooperation and coordination. “Most of us had never met or worked together before. We were in the office apart from night time when we did it through home IT systems. We worked day and night for those three days,” says Shiu. The dashboard has had more than 22 million views. “People would look at it to find out if their building had any cases and they would then become more aware of hygiene when going in or out,” says Shiu. She hopes that with the application of more resources and medical data, the resource can eventually be used for contact tracing. But, at the very least, doctors will be able to use it to plan for the day when another pandemic might occur.
GIVING ONLINE ADVICE TIMOTHY ALLCOT T MRICS, PARTNER, ALLCOT T ASSOCIATES, BIRMINGHAM, UK
F
or Allcott Associates, as for many small and medium-sized companies that are trading principally in surveys for home buyers, the suspension of the UK residential property market meant an immediate temporary shutdown. All of its employees, including 11 surveyors, were furloughed and its offices were closed down. The income support that the UK government has offered is not open to partners in limited partnerships, so principals Timothy Allcott MRICS and Matthew Baker did their best to keep busy with leftover paperwork and occasional commercial surveys of vacant industrial buildings. They still had considerable time on their hands, however, so Allcott’s wife, Kim, who does marketing for the firm, came up with a scheme to keep them busy and build up the company’s public profile by offering free advice online. An email and social media campaign elicited dozens of queries on topics including cracking, condensation and leaky roofs. Most have proved commonplace and simple to answer without needing to see them in person, says Allcott. “As a surveyor, when it is your bread and butter, you take for granted how much you know and forget how much the general public don’t know. A little information goes a long way,” he muses. “Most of the questions are things about which I would have been happy to give advice over the phone or email anyway, which makes me realise that as an industry we probably come across as a bit unapproachable.”n
COVID-19
Winnie Shiu FRICS, Head of Spacial Data Office, Hong Kong SAR Government, and President, Hong Kong Institute of Surveyors
For Covid-19 news, updates and inspirational stories, go to rics.org/coronavirus JUNEQ22020 2020/ /MODUS APAC / 23
AGAINST THE ELEMENTS The planet is becoming ever more hostile to human life – how can building design help us to adapt?
WORDS BY ROBYN WILSON ILLUSTRATIONS BY MIKE LEMANSKI
As the global temperature continues to increase, so too does the frequency and intensity of the catastrophic climate events it causes. Last year was the second warmest on record and brought to an end the hottest decade in human history. In January this year, there were fierce bush fires in Australia, caused by severe droughts and strong winds, that have burned an estimated 18.6m ha (46m acres) of bush, forest and parks across the country. At the time of going to print the BBC reports that at least 29 people have lost their lives due to the fires. In September last year, the Bahamas was hit by a Category 5 hurricane – the strongest the islands have ever endured. And worse is predicted: in February last year, a study part-funded by the National Oceanic and Atmospheric Administration and published in Nature, suggested that, in future, similar storms will strengthen faster in the Atlantic Ocean. And the UK hasn’t remained untouched by the chaotic weather. Large parts of the country battled floods last year. In November, the rivers Severn and Avon burst their banks, and the Sheffield Met Office weather station reported its wettest ever autumn. It seems undeniable that climate change is ushering in a new world of extremes, with each posing a unique risk to different elements of the built environment. With that in mind, we take a closer look at precisely what those threats are and, perhaps more importantly, what can be done to mitigate their potentially disastrous effects.
BUILDING RESILIENCE
N I
W
O
bviously, tall buildings are particularly vulnerable to extreme wind speeds, especially when it leads to a process called vortex shedding. This occurs when wind moves past a building, creating a fluctuating low-pressure area (vortex) behind it and causing the building to vibrate or sway. The taller and more uniform in shape the structure, the more damaging vortex shedding can be. As cities construct taller and taller buildings in the face of rising urbanisation, innovative solutions to vortex shedding will become more pressing, especially as winds become stronger and more frequent. Research published in November last year, a report in the peer-reviewed journal Nature Climate Change, suggested that shifting global ocean circulation may have triggered a significant change in wind speeds over the past 10 years. Analysing data from 9,000 weather stations, researchers found that in the past decade wind speeds have unexpectedly increased. Currently much of the focus on mitigating against this problem is on improving the aerodynamics of buildings, smoothing sharp edges to reduce the strength of the vortices. Shanghai Tower, which stands at 128 storeys and 2,073ft (632m) in height, making it the second tallest building in the world, is a good example of how this works in practice. The tower is susceptible to sways of up to 5ft (1.5m) during the region’s regular typhoon conditions and has been designed with a twisting, smooth, triangular shape that has been found to reduce the force of typhoon-strength winds by nearly a quarter. The tower is also equipped with a 1,200 tonne mass dampener – a computerised stabilisation system that counteracts the motion and slows the sway. Another method used to minimise the areas where vortices can form is to taper the shape of the building as it rises. This is evident in the design of the world’s tallest building, Burj Khalifa in the United Arab Emirates. It rises from a flat base, with setbacks occurring in an upward spiralling pattern and the central core emerging at the top of the structure to form a spire. However, with space at a premium, tapering isn’t always possible – or even desired – as demonstrated by New York City’s superskinny 432 Park Avenue tower, which is a perfect square that reaches 1,398ft (426m) in height.
Rather than tapering the building or smoothing its corners, engineer WSP sought to reduce the likelihood of vortex shedding by omitting the glazing from the mechanical floors, which occur at 12-storey intervals all the way up the tower, allowing air to pass through the building. But it isn’t just tall buildings that are affected: low-lying properties face their own challenges, particularly if they are located in hurricane-prone areas. Having inspected the devastating impact that Hurricane Dorian had on properties in the Bahamas, quantity surveyor Ron Taylor MRICS says that work still needs to be done in some areas to implement and enforce building codes to better prepare for severe storms. Taylor says inadequately fixed hurricane straps, which play a big part in keeping the roof anchored, as well as the design and installation of hurricane windows and doors, were frequent problems. While bad design clearly heightened the vulnerability of these properties, elsewhere innovative design is being used to reduce the risks associated with hurricanes. Q2 2020 / MODUS APAC / 25
D
N
ot far from the Bahamas, in Miami, Koen Olthuis from architectural firm Waterstudio has designed a storm-resilient home in partnership with housing start-up Arkup. Built on water, the home is fixed with several stilts that enable it to move up and down with rising water levels during a storm, and withstand winds of up to 156 mph (251 kph). The first prototype was built last year. “In an extreme situation, where there is a hurricane – and they’ve just tested it with Hurricane Dorian – the technology enables the house to move up 6m above the water, so it’s really like a growing house,”says Olthuis. Olthuis’ firm has also been involved in the building of a sustainable floating neighbourhood, called Schoonschip, in Amsterdam. Schoonschip, which is still under development, will eventually have 46 homes built across 30 floating plots and be home to more than 100 residents. The idea behind the community is that it makes better use of Amsterdam’s available space, while developing houses futureproofed against rising sea levels. So far, 26 homes have been built. “In the project all the clients try to be as sustainable as possible and try to take as much from the natural energy around them as possible,” explains Olthuis. “So, many of the houses have systems in the water that can take heat out of the water during the winter or cold out during the summer.” On this latter point, the heat is generated by water pumps, which extract warmth from the canal water. Tap water is then heated by sun boilers in warm-water pumps, while all the showers are equipped with installations that recycle the heat. Elsewhere, green infrastructure is being used as a more environmentally friendly way of protecting against storm waves and coastline erosion. North Carolina had previously tried to tackle coastal erosion by constructing bulkhead walls or stone riprap. But this resulted in loss of vegetation and degraded shellfish habitats along the shoreline, which naturally absorb storm run-off. To combat this, the North Carolina Coastal Federation, in partnership with multiple public and private bodies, has created living shorelines, which are made up of restored salt marsh and oyster reefs
BUILDING RESILIENCE
HOW DO WE VALUE RESILIENT BUILDINGS?
– both of which help to reduce the impact of waves and reduce coastal erosion by acting as natural buffers and sponges. In 2019, 2,379ft (725m) of living shoreline was installed in North Carolina. Michael Floyd, environmental technologist and design director at architectural software company Autodesk, explains how some cities are using similar principles to adapt buildings to deal with increased rainfall and storm run-off, which can cause city drainage and flooding. “A typical response to designing for drainage is to think ‘let’s channel the water into a sewer drainage system’,” says Floyd. “But we also need to think about what we can do at a site-by-site level and think about better utilisation of rain gardens, retention ponds, permeable pavements and green roofs – all ways of catching and allowing water to absorb.” One city that’s doing particularly well in that regard is Singapore, largely due to the state’s Landscaping for Urban Spaces and HighRises (LUSH) programme, which places a requirement on developers to integrate green features into their building, the level of which must equal the size of land that was used for the development. Far from merely improving the aesthetic of the building, foliage also boosts the drainage system, with the plants and substrate absorbing the water before releasing it naturally into the environment at a slower rate. With these types of benefits in mind, Autodesk came up with a software solution to help designers and engineers incorporate green infrastructure into their building developments. The Green Stormwater Infrastructure (GSI) plug-in works alongside Autodesk’s InfraWorks infrastructure design software, which supports the building information modelling (BIM) process. Floyd explains: “They [Designers and engineers] can choose and customise a variety of techniques – including green roofs, bioretention, harvesting, swales, permeable pavement, trees, infiltration and wetlands. “GSI’s ability to provide real-time feedback on stormwater performance with each design change enables users to iterate quickly, compare alternatives, and improve their designs. Engineers, landscape architects and planners can use GSI as part of their earlyphase planning and conceptual design process for new or existing development projects.”
As the built environment has to increasingly design and adapt to survive extreme weather, so too will the world of valuation. RICS’ report, Changing priorities in investor decision-making: the sustainability agenda, examines the importance of environmental sustainability in the decisionmaking process of UK fund managers when investing in property. The report considers whether values being paid for sustainable buildings are greater than the financial cost-savings and whether environmental sustainability and financial objectives are compatible. RICS also contributed to Savills’ Revalue report about how energy efficiency could affect property values, particularly in residential buildings, which gives an insight into how the sector could value resilient homes. As Savills affordable housing consultancy director, Mervyn Jones FRICS, explains: “The research looked at the impact of energy efficiency on residential values across Europe. Purchasers and leaseholders of commercial buildings already look very carefully at their energy efficiency but the question at hand was what do owners and valuers of residential think?” He explains that the research initially found a weak correlation between energy efficiency and value, while adding that “as people become more aware of these issues, it would become more prevalent”. To read the RICS report, visit rics.org/sustainableinvestment Q2 2020 / MODUS APAC / 27
H E A TT H E A H HE EA A TT
T
he recent bush fires in Australia provide a tragic and stark example of how prolonged periods of drought, extreme heat and dry weather can devastate a country. But while it’s all but impossible to control wildfires once they spread, innovative design can help protect buildings in the event of a fire. Ian Weir, research architect at the Queensland University of Technology, is known worldwide for his bush-fire-resilient housing designs, including his acclaimed H House, which can withstand strong fires. Located in bush-fire-prone Point Henry, Western Australia, the home is elevated on steel stumps and clad in galvanised steel. Bush-fire-rated reflective glazing and fire-rated roller shutters were also installed to the outside of the building to protect against fire embers – which Weir explained to the Guardian in 2016 were the primary cause for house loss in bush fires – as well as timber decks and verandas that are protected by sprinklers. A more unusual building concept, meanwhile, is being tried out by Baldwin O’Bryan Architects elsewhere in Australia. Based on so-called “earth-sheltering”construction, the idea behind the design is that the building is enclosed under stabilised compressed earth blocks – building blocks made from soil – much like a bunker, which reduces the number of entry points for flames and ember attacks. The blocks have the same bush-fire-resistant qualities as reinforced concrete, which is typically used in earth-sheltered buildings. However, they are a cheaper and more sustainable option, since they can be made from soil taken from the building site. Elsewhere in the world, heatwaves – like the one that hung over France last July, pushing the temperature to 46.1°C (115°F) – are expected to become a more frequent problem. Indeed, in December 2018, the Met Office in the UK said that heatwaves were now 30 times more likely than they would be naturally. For Asif Dan, head of sustainability at architect Perkins & Will, the buildings most at risk are residential, particularly in northern Europe, where most homes have no air conditioning, which itself doesn’t offer a sustainable solution for the long term. Statistics from energy analyst International Energy Agency (IEA) show that carbon emissions from space cooling tripled between 1990 and 2018 to 1,130 million tonnes. The group says that without significant efficiency improvements, electricity demand for cooling in buildings could increase by as much as 60% globally as soon as 2030.
As such, Dan says the built environment will have to think about more passive design to cool properties. Passive design looks to control building temperature using natural and low-energy solutions and techniques, including thermal mass, an example of which can be seen in Council House 2, an award-winning office building located in Melbourne, Australia. Thermal mass is essentially a heat storage system, in which the heat arising during the day gets stored in exposed concrete ceilings. Then at night, when the external temperature has fallen below that of the internal concrete ceilings, windows beneath the low points of the vaulted ceiling automatically open, allowing cool air to flow through. Melbourne is also carrying out a “cool roofs” initiative in a bid to control internal building temperatures – as is New York City. This relatively low-cost solution works by layering specialist paint on the roof of a building. The paint includes additives that reflect the sun’s heat, and it also absorbs radiation and emits it back into the atmosphere at a higher rate than standard materials could.
WEATHER WARNING
3. SAINT-LOUIS, SENEGAL
changes in weather, the catastrophic impact of the climate emergency is all too real
WATER
HE AT
Three of the 10 most destructive Japanese typhoons since 1950 have occurred since 2018. Also, the homes of one-third of the country’s 19 million residents would be at risk from a 3°C rise in global temperatures.
Saint-Louis in Senegal is located on the coast of the Atlantic Ocean and at the foot of the Sahara. No part of the city is more than 4m (13ft) above sea level and the UN has called Saint-Louis the African city most threatened by rising sea levels.
For these places on the front line of extreme
WIND
6. OSAK A, JAPAN
COLD
7. OYMYAKON, RUSSIA In January this year, the temperature in Oymyakon – already considered the world’s coldest permanently inhabited town – dropped to –67°C, which is even colder than the average temperature on Mars.
INFO 7 1
6 2
3
1. NORTHERN AMERICA
5 9
Approximately twice as many extreme American snowstorms occurred in the latter half of the 20th century than the first.
4
2. GULF OF MEXICO
5. MALDIVES
If global temperatures rise by 2-3°C, rainfall during a tropical storm such as Hurricane Ike, which hit Cuba and Texas in 2008, would intensify by approximately 26.5%. In the northern Gulf of Mexico, were New Orleans to experience another storm on the scale of Katrina it would deposit 25% more rainfall.
No part of the country is higher than 3m (10ft) above average sea level and 80% of the land area is less than 1m (3.3ft) above average sea level. According to the World Bank, with “future sea levels projected to increase in the range of 10cm to 1m by the year 2100, the entire country could be submerged”.
4. MADAGASCAR If there were a 3°C rise in global temperature, tropical cyclone Gafilo, which killed more than 300 people in Madagascar in 2004, would have been 40% more intense.
8
8. AUSTRALIA Eight of Australia’s 10 warmest years have occurred since 2005, and the continent as a whole has warmed by more than 1°C since 1910. There has been a decline of around 11% in rainfall in the south-east of Australia between April and October since the late 1990s.
9. MARSHALL ISL ANDS The Marshall Islands are all lower than 6ft above sea level. Just a 1m (3.3ft) rise in the waters could result in the loss of 80% of the Majuro Atoll of 64 islands, which includes the Islands’ capital – home to half of the country’s population.
Q2 2020 / MODUS APAC / 29
A
t the other end of the temperature scale, cold snaps are an increasing blight across the world. This year, a polar vortex swept in from the Arctic causing temperatures in the American Midwest to drop to -35°C (-31°F), with wind chills as low as -50°C (-58°F). With that in mind, adequate insulation will be a critical factor for many homes in the UK, which has a lot of vulnerable heritage stock, says Floyd. He points to the Rocky Mountain Institute’s Innovation Center in the US as an example of the types of solution that could be applied. The building uses what it calls “aggressive insulation” against the elements and is surrounded by thick concrete walls and levels of insulation three times thicker than that required by regulation. The centre has also been made 97% more airtight than a conventional commercial building , using advanced materials combined with strict construction details, including two coats of airtight tape and air barriers and seals to avoid leakage. “This protects against swings in internal temperature, hot or cold, and creates a more stable atmosphere inside the building and comfort for the inhabitants,”explains Floyd. 30 / MODUS APAC / MARCH Q2
WSP head of London building services Austin Wikner, meanwhile, says it’s worth contemplating how tall structures in dense city areas, that are not used to extreme cold, would need to adapt. “If we get to climates where we’re regularly experiencing temperatures of -10°C (14°F) or -15°C (10°F), you’ve got a real potential issue of the build-up of snow and ice, which means there is a risk to pedestrians from falling hazards,” he cautions. “This is a problem they deal with regularly in parts of America, but the UK and London don’t tend to have that problem because – at the moment – temperatures don’t often get that cold. But as things change, and if we’re going to be heading for more extreme temperatures, that’s something that could impact design.” As a consequence, he says, the actual shape and form of buildings would need to ensure that snow and ice couldn’t build up along any overhangs. Also, consideration would need to be given to the design of the public realm at the base of the building, which may have to include “no-go” zones to protect the public. n
Future of the Profession Conference Philippines 2020 Age of Digital Transformation and Disruption of the Quantity Surveying Profession
17 October 2020 Manila, Philippines The RICS-PICQS joint conference will uncover how the role of the quantity surveyors and related disciplines are evolving as the Philippines built environment undergoes industry and digital transformation alongside the Philippines Construction Industry Roadmap 2020-2030. Through unparalleled thought-provoking content, the conference will feature prominent overseas and local speakers from the entire built and real estate value chain, providing the latest updates and developments in Philippines and the region’s built ecosystem for all built environment professionals. #RICSFPCP
Find out more at rics.org/FPCP
DRIVERS OF CHANGE
Urbanisation, digitisation and a global climate emergency are changing how and where people live, travel and work. But with change comes an opportunity to reshape the role of the surveyor and redefine the limits of the profession. It’s a challenge on three fronts and, as these industry leaders explain, this is how we’re going to do it
ILLUSTRATION BY HUNKY-DUNKY
T
he volume of spend in construction is going to soar over the next decade, largely driven by macro-level trends happening around the world. First, there is still a significant rate of population growth and increasing urbanisation which, particularly in emerging markets, will require the building of more infrastructure. Also, in a number of mature markets around the world, including the UK and the US, infrastructure will need renewing. In the UK alone, there is a £600bn commitment to renew infrastructure over the next decade. Another exciting shift is that increasingly governments and society in general are committed to a zero-carbon world. That shift alone will have a significant impact on how our cities operate – for example, how we travel and consume energy – and cities will have to reinvent themselves, which will again create demand for construction. There will also be big changes in how people connect and travel. For example, in India we are involved with Virgin Hyperloop One on a scheme to connect Mumbai and Pune, which will cut the journey time from six hours to 25 minutes. The opportunity to raise infrastructure standards by adopting
new forms of technology will also lead to increased demand and investment. So, I see a lot of macro issues coming together, which will significantly increase the demand for construction. According to McKinsey, 4,000 megaprojects – projects in excess of $1bn – have been announced or are about to start globally, which represents a 50% increase on today. However, it’s not all good news. We’re in an industry that has fundamental issues that need addressing – in terms of productivity, sustainability, skills and investment – which means that construction is currently part of the problem rather than the solution. As a result, at Turner & Townsend, and I’m sure the same is true of our competitors, we are building capacity in the areas of greatest demand – areas including digitalisation, a “whole-life” approach to projects and design and manufacture. But at the heart of everything is people. We need to equip our workforce with different skills. And the next generation of talent will allow us to grasp the opportunities that are coming forward globally. VINCENT CL ANCY MRICS, CHAIRMAN AND CEO, TURNER & TOWNSEND Q2 2020 / MODUS APAC / 33
DATA AND TECHNOLOGY Dr Lara Potter is director, Workforce for the Future, and a partner at Arcadis where she leads on strategic workforce insight and planning for the built environment
W
e are faced with a series of major issues, including the housing crisis, mobility, an ageing population and the climate emergency. We need to ask ourselves what the economy needs from us. This is where the opportunity for the sector around technology and digitisation comes in. My view is that digitisation is our lever to deliver solutions to these problems. That is happening in four main ways. The first is at a tactical level. Technology is changing the way we work in the sector. In Arcadis, we now talk about digital teams, which we didn’t at all five or six years ago. It allows you to draw on the right people, at the right time, through a virtual network. People no longer need to be co-located to work together, which is a big shift for a sector that traditionally involved having everyone sat in the same room. Particularly for the generations coming into the sector now, it’s a natural thing to do. For clients, it means that we have access to talent that perhaps we wouldn’t have done in the past. For instance, we now have a growing digital analysis team based in India who work alongside our UK teams delivering projects for our clients. The second area relates to automating and augmenting what we already do. Building information modelling (BIM) platforms, for example, are changing the way we deliver projects. They can generate much better data sets and also provide an opportunity to work together across professional silos in quite a different way. We’re starting to see this happen in the development of digital twins, where different
professions visit the same information at different points in the asset’s lifecycle and provide additional information and datasets. The result is improved programming and better visibility on time and cost. Then there is the opportunity to develop propositions not seen in the sector before. This is about pulling together different datasets to be able to drive more productive outcomes. For example, by pulling together better data around housing capacity and allocation, as well as information on site viability, to name a few, you can take a more systematic approach to bringing land forward for development. Finally, there is the issue of disruption. Where is the Amazon or Uber of the built environment sector? One company, Sidewalk Labs [a subsidiary of Google’s parent company, Alphabet], was developing the Toronto waterfront using a data-driven model rather than an infrastructure-and assets-driven model. It shelved the project in May, citing uncertainty in the global economy in the wake of Covid-19, but it’s not out of the question that others will try to pick up the baton. What is this likely to mean for RICS and other professionals in the built environment? It is already clear that the proportion of chartered professionals has gone down at the big consultancies, from approximately two-thirds to around a half. But it’s not that the core professions are no longer important, it’s that the companies are diversifying. People are also looking to gain new, transferable skills to supplement their core discipline – skills relating to data, automation and process thinking, client understanding and insight. We are hearing words such as “creativity” and “empathy” in the built environment sector more than ever before. With the rise of the machines we are also seeing a greater emphasis on the things that define us as humans. However, there is a huge challenge around how professionals of the future will know that machines are producing the right solution. Engineers in particular are talking about the possibility of there being failures before we know how the human and machine elements are operating alongside one another. In that sense, it’s a disruptive time.
Amazon, a major disruptor in the e-commerce space, has three biosphere domes that are open to both staff and the public outside its headquarters in Seattle
DRIVERS OF CHANGE
“ WE HAVE ACCESS TO TALENT THAT PERHAPS WE WOULDN’T HAVE DONE IN THE PAST ” Then there are the shifts in demographics and the challenges to traditional forms of hierarchy. We normally expect people to come in as graduates or apprentices and work their way up, but what we’re seeing through digitisation is people coming in with very little experience but actually very valuable knowledge. Different generations are now working together in different ways. So, technology and digitisation are already changing the industry, both in terms of our capabilities and the work that we do. There will no doubt be bumps in the road but ultimately the result should be a more productive built environment industry, with social value and sustainability at its heart. That, surely, is something to be welcomed. Q2 2020 / MODUS APAC / 35
COGNITIVE DIVERSITY IS KEY TO GAINING A COMPETITIVE EDGE MAT THE W SYED IS AN AWARDWINNING JOURNALIST, SPE AKER AND BESTSELLING AUTHOR
TALENT AND SKILLS Caroline Williams is the director of Open Programmes at Saïd Business School, University of Oxford
T
he start of a new decade sees the built environment sector on the brink of upheaval. Big data, AI, the internet of things: new technologies are emerging at breakneck speed. You might think that the answer to navigating this change is to rush to action. However, the message from my colleagues at Saïd Business School is: “Slow down and find space to think.” The CEO Report, which we published in 2015 with Heidrick & Struggles, is based on interviews with more than 150 CEOs. The research shows that although it may feel as if the world is changing faster than ever before, your business, or even parts of your profession, aren’t necessarily changing at the same pace. And some areas aren’t changing at all. How leaders think about the pace of change affects how they go about acquiring the necessary skills within the organisation. The choice is ultimately to develop skills in house, or gain them via recruitment – a particularly tough decision for professional firms, which are traditionally dominated by a professional workforce. Whichever option a leader chooses, they may find it radically challenges the firm’s identity, governance, regulation and professional jurisdiction. New hires with new skills may initially feel like misfits because their expertise has not traditionally been valued by the profession. If they are introducing new technology, they will be disrupting how others work. As one of the report’s authors, Dr Michael Smets, says: “You have a new workforce trying to change how the organisation operates. That won’t be easy.” Not only that, but all of your existing performance, promotion, remuneration and
career systems will be geared towards the professionals in the firm, and they won’t fit your new recruits and their skills. You will also be asking existing leaders, who have risen through the firm on the basis of their own professional expertise, to lead new staff with unfamiliar skills and who know more than they do. Many experts might be deeply uncomfortable to discover they’re no longer the smartest person in the room. So, there are clear advantages to developing new expertise in house. And Smets says that while it may be slower, “embedding it is quicker as new experts can draw on their existing credibility”. Technical experts below partner level can play a critical role, as they help to connect the old and the new, providing the connectivity and credibility that newcomers lack. Moving forward, it is important to acknowledge that technological change is a leadership issue. You can’t devolve it to people with “digital” in their job title, sit back and expect everything to go swimmingly. Introducing new technologies requires new people, and new people need new career structures. New career structures require new incentives, which in turn change the identity of the firm, and even the profession. The challenge goes beyond what you might think of as standard change or transformational leadership. It requires openness to the possibilities of technology and the “savviness” to spot them, even when you do not have technical expertise yourself. Most of all, it requires a deep humanity and sensitivity to the people you’re leading, both traditional professionals and the new breed of experts.
More and more people are recognising that great minds do not think alike. The best decisions, the most accurate predictions, and the most creative ideas come from groups that are cognitively diverse: people who have different insights, and experiences, and perspectives. The problem is that we are attracted to people who think like us. It makes us feel smarter and validates our world view. Indeed, the pleasure centres of our brains light up in a scanner when people reflect our own thoughts. The most dynamic organisations are those who resist the tendency to remain within their comfort zones, that are capable of reaching out to people who think differently. Organisations that are not afraid of being challenged, or to adapt to the changes that are inevitable in a world where technology and demography are morphing at speed. In science, the best teams are multidisciplinary, breaking down the silos that can emerge within subcultures of all kinds, thus bringing a richer understanding of human behaviour. The same is true at tech companies, which recognise that expertise can be turbocharged by the crosspollination of ideas, providing these fresh ideas are synergistic. My sincere belief is that cognitive diversity will prove to be the single greatest source of competitive advantage in the coming half century. You might almost say: diversify or die.
DRIVERS OF CHANGE
O VALUING SUSTAINABILITY Jason F. McLennan is a globally recognised architect, planner and author and the founder and creator of the Living Building Challenge. He is the CEO of McLennan Design
ver the past 25 years, I have watched green building move from a fringe topic to the mainstream. During this period there has also been the emergence of initiatives such as Leadership in Energy and Environment Design (LEED), Building Research Establishment Environmental Assessment Method (BREEAM), GreenStar and the Living Building Challenge (LBC) – each of which attempt to reduce the negative impacts of building. But while the building industry has undoubtedly made progress, most new buildings in the world are not green buildings, and they continue to consume significantly more resources than necessary and contribute to global warming emissions and climate change. In 2018, an Intergovernmental Panel on Climate Change (IPCC) report showed that in 2018 global emissions increased by 2.7%, following a 1.6% increase in 2017, and that major cuts to our CO2 emissions will only delay an inevitable increase of 1.5ºC, which would give rise to stronger storms, more erratic weather, rising sea levels and dangerous heat waves. Change won’t be easy, and will require all fossil fuel infrastructure to be replaced with renewable, non-polluting energy sources. The building sector knows how to do this, but one reason it doesn’t is that people don’t know how to properly value and recognise the benefits of “living buildings” – let alone typical green buildings – and align policy and financing appropriately; we incentivise the wrong things and punish innovation.
“ PEOPLE DON’T KNOW HOW TO VALUE AND RECOGNISE THE BENEFITS OF GREEN BUILDINGS ” Q2 2020 / MODUS APAC / 37
Seattle’s Bullitt Centre (above and p15) was built to have a 250-year lifespan, with composting toilets, a rainwater re-filtration system and 26 geothermal wells that extend 400ft underground 38 / MODUS APAC / Q2 2020
IMAGES BY SIDE WALK L AB S, BENJAMIN BENSCHNEIDER & NIC LEHOUX FOR THE BULLIT T CENTER
The Bullitt Centre in Seattle, the world’s first commercial living building, is a case in point. It uses a fraction of the energy of a typical office building, and all the energy it does use is generated by the 575 solar panels, which cover 14,000 ft2 (1,300 m2) and produce 230,000kWh per year. A host of other green features will ensure that it never receives a water bill or an energy bill. However, when the building’s owners sought financing for the project, lending institutions had no idea how to properly value it as there were no comparable buildings, and they ended up penalising many of the Centre’s atypical green features because they were unprecedented. The low valuation meant that considerably more equity was needed to build the Centre, which would scare off many developers. Once completed, the building was equally difficult to value, despite the obvious benefits of its design. There were annual operational savings of more than $147,000 (with associated emissions of 323 tonnes of CO 2) and energy savings equal to 704,367kWh per ft2 each year. The fact that these benefits were ignored (or misunderstood) highlights that current models for valuing buildings penalise green buildings while rewarding traditional, inefficient ones. It is worth noting that these aren’t the only savings made by the Bullitt Centre – many of the true costs of operating buildings are borne by public utilities, the environment and the taxpayer. Also unquantified is the health and wellness benefits to the building’s occupants, as only safe, non-toxic materials, free of red-list chemicals such as formaldehyde were used, and it was designed to ensure optimal air and light quality. Measures such as these are proven to reduce sickness and absenteeism and increase productivity and retention, but they never make it into valuation discussions. Although current financial analyses do not factor in these kinds of externalised or optional costs, and while there isn’t yet a carbon tax in most markets, changes along these lines are likely in the near future and the value of the building increases even more dramatically in that light. The proof of these elements is now clear: the building has been fully occupied since its
first year and is able to charge slightly higher rental rates than comparable buildings in the neighbourhood because of its superior environmental and occupant attributes. All of these factors combined with extremely low operating costs and zero utility costs mean that it is one of the strongest financial performer of any building in Seattle – all for a structure that lenders initially felt was low in value because they considered it different. Chartered surveyors need to properly value sustainability elements rather than undervaluing such elements in buildings. This will require new perspectives, new analysis, and new thinking. Future trends such as climate change and rising energy costs put inefficient assets at risk of being stranded, or at extreme disadvantage, yet these trends are hardly ever discussed. n
Smart Buildings Conference 2020 Advancing into the Future: Innovate, Improve, Integrate
03 November 2020 Singapore Returning for for the third year, the REDAS-RICS joint conference will realign and reinforce the vision to push boundaries, relearn continuously, and synergise new opportunities and insights – to transform and strengthen the future of the build environment. Through unparalleled thought-provoking content, the conference will provide the latest updates and developments in Singapore and the region’s build ecosystem for all build environment professionals. #RICSSmartBuildings
Early bird ends 14 August, find out more at rics.org/smartbuildings
WORDS BY RHIANNON CURRY ILLUSTRATIONS BY MIKE MCQUADE
WHISTLEBLOWING
In recent decades whistleblowing has shed itself of its negative connotations and emerged as an essential par t of a healthy business culture – so why are some people still reluctant to do it?
P
icture the scene: you witness something at work that makes you feel uneasy, perhaps inappropriate behaviour or financial discrepancies. Upon reflection you realise that what you saw was criminal or a serious breach of professional standards. Who do you tell? One of an RICS professional’s core responsibilities is to act in the public’s interest, which includes an obligation to report any fellow professional who isn’t doing so. But whistleblowing has got something of a bad name; it can be perceived as difficult and risky, with potentially serious professional implications – possibly even dismissal from your job, or a criminal conviction. However, whistleblowing is also part of a healthy business culture (see box, right): it’s an effective way to uphold and enforce a professional ethos, it shows employees that they are valued, and it gives access to otherwise difficult to reach information, which, in turn, reduces a range of risks. So why is there still a stigma around the practice? Some countries, including Canada, South Korea, the US and South Africa, have introduced legislation to compensate public sector whistleblowers who suffer adverse effects as a consequence of speaking up. In Canada, for example, the Ontario Securities Commission offers whistleblowers up to C$5m (£2.9m) for a tip that leads to enforcement action. And a similar system exists in Australia. To encourage people to come forward with their concerns, and protect them when they do, the Corporations Act 2001 gives certain legal rights and protections to whistleblowers. They also have the right to seek compensation for reprisals, and courts are required to preserve and protect a whistleblower’s identity, unless it is in the interest of justice to do otherwise. While employment legislation varies across the world, RICS has rules of conduct to which members must adhere that includes five ethical standards: act with integrity; always provide a high standard of service; act in a way that promotes trust in the profession; treat others with respect; and take responsibility.
“ WE NEED TO FIND A BETTER WAY TO ENCOURAGE PEOPLE TO COME FORWARD WHEN THEY SEE WRONGDOING ” DOUGL AS THORNTON FRICS WHISTLEBLOWER
ON THE FLIGHT PATH TO RIGHTEOUSNESS WHAT THE AVIATION INDUSTRY CAN TE ACH US ABOUT TRANSPARENCY AND ACCOUNTABILIT Y In his book Black Box Thinking, Matthew Syed claims that we cannot grow unless we embrace the lessons that arise when we fail, and it is only then that success occurs. He points to the aviation industry as a model of this attitude: the sector has created an astonishingly good safety record because, he says, mistakes are learned from rather than concealed – promoting a culture which encourages whistleblowing. “When people don’t interrogate errors, they sometimes don’t even know they have made one – even if they suspect they may have,” he writes. He cites the case of United Airlines Flight 173, which crashed in Portland, Oregon, in 1978. Following a problem deploying the landing gear, the plane was put into a holding pattern for approximately an hour. During this time a flight engineer tried to warn the captain that the plane was dangerously low on fuel, but the captain was focused on the issue with the landing gear. The plane subsequently crashed, killing 10 people, and what Syed is keen to point out is that there was a statutory, immediate investigation in the weeks and months that followed. Historical and real-time data was used, including the plane’s black-box data, enabling comparison with previous incidents. Everyone involved cooperated fully, as the immediate assumption was there must have been a system problem. Any evidence given to the independent inquiry was inadmissible in court. Within weeks of the report being completed, its findings were disseminated throughout the entire aviation industry, with recommendations for change to protect air crews and passengers in the future, with checklists, tools and training simulations. Since these changes have been implemented, the spate of crashes that were so typical of the 1970s have declined significantly. “A ‘closed loop’ is where failure doesn’t lead to progress because information on errors and weaknesses is misinterpreted or ignored; an ‘open loop’ does lead to progress because the feedback is rationally acted upon,” Syed writes.
THE WHISTLEBLOWER’S STORY Douglas Thornton FRICS, a chartered valuation surveyor, became a whistleblower after noticing financial discrepancies at the company he was working for. “I didn’t know I was a whistleblower until I became one. It’s not something I was terribly aware of in my professional career,” he explains. But when he noticed a major spending issue at work, he felt he had no choice but to act. “It was just so shockingly obvious to me that there was something wrong,” he says. “I was looking at it in the context of regulatory and ethical
standards; I was being asked to act in a way that wasn’t in the public interest.” Thornton approached his line manager, HR director and the chief executive of the company, but felt his concerns hadn’t been listened to. “[Whistleblowing] leaves you lonely, and concerned,” he says. “The organisation turned on me for raising concerns.” He felt he had no choice but to approach RICS for help, and worked with charity Whistleblowers UK to take his concerns to a higher level. The information he provided is now being used in a wider investigation. He also discovered that he was not alone in his suspicions. “I went from
feeling it was just me to finding out that other people had concerns.” But it has affected his career.“You become a pariah in the job market - I am four years on now and I have barely worked. The effects of whistleblowing are marked,” he says. “We need to find a better way [in the UK] to protect whistleblowers, and to encourage people from all professions to come forward when they see wrongdoing.” Despite the consequences, Thornton has no regrets about his actions. “You could see that there were other members who were aware of the problems but chose to step away from it,” he says. “Would I do it again in the public interest? Yes.”
WHISTLEBLOWING
Although there are procedures in place that allow any breach of these standards to be brought to RICS’ attention by whistleblowing, it’s clear that many people still feel nervous about stepping forward; a point reinforced by the fact that nearly all the RICS professionals who agreed to take part in this feature would only do so on the condition of anonymity. RICS professional Mr H has worked in valuation in Beijing for more than 12 years. He says: “I think each whistleblower will have to imagine what future consequences will be borne by themselves or their family, and balance that against how serious the problem is. Can the problem be solved? This is human nature.” Mr H adds that while he believes that RICS professionals in China take their responsibilities to act in the public interest very seriously, it isn’t always easy to do so: “Some problems can slightly affect the interests of others, but seriously affect yourself,” he says, citing an example where someone may have to report their line manager to a higher boss, potentially causing tension at work, or make a disclosure about an important or valuable client. Censorship in China sometimes makes the problem worse. “When this issue is related to the government, the consequences can be worse,” explains Mr H. “Somehow, public interest comes below national interest.” Other professionals agreed that there were fears around reprisals and a lack of confidentiality for those who speak out, and that turning a blind eye to the behaviour often seems easier. An Indonesian RICS professional, Mr M, who has worked in quantity surveying in Indonesia for more than 10 years, says: “I have been in a situation where maintaining the ethical code would take longer and cost the same as exposing the main or sub-contractors who were engaging in this behaviour. I feel that local companies maintain the status quo [rather than reporting bad behaviour], and it has actually become part of the process.” However, there was more positivity from members in India. Ms P, who has worked in different corporate offices specialising in legal and compliance for more than 15 years, says: “I think things are changing in India. People are proactively whistleblowing. We can see this in relation to companies listed on the stock exchange, many of whom have received complaints. And time and again, courts are upholding the need to protect whistleblowers.” But some difficulties still remain. Although whistleblowers in India are technically protected under the Whistleblower Protection Act 2011, the Act has still not yet come into force, because amendments pertaining to safeguards against certain disclosures relevant to national security could not be incorporated. “In this highly competitive market, which has limited business opportunities, ethical compliance is often considered secondary to business gains. This is further marred by economic turmoil, like India is facing at present,” says Mr A, who has worked in real estate research and consultancy for more than 12 years. “For many professionals, their business relationship is too important to risk by causing friction within their professional networks,” Mr A adds. “Consequently, they avoid facing any retaliation and personal confrontation.” Say what you see Mindful of these potential challenges, RICS has released new guidance on making reports, called Speaking Up (see Whistleblower’s toolkit, overleaf). Emma Dowd, a regulatory technical specialist at RICS who co-authored the guidance, says it was written in response to a lack of clarity about members’ rights and responsibilities.
“ I FEEL THAT LOCAL COMPANIES MAINTAIN THE STATUS QUO RATHER THAN REPORTING BAD BEHAVIOUR ” MR M RICS PROFESSIONAL BASED IN INDONESIA
“CPD events organised by the regulation department, showed us that people were really interested in cases we had worked on,” explains Dowd. “But we found that people either didn’t realise they had an obligation to report, or they didn’t necessarily come forward. This new guidance is intended to remind professionals of their obligations, and to have something clearly visible on our website that we could point people towards.” Generally, she finds that professionals are keen to uphold the high standards across the sector and see the real value in professional qualification to support their business. “The profession wants to protect its reputation – they take pride in the industry,” Dowd says. Francesca Richards, a lead investigator for RICS in the UK, explains that the current process works well – although it can sometimes have challenges when a whistleblower wants to remain anonymous. Richards has recently worked on two cases where this was a real issue: one where someone reported inappropriate behaviour, and another where someone highlighted court judgements against an RICS professional. In some instances, this can have a real impact on RICS’ ability to take investigations forward. But, Richards says, many of the complaints that she receives are about poor service, which isn’t something the investigations team deals with. “If we are satisfied it meets the threshold, it goes to an investigator. They review the information and see if more is needed, usually from the person or member who has made the complaint, although we do also seek evidence from third parties. “Once we have the information and we are satisfied that there has been a breach of conduct rules, we will write to the member concerned with our findings.” This letter will address the claims and give the member a chance to respond to the allegations. Q2 2020 / MODUS APAC / 45
SPEAKING UP: THE WHISTLEBLOWER’S TOOLKIT RICS has a toolkit, called Speaking Up, which is intended to guide people about what to do when they encounter problematic behaviour or practices in a work environment. The guidance says: “A key part of doing the right thing may be to speak up about wrongdoing, in order to help prevent further harm from happening and to maintain trust in the profession.” “This can mean talking to a line manager or reporting your concerns through specially designated channels within your place of work. However, you should also consider whether the matter is serious enough to be reported to RICS for regulatory consideration.” But how do you know what the right thing to do is? When does a situation become serious enough to report it?
SITUATIONS WHEN IT IS APPROPRIATE TO REPORT:
SITUATIONS THAT DON’T FALL UNDER THE INVESTIGATIONS TEAM’S REMIT:
PROBLEM: You are concerned about the independence of a valuation by an RICSregulated professional after seeing emails from the client asking for the value to be lowered. ACTION: Report the concerns to RICS, indicating any client files that might need to be reviewed.
PROBLEM: You’ve spotted a legal issue with a contract that is threatening to derail a deal that you have been working hard on. ACTION: This is not something that would be covered under whistleblowing legislation. The appropriate course of action is to take legal advice.
PROBLEM: You notice discrepancies in the client bank account reconciliation, and as a result there are not enough monies in the client bank account to meet the liabilities. On further investigation it appears that monies have been misappropriated. ACTION: Report the member of staff to the police and report the matter to RICS. PROBLEM: Following several professional negligence claims, a firm is unable to renew its professional indemnity insurance and the policy lapses. The firm does not cease trading or taking instructions from clients. ACTION: Raise the concerns with principals and report them to RICS. PROBLEM: An RICS-regulated firm holds an event for its staff. You notice a principal at the firm approach a junior member, make comments about their appearance and touch their body. The member of staff is offended by the advances and tries to walk away. The principal tells the member of staff not to come into work the next day. ACTION: Report the action to RICS. You can confide in another senior member of staff and make the report together.
“ THE PROFESSION WANTS TO PROTECT ITS REPUTATION – THEY TAKE PRIDE IN THE INDUSTRY ” EMMA DOWD RICS
PROBLEM: You suspect someone has been negligent in their work, or just not offered a very good service to a client. ACTION: Unless the behaviour is in direct contradiction with the RICS ethics code, this probably isn’t a whistleblowing situation. Again, taking legal advice may be the best way to take a complaint forward. If you decide to make a report to RICS, you can do it online or by sending an email and any supporting evidence that you have to complaints@rics.org. When reporting concerns about a regulated member, you may want to remain anonymous. When anonymous information is received, RICS may decide not to investigate if it does not believe the information is credible. If you want to remain anonymous, RICS will make its best efforts not to disclose you as the source of the information. However, you should be aware that there may be circumstances when RICS is obliged to disclose you as the source, for example, where a court or another regulator orders it.
“Once we have the response, it may be then that it is clear that the allegations are unfounded, or it shows that we need to get more information, or to refine the allegations we are looking into,” she explains. “After that, we can decide whether the allegation meets the threshold for disciplinary action.” For those who do make a disclosure, LionHeart, an independent charity for RICS professionals and their families, can help. Although only one way in which RICS captures information that can lead to regulation action, whistleblowing remains an important way to raise concerns in order to confront, challenge and deal with bad or illegal practices. “People say, ‘We’re part of this group that upholds high standards, that provides a good service to clients, and we don’t want that to be spoilt by the actions of a few’,” Dowd explains. “That’s a great motivator to speak out.” n For further advice about speaking up and the rules of conduct for RICS professionals, go to rics.org/rulesofconduct
46 / MODUS APAC / Q2 2020
Global strategic thinking, practical solutions and urban resilience under public health emergencies are the focus of the World Built Environment Forum Summit China 2020. Join fellow professionals and built environment stakeholders to set agenda for the future of our rapidly changing world. #WBEF
Summit China 30 July 2020 Jing An Shangri-La, West Shanghai
rics.org/wbef
#WBEF
Awards China 2020 Presentation Ceremony 30 July 2020, 17:30 - 22:00 Jing An Shangri-La, West Shanghai
rics.org/chinaawards
The cost of high living
WORDS BY CATHERINE EARLY ILLUSTRATIONS BY TOM ABBISS SMITH
Rapid urbanisation means billions more people are living and working in cities – mostly in skyscrapers. But that’s terrible news for the planet as, typically, the taller the building, the less energy efficient it is. So, how will we build the greener tall buildings of the future?
WORDS BY HUGO COX
A
ccording to the UN, in 2007, when the world’s population was approaching 6.7 billion, the number of people living in urban areas was approximately equal to the number living elsewhere. However, by 2050, when the global population is predicted to have reached 9.8 billion, twice as many people will live in urban areas than elsewhere. If you’re wondering where an additional 3 billion-plus people will live and work: look skyward. Advances in construction methods and materials, alongside unmanageable traffic congestion and a resurgence in city centre living have seen a growth in the construction of tall buildings. Figures from the Council on Tall Buildings and Urban Habitat (CTBUH) show that the number of buildings over 150m high has increased from 2,376 to 4,991 in the past 10 years. Among buildings taller than 300m, numbers have increased from 542 to 1,616. But the ever-increasing number of people living and working in cities, and the construction of the buildings that will facilitate it, could be very bad news for the planet, as early research indicates that tall buildings are proportionately more energy intensive than short ones.
A rising problem A 2017 study of 600 British office buildings by a team at University College London (UCL) showed that as a building’s height increases from five to 20 storeys, carbon emissions from energy use, per unit of floor area, double. Taller buildings are subject to forces that smaller buildings aren’t. “[They] rise above their neighbours and are exposed to stronger winds, lower temperatures, and more direct sunshine,” explains Philip Steadman, Emeritus Professor of Urban Studies and Built Form Studies at the Bartlett School of Architecture, who led the research. “[So] they need more heating in winter and more cooling in summer.” There is a scarcity of studies about the carbon impact of running tall buildings. One of the reasons for that is operators are notoriously guarded about releasing the necessary data, for fear they might give away their competitive edge. The data from private building operators that was used in the UCL study, for example, was provided on strict condition that no individual building data would be published. Another reason is the current primacy of computer modelling to determine buildings’ energy consumption, which
THE SPANISH HIGH-RISE REACHING NEW HEIGHTS DESPITE ITS TOWERING SIZE, BOLUE TA MEE TS STRINGENT ENERGY EFFICIENCY STANDARDS At 88m (289ft) tall, the Bolueta high-rise in Bilbao, Spain, is the tallest Passive House-certified building in the world. Completed in 2018, Bolueta – named after the district in which it is located – comprises 171 apartments. A second Passive House-certified tower of 21 storeys is planned next to the first tower. A Passive House typically consumes approximately 90% less energy than an existing building and 75% less energy than an average new construction. The project’s architect, Germán Velázquez, said at the time of its completion: “Now that Bolueta is complete, there are no excuses any more: it is possible to realise such a project, and it is just as possible to realise one almost anywhere out there.” Q2 2020 / MODUS APAC / 49
EMISSION CRITICAL The taller a building climbs, the less energy efficient it becomes, which is a cause for
<6
ST
O
concern as the number of 300m-plus buildings has virtually tripled in the past decade
RE
YS
215 115
EY
S
82
2019
1,616
304
0S
TO
R
100
6 -1
202 2018
RE
5S
TO
102
YS
2017
302
1,338
1 1 -1
185
117
124
OR
2016
EY
S
20 16-
1,195
Buildings in the world over 300m
Mean annual emissions ( k g C O 2 /m 2 ) 343
2015
ST
Mean annual energy consumption ( K W h /m 2 )
1,486
130
1,059
225
118
147 2014
942
FOSSIL FUEL
ELECTRICITY
2013
839
2012
766
2011
696
2010
542
270
142 CARBON EMISSIONS
177
SOURCE: UCL, 2017; C TBUH, 2020
TOTAL ENERGY
20 >
STO
RE
YS
412
“ TALLER BUILDINGS NEED MORE HEATING IN WINTER AND MORE COOLING IN SUMMER ” PROFESSOR PHILIP STEADMAN THE BARTLE T T SCHOOL OF ARCHITECTURE
according to Steadman has consistently suggested that tall buildings are as, or more, efficient to run – results that are unsurprisingly favoured by those with financial interests in building tall buildings. Steadman claims that a powerful lobby for computer simulation models is still reluctant to accept the results of his research. “I have given a number of talks [about the research] that are well attended by planners, but not developers. And where I encounter them [developers] they are much harder to convince,” he says. Despite this reluctance to accept Steadman’s results, comparable evidence has been available for a while. As long ago as 2004, a study of 20 government office buildings in Hong Kong measured each building’s height and the energy used from functions such as air-conditioning, lighting and lift operations. However, despite gathering all the necessary information, the study’s analysis was focused elsewhere. “There was enough data to draw comparable conclusions to our research, but the paper did not,” says Steadman. The problem of glass At the heart of tall buildings’ energy inefficiency is their use of glass, whose high conductivity heats the building in summer and cools it in winter. Steadman’s research found that the proportion of a building’s exterior that was glazed “increases systematically with [a building’s] height, increasing heat loss and heat gain”. Most of the world’s tallest buildings are fully or nearly fully glazed, according to Simon Sturgis founder of Targeting Zero,
Hong Kong is home to more than 350 buildings that are taller than 150m
a sustainability consultancy in London. And the problem with glass isn’t limited to its thermal inefficiency – maintenance of glass buildings is relatively wasteful, too. To reduce the amount of air-conditioning needed to cool the interior of a mostly glass building, they are typically built with a triple-glazed facade with a large gap between the outer pane and doubleglazed inner panes, in which electronically operated blinds fit. There is also the laminate required for strengthening, and then a heavy aluminium framing system to support the five sheets of glass. Furthermore, these glazing units don’t last as long as the traditional stone-andsteel facades of older skyscrapers. Sturgis estimates that they must be replaced every 30 to 40 years compared with every 100 years for a building with exterior glazing of 40% – a figure that reflects that of Empire State Building-era skyscrapers – and one that he suggests should be a target for future buildings. A further issue with fully glazed facades is that they come in large units, meaning that a fault in one section often requires a wholesale replacement. “And the material is hard to recycle, so there is a huge resource impact,” adds Sturgis. It seems clear that if the fast-urbanising world cannot curb its appetite for tall buildings, it will need to start building them with less glass. Transparent solar Q2 2020 / MODUS APAC / 51
Above: The Passive House development in Gaobeidian, China, is the largest in the world – it comprises eight high-rise buildings, 12 multi-family buildings and six villas Opposite: When the eight-storey Innsbruck University building was retrofitted to meet Passive House standards, only the reinforced concrete main structure was retained
cells coating large skyscrapers theoretically provide a future power bounty, given the uninterrupted access to sunlight enjoyed by taller structures. “Currently, though, these are expensive and high on embodied carbon [the carbon produced in their manufacture and installation],” says Sturgis. Passive progress? When it comes to how to build at scale more sustainably, the principles of Passive House could prove to be a valuable resource. The stringent design standard was developed to reduce the energy required to heat or cool a building by harnessing the power of the sun and internal energy sources, while conserving heat with airtight construction methods. In the fast-expanding city of Gaobeidian, in China’s central Hebei province, 1.2m m2 (13m ft2) of living space has just been Passive House-certified. But the application of these standards to commercial buildings can provide particularly big dividends. In 2015, a full Passive House retrofit of a university building in Innsbruck, Austria,
reduced heating demand from 180 kWh/ m² a year to just 21 kWh/m² a year, reports the Passive House Institute. In 2018, Klinikum Frankfurt Hoechst, the world’s first certified Passive House hospital opened. Typically, electricity consumption in a hospital is between three and four times higher per m2 than that of an equivalentsized residential building, the institute estimates. According to its figures, 40-60% of a hospital’s energy use can be saved using a Passive House construction. Dr Wolfgang Feist, director of the Passive House Institute, says that sourcing power entirely from locally generated renewables is a far more useful measure of a self-sustaining building than the popular “annual net zero” balance where electricity fed into the grid is offset against energy consumed. One reason is that large-scale electricity grids waste a proportion of the power that runs through them, and this is not taken into account in calculations. In 2014, 8.3% of all electricity generated across the world was lost in transmission, according to the World Bank.
ENERGY EFFICIENCY
“ CURRENTLY, TRANSPARENT SOLAR CELLS ARE COSTLY AND HIGH ON EMBODIED CARBON ”
PHOTOS BY PA S SIVE HOUSE INSTIT U TE; LONGFOR
SIMON STURGIS TARGE TING ZERO
The Innsbruck building combines renewable generation, including a groundwater heat pump, a solar thermal system and solar panels, with traditional Passive House building methods to reduce heat loss. “The combination of energy efficiency and renewables is the futureproof solution for all buildings, including multi-storey projects… [In the Innsbruck building] the actual amount of regionally and seasonally available renewable energy is taken into account so that a completely sustainable supply system becomes possible,” says Feist. Since battery technology doesn’t yet allow a building’s self-generated power to be stored onsite – which, if it were possible, would allow heat or power generated in the summer to be kept for use during the winter – the best solution is creating buildings that need less energy in the first place, and can generate all they need. Until buildings generate their own energy, smart technology may localise electricity grids, reducing transmission waste. Shrinking the grid to a very local level is almost as effective as removing it altogether, since the further electricity must travel, the greater the waste. (Ironically, the growth of renewables has, in some cases, increased the distances across which electricity must be transmitted.) Wide-scale adoption of solar panels and the growing number of local wind farms raises the prospect of a future where local energy demands are met by locally generated electricity, which would
vastly reduce waste from transmission. For example, a business could need energy for air-conditioning on a hot summer day, and use power generated by solar panels on nearby houses, while residents are at work. But local power generation is only one factor. To support a local network you need a model for local consumption, which means building a marketplace where consumers and generators can trade. Chain reaction David Shipworth, Professor of Energy and the Built Environment at the Bartlett, believes that blockchain can play a crucial role in facilitating peer-to-peer energy trading, which could hold the key to the future of sustainable energy generation. “Think of blockchain simply as a way of exchanging data that ensures an accurate record of that exchange between generators and consumers,” says Shipworth. Say, for example, that you buy a unit of energy that I have generated from solar panels on my roof, next door to you. My smart meter registers one more unit of energy exported to the grid; yours registers one more used. The blockchain register would work as an electronic ledger: a unit is added to my “produced” column and one is added to your “consumed” column. Everyone has a real-time copy of the ledger. So, you and I don’t even need to trust each other: transactions are recorded on everyone’s ledger, meaning that transactions are virtually impossible to forge. It is the perfect mechanism to support a market. A local power network supported by blockchain could also support socially responsible investment. For example, a householder might support her daughter’s local primary school by buying energy produced by the school. The next obstacle is regulatory, says Shipworth. Currently the tax and regulatory model for energy markets is partly a function of the huge costs of maintaining the grid. Today, the same amount is spent on keeping the UK’s National Grid running – strengthening wires, replacing transformers and pylons and so forth – as is spent on all renewable energy generation, says Shipworth. Reducing the size of wasteful national electricity grids would release money that could be used to fund sustainable power generation. By then, perhaps the world’s skyscrapers will finally be paying their way in environmental economics. n Q2 2020 / MODUS APAC / 53
J
U
WORDS BY RENÃ&#x2030; LAVANCHY ILLUSTRATION BY SIMON LANDREIN
S
T M
N
O
T
A
D
E
F
O
R
T
H
E
S
E
T
I
M
E
S
How do we meet the challenge of building resilient infrastructure for an unforeseeable future?
T
here can be few more compelling illustrations of the drastic effects of climate change than when rising sea levels help cause mass flooding. Coastal cities, already sinking into the ground after decades of pumping out groundwater from beneath their streets, are often vulnerable. In August last year, Indonesian president Joko Widodo announced a radical response to rising sea levels threatening Jakarta: he would move the seat of government out of the city and on to the island of Borneo. Within weeks, Thailandâ&#x20AC;&#x2122;s prime minister Prayut Chan-o-cha raised the possibility of doing the same for Bangkok, another capital city menaced by rising sea levels. Climate change, the fourth industrial revolution and global political instability are all feeding a growing scale of risks challenging that most risk-averse of businesses: infrastructure. A warming planet brings the possibility of extreme weather and population displacement, resulting in damaged or redundant infrastructure assets. Meanwhile, Q2 2020 / MODUS APAC / 55
technological change risks leaving traditional infrastructure obsolete, and political turmoil could upend its business model. Examples abound. In developing Asia, from China to India, billions of dollars continue to be invested in large-scale, coal-fired power stations. But investors in these plants, including global engineering firms, risk severe financial loss if the plants don’t remain economically viable long enough to repay their investment. “The politicised nature of electricity prices in Asia’s developing countries, coupled with the improving efficiencies and technology employed in renewable energy, will combine to threaten larger-scale thermal power plants,” warns Don Stokes, a Singapore-based partner at law firm Freshfields Bruckhaus Deringer, specialising in energy and infrastructure. Ambitious plans by governments and private enterprise to roll out fibre broadband networks are challenged by the promise of superfast, cheap 5G coverage, which also risks devaluing networks of existing mobile towers. Across Europe, infrastructure investors are perceiving heightened political risk, of which one symptom is tougher pricing settlements from regulators that dictate the returns that gas and electricity network operators can make. UK water regulator Ofwat last year announced record low allowed returns – even as it demanded that water companies do more to innovate and respond to climate change. This last case, along with the talk of moving capital cities, illustrates something else: that these risks are interrelated. Despite the news headlines when the decision to move the Indonesian capital was announced, sea levels are only one factor: the city is also heavily congested and the government wants to rebalance the economy in other parts of the country. The move is as much political as climate driven. And climate change itself is driving technological transformation by spurring low-carbon technologies. “The world’s infrastructure needs are growing, particularly in developing countries, and this infrastructure must be sustainable, low carbon and climate resilient,” says Arun Mani, principal at KPMG Strategy in the US. Organisations such as the World Bank and the G20’s Global Infrastructure Hub are urging governments to spend more on infrastructure: the latter estimates a $15tr spending gap will open by 2040 if spending doesn’t meet UN sustainable development goals. But how can such spending on long-term assets be justified when the long term is increasingly uncertain? As demand for spending increases, the calculations involved become harder. Can infrastructure be futureproofed, or is it less durable than we thought? Think global, build local An obvious solution is to spend yet more money building more robust assets. But, says Mani, “building to withstand a 1,000-year event, instead of a 100-year event” can be discounted: “Even if we could accurately predict risks that far into the future, it is often not technically, financially or politically feasible to build systems robust enough to last that long.” Instead, he argues, to be resilient, infrastructure should be able to adapt to shocks, such as by deploying a micro-power grid ahead of a hurricane landing, so that damage to power lines does not cause widespread loss of power.
“ 30 YEARS AGO, INFRASTRUCTURE WAS SOMETHING YOU BUILT AND FORGOT ABOUT ” ARUN MANI KPMG STRATEGY
Indeed, Mani contends, smaller-scale and localised infrastructure is inherently more resilient: “Because a local or bottom-up solution takes into consideration the attributes and requirements unique to a region, there’s a higher probability of finding a suitable solution than when taking a top-down planning approach.” Certain technological changes, such as advances in battery storage, growth in the number of electric vehicles and the rise of drones, are leading to such localised solutions in the form of microgrids, charging hubs and drone ports. Together forever? One added complication to ensuring resilient infrastructure is the way in which different types of asset are increasingly dependent on each other. Electrification of cars and heating, for example, when combined with the increase in hard-to-predict power generation from wind and solar farms, has the potential to make it much more difficult to balance supply and demand on the electrical grid, and also disrupt other assets that rely on a steady power supply. This was shown in the UK last summer, when a sudden loss of power combined with unfortunately configured train software to paralyse 30 trains for several hours, spreading chaos across the network. Smart grids connected to the internet will add another layer of interdependence. “Previously separate verticals around utilities, transport and telecoms asset classes are now much more integrated and much more interdependent,” says Greg Bradley, UK head of business advisory at Arcadis. “If any one of those has performance challenges, the overall availability of the asset is compromised, and that is new. Who’s accountable for the resilience of that system?” Legally, making the public and private bodies that own infrastructure responsible for each other is probably unworkable, but a good start would be to encourage them to work together. A lot of this, Bradley notes, will be about managing the vast stock of existing infrastructure, whose value needs to be safeguarded if the private sector is to have confidence to invest in upgrades and new assets. “I think there’s an increased need for collaboration and communication between asset owners,”Bradley says. “Regulators need to play their part in that, too.” Bradley stresses “the need for integrated asset management” to cope with risks such as climate change and digitisation, adding:
RESILIENT INFRASTRUCTURE
In 2016, Jakarta had the worst traffic congestion in the world, costing the Indonesian economy an estimated £5.4bn a year
IMAGE BY GETTY
“These pose new and additional asset management considerations in terms of systems planning, technical standards and multi-assetclass asset management: rather than just a railway, perhaps you might have a mobility system. I think the challenge is much more about looking at things in an integrated way, and that is different.” But he doesn’t stop at cooperation. Urban masterplanning, involving the simultaneous scoping of multiple infrastructure systems, has the potential to identify how they rely on each other and how best to mitigate the consequences. “If you look at the broader externalities that could happen, if you’re confident at a city or combined authority level that you have a clear masterplan of what’s required, you can start to look at what your dependencies are,” Bradley says. Intelligent incentives While infrastructure delivery may adapt to an age of uncertainty, it remains unclear how investors, public or private, can accept the risks involved. “Thirty years ago, infrastructure was something you built and forgot about,” Mani comments. “That model is going to change. You can’t forget about it, you have to be very mindful, almost on an ongoing basis, about what is impacting your infrastructure.” Governments, particularly in the developing world, are now being urged by multilateral institutions such as the World Bank and UN Development Programme to turn to the private sector for the upfront financing for their infrastructure. But the 20-30-year contracts investors typically demand to recover their investment do not sit well with the built-in obsolescence of digital technology that infrastructure increasingly contains. To overcome this, Australian fund manager Whitehelm Capital has proposed a “smart concession” model for smart city projects, under which it would finance the installation of wireless networks, sensors and communications equipment for essential services, under flexible contracts that allow for periodic upgrading. In April last year, Whitehelm made its first smart city investment in a fibre broadband network for the city of Fullerton in California. The long-term success of this model and whether it can be replicated remains to be seen. One way to align client interests with resilience is to provide financial incentives. Resilience bonds are emerging as a response to the rising global repair bill from natural disasters, for which insurance doesn’t always provide adequate cover. The bonds can be used to pay for infrastructure where bondholders are exposed to a higher than usual risk of losing money if the asset doesn’t withstand extreme weather or other shocks. The more resilience the borrower builds into their infrastructure, as measured by specific targets, the lower their interest payments. The bonds are untested, but if they catch on as an ethical investment product in the way green bonds have done, they could start to account for a meaningful share of infrastructure finance. Infrastructure is a trillion-dollar global industry with a fragmented supplier base, and even if infrastructure can be futureproofed, their effect is likely to be marginal, at least for now. Some assets, and delivery models, may have to fail before the message gets through. n
RAISING THE STANDARDS HOW ICMS CAN CONTROL RISKS AND REDUCE COSTS FOR INVESTORS The International Construction Measurement Standards (ICMS) are a set of standards for categorising and reporting costs of building and civil engineering projects – from a single total capital cost figure down to itemised costs for doors and windows. Their purpose is to provide consistent and comparable cost figures for projects worldwide. ICMS are intended to reflect that, while the construction market is still largely a local one, the investor community for property and infrastructure is increasingly global. The standard helps identify the best-value projects to invest in, and the quality of outturn cost data can be improved, leading to improved cost estimation and better control of cost risks. Value for money to clients can be demonstrated, while underperforming projects can be identified. For more information about ICMS, and to download the standard, go to rics.org/icms Q2 2020 / MODUS APAC / 57
EXPERIENCE
UPGRADE CLINIC
Keeping data as safe as houses
EVERYONE IS RESPONSIBLE FOR ENSURING DATA REMAINS SECURE
ASSET MANAGERS MUST SECURE THEIR COMMERCIAL AND FINANCIAL DATA
Kevin Brogan FRICS is principal, valuation policy and compliance at CoreLogic in Adelaide
Dominik Brunner FRICS is real estate investment adviser at Arelio in Munich
The principles set out in the Professional Statement will have a major impact on the role of the valuer, which has always involved large amounts of data handling, analysis and interpretation. Transaction data and certain transaction types may be confidential in some markets and, if collected for valuation purposes, must be kept securely and used solely for the purpose intended. Valuers may receive sensitive data not intended for a valuation – for example a landlord’s credit history or bank statements as part of an instruction for a mortgage security valuation – that cannot be retained and therefore must be removed or deleted. Similar to health and safety, data handling and security is everyone’s responsibility, and firms can support this by creating a compliant data-handling framework. Effective prevention of cybercrime will also require training, awareness and vigilance. Valuers need to ensure they capture, store and share data only using approved devices and via a secure connection with robust passwords and encryption. Greater awareness and understanding of more stringent data handling often reveals a significant number of potential vulnerabilities, so it is critical that the new policy framework and practices are kept under constant review.
Property asset managers need to store a constantly increasing volume of data to stay competitive. Investors want more insights into the assets they own, or co-own; new proptech platforms, used by individuals and companies to research, buy, sell and manage real estate, require larger data sets, for example via tenant portals. The RICS Professional Statement will give asset managers a concrete industry standard for data handling to adhere to, which is a critical component of a GDPR audit. The threats arising from cyber security are an important aspect of data handling and the discussion around GDPR rightly brought the subject to a wider audience. Apart from protection of personal data, property asset managers must secure commercial and financial data against unauthorised “read” leaks and “write” access, such as ransomware that targets operational and financial data. The Professional Statement sets guidelines for backup strategies, password protection, usage of malware detections and encryptions, and provides checklists to help a real estate organisation secure itself appropriately. IT infrastructure is exposed to a plethora of cyber attacks from various sources. It is vital, therefore, that firms address any shortcomings that could lead to a leak.
WORDS BY STEPHEN COUSINS; ILLUSTR ATION BY VERONIC A CERRI
The new Data Handling and Prevention of Cybercrime Professional Statement will set out best practice and 24 mandatory obligations that RICS professionals and regulated firms must comply with. Ensure your business is ready by following our experts’ advice, and familiarise yourself with the Statement at rics.org/datahandling
SMALLER BUSINESSES WITH LIMITED RESOURCES MAY STRUGGLE TO COMPLY
“ The threats arising from cyber security are an important aspect of data handling and the discussion around GDPR rightly brought the subject to a wider audience ” DOMINIK BRUNNER FRICS ARELIO
Justin Sullivan FRICS is managing director at Londonbased project management and surveying firm Adair Meeting these cyber security requirements is going to be a big ask for smaller businesses that lack the required IT resources and skills. I run a business with about 25 employees and, because we work on government contracts, we were compelled to go through an IT upgrade. This meant buying new computers, moving systems to the cloud, creating a secure encrypted environment with password protection, and ensuring our data segregation is GDPR compliant. It was a lot of work, and I suspect that most micro firms, which make up around 80% of RICS members, haven’t gone to these lengths and don’t have an IT manager or IT department. Also, understanding of data policy is currently lacking; I still get emails that show other recipients’ email addresses, in breach of GDPR. Many building surveyors and valuers at SMEs are unaware that photographs and notes taken when they visit sites are classified as personal client data and, according to the Statement, must be stored differently. I suspect most just store them on the same server as everything else, to which any employee can gain access. Most SMEs will need to employ an IT company to complete the work. Yet standard terms of services for IT companies offer little protection to firms in the event of a cyber security breach, which will probably mean taking extra measures to insure against it. Q2 2020 / MODUS APAC / 59
EXPERIENCE
NEWS IN BRIEF
TRAINING & EVENTS
RAISING INDUSTRY STANDARDS WITH SINGAPORE UNIVERSIT Y
GUIDELINES ON REOPENING BUILDINGS AF TER CORONAVIRUS
We have signed a memorandum of understanding with Singapore University of Social Sciences to promote continuing education among built environment practitioners. The collaboration intends to raise the standard of the industry by jointly developing and/or offering seminars, talks and training courses from time to time. For more information, visit: rics.org/suss-mou
We have launched the guidebook COVID-19 recovery guidelines for buildings – China practice, a joint effort between RICS, Vanke Service/ Cushman & Wakefield and Shanghai Lujiazui Financial City Authority. The guidebook curates China’s experience in reopening properties coming out of pandemic, and the associated responsibilities of the building profession. It outlines practical guidelines on precautionary measures, including risk assessment, formulating three-tier contingency plans, safety and protection measures over disinfection and epidemic prevention, public space management, facilities and equipment management, waste management, and communications and client care. To download the handbook visit: rics.org/ cnc19guidebook/
FAST TRACK TO RICS MEMBERSHIP FOR SINGAPORE SURVE YORS We have refreshed the direct entry requirements for Singapore Institute of Surveyors and Valuers (SISV) members to become RICS Chartered Surveyors. SISV members can now join RICS with just five years of professional experience instead of 10. For the full requirements, visit: rics.org/refreshed-direct-entry-sisv AUGUST L AUNCH FOR HONG KONG PROPERT Y MANAGEMENT LICENCE The Property Management Services Authority (PMSA) in Hong Kong plans to implement the licensing regime for the property management industry from August. RICS chartered professionals (FRICS and MRICS) in Hong Kong who are qualified in 10 PMSA-recognised pathways fulfil the criterion regarding membership of a recognised professional body for holding a property management practitioner Tier 1 licence. PMSA is accepting applications from 1 August 2020. For more details on the licensing regime, go to: pmsahk. org.hk/en/licensing/licensing.
RICS ELECTS ANN GRAY AS NEX T SENIOR VICE PRESIDENT RICS Governing Council has elected Ann Gray FRICS as the next Senior Vice President. Gray is a real estate broker based in Los Angeles, California, who brings more than 25 years’ experience of built environment leadership to the role. She will take up her position in late 2020, serving a one-year term before becoming President-Elect in 2021 and then President in 2022. RICS Governing Council elects a new vice president every year, with all chartered professionals around the world eligible to apply. To find out about the presidential team, visit: rics.org/en-hk/about-rics/ corporate-governance/ presidential-team
RICS Annual Dinner and Awards Hong Kong Presentation Ceremony 2020 03 September, Hong Kong Join us as we celebrate the outstanding achievements of professionals in the built environment. Across 14 categories, the awards recognise professionalism, innovation, and positive social impact. For more information go to: rics.org/hkawards
ONLINE EVENTS
SINGAPORE
RICS-RISM Joint Webinar: Digital Construction Revolution – Integrated Digital Delivery (IDD) 22 September Find out how Integrated digital delivery (IDD) will be impacted in the post Covid-19 world. rics.org/idd-cpd
REDAS-RICS Smart Buildings Conference 3 November This year’s theme is “Advancing into the Future: Innovate, Improve, Integrate”. rics.org/smartbuildings
RICS-PICQS Future of the Profession Conference Philippines 17 October Discover how the role of quantity surveyors and other disciplines is evolving. rics.org/FPCP
RICS Awards 2020 Southeast Asia 12 November One of the premier built environment awards, celebrating the most innovative projects and industry professionals. rics.org/SEAawards All prices exclusive of VAT or local taxes
For details of conferences, training sessions and CPD seminars near you, go to rics.org/events Q2 2020 / MODUS APAC / 49
EXPERIENCE
P R O B L E M… S O L V E D ?
Giving for better living The most essential part of improving a person’s wellbeing is providing them with a safe and secure home. But a safe home isn’t just about having somewhere to sleep at night. A home creates a stable foundation for life that gives us a sense of belonging within our community, personal pride and confidence, and sets us up to make a more meaningful contribution to society. Everyone should have access to a safe and secure home, yet in Australia alone, 116,000 people are homeless every night, and around 1.5 million live in housing stress. Social and affordable housing is desperately needed, but the current supply cannot meet the demand. Without a safe and secure place to call home, people find it hard, if not impossible to secure and maintain employment, and look after both their physical and mental health. They are operating in survival mode and are just trying to get through each day. For many,
“ The initiative has allocated nearly A$1m in funding to housing providers ” 62 / MODUS APAC / Q2 2020
this is their reality – things we take for granted are just not possible for people who do not have a stable place to call home. However, a new initiative could become a global blueprint for ending homelessness. Called Homes for Homes, it has been set up by The Big Issue in Australia to create a brand-new funding stream for social and affordable housing projects, raised from the sale and resale of properties. The idea originates from a US fundraising initiative implemented by Lennar, one of America’s largest for-profit developers, in California. The company began selling homes with one small condition attached: all new homeowners were required to make a small donation when they sold their property to help fund local homelessness initiatives. The Homes for Homes initiative in Australia is underpinned by donors – such as individuals or property developers – agreeing to a caveat on their property title, which enables a tax-deductible donation of 0.1% of the sale price to be donated to Homes for Homes. The property remains registered with Homes for Homes as it is sold and re-sold, which then creates a property pipeline that will continue to generate new funding throughout the life of that property. This funding is granted to experienced housing providers to increase supply.
Many housing providers lack the 1-15% of the total cost needed to complete a project, so this funding can make all the difference between a project going ahead or not starting at all. Since 2015, the Homes for Homes initiative has allocated nearly A$1m in funding to housing providers, to support eight different projects. And it is estimated that the initiative could generate in excess A$1bn of funding over 30 years. The success of the Australian experience has led us to work with The Big Issue in the North to explore implementing Homes for Homes in the UK market. Last year, the keys to the first home funded with the support of Homes for Homes, and built by Habitat for Humanity Victoria, were handed over to a young family experiencing housing stress. It shows than an initiative such as Homes for Homes can have a real positive effect on people’s lives. In developed housing markets, there is enormous potential to create change in the aggregation of donations from property sales, and by working together we can make a significant difference in the community. Steven Persson is CEO of The Big Issue in Australia and Homes for Homes: homesforhomes.org.au
ILLUSTR ATION BY NEIL STE VENS
How voluntary donations from house sales are helping to create more affordable housing