MODUS 08.12 // ricsASIA.org
08.12 // social network Growing your business on and offline p14 best practice Recognising high standards in Hong Kong p20 global gateway The rising importance of airport cities p32
The communication issue
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Contents
No 6 08.12 //
The communication issue In the past two years I have seen quite a lot of changes to the way messages are communicated to staff, to members and to external stakeholders. To staff, the intranet, the blogs from Sean and Marcus together with the weekly newsletters are very helpful for keeping us up to date on the latest developments from RICS worldwide. To members, the regular e-news, the quarterly Modus Asia, and the RICS Asia Facebook, Twitter and YouTube channels have all become popular outlets for informing and interacting with the 21,000 members in this region. And with the Digital First project near its completion, we will soon launch a new user-friendly website for all stakeholders. However, don’t forget that face-to-face interaction is still crucial, so keep an eye on RICS Asia’s ambitious events calendar for 2012-13. roy ying rics asia head of communications
Regulars 04_feedback Your views on Modus and the profession, and the latest poll 06_intelligence Global news, plus opinions, reviews and reactions 39_law advice Ascertaining construction claims in a professional manner 44_business advice How to develop a professional and effective company website
Features 14_network power How to make the most of all the social media channels available 20_raising the bar A new set of standards for all HK estate agencies are being encouraged to adopt 24_interview Roy Ying speaks to Carrie Lam, Secretary for Development of the HKSAR Government
29_on track A roundup of high-speed rail projects in Europe, China, the Middle East, US and Australia 32_the rise of the aerotropolis Why the successful global cities of the future will be airport hubs 40_10 coastal schemes A roundup of the best waterside developments around the world
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In formation 45_rics news News and updates, plus a message from Darren Jensen, Director RICS Asia 51_events Training and conference dates for your diary 58_the measure The growth of global communication networks
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Feedback//
Join the debate :email your feedback to editor@ricsmodus.com
learning lessons As a chartered surveyor who specialised in housing for 30 years, I very much welcome the analysis of affordable housing issues in the March and April global editions of Modus. The April article ‘The Money Machine’ included the key quote from David Dalby that, ‘In terms of housebuilding, the current obsession with a home as an investment must fade.’ It is possible to learn from the past, and from other countries, when searching for solutions to the current affordable housing crisis. In 1989, as chair of the RICS Housing Policy Panel, I participated in a UK/West German comparison of policy and practice. At the time I reported back that, in Germany, the dominant housing tenure was (and is) rented. This characteristic was underpinned by a long-established tradition of residential property and land hardly appreciating in real value for decades. In response to this there were national and regional financial/tax incentives put in place to enable large-scale activity to build for rent. Rental law was also well developed to provide short-, mediumand long-term leases. RICS is well placed to assemble best practice from other countries and to bring forward proposals to stimulate residential development to respond to the seismic shift now taking place in the UK housing market. George Barlow OBE FRICS, Hampshire making the games I have just read the Olympics feature [in the March issue] and wish to congratulate you on what I found to be a most informative and
comprehensive piece. The article highlights the involvement of the many hundreds of chartered surveyors behind the success of bringing about the Olympic Park, or ‘theatre’ as it is being called. This can only be of benefit in highlighting the expertise and professionalism of RICS members. May I also suggest how fitting it might be to also mention in due course the role and contribution made by chartered surveyors who have volunteered to play a part in helping to make what we all hope and expect to be the greatest show on earth. This would perhaps highlight the wider communitybased contributions that complement those which are perhaps more evident. I am delighted to be an Olympic Games Maker volunteer, and believe I am but one of many surveyors who have offered their time and skills to this once-in-a-lifetime event. In my view, we should not miss the opportunity to highlight this different but critical complementary role played by our members. Michael Knight FRICS
no need for hs2 Prime Ministers are prone to vanity projects, and David Cameron seems set on HS2. But this rail project fails to stand up to examination on every count. Why build a line that the vast majority of travellers will be unable to use due to the distance from the stations? Is it to create jobs? Then why not improve schools, hospitals or the social housing program to create work across the whole country? The project’s economic viability is based on outdated and dubious statistics. The toll on the M6 has not relieved congestion, and has again declared an annual loss – this time of £45m (US$70m) – because people are not prepared to pay the extra charge. Are people in Cornwall, Shropshire or Norfolk happy to pay £1,200 (US$1,865) per household in extra taxes to fund a project they’re unlikely ever to use? This is not Spain, China, Saudi Arabia, Australia or the US, to which comparisons were made. This is the UK, where distances are far smaller and the population density far greater. This project cannot be justified and is not needed. R B K Dyott FRICS, Warwickshire
the modus poll :Where do you get most of your business leads from? Total votes: 171
Networking events 22.2% Find a Surveyor 2.9%
Social media
(LinkedIn, Twitter, etc)
Word of mouth 54.4%
13.5%
Company website or blog 7%
Visit rics.org/modus now to vote in our latest poll, or view past poll results.
Due to the volume of correspondence we receive, we regret that we are unable to print all letters or respond to every one individually.
The MODUS team// For Sunday
Modus Asia edition is the official publication of the Royal
For RICS
Editor Victoria Brookes // Art Director Christie Ferdinando //
Institution of Chartered Surveyors in Asia: Room 2203,
Editorial board Ian Fussey and Jaclyn Dunstan (UK)
Contributing Editor Brendon Hooper // Deputy Art Director
Hopewell Centre, 183 Queen’s Road East, Hong Kong
Roy Ying and Vivian Yuen (Asia)
Lauren Webb // Sub Editor Samantha Whitaker // Creative
Published by Sunday, 207 Union Street, London SE1 0LN
Asia advertising ROF Media
Director Matt Beaven // Account Director Stephanie Hill //
sundaypublishing.com
Bryan Chan +852 3150 8912 | bryan@rofmedia.com
Commercial Director Karen Jenner
Cover Andrea Manzati
Views expressed in Modus are those of the named author and are not necessarily those of RICS or the publisher. The contents of this magazine are fully protected by copyright and may not be reproduced in any form without the prior permission of the publisher. All information correct at time of going to press. All rights reserved. The publisher cannot accept liability for errors or omissions. RICS does not accept responsibility for loss, injury or damage or costs that result from, or are connected in any way to, the use of products or services advertised. All editions of Modus are printed on paper sourced from sustainable, properly managed forests. This magazine can be recycled for use in newspapers and packaging. Please dispose of it at your local collection point. The polywrap is made from biodegradable material and can be recycled.
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Seeing Value in Real Estate
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www.mgpa.com Š MGPA 2012.
Intelligence :news :reviews :opinions :reactions
Image Ryota Atarashi
:Tokyo Skytree, Tokyo, japan Surpassed in height only by Dubai’s Burj Khalifa, the newly completed Tokyo Skytree is the world’s tallest freestanding broadcasting tower at 634m. Designed by Nikken Sekkei and constructed by a team led by the Tobu Railway Group, the tower has been built on reclaimed land, and at such a height as to ensure uninterrupted broadcast signals over the 200m+ skyscrapers of Tokyo. Costing around ¥40bn (US$40m) to build, its triangular base structure has been inspired in part by the three city grids that converge at the tower, but also because a ‘tripod’ design made for the strongest and steadiest structure on a constricted site. Further up, the steel structure morphs from a triangular to circular plan. To combat against damage from Japan’s frequent earthquakes and typhoon winds, the Skytree has been built with rigorously developed wind-resistant and earthquakeresistant design elements, such as oil dampers that should reduce swaying of the central column during an earthquake by up to 50%. This system, named Shimbashira-Seishin (centre column vibration control) was inspired by similar stability building methods used in traditional Japanese pagodas.
Intelligence//
Opinion
Green offices can raise quality and lower costs Henry Li FRICS RICS China Chairman
T
he construction cost for the World Trade Center (also known as the Freedom Tower) in New York is now estimated to be more than US$3.8bn, making it the world’s most expensive office building. Also in New York, the Bank of America Tower (US$1bn) has been built to recycle rainwater and wastewater, and is a great example of an office building with systems to efficiently use solar energy and natural light. I believe such worldclass projects have become a new standard for future office buildings to follow and adopt, and it’s important that office developments in China maintain the same standards as those in Europe and the US. The high cost for the new World Trade Center is probably due to the amount that has been spent on safety and environmental protection. Since the terrorist attacks of 11 September 2001, developers must ensure safety and security in all areas for high buildings, so the selection of building materials has become very important. More and more often, the sustainability of building materials, particularly effective fireproof materials, is a major concern to tenants. From the perspective of commercial real estate development, in a normal economic environment the depreciation value for office space is fast. This is particularly true for office buildings with low energy efficiency that require renovation more often to extend their lifecycle. But a high-quality and sustainable building can actually improve the rental value through a mild renovation and a gradual replacement of materials. For most new offices, planning for the subsequent renovation
China // Air power
China is planning to build the world’s largest and busiest airport just outside Beijing at a reported cost of around US$15bn. The new international airport will have nine runways when complete in 2017, with the capacity to serve up to 200m passengers and process 5.5m tonnes of cargo annually.
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would have already been considered during the pre-development and research stage. In the early design stage, sustainability is now becoming the mainstream in design. Introducing many sustainable features during the early design stage will, of course, bring higher costs, however, these costs will be justified later by the savings made on ongoing renovations and the high rental value of office space. Currently, many of China’s developers lack a ‘green building’ awareness and still use a conventional model to develop residential projects. This is because, as long as the property is being sold to another owner, they don’t feel the need to take responsibility. However, this pattern cannot be applied to commercial property – developers need to bear their own operational costs, or they will face a continuous depreciation of the commercial property. In the past, real estate developers have only considered the importance of the location of the property, but now they need to change their perspective. The economic value of a building will soon be determined more by sustainability factors than by accessibility and location.
high security Costs for New York’s World Trade Center rose as a result of increased safety and security measures
Henry li FRICS is RICS China Chairman and a member of RICS Governing Council.
Foster + Partners, Rogers Stirk Harbour + Partners, Zaha Hadid Architects and HOK are just some of the architecture firms shortlisted to design the project. Beijing International Airport is already the world’s secondlargest airport in terms of passenger traffic, overtaking London Heathrow last year.
Singapore // Lakeside learning Singapore’s second minister for trade and industry S. Iswaran recently opened the Canadian International School’s new lakeside campus in Jurong West, on which Turner & Townsend (T&T) has provided cost management services since November 2007. The S$140m (US$110m) development includes state-of-
the-art classrooms, a library, a 500-seat auditorium, seven science labs and an Olympiclength swimming pool. ‘We were able to support the client and provide sound advice on the current market rates for obtaining the best possible solution,’ said Jenny Yeng, cost management director at T&T.
South Korea
Ocean wave One Ocean, a solar-powered, naturally ventilated pavilion designed by Vienna-based soma architecture has opened in Yeosu, South Korea. The building is the centrepiece of the city’s waterfront redevelopment, as it hosts EXPO 2012 this summer. Designed to keep visitors cool during humid weather, One Ocean’s glass fibre ‘gills’ on the façade open to allow fresh air to circulate through the building.
$98m
The total amount (US$) of commercial property volumes in Asia Pacific in 2011 – the second strongest year on record (JLL)
Global
Serviced strength The world’s serviced office sector is growing by 10% per year, according to research by Instant, reflecting a change in the way people work and how businesses occupy office space. Since 2005, the sector has more than doubled in Hong Kong, while serviced offices in London have grown by 44%, in New York by 56% and by 59% in Sydney. ‘One reason is the efficiencies they offer property portfolio managers in the current economic climate,’ said Tom Sleigh MRICS, associate director of Instant.
China
Master hub The city of Zhengzhou is one of China’s most important transportation hubs between Beijing, Shanghai and Xian. Architecture firm BDP has been selected to design a new station for a major high-speed rail link to the cities. Named the Zhengdong Transit Hub masterplan, the 3m m2 mixed-use scheme will handle more than 200,000 passengers per year, while the designers hope its innovative layout will help encourage efficient pedestrian movement and social interaction through its retail, commercial, residential and cultural spaces.
:One big question How is your local commercial property market performing? Vietnam We’re fighting to keep inflation in single digits this year, which is unlikely. Unfortunately, problems with loan repayment and new developments will ensure that rentals continue to fall. Tony Milton MRICS, REITinfo.com – Vietnam
Singapore Overall, the retail sector remains highly resilient. Additional supply in leasable space has been well absorbed, and we’re still seeing increases in the value of renewed leases, especially in suburban centres. Dr Tuan Chiong Chew, Frasers Centrepoint Trust
Japan New supply in the Tokyo office market peaks this year. Many buildings that suffered high vacancy in the 20082009 decline have finally increased occupancy and regained some pricing power. James Fink MRICS, Colliers International, Japan
Shanghai With demand for office continuously increasing, prime and average office rental has reached a new high level. Capital value in the prosperous office market is also increasing. Frank Jiang MRICS, Shanghai Urban Real Estate Appraisal Co., China
Singapore Occupier demand is cautious but the low interest rate/negative real interest rate has made investment attractive, especially to small- to mid-sized investors looking for a safe asset class. Ong Choon Fah MRICS, DTZ Source: RICS Asia Commercial Property Survey Q1 2012
08.12 // MODUS ASIA
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Intelligence//
Opinion
there is a strong case for setting lending ceilings Simon Rubinsohn RICS Chief Economist
T
he soul searching continues over how best to manage future volatility in housing markets and the inevitable impact that wild fluctuations in prices have on the wider economy. As part of this process, the International Monetary Fund spent a considerable amount of time in its recently released World Economic Outlook examining the interrelationships between household debt, real estate markets and economic growth. It concluded that leverage was critical, noting that ‘housing busts preceded by larger run-ups in gross household debt tend to be associated with deeper slumps and weaker (subsequent) recoveries’. In light of this, it is perhaps not surprising that the Bank of England’s newly created Financial Policy Committee (FPC) is currently grappling with how best to exercise the various macro prudential tools available in order to meet its mandate of ‘protecting and enhancing the resilience of the UK financial system’. The FPC’s statement following the March meeting shows that it has a preference for acting on the capital requirements of banks in a countercyclical fashion. It also favours a sectoral focus that would enable it to set specific requirements for residential mortgages and commercial property, giving it scope to make lending in these areas‘more expensive’if it felt these markets were beginning to overheat or threaten financial stability. Interestingly, however, the FPC felt that it was not appropriate to set loan to value (LTV) or loan to income
(LTI) ceilings. This direct strategy has actually had some success in cooling real estate markets in a number of countries recently, including Sweden, China, Hong Kong and Singapore. While acknowledging this, the FPC raised the justifiable question of public acceptability for such restrictions in the UK. I suspect many RICS members reading this would go along with the FPC’s caution, but I am less convinced. It is true that higher capital requirement for home loans would, in theory, make mortgage lending less profitable. However, the experience of the pre-credit-crunch period is that banks were increasingly willing to lend on everfiner terms to meet the insatiable demand. It may only be in extraordinary circumstances, but I believe there is a strong case for at least having the LTV and LTI options in the armoury. This would limit the risk that propertyrelated lending will once again threaten both the financial and economic system.
lending levels Despite differing views among its members, the Financial Policy Committee, chaired by Mervyn King, decided against setting LTV and LTI ceilings in March
China
Magnum opus Swire Properties has completed OPUS HONG KONG, the first residential project in Asia by world-famous architect Frank Gehry. Located at 53 Stubbs Road on The Peak, the 12-storey building includes two double-level garden apartments. The scheme’s unconventional form, with a spiralling series of curving façades, features glass-enclosed columns twisting around the building. ‘We knew that Frank Gehry, with his unorthodox and inventive design concepts, could help us create an outstanding new landmark for the city,’ said Martin Cubbon, chief executive of Swire Properties.
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Essential connections
linkedin.com/company/rics twitter.com/RICSnews twitter.com/modusmag twitter.com/RICSAmericas twitter.com/RICSAsia twitter.com/RICSOceania twitter.com/RICSIndia
Books :reviews
Australia
(RICS Global Real Estate Weekly) (RICS Global Real Estate Weekly)
China Real estate investment fell for the 10th straight month in May Japan Several reports are pointing towards a pick-up in the construction sector
Rising
Falling
123 go
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123 Albert Street, also known as the Rio Tinto Tower, has been completed in Brisbane’s central business district. Designed by Hassell and owned by Dexus Property Group, the 35-storey, premium-grade commercial tower includes around 38,000m2 of office space and has been awarded a six-star Green Star Design rating by the Green Building Council of Australia for its host of energy-efficiency measures. As well as a highperformance façade system that helps to regulate solar gain, the building features energy-efficient artificial lighting, rainwater harvesting, and tenant waste and recycling management systems.
$350m The cost (US$) of a Chinese-funded highway to be built through Uganda
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China
Future museum Construction is underway at the Datong Art Museum – China’s ‘Museum of the 21st century’. Set to open in 2013, the 32,000m2 venue by Foster + Partners is one of four new buildings within Datong New City’s cultural plaza, with its centrepiece being the 37m-high Grand Gallery. The entire museum will be sunk into the ground with only the peaks of the roof visible at ground level. As well as installing high-level skylights to allow in natural light, the roof will be insulated to twice building code requirements.
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08.12 // MODUS ASIA
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Opinion
conflict should be spotted early and nipped in the bud Martin Burns Director of RICS Dispute Resolution Service
T
he global construction sector would save billions each year if, instead of spending vast sums on resolving disputes, people simply avoided them in the first place. The amount of time and money spent on dispute resolution would be massively reduced if the signs of potential conflict could be spotted early and nipped in the bud. This is commonly known as dispute avoidance and not only does it save money, but it is also good for helping to maintain business relationships. When a dispute arises and is allowed to escalate to litigation, arbitration or adjudication, relationships are often damaged because these are adversarial (eyeball to eyeball) procedures, and at least one party is going to be the loser. A culture change is under way in dispute resolution globally. This is particularly so in the construction sector, where there is evidence of increasing desire for innovation and the use of methods that predict, and therefore avoid, disputes. Anticipating disputes and dealing with them promptly is not new. The US has a long tradition of using dispute avoidance methods on major projects such as dams and
bridges. The most common method used to avoid and manage conflicts in construction, and one that is gaining in popularity in many world regions, is a dispute board. Constituted at the beginning of a contract, a dispute board works by managing relationships between everyone involved in a project, spotlighting areas where disputes can arise and addressing them before they escalate and end up in slow and costly court action. To those who are more familiar with traditional methods for resolving disputes, dispute boards perhaps represent a new and radical way of thinking about how to deal with disputes. However, the evidence shows that they reduce costs and time spent on litigation and arbitration. Increasingly being used across the globe, they have been employed on major projects in the UK such as the London 2012 stadiums and the Network Rail Link. rics dispute resolution service launched a Dispute Board Register on 1 May of construction professionals who are trained and qualified to act as dispute board members. rics.org/drs
Vietnam
Trading up Designs for the World Trade Center Danang have recently been unveiled by architecture firm Broadway Malyan. Developed by VinaCapital Commercial Center Ltd, the 46,600m2 retail scheme will be the first shopping centre in Vietnam with a major department store, and will occupy a high-profile site facing the Han River. It’s hoped it will also be a catalyst for driving new development on the west bank of the river.
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3.8%
Office market vacancies in Hong Kong fell to its lowest recorded figure in 20 years in March (JLL)
China
Rarer earth China is the world’s main supplier of rare earth minerals – 17 elements that are vital in the production of modern electronic technology. However, a new white paper by the government warns that its three main mining sites are now depleted to the extent that around two-thirds of their total supplies may have now been mined, which will lead to higher extraction costs. China believes countries with their own rare earth mining potential, such as the US and Brazil, should try to source their own supplies as exports slow.
news bites Floating ideas
The UK and US are to work together to develop ‘floating’ wind turbines to harness more offshore wind power in deeper waters, according to the UK government. Meanwhile, Japan plans to bolt wind turbines onto barges to build a 16MW pilot floating power plant off the coast of Fukushima.
Sweett deal
Sweett Group is to provide cost management services on a US$125m retirement home development on Hong Kong Island. Comprising 1,500 homes in the North Point area, the scheme will be delivered in two stages, with the first at Tanner Hill completed in 2015, and the second at Tin Shui Wan by 2016.
Property 2.0
Jones Lang LaSalle has launched a new web-based platform to provide property information for buyers and sellers in Hong Kong. The platform includes a more interactive search function that allows users to search for properties according to district, property type, property size and other categories. Visit bit.ly/PEnEQn
Battersea grab
Malaysia’s SP Setia and Sime Darby have been chosen to redevelop London’s Battersea Power Station in a £400m (US$628m) deal, beating a rival bid from Chelsea Football Club to make the site into their new stadium. The protected 15-hectare site on the south bank of the river Thames has been closed for three decades.
Save time and money
Resolving property and construction disputes
Go straight to RICS Dispute Resolution Service (DRS) for an independent mediator with the skills and experience you need. Getting locked into a property or construction dispute can cost you valuable time and money. There’s also a real risk that your dispute could end in expensive litigation. Put your dispute into the hands of an experienced RICS DRS mediator and you’ll find it much quicker and easier to resolve the issues that are holding things back. Ask us to appoint a mediator and you’ll save time on researching the marketplace. You can also feel confident that you are appointing the right professional to handle your case. Contact DRS today to appoint a specialist mediator to resolve your dispute +44 (0)20 7334 3806 drs@rics.org rics.org/drsmediation
rics.org/drs
network power Networking is essential for generating a flow of new business. But are you making the most of all the channels available, asks Heather Townsend Illustration by Andy Gilmore
A
sk any established surveyor, regardless of the size of their practice, and they will tell you that typically 80% of their business comes from a recommendation or existing client. You don’t need me to remind you that trading conditions are pretty tough for any surveyor right now; the banks are still not releasing money into the marketplace, severely restricting the amount of work available. But what may surprise you is that many surveyors are still trading profitably and growing throughout this long drawn-out downturn. So what’s their secret to success? Networking – or, more precisely, joined-up networking. The savvy and switched-on have realised that you now need to network both off and online if you’re going to get ahead of your competitors. ‘Many surveyors are struggling to win business in the current marketplace because they are not networking,’ believes Larry Russen FRICS of Norfolk-based Russen & Turner. ‘They think wrongly that when they qualify and put the brass plaque up on the door, people will come to them, rather than the other way around.’ Surveying by its very nature is about building professional relationships, says Graeme Hartley, RICS Director of UK Regions. ‘Networking is a key component to modern business; never more so when competition is fierce and business scarce,’ he says. ‘Understanding what the market needs, and knowing what our competitors are doing, helps us to stay ahead of the game.’ Go back five years to the days when business still walked through the door, and the size of your network was limited only by the amount of time you had
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available to meet people. The arrival of social networking tools such as LinkedIn and Twitter has allowed surveyors to exponentially increase the size of their networks, and communicate with them 24/7. ‘LinkedIn helps get me and my message in front of people I can’t physically meet,’ explains Ray Smith FRICS, a partner at Watsons in Norwich. We, and our prospective clients, have far greater choice and access to people than ever before, but less time or inclination to spend on finding the right person for the job. This is why people are now using their networks more and more, to help them rapidly find the best professional for them, at the first time of asking. With the rise of online networking via social media, any surveyor can now build a far larger and more engaged network of advocates and introducers more easily and quickly than ever before. Networking at its simplest is about interacting with people. Effective business networking is the process of finding, building and maintaining mutually beneficial relationships. It’s not the start of the sales process, it’s the start of the relationship-building process – and from those relationships, if chosen well, business will flow. ‘Look for businesses and contacts who you think you can give business to, and get business back from, such as solicitors, builders and architects,’ advises Smith. ‘It may take a while to build contacts and trust, but stick at it.’ Effective business networking is not a cosy chat, or solely about meeting new people or ‘working a room’. Surveyors typically network for one of four reasons: to increase their profile; to generate opportunities such as new business or a new job; to build their knowledge, whether business intelligence or learning new skills; and to extend and strengthen the community around them. Membership of a professional body such as RICS offers invaluable networking opportunities, believes Hartley, particularly for individuals and small firms who may otherwise feel isolated.‘Professionally delivered training and development events bring together members and clients – members are clients too,’ he says. ‘We actively encourage members to set up local groups as part of helping us to deliver local CPD, but also to provide networking opportunities for members. Cross-professional networking is vital, too, especially where the surveyor is part of a design/ project/commercial team.’ Online networking may offer unbridled access to key decision-makers at a time convenient to you, without the need to go out to attend a networking event. But what it can’t deliver is the ability to rapidly build up trust in the relationship. And it’s the amount of trust that will determine whether it yields fruit for both parties or slowly withers away. Each business relationship can be categorised as one of five levels (see box, right). Recognising the level is key to being able to successfully leverage it to win new business. >>
Networking//
the five-level relationship model Level 1: Identify This is where someone first comes on to your radar. You know their name, and maybe their reputation, but you have never communicated with them. Level 2: Connect You are now having a one- or two-way conversation, either in real life or via social media. This is the ‘sniffing dogs’ stage of a relationship, because you are both asking yourself, ‘Do I like them?’ and, ‘Do I see a benefit to getting to know them better?’. Level 3: Engage When you can both answer ‘yes’ to these questions, it is only natural to develop the relationship further. To quickly cultivate trust you must take the relationship offline – have a phone call or face-to-face meeting at this point. Before you can generate any business from a relationship or via a relationship, you need to get your relationship to at least this level. Level 4: Collaborate Your relationship has now progressed sufficiently so that you are both regularly communicating together, both on an ad hoc and formal basis. You will be helping each other in either little or big ways, such as passing business opportunities to each other and introducing each other to members of your network. Level 5: Inner circle Sometimes the professional relationship becomes so strong that it turns into a personal friendship. You know your relationship has reached this point when you find yourself sharing in each other’s personal life, for example, attending a family party.
:networking
dos and don’ts
✓ Have a strategy for who ✗ Mistake activity you want to meet (and why) for progress and where you’ll meet them ✓ Focus on the relationships ✗ Focus solely on face-tothat are more likely to help face or online networking you achieve your business and personal objectives ✓ When asked, be specific ✗ Forget to follow up about who you want to meet
Trust and time
✗ Sell to the room ✓ Set a time limit on the amount of activity you’ll do
5. Inner Circle 4. Collaborate 3. Engage
✗ Spend time with ✓ Implement threemonthly rolling relationship people unconnected to your target market plans for the important people in your network ✓ Measure the payback on ✗ ‘Sell’ too early into time spent with individuals a relationship and networking groups ✓ Help people in your network
✗ Just turn up, hoping something will happen
2. Connect
✓ Expect to have more than one cup of coffee to deepen a relationship
✗ Stop networking when you get busy
1. Identify
✓ Consider joining a structured networking group such as BNI
✗ Expect instant results
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Choose a mix of options, online and offline, and decide how to use them There is a downside to networking as a business development tool: it is not a silver bullet. It takes time. Time to meet people, to develop the relationship, to find opportunities for each other. Very often, this is time that people simply don’t have, or that needs to be found at the expense of other activities. ‘With chargeable time targets generally increasing across the industry, many surveyors are finding it much harder to make the time to network,’ agrees Gillian Sutherland, global business development director for Aecom.‘But you shouldn’t stop networking when you get busy.’ You should only expect to generate a decent return on your time from networking six to 12 months into implementing your strategy. When social networking started to become adopted as a credible alternative to face-to-face networking, many people predicted the demise of the latter. But there is still a place for both face-to-face and online networking. ‘You should look at all the networking options available to you,’ advises Sutherland. ‘Choose a mix of options, including both online and offline methods, and decide how you will use them to get in front of the people who matter to you.’ Russen & Turner, for example, finds that its membership of BNI (Business Network International) brings in at least 20% of its business each year. ‘A formal networking group such as BNI will train you on how to build mutually beneficial relationships and provide access to a greater network than you can achieve on your own,’ explains Russen. social media Social media refers to web-based, user-generated content such as blogs, Twitter, YouTube, Flickr, Pinterest, Google+ and internet forums. Social networking sites, which are one part of social media, are where like-minded individuals form communities together. For example, as Helen McSkimmings of Edward Watson Associates in Newcastle upon Tyne has found, the RICS LinkedIn Group is a great place to meet and chat with other surveyors. ‘LinkedIn is excellent for raising your company’s profile,’ agrees Jim Kingston, commercial director at Altaca Group in Moscow. ‘You could call it subliminal advertising. You have to do it through a very focused group for it to work, though.’ Each social media site or ‘platform’ tends to have its own identity and etiquette. LinkedIn, Twitter, Facebook, YouTube and blogging are the ‘big five’ of the social media world, with Google+ and potentially Pinterest also worth having a look at. Perhaps the easiest way to distinguish between Facebook, LinkedIn and Twitter is to use these analogies: Facebook is the social networking equivalent of when you come home
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at the end of the day, kick your shoes off and want to be entertained. Which means that it is probably the most ‘social’ of all the social networking sites, and a great place to be if you want to reach out to individuals acting in their own capacity rather than organisations. Think of LinkedIn, meanwhile, as the equivalent of being at a large industry conference; anyone who is a player in your marketplace, plus a smattering of colleagues, journalists and random folks, is there and either actively taking part or listening in to the conversation. This is not the place to talk about what you got up to at the weekend; the mantra here is ‘strictly business’. A mixture of Facebook and LinkedIn, Twitter is the equivalent of being at the world’s biggest cocktail party. ‘We’ve found LinkedIn very useful for building FM supplier contacts and ground rent deal contacts in the residential block management market,’ says Neil Roberts FRICS of Braemar Estates in Cheshire. ‘We also use Facebook to engage with and get feedback from owners and occupiers at our larger city centre blocks. And we use Twitter to build brand awareness and to distribute news and views in our market.’ Only time will tell whether Google+ and Pinterest will fulfil their potential and become viable alternatives or additions to the big five of the social media world. It’s fair to say that Pinterest, described as an online pinboard, is the current media darling and young pretender, but the jury is out on whether that interest will be maintained or whether it will fade from view after the next big thing launches on to the social media scene. Google+ is Google’s third attempt to crack the social media marketplace. It is a mixture of Twitter and Facebook, with the ability to segment who receives >>
Networking//
:Social media
LinkedIn is excellent for raising your company’s profile. You could call it subliminal advertising
what to use when LinkedIn
Good for: Building a relationship with corporate decision-makers Networking with potential introducers Tips: Focus your updates on business matters Update your status at least once a week Use LinkedIn groups to increase your network’s reach Complete your profile
Good for: Networking with introducers Influencing journalists Growing website traffic Tips: Balance your tweets so you have a mixture between sharing articles, updates and conversations Tweet daily, and ideally a minimum of five times Don’t ‘sell’
Good for: Engaging with consumers Sharing visual content Tips: Keep your updates light and encourage users to interact with your page Only post up to a maximum of three times in one day
Blogging
Good for: Search engine optimisation (SEO) Encouraging website visitors to return regularly Communicating your business and fee earner’s personality Creating marketing collateral Tips: Blog regularly Keep your blog posts short, ideally under 500 words
YouTube
Good for: Creating marketing collateral Displaying video content that can be reproduced on Facebook, your website and blog Tips: Use your YouTube videos as marketing collateral Have a different YouTube channel for each of your market segments
Google+
Good for: Great exposure for content to Google search engines Easily segment your message to people you want to read it Use the hangouts feature to have live video chats with your network, clients and prospective clients Tips: Organise your Google+ contacts into circles Add a Google+ business page Add a Google+ 1 button to your website
Good for: Driving website traffic Connecting with advocates and influencers Sharing pictures and images Tips: Create boards that help you tell your story to the audiences you want to tell it to Pair every important piece of content with an eye-catching image Encourage engagement and pinning activity by allowing others to post their pins to your profile
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Networking//
be as helpful to your contacts as possible, be yourself, be interesting and behave as if you are at a networking event
:social media
dos and don’ts ✓ Have a strategy for who you want to attract and how you’re going to do this
✗ Only broadcast your message without engaging in the discussion
✓ Spend time making sure all the members of your practice are able to present a consistent brand on social media
✗ Sell
✓ Write and communicate a social media policy that is flexible enough to allow you to use social media, but minimise any risks to your company
✗ Spread your brand presence too thinly across different social media sites
✓ Set a time limit on the amount of activity you will do on social media
✗ Leave your biography or profile blank
✓ Tailor your message to your audience and social media platform
✗ Spend time with people unconnected to your target market ✗ Just turn up, hoping something will happen
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what updates from you. To date, Google+ has 90m users signed up, but only a small proportion of them are regularly using and engaging with the site. Like networking, social media is a type of ‘pull’ marketing, which means you attract people to you by the messages you communicate, the content you share, the profile you build and the conversations you have. While the search functionality of sites such as Twitter and LinkedIn may provide you with a massive ready-made prospect list, this cannot be harnessed in the same way as your mailing list or subscriber database. Just as you wouldn’t go up to someone at a networking event and start to sell your services to them, so you wouldn’t do this on social media. Any business won is built upon a foundation of trust and credibility, which is often developed over months rather than on the basis of a single email. ‘The key to successful engagement with social media, in my view, is to be as helpful to your contacts as possible, be yourself, be interesting and behave as if you are at a networking event,’ says Andrew Stanford MRICS, managing director of Stanford Mallinson in London. ‘I’ve been on both Twitter and LinkedIn for about six months now. Having been tentative and a little sceptical at first, I have now embraced both fully, and I’m sure that I will win work either directly or indirectly as a result of engaging with social media – I’m currently in the middle of a property deal picked up on LinkedIn and hopefully that will result in a successful transaction.’ While getting started on social media can seem daunting, it should not just be the preserve of the younger generation, believes Hartley. ‘RICS is well aware of the power of online networking and the various forms of social media,’ he says. ‘It’s true that we’re moving away from the “letter through the post” type communication to a more digital age. Saying that, though, RICS aims to tailor information to relevant member audiences – and our Digital First project will be key to making that happen.’ getting started Before you throw yourself in, you should first decide why you want to be on social media and how this will help your existing business development efforts. Social media should never be implemented in isolation to the rest of your business development strategy and plans. For example, many surveyors use a regular e-newsletter to keep themselves visible to their network – how can you use social media to generate more readers for your monthly e-newsletter?
:Linkedin with RIcS
Have you won work via social media?
‘We’ve been put on tender lists through being in contact with people via social media. For us, social media is part of a larger strategic campaign we have put together.’ Adrian Allen MRICS, MJ Mapp, London ‘I have secured a number of instructions via social media. Earlier this month I concluded the sale of a portfolio of four day nurseries and two standalone wraparound care businesses. My instructions were a direct result of my activity on Twitter.’ Courteney Donaldson MRICS, Christie + Co, London
Next, agree on whom you want to attract and engage with. The more specific the better. For example, this could be local homeowners, solicitors and architects. You should then follow the ‘4Cs’ model to build the rest of your strategy: Content – identify what your target audience would find valuable to read. Connections – identify which social networking sites you need to share this content with to connect with your target audience. Conversations – identify who in your organisation will have the conversations and engage with your target audience, and train them on how to use social media. Call to action – decide what you want your target audience to do as a result of interacting with you. Sign up for a mailing list? Contact you for a conversation? You should identify key performance indicators, processes and systems to enable you to measure the impact of your social media activity. For example, this could be you tagging people in your CRM system when you have engaged with them on social media. Or it could be using Google Analytics to measure how much traffic you are getting from social media and what they do when they visit your website. Whether using face-to-face methods or social media, networking is the easiest way to generate a sustainable flow of new business. Can your practice afford not to? Heather Townsend is the author of the award-winning bestseller on networking, the Financial Times Guide to Business Networking. joinedupnetworking.com
connect with RICS
For advice on creating a successful company website, see p44
Join the RICS group at linkedin.com or follow @ricsnews. Find out more about RICS’ social media channels and the Digital First project at rics.org
‘I’ve certainly won work through social media in the past. I have a lot of contacts in Malaysia and, when they look to invest in property in the UK, they will often start with me because they know who I am, who my friends are, and can be confident that I’ll provide sound and honest advice. It would be impossible to build and maintain an international network like that without social media.’ Steve Palmer MRICS, Haig Homes, London ‘We’ve dragged a huge amount of new visitors to our site using a variety of media, resulting in some new work.’ Philip Wilbourn FRICS, Wilbourn Associates, Sheffield ‘Being on social media is all about your presence and impact. I cannot claim to have actually got direct work through being on LinkedIn and Twitter, but using them has increased our exposure to a much larger market and allows us to demonstrate some of our knowledge and skills. I am a firm believer in using these platforms.’ Chris Caselton MRICS, Bailey Partnership, Bristol ‘Social media has definitely contributed to our commercial success, both through direct approaches and because a social profile shows your credentials and allows for background research for your potential clients.’ Leon van Leersum FRICS, REDEPT, Netherlands ‘LinkedIn has certainly helped my business here in Brazil. It has on many occasions been consulted by potential clients who want to know more about my work. Another benefit for those of us working in relative isolation from the rest of the profession is that it keeps us up to date with some of the latest issues at the forefront of our work.’ Raymond Smith FRICS, Magno Smith Gestão Patrimonial Ltda, Brazil ‘I believe the use of social media is very important for business nowadays. Using Twitter, I have been able to source a large array of new suppliers and specialist contractors. LinkedIn has been very useful to make new connections. I have managed to get a contract to tender for through a LinkedIn connection. Visitors to our website have increased four-fold per month as a result of social media.’ Hugh Kelly AssocRICS, Kelly Contractors, Northumberland
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Raising
Image Getty
the bar
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Best practice //
based on RICS Standards, the Hong kong Estate Agency Authority has jointly produced a Best Practice Checklist that all agencies are being encouraged to adopt
A
round 33,000 estate agents in Hong Kong handle property transactions amounting to more than HK$10bn (US$1.2bn) every year, including those of lands, office buildings, industrial buildings, residential units and more. The service provided by estate agencies is of great public interest, as most property transactions are brought about by the estate agents or salespersons they employ – transactions that represent significant investments for vendors or purchasers. And while competition for business may be intense, it is vitally important that all estate agency companies, estate agents and salespersons work in an honest, prudent and caring manner to protect their clients’ best interest. Therefore, the Estate Agents Authority (EAA) and the Corruption Prevention Department of the Independent Commission Against Corruption (ICAC)
:agency views on REABS & the BPC ‘Our decision to be the first agency in Asia to embrace the RICS Real Estate and Brokerage Standards (RICS REABS) is a clear demonstration of our responsibility to our clients and community. With our professional real estate practices in compliance with RICS REABS, we ensure our services are delivered with an unsurpassed level of quality to our clients.’ Piers Brunner MRICS, CEO, Asia, Colliers International ‘Cushman & Wakefield (C&W) is a proponent of adopting RICS REABS. Through the joint effort of RICS, its members and other industry leaders, market practices can be improved and
better regulated, which will enable firms such as C&W to better service its clients.’ John Siu, executive director, Cushman & Wakefield Hong Kong ‘As CBRE continues to expand its operations in both Hong Kong and Mainland China, it is important that we provide a clear and consistent framework to our employees, in relation to the professional standards with which we expect them to comply and the type of best practice that we would like to see adopted in connection with day-to-day business activities with clients. RICS REABS represent an excellent guide for our staff as to the standards that are expected and that can be achieved.’ Chris Brooke FRICS, president and CEO, China, CBRE
have jointly compiled a Best Practice Checklist (BPC) for reference and use by all estate agents, salespersons and estate agencies in Hong Kong. Not only does the BPC provide a user-friendly directory of the practical measures to help estate agencies foster good governance, it also helps to remind agency staff to handle property transactions ethically and properly, and to put in place effective internal controls to prevent corruption and other malpractices. With the aim of promoting professionalism and quality in estate agency practice, the BPC provides advice and recommendations on the best practices for estate agency practitioners’ continuous improvement, rather than mandatory and binding standards. Hence, it is recommended for licensees to follow the best practices, and estate agency companies may adopt the procedures and standards of practice set out in the BPC according to their own needs and resources. ‘The BPC provides practitioners with the best practice standard against which they can benchmark their professional services,’ said Rosanna Ure, EAA chief executive officer. ‘Practitioners may follow the guidelines in their daily operations according to their own needs and business scale. The professional and ethical levels of the trade will be enhanced if the trade can fulfil the standards set in the Checklist.’ Licensees are also reminded that they are obliged at all times to observe and comply with the law and, in particular, the Estate Agents Ordinance and its subsidiary legislation, and the Code of Ethics and practice circulars issued by the EAA. For the purpose of compiling this BPC, reference has been made to previous ICAC cases and the EAA’s inquiry hearing cases. ‘The BPC helps to remind management and frontline estate agency staff to maintain their professional conduct and awareness of corruption >>
‘RICS, like DTZ, is a global brand that upholds the strongest professional and personal ethics. We feel that it is important to align ourselves with RICS REABS so as to create a trusted brand that our clients can rely and depend upon.’ Mark Price, senior director, head of business space, DTZ ‘Jones Lang LaSalle is pleased to endorse the EAA’s Best Practice Checklist. It is important for Hong Kong’s real estate industry that market practice is kept to the highest ethical standards at all times, and the RICS’ commitment to maintaining these standards is greatly appreciated.’ Gavin Morgan MRICS, chief operating officer and head of leasing, Jones Lang LaSalle, Hong Kong Markets
‘As an international property consultancy, we strive to ensure that the service and customer care we provide to our clients is delivered to the highest professional standards. To this end, we strongly advocate standardisation of industry practice and therefore wholeheartedly support RICS REABS and the BPC.’ Colin Fitzgerald FRICS, managing director, Greater China, Knight Frank ‘Savills is proud to announce the implementation of RICS REABS. These standards will provide all of our staff with crystal-clear guidelines for dealing with clients and transactions, as well as protect both brokers and clients.’ Peter Yuen, deputy managing director, Savills Hong Kong
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Best practice//
:Real Estate Agency Code
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Above: High-rise apartment blocks rising up the slopes of Victoria Peak on Hong Kong Island
prevention,’ said Wah-hoi Mok, ICAC assistant director of corruption prevention. Many of the guidelines and best practices have been based on the information and advice provided in the guidance note on RICS Real Estate Agency and Brokerage Standards (RICS REABS). Furthermore, a number of estate agency practitioners, the office bearers of a number of trade associations in the industry, RICS and Professor Eddie Hui of the Hong Kong Polytechnic University have also been consulted. RICS strongly believes that the BPC is a major step in elevating the professionalism of estate agents, and protecting consumer interest in the real estate market. In the long run, RICS would like to see the principles under the BPC become mandatory industry regulations. ‘RICS Hong Kong is extremely delighted to see the RICS REABS being recognised by the EAA and ICAC with many of the global agencies committed to subscribe,’ said Kenneth Kwan FRICS, Chairman of RICS Hong Kong. ‘This will go a long way in improving the image of the real estate agency industry, and we would suggest the government considers progressively migrating the BPC into a set of compulsory regulations.’ To download the full Best Practice Checklist in PDF format, visit eaa.org.hk. For more information on RICS REABS or the BPC, visit ricsasia.org or email ricsasia@rics.org
Image Getty
To conduct business in an honest, fair, transparent and professional manner To carry out work with due skill, care and diligence, and ensure that staff employed have the necessary skills to carry out their tasks To ensure that clients are provided with terms of engagement that are fair and clear, incorporate details of complaints handling procedures and, where existing, an appropriate redress scheme and meet all other legal requirements and relevant codes of practice To do the utmost to avoid conflicts of interest and, where they do arise, to deal with them openly, fairly and promptly Not to discriminate unfairly in any dealings To ensure that all communications are fair, clear, timely and transparent in all dealings with clients To ensure that all advertising and marketing material is honest, decent and truthful To ensure that any client money is held separately from other monies, and is covered by adequate insurance To have appropriate professional indemnity/ errors or omissions insurance, to ensure customers do not suffer loss as a result of any negligent act To ensure that it is made clear to all parties for whom you are acting the scope of your obligations to each party Where provided as part of the service, to give a realistic assessment of the likely selling, buying or rental price or associated cost of occupancy, to the client based on market evidence and using best professional judgment To ensure that any property viewings are carried out in accordance with the client’s wishes, having due regard for the security and personal safety of all parties.
Advertorial//
The 2012 edition of the RICS Red Book Following discussions with the International Valuation Standards Council, the new edition of the ‘Red Book’ includes the International Valuation Standards (IVS)
This latest version of the Red Book reflects the inclusion of IVS in full within its covers and incorporates a number of revisions to reinforce the principle that compliance with the Red Book will also ensure compliance with the IVS. In particular, the following revisions have been made: The glossary has been revised to incorporate IVS 2011 definitions. The standards on bases of value, terms of engagement, inspection and reporting have been revised to incorporate the respective IVS requirements together with RICS specific requirements. The standards on valuations for
specific applications, ie financial statements, secured lending and public sector, have been reinstated and now incorporate a summary of the relevant IVS. A new appendix provides detailed cross-references between the new IVS and the relevant Red Book standard. There is new text to confirm that the revised standards apply only to valuations where the valuation date is on or after their effective date. The Application of RICS Valuation – Professional Standards in the US: Guidance Note 1 (USGN1) – assists RICS members on the application of the Red Book 2012 to be in compliance with US jurisdiction.
To order your new Red Book
RICS Valuation – Professional Standards, March 2012. Incorporating the International Valuation Standards (retail price £40) Global and UK edition – combining standards of global application with UK-specific guidance To buy a hard copy, visit ricsbooks.com/ redbook, call +44 (0) 870 333 1600 or email
David Park, Chair, RICS Valuation Standards Board: ‘Valuation standards are crucially about delivery and assurance. This latest Red Book edition ensures that effective implementation of the new IVS forms an integral part of RICS members’ overall service to valuation users.’ Ben Elder, RICS Global Director
mailorder@rics.org, quoting redbook6. £120 to RICS members, £200 to non-members Format: Spiral bound with cover Item code: 19035 To access the Red Book online via isurv.com (which includes all Red Book translations) call +44 (0) 24 7686 8433,
of Valuation: ‘Valuation standards drive improved services for our customers, ensuring a consistent approach that delivers valuations to an internationally recognised market norm, which is increasingly demanded by clients. The latest Red Book edition reinforces the convergence of thinking in the arena of IVS.’
quoting isurvredbookoffer6. Or visit isurvvaluation.com to sign up for a free seven-day trial and view the benefits for yourself. Please note: all RICS standards are available to isurv subscribers and RICS members through rics.org.
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Interview by Roy Ying, RICS Asia Head of Communications Photographs by Steve Wong
Passion and conviction
MrS carrie lam, Secretary for Development of the HKSAR Government, is RICS Hong Kong’s Property Person of the Year 2012
How well do you think the HKSAR Government Development Bureau has performed in the past five years? // I think it is not for me to judge how well the Development Bureau has performed over recent years. I think it is for the public, the community and the stakeholders to judge. Since 2007, based on the progressive development mandate from the Chief Executive, I have tried to make sure that Hong Kong has grown both quantitatively and qualitatively. If you look at the amount of time I have spent on issues related to infrastructural development, heritage, the waterfront and the living environment, I think it’s fair to say that I have taken a particular interest in the qualitative side of Hong Kong’s development. You are probably the first Hong Kong government minister with heritage as part of your policy agenda. From RICS’ viewpoint, we feel that private owners’ rights are probably the trickiest issues to address. Though the department had a number of
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successes, it appeared that you had to spend a lot of effort in striking different deals with private owners. Going forward, how do you envisage heritage policies will change and adapt? // Yes, I do have a personal interest, conviction and passion in preserving heritage sites. I’ve lost count of the number of meetings I’ve had personally with the owner of King Yin Lane and there have been, to date, nine meetings with the Ho Tung family. In my view, these negotiations and interactions have to be handled at a very senior level in order to give the owners a credible sense of sincerity. That’s why I have been in the forefront in managing these deals. But despite the difficulty in managing the owners, I will not compromise the rights of ownership of heritage buildings. A good example is the Wanchai Market development where I came in after the Urban Renewal Authority (URA) had signed the contract with the developer. I made it clear to the URA that as much as I would like to preserve the market, I would only want to do so if we could make sure that private property rights were respected, and that there was a public benefit and it met the needs of Hong Kong. >>
Interview//
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Above: Carrie Lam is the Secretary for Development of the HKSAR Government 2007-2012; Far right: the Ma Tau Wai Road building collapse; Right: King Yin Lane
In recent years, property prices in Hong Kong have risen to historic highs, with critics attributing this to the shortage of land. Can you tell us what policies the department has implemented over the past five years to help increase the supply of land, and what you think will happen in the next few years? // When the Development Bureau was established in 2007, the Planning Department reported to me that we had to restart planning studies, as the land supply planning process together with the Home Ownership Scheme came to a halt following the 2002 financial crisis. Despite the fact that we wasted no time in restarting the process, the five-year gap was a challenge to fill. I can assure you
‘I will never forget the Ma Tau Wai Road building collapse. It was heartbreaking that so many died’
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Interview// that we have exhausted every avenue in creating land – for example, the New Development Areas in Fanling, Ping Che, Ta Ku Ling are ready to move on to the Outline Zoning Plan stage. The industrial land review has been completed and about 30 hectares of industrial land in Tsuen Wan and Tai Wo Hau have been identified for conversion into residential use. In addition, the review of government, institution or community sites, green belt sites and underutilised land in the Yuen Long area are all happening concurrently. Meanwhile, the Civil Engineering and Development Department is also enhancing land supply via land reclamation near to Victoria Harbour. The government is putting a lot of investment into Hong Kong’s waterfront, such as Kwun Tong, as part of the Energizing Kowloon East initiatives, and the Hung Hom waterfront promenade under the Harbourfront Commission. Can you give us a brief timetable on the establishment of the Harbourfront Authority along with its objectives and remits? // We expect a concrete recommendation will be made to the administration within the year, but the process will have to go through a proper public consultation, and possibly some debate at the Legislative Council, as a new piece of legislation will have to be enacted in forming the authority. The timing does not rest with the policy bureau, but what I am planning to do with the central waterfront is to hire an event organiser to manage the space on a short-term tenancy, to organise international festivals, events and activities so that the people of Hong Kong can enjoy the harbour front. I expect the tendering process will commence soon with the event manager operating this site between 2013 and 2016. By the time the event management contract finishes, I hope we will be close to the establishment of the authority.
What would you say is the one incident or issue that you handled in the past five years that you will never forget? // I will never forget the Ma Tau Wai Road building collapse in January 2010. It was heartbreaking that so many people died. As the Secretary for Development, I would also defend my colleagues by saying that it may be unfair to put the whole blame on the lack of building maintenance inspection, as the Buildings Department has been doing a fantastic job in increasing building safety. The minor works control, the mandatory building inspection scheme and the inspection of unauthorised subdivided flats are just some examples of how seriously the administration takes building safety in Hong Kong. We also wish to further strengthen our inspection system with legislation that allows our colleagues to apply for warrants to enter premises to conduct inspections. You once described architects as ‘romantic’ people. How would you describe surveyors? // Entrepreneurial spirits are the words that come to mind, and I mean it in a very positive way as surveyors’ professionalism can help to maximise the limited land resources we have in Hong Kong, making our commercial activities go further. I have always been able to rely on RICS and its members to make valuable recommendations.
‘Surveyors help to maximise Hong Kong’s limited land resources, making our commercial activities go further’
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ON TRACK
High-speed rail//
with thousands of kilometres of lines already in operation, europe and china lead the way in the global race to high-speed rail Words by Samantha Whitaker Illustration by Adam Softley
SPAIN // 2,056km in operation, 1,767km under construction Spain is leading the way in Europe, with a total of 2,056km of high-speed lines in operation. The Alta Velocidad Española (AVE) is the second-longest network in the world after China and accounts for 35% of all European high-speed lines. The acronym translates as ‘bird’ in Spanish, and the bullet trains fly along at speeds of up to 330kph (205mph), with a punctuality score of 98.8%. Unlike Spain’s conventional 1,668mm wide-gauge tracks, the AVE features a standard European track width of 1,435mm, signalling the
country’s enthusiasm for European involvement. In total, the network connects 21 cities and transports 11,500 passengers a day. The 471km Madrid to Seville line was the first to open in 1992, with the aim of helping develop the Andalusia region as a tourist destination. The popular 621km Madrid to Barcelona line opened in 2008, ferrying passengers between the capital and second city in less than three hours, and taking a huge volume of traffic away from the world’s busiest air shuttle. The delivery of high-speed rail in Spain is managed under
a public private partnership, and there are currently 1,767km of lines under construction. At an estimated cost of €12.5bn (£10.4bn), the 940km Madrid to Levante line will be the country’s most expensive highspeed rail project. Construction has also already begun on the Spanish side of the Madrid to Lisbon line, which will reduce travel time between the two capital cities to around three hours. Also, the LGV Perpignan to Figueres high-speed rail line, which opened in December 2010, linking Spain and France, is being extended to Barcelona.
Other high-speed projects in Spain include extensions to the Madrid to Valladolid and Madril to Seville lines, and the Basque Y line, which will link the three Basque capitals – Vitoria-Gasteiz, Bilbao and San Sebastián. There are also plans for an interconnecting tunnel between Madrid’s Atocha and Chamartín stations, which will allow services a non-stop route between the northern and southern cities. Currently, the only option is for trains to bypass Madrid or for the driver to walk from one end of the train to the other, both of which impact on journey times. >>
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CHINA // 6,299km in operation, 2,901km planned china’s first high-speed line opened just before the August 2008 Olympics, delivering a 30-minute passenger service between Beijing and Tianjin. Around 69,000 people now use the service daily. The world’s fastest line, from Wuhan to Guangzhou, opened in January 2011, with trains travelling 968km non-stop at an average speed of 313kph (195mph). China’s two largest cities, Beijing
and Shanghai, were connected in June 2011 with a 1,318km highspeed link capable of ferrying passengers in four hours 48 minutes – compared to around 10 hours on the previous railway. With a population of just under 1.4bn, China has some of the world’s most densely populated areas. The State Council’s Mid and Long-Term Plan (MLTP) for railway development, adopted in 2004 and revised upwards in
2008, aims to increase the total rail network to 120,000km by 2015, including the construction of 16,000km of high-speed lines. China will then have more highspeed railway than the rest of the world put together. Total investment in highspeed rail to 2020 has been estimated at around US$300bn (£190bn). Currently, 4,339km of high-speed lines are under construction and a further
2,901km planned. However, a corruption scandal, and a fatal crash in July 2011 that killed 40 people, have led to increasing public anger and concerns about the safety of the network, casting a shadow over the development of railway projects. Trains on the Beijing to Shanghai line, for example, have been slowed from 380kph (236mph) to 300kph (186mph) to improve safety and reduce operating costs.
SAUDI ARABIA // 450km under construction Expected to open at the end of 2012, the 450km Haramain High Speed Rail Project (HHR) will link the Muslim holy cities of Medina and Mecca, cutting the journey time to around two hours. The US$1.8bn (£1.1bn) contract for phase one of the project, which began in 2009 led by the Al Rajhi Alliance, a consortium of China Railway Engineering and Saudi’s Alstom Transport, includes civil works, such as construction of
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bridges, retaining walls, tunnels and embankments. Phase one also includes the US$38m (£24m) construction of five passenger stations in Mecca, King Abdul Aziz International Airport, Medina and two in Jeddah. Due to the fasttrack construction schedule, designers Foster + Partners have adopted a modularised approach for the stations, with a high degree of prefabrication.
Phase two of HHR was awarded to Al Shoula, a SpanishSaudi consortium, and involves the construction of railway tracks, signalling, operation and maintenance over the next 12 years, and the procurement of 35 high-speed electric trains capable of running at 360kph (223mph). The track will be designed to handle temperature fluctuations, which range from 0-50°C in the region.
Each year the city of Mecca attracts around 2.5m Hajj pilgrims and more than 2m Umrah performers during Ramadan and seasonal holidays. And with a resident population of 1.7m there is already heavy traffic, particularly on Fridays. The high-speed service will significantly relieve the pressure on the roads and drastically reduce energy consumption and pollution levels in Saudi Arabia.
High-speed rail//
US // 362km in operation, 1,287km planned the us is lagging behind when it comes to high-speed rail. With only one 362km line currently in operation, it has looked on with envy at high-speed development elsewhere in the world. Opened in 2000, the Acela Express runs between Washington DC and Boston via New York City. Although the trains are capable of maximum speeds of 241kph (150mph), they only average around 126kph (78mph) as the
track is shared with lower-speed passenger and freight services. This year should see construction begin on the first phase of a 1,287km network in California, administered under the California High-Speed Rail Authority, which will connect the San Francisco Bay area with Los Angeles, reducing travel times to just two hours 40 minutes. From here, extensions to San Diego and Sacramento are also
planned. Initially, the network was estimated to cost US$40bn (£25bn), with construction costs provided by the federal government and through P3 (public private partnership) funding. However, the authority has recently released a business plan estimating that the cost will be US$98.5bn (£62.4bn) – more than double the initial estimate – due to extended construction schedules and the need to match
possible future inflation. Also, the 2008 estimate expected construction to be complete by 2020, but the revised plan has pushed this back to 2033. The region is an earthquake zone and prone to dense fogs, making the already congested roads even more hazardous. And with California’s population expected to grow from 35m to 48m by 2030, the high-speed line will be a welcome addition.
currently the fifth busiest in the world. And with each full train of 450 passengers equivalent to taking 128 cars off the roads, levels of carbon pollution would be drastically reduced. A highspeed line linking Sydney and Canberra airports, which is part of the proposed network, would provide an effective and muchneeded second airport for Sydney. In response to the study, design practice HASSELL has
developed a pioneering new concept for the Australian High Speed Vehicle. The proposed low-carbon, double-decker train looks very different to current designs, and inside would offer spacious, open-plan seating, with private berths for business meetings and luxury travel. Phase two of the study, which will be far more detailed, has now commenced, and is scheduled for completion in late 2012.
AUSTRALIA // 1,600km proposed Nearly 10m people live along Australia’s east coast between Brisbane and Melbourne. In September 2010, Infrastructure Partnership Australia and Aecom launched a A$20m (£13.5m) study to identify possible land corridors that could support a high-speed railway network. Phase one of the study found that the network would cost A$61-108bn (£41-73bn) and cover around 1,600km, passing
through Brisbane, the Gold Coast, Newcastle, Sydney, the NSW Southern Highlands, Canberra, Albury-Wodonga, Tullamarine Airport and Melbourne. Trains would travel at up to 350kph (217mph), reducing journey times to just three hours between Sydney and Brisbane, and carry around 54m passengers a year by 2036, massively easing the pressure on the Sydney to Melbourne air corridor, which is
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aerotro the rise of the
in a globalised world, the airport city thrives. And those that cannot compete will stagnate, says Christopher Choa
Air Lines, an art project by Mario Freese, tracks the paths of scheduled airline routes. Hubs such as New York’s JFK and Dubai create knots where multiple lines converge
Image Mario Freese
polis
Airport cities//
I
n many ways, cities are becoming more important than nations. If the 19th century was the age of empires, and the 20th century the age of nations, in the 21st century we are witnessing the rise of cities. This phenomenon has profound implications for the way cities will develop in the future. In particular, we will see increasingly strong reciprocal relationships between traditional cities and their airports, and the emergence of a new urban typology: the airport city. Globalised culture is changing the way residents of cities relate to each other. Thanks to the internet, the increasing accessibility of air travel and worldwide supply chains, residents of cities are becoming more temperamentally attuned to each other. More people live in cities than ever before, and they will have more in common with their urban peers thousands of miles away than with their neighbours in national hinterlands only a few hundred or even just a few dozen miles away. We are deeply social creatures – we can’t avoid our inclinations to constantly establish new relationships and to exchange. Cities consolidate people, wealth and virtually all of global innovation. Above all, they allow us to trade. Virtually every other desirable urban possibility – stability, cultural offerings, social opportunities, coherent governance – is in one way or another dependent on the city’s role as an economic marketplace. The rise of cities in an increasingly globalised world affects the way they will develop in the future. If a city can leverage the connectivity of its global gateways to trade and exchange, the future looks bright. If it fails to establish mutual benefits for its gateways, its industries and its communities, then the city risks stagnation. In this globalised world, every city that seeks international relevance needs to focus on its core global strengths and connectivity to other cities, and less on regional relationships and limitations. Throughout history, the dominant form of transportation of the time predicates the form and ultimately the influence of any city. In particular, the commercial activity has an intimate and reciprocal relationship with the transportation network that serves it. As the movement of people and goods becomes easier, the commercial and cultural activities of a city flourish. As the urban core evolves, it creates demand for additional and easier movement. In the age of camels and shoe leather, we saw the slow evolution of new urban forms: caravanserai along the Silk Road, the compact markets within the citadel of Jerusalem, the walled blocks of Chang’an in China. London’s 14th-century settlement was scarcely larger than its Roman-era footprint. Pre-industrial settlements very rarely exceeded a diameter of three miles, roughly no more than 40 minutes’ walking time from any point to the market centre. In the age of maritime expansion, we saw how great coastal seaports such as Lisbon and Venice and the inland waterways of London and Amsterdam faced the shoreline and allowed these cities to dominate Atlantic and Mediterranean trade. >>
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Airport cities//
‘Throughout history, the dominant form of transportation predicates the form and influence of any city’ The opening of the Erie Canal in North America created cities such as Syracuse and Buffalo from scratch, the urban cores of their entrepôt economies physically orientated towards the locks of canal barges. The advent of the Industrial Revolution and the innovation of railway networks exploded the dimensions of the city. In 1830s London, new railway lines terminated at the edge of the city. But by 1860, within the span of a single generation, the area of London engulfed these gateways; the city formed itself around the stations, seeking to maximise access to them. Entire cities in North America grew up around rail hubs. The grid pattern of Chicago, centred around Union Station, recalls the expansive growth of rectangular stockyards made possible by railways. The evolving productivity and wealth of the city in turn created demands for more train and station capacities. The automobile and the related development of express motorways exploded the traditional city. Cheap energy and mechanical innovation made it possible to dislocate functions and land uses that had always been closely clustered together. The traditional value of proximity, expressed as urban density, was replaced by the ease of private rapid movement. The dominant transport gateway, once marine port or train station,
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was now the motorway slip road and the car park. The diameter of a typical large city, once no more than three miles in pre-industrial times, now ballooned up to 30 miles across – a hundred times the land area of its antecedent. Interestingly, while the physical dimensions of these two examples are vastly different, the dimensions as measured by time remain approximately the same – still roughly 40 minutes’ travel from most points to the centre. City airport to airport city Now, in the age of global air travel, like the ports and railway terminals that came before it, the airport is increasingly the principal economic gateway for a city’s trade and exchange. Once banished to the peripheral limits of the city – like London’s railway stations in 1830 – airports are now becoming increasingly centralised both in a city’s commercial patterns and absorbed within the form of the city itself. High-value activities that are part of time-sensitive global supply chains are drawn to the airport; the airport city consolidates peripheral development into a coherent urban core adjacent to the airport limits, and occasionally into the very centre of the airport. The presence of these activities creates demand for additional aviation movements, which in turn stimulates additional high-value activity. Virtually every land use that can be found in a traditional downtown has a counterpart in the airport city. The growth rate of real estate values in the airport city is greater than in most traditional downtowns. In some cases, for example Amsterdam, the absolute values of airport city real estate is equivalent to or greater than rents in the traditional downtown. The city airport becomes the airport city.
The reciprocal benefits between the airport and the airport city, between ‘airside’ and ‘landside’ developments are important. If airside activities increase – more destinations, more passengers, more cargo – then landside developments become more valuable as they benefit from the increasing demand of additional visitors. If landside developments grow in variety, breadth and scale, then they become a destination for travellers and cargo, which in turn encourages the growth of airside capacities. The airport city leverages the connectivity of the airport, and transforms the traditional hinterland city into an aerotropolis. Aviation will play an increasingly important role in global trade and urban growth patterns; the increasing centrality of aviation in our global life closely influences a city’s economic outlook and its competitive priorities. Worldwide, passenger movements continue to grow steadily at around 5% per year – with some regions, including Asia and the Middle East, increasing well above that rate, even during the current global recession. When measured by weight, less than 2% of global trade travels in the belly of a plane. But when measured by value, we know that 40% of global trade now moves by air – an astonishing figure. These high-value, low-weight products (technology components, pharmaceuticals, perishables) are part of complex and extended production/assembly/ distribution/consumption networks. Independent components of consumer goods are increasingly produced by a wide range of sources, combined or assembled in specialised zones before being transhipped to final destinations. Professional services, tourism, leisure, entertainment, cultural offerings and higher education are also part of global networks, with key resources in one city catalysing and leveraging the work of others in another distant urban centre. Any city that seeks to derive comparative advantages by producing and consuming products and services through these evolving and dynamic supply chains will inevitably embrace aviation gateways. The airport provides international access to the city. If the number of international destinations served by the airport grows, then we can appreciate that the presence
of the airport will continue to be a factor for international companies when they choose where to base their enterprises. These businesses in turn generate economic activity and diversify the regional economy. Every one million passengers per year that travel through an airport can support up to 3,000 direct, indirect or catalytic jobs. If an airport can transform itself from regional destination into global hub, it makes itself even more valuable; every regularly scheduled flight that travels through a hub airport supports around 2,000 direct and indirect jobs. These are figures that should be of interest to those in government, who genuinely seek to create employment opportunities for their constituents. Related cargo operations are also a major factor in the creation of economic value, because they also create employment related to the transhipment of goods. Memphis International Airport is not a major passenger destination, but it is the global cargo hub for FedEx and a wide range of other freight forwarding companies. It is one of the largest commercial logistics centres in the US, with a base of international corporations that are served by the city and airport, and serve the city and airport in return. As competitive cities continue to develop their respective comparative advantages in a globalising world, the city and its airport will increasingly rely on each other. If the airport does well, then the region’s economy benefits. If the regional economy does well, then the airport will grow. A 10% increase in passenger throughput creates a 2% growth in the regional economy. A 1% increase in regional growth rate produces 2.7% more passengers. The future prospects of the city and the airport are inextricably linked. In a globalising world, cities compete worldwide by cooperating with each other. They seek comparative advantages through specialisation – producing a surplus of what they are good at, and trading with other cities that produce other things that they seek to consume. That’s true whether the urban economy creates sub-components for products, grows exportable foods, assembles kits from other places or simply tranships material. It’s true if a city’s media industry makes >>
Aecom’s masterplans for Hyderabad, India (left), and Brisbane, Australia (above left), cities that are using airport hub strategies to raise themselves into the global top tier
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Airport cities// movies or records music, its academics develop the intellectual capacities of university students or professional consultants fly out to distant projects. The most successful cities are globally relevant urban hubs, important nodes in the global economic system. Their activities have a direct and tangible effect on global affairs through socio-economic means. But the premium positions of global cities are not guaranteed; their rise and fall is directly attributable to how socially and politically cosmopolitan they are, and how they leveraged the global transportation networks of their time. Alexandria in Egypt and Xi’an in China have fallen from the ‘global hub’ top tier, as have Venice and Moscow. Some cities, such as Amsterdam and Frankfurt, have declined but are rising again, largely due to their ability to leverage their aviation capacities. Others, such as Dubai, have entered the top tier through their singleminded devotion to becoming an aeronautical hub – a city of just two million people becomes globally relevant primarily because it’s a place that people pass through on their way to somewhere else. Other cities, from Cairo and Hyderabad to Brisbane and Madrid, are using airport city strategies to leapfrog themselves into the upper global tiers. We know this intimately because as
‘Every regularly scheduled flight that travels through a hub airport supports around 2,000 jobs’
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economists, planners and urban designers, we are looking at how to best plan new urban cores in the centre of their hub airports, creating new central business and industrial districts than will transform their traditional downtowns into aerotropolises. London’s future London has been a global city through the age of empire and the age of nations. It created critical advantages for itself by forming and adapting around dominant transportation gateways. Inland maritime ports, expansive railway terminals, extensive underground stations, motorway networks and dispersed airports all boosted London’s economic potential to trade and exchange, and created the original foundations for innovation and wealth. In this era of globalisation, when cities around the world pull away from nations and seek more direct links with each other, London faces a new challenge: can it remain connected to the rest of the world? More specifically, can London connect effectively to the emerging economies of the world and in particular to the scores of rising new cities that are themselves creating new foundations for growth and innovation? Right now, the answer is no. London will always be a significant destination. But London’s (and the UK’s) primary international hub and Europe’s busiest airport – Heathrow – is constrained. It no longer has the capacity to connect to the economies of emerging cities, and genuinely risks stagnation as a result. China Southern, China’s largest airline, currently does not have a single flight landing at Heathrow; there is no room – the airport is operating at 99.2% capacity at a time when other Continental airports such as Paris, Frankfurt and Amsterdam are actively and strategically
building operating capacity. Other airlines from emerging economies would like to add new routes at Heathrow, but are also unable to do so because of a lack of take-off and landing slots. There are 21 emerging market destinations with daily flights from Continental European hubs but not from Heathrow; a fact that costs the UK economy £1.2bn a year in lost trade. London is an aerotropolis, for now – until recently, its global air connectivity and its strong transport connections from airport to city have leveraged the productive and innovative capacities of residents and visitors. But in the long term, even incremental expansion of Heathrow will not be enough to allow London to maintain its privileged opportunities as a hub; it is losing out to strategic competitors on the Continent. And with the migration of connectivity to Paris, Frankfurt and Amsterdam go many of the industry and services that require the competitive advantages a hub gives them. There are proposals for a new hub airport in the Thames Estuary, powerful long-term solutions that will create world-class opportunities for London in the age of cities. And it’s not just about the airport. Locating a new hub in the estuary creates other synergies that are impossible to achieve even if Heathrow could expand – 24-hour operations (essential for cargo), multimodal connections with the maritime port, comprehensive development of a new airport city that can reinforce London’s strength as an aerotropolis, economic development of the region. But given the political dimensions and planning policy in the UK, even the best of the estuary plans are still at least 20 years off. There are some short-term fixes (maybe an additional runway) but no medium-term ones. Will London position itself for the next wave of innovation, or will it stagnate? Should it start preparing to become just another Alexandria or Venice? In the globalising age of cities, with the world’s centre of gravity and new opportunities shifting eastwards, will London thrive?
Image BAA; Foster + Partners
Christopher Choa is an architect and urban designer, and a principal with Aecom Design + Planning. aecom.com
Architects Foster + Partners’ proposal for the Thames Hub (nicknamed ‘Boris Island’) in London’s Thames Estuary (left) and Aecom’s design for an airport hub in Cairo, Egypt
:ultra efficient
heathrow’s prt system Driverless ‘pod’ cars whizzing along a track high above the ground – it’s a scene more reminiscent of a theme park or futuristic movie. Since September, passengers travelling between Heathrow’s business car park and Terminal 5 have been experiencing a similar vision of the future, by hopping into their very own ULTra personal rapid transit (PRT) vehicle. Built for BAA by Arup and ULTra PRT, a transit systems developer in association with Bristol University, the world’s first commercial and public PRT system began development in 2005, and has launched with 21 automatically controlled vehicles. Whereas most mass-transit systems in airports move people in groups over scheduled routes and times, Heathrow’s PRT system aims to increase efficiency by moving smaller groups quickly and non-stop, and by being available for use whenever the passenger requires. ‘It’s a quirky system,’ says Austin Smith, a chartered civil engineer and associate director at Arup. ‘We were charged with delivering the track layout and infrastructure against some tough objectives – not only did it have to be easy to construct and be as lightweight as possible, BAA wanted us to make sure the operation of the airport wasn’t affected.’ To ensure this, Arup developed a 3D testing model for the guideway, and came up with an alignment and span arrangement that avoided impacting on existing infrastructure. Passenger feedback has been overwhelmingly positive, and business car park use has risen as people are also drawn to it as an attraction. A similar PRT system, developed by 2getthere, has been operating in the Masdar eco-city in Abu Dhabi since 2010 to serve the Masdar Institute of Science and Technology. This year, ULTra will collaborate with Fairwood Consultants to build the world’s first urban PRT system in Amritsar, India, to serve up to 500,000 people who visit the city’s Golden Temple on religious festival days.
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8400+
Law advice//
The principles of…
ASCERTAINING CLAIMS Illustration by Mitch Blunt
It has been said that claims are unavoidable and as ubiquitous as the hard hat in any construction project. If this is the case, then dealing with claims effectively in a professional and disciplined manner is principled on putting the aggrieved party in the same position – no better and no worse – than it would have been if there had there been no delay or disruption. How, then, should such claims be ascertained? ON-SITE OVERHEADS Sometimes called extended preliminaries or prolongation costs, therefore recovery of such loss and expense is based on actual costs rather than the pricing assumptions made by the contractor in the accepted contract amount. Records must be provided to establish and secure contractual entitlements. Also, when examining the contractor’s manpower records, it is essential to verify that the site staff are working exclusively on the project that is the subject of the claim, and not ‘helping out’ with work or assigned part-time to unrelated tasks or other projects. OFF-SITE OR HEAD-OFFICE OVERHEADS Whether or not a contractor is entitled to head-office recovery depends on their ability to demonstrate that they have suffered a missed opportunity on work that they would have carried out during the delay period and, therefore, earned a contribution to head-office costs. The construction industry must be buoyant at that time, and work must be readily available. In a downturn period, or where the workload of the contractor is not heavy, this argument may be questionable. Furthermore, if expenditure on additional time and resources by headoffice staff to deal with the claim is to be recovered, the extra time on the particular project must be proven to be necessary because the problems were of such magnitude as to warrant it, which would not be the case had there been no delay or disruption.
The basic tenet is that a contractor will not be allowed to recover more than they can prove
LOSS OF PROFIT Loss of profit is an allowable head of claim if the contractor can prove that they were prevented from earning profit elsewhere, or taking on alternative profitable work as a result of the circumstances giving rise to the claim. The loss of profit-earning capacity must be demonstrated,
which is the difficulty faced by contractors in advancing such claims. Establishing a successful claim for loss of profit is not a straightforward exercise where the contractor can simply show the profit they have included in their tender. INCREASED COSTS Unless it is a fixed-price contract – where the risk ownership of price escalation lies with the contractor – additional expenditure arising from increased costs on labour, goods and other inputs is an allowable head of claim. Care must be taken to ensure that there is no double-recovery under other heads of claim and in the evaluation process of any variation. When a claim is made for cost increases, the contractor must demonstrably show the difference between what they would have spent (had there been no delay or disruption) and what was actually spent over the whole of the contract period, taking into consideration the delay and disruption. COSTS OF CLAIM PREPARATION The cost of preparing a claim document is generally denied. When preparing and submitting a claim, the contractor is merely responding to the requirements of the contract, which does not call for a voluminous document to be presented. It only requires the contractor to comply with the notice and procedural requirements supported by evidential records. Contract forms typically provide for the possibility of contractual claims and an experienced contractor cannot avoid providing for this eventuality invariably as part of their overheads, and allow for the costs of preparation and settlement of claims in their tender. In ascertaining any claim, the basic tenet is that a contractor will not be allowed to recover more than they can prove. Claims must be based on detailed back-up evidence, not some commercial assumptions or broad assertions. Eugenie Lip FRICS is head of KPK Contracts Support Group and a director with KPK Quantity Surveyors. kpkqs.com
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10 of the best Waterfront developments Compiled by Roxane McMeeken
Royal Seaport Sweden A 15-year project to create a sustainability Mecca on the coast of Sweden near Stockholm is under way and due to be completed in 2025. Royal Seaport will develop, test and showcase Swedish clean technologies and innovations. The town will cut carbon emissions to half of the standard building code requirements, and 30% of the electricity for buildings will be produced locally. Overall, the CO2 produced per person will be less than three tonnes a year, compared to the Stockholm average of four tonnes. Agneta Persson, project director for Royal Seaport at engineer WSP Group, which is working on the scheme, says, ‘Residents will find that energy demand is so low that their own behaviour – such as the length of your shower or whether you open windows – will have a much bigger impact on energy use.’ The 236-hectare scheme will include 10,000 new apartments and 30,000 workspaces.
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Coastal schemes // Titanic Quarter UK The Titanic Belfast exhibition centre, completed in March 2012, has exploded into the Northern Ireland capital’s dynamic Titanic Quarter, Europe’s largest waterfront development. The imposing £90m, 15,000m2 building, which reflects the high-impact outline of the cruise liner it commemorates, is now the quarter’s star attraction. The Belfast office of Turley Associates has been involved in the 75-hectare Titanic Quarter for the past decade, from drawing up the initial development framework document to working on more than 30 planning applications. According to its director, Diana Fitzsimons FRICS, ‘The highlights have been working on such a historic site and seeking to retain some of the memories of the shipbuilding industry that once employed 30,000 men here, while also creating a brand-new, well-designed city centre destination.’
Yas Island UAE Yas Island, just off the coast of Abu Dhabi, has been designed as a £27bn leisure and retail wonderland, but the construction programme has come with cost-control headaches. The island features a Ferrari theme park, Formula 1 racing circuit, signature hotels, giant malls and golf courses. Work has completed on some of the island, but Yas Mall, comprising more than 300,000m2 of shopping space, around 400 retail units, a hypermarket, two department stores and parking for 14,000 cars, is still under way and due to open in 2013. The cost challenge came when the financial crisis struck the region in 2008. Ian Kerr MRICS is associate director at Sweett Group, the mall’s programme manager and cost consultant. ‘We worked with the architect, providing advice in areas such as building form, construction material selection and building services,’ he says. Overall, Sweett was able to shave AED2bn (£349m) off the original price tag.
V&A Waterfront South Africa The continued expansion of Cape Town’s historic V&A Waterfront is gaining momentum. In the latest new development, water from Cape Town’s chilly Atlantic Ocean, which averages around 15˚C year round, will be incorporated in the cooling system of the super-sustainable 18,000m2 mixed-use No. 1 Silo office building. However, Mike Brokenshire, head of development at the privately owned V&A Waterfront, says that building on reclaimed land while keeping the sea at bay ramps up building costs. ‘When we built the Table Bay hotel in the 1990s, for example, we paid a premium of around 40% of the basement construction cost on underground works.’ Similar conditions, although not quite as extreme, still hold for the current 1.5bn Rand (£114m) of works planned for the coming five years. These will see retail, offices and residential new build added to the predominantly historic buildings that have been converted from industrial to mixed use over the past 20 years.
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Victoria Harbour Hong Kong An ambitious plan to redevelop Hong Kong’s Victoria Harbour is set to be one of the world’s most important coastal schemes. The project, which will span at least 20 years, will see the 73km stretch of seaside land transformed into a vibrant district featuring facilities ranging from cafes and bars to recreational space on the water for canoeing and dragon boats. ‘There is little life on the waterfront, so there is a need for a variety of experiences for both residents and visitors,’ says Nicholas Brooke PPRICS, chairman of the Hong Kong Harbourfront Commission, the development authority for the project. The first task for the project, he says, is to devise a series of public-private partnership models. ‘The approach will probably be to grant leases to developers [for the 70% of the land that is government owned]. This approach is new for Hong Kong, but it will bring the entrepreneurship and creativity needed.’
Newbiggin Maritime Centre UK
Seaplane terminal Canada Seaplanes provide a vital transport link for many of Vancouver’s remote coastal communities, and since May 2011 they have been flying right into the heart of Vancouver city’s redeveloped downtown waterfront. The CA$22m (£7.5m) Vancouver Harbour Flight Centre (VHFC) features 18 seaplane slips housed at concrete docks, as well as a terminal building. It’s expected to see 300,000 passengers annually. Consultancy BTY Group provided technical due diligence for client BC Pavilion Corporation, which owns the water lot where the new terminal is located and leases it to VHFC. ‘We had to understand the terminal’s complex ownership and governance structure and how it affected payment responsibilities, and the marine construction methods involved,’ says Ross Templeton MRICS, a partner at BTY Group. ‘Also, the facility’s function as a refuelling depot impacted safety and environmental requirements, which had to be factored into costs.’
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This new maritime museum on the Northumberland coast completed in July 2011 and is a great example of a building that complements its setting. Set in the sand dunes, the museum allows views of the sea, and from the sea to a church that has helped guide in sailors for centuries, to remain unchanged. The £2m project by Mosedale Gillatt Architects faced disaster halfway through when it lost £100,000 of its funding due to a land ownership dispute. ‘We had to value engineer every aspect of the building, from the structure to the toilet-roll holders,’ explains Harry James FRICS, an independent project manager who worked on the scheme. This included a redesign so that the green roof originally envisaged can be added later. As a result, the project was brought in on budget and the centre was shortlisted in the Renaissance category of the 2012 RICS Awards for boosting tourism and regeneration.
Images Urban Design Study for the New Central Harbourfront, Planning Department, HKSAR; VHFC
Coastal schemes//
Stavros Niarchos Foundation Cultural Center Greece
Image ALAB
Red Sea coast Saudi Arabia The first phase of the 168km2 King Abdullah Economic City on the coast in the west of Saudi Arabia is complete, but construction is expected to continue until around 2025 – by which time the city will be the size of Washington DC. South along the coast at Rabigh is the £2.2bn King Abdullah University of Science and Technology (KAUST), whose first buildings opened in 2009. These developments, near Saudi’s most liberal city, Jeddah, aim to attract a freer generation of young Saudis to help avoid political unrest. Philip Cooke MRICS is director at Northcroft, which provided cost plans for KAUST for contractor Saudi Oger. He says the main challenge was the government’s requirement for speed: ‘We did a four-year build in two years.’ This is impressive considering the university comprises 23 buildings, including four highly sophisticated laboratories.
Donated to the state by the Stavros Niarchos Foundation, the €566m (£453m) Renzo Piano-designed cultural centre under construction at Faliro Delta on the south coast of Athens will comprise Greece’s national opera, the national library and a cultural park. ‘This is a beacon for the economic recovery of Greece,’ says the scheme’s project manager, Neil Clemson FRICS, head of project management at Faithful + Gould. ‘It will attract tourists and change the lives of local people at a crucial time.’ Located on a prime coastal spot, surrounded by Olympic venues, the site was deemed in need of regeneration. The 557,700ft2 scheme aims to earn a Platinum or Gold LEED certification for sustainability, and will create 1,500-2,400 jobs annually during construction, which is set to begin in late 2012.
Gold Coast 2018 Australia The 2018 Gold Coast Commonwealth Games development is shaping up to be one of the greenest sports event construction projects in the world. Some 80% of the venues are already in existence, but the AUS$620m (£390m) athletes’ village will need to be built from scratch, accounting for a large chunk of the AUS$889m (£560m) construction cost. ‘If we built the housing in a traditional way, after the Games we would have to put a huge amount on the market at once,’ says surveyor Nigel Chamier, chairman of the board of the Organising Committee. Instead, to ensure a sustainable legacy, the residential units will be constructed so that they can switch use to low-cost housing and auxiliary accommodation for hospital patients who still need nursing. A further AUS$105.7m (£66m) will be spent on six new venues.
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Business advice//
How to create a
winning website Illustration by Mitch Blunt
When McKinsey interviewed 750 buyers of professional services to find out what influenced them when arriving at purchasing decisions, they found, not surprisingly, that access to information and reduction of risk were crucial. What has this got to do with your website? Irrespective of how you make initial contact with a prospect, they’ll inevitably subsequently visit your website. Hopefully it will portray you as a professional and successful business; a risk-free proposition. By contrast, if a prospect is greeted with dated, poorly written text and fuzzy images, they could dismiss you out of hand and you’ll be none the wiser. Equally, the days of being able to get away without having a website at all are long gone. If you have a website and it has seen better days, it’s time to improve or renew. Whether you’re blogging, using social media, paying for Google AdWords or doing search engine optimisation (SEO), all that effort is wasted if, when prospects arrive at your website, they don’t get your message or don’t like what they see.
Your homepage is your shop window. a visitor should be able to see at a glance what’s on the other pages
Getting started Make every word count. At the heart of effective copy is an understanding of what your reader is looking for and how you can address their needs. If you’re considering using a copywriter, brief them thoroughly on your services, the benefits you offer, your client service standards and your target audience. Copy should focus on the reader, using ‘you’ rather than ‘we’ language, and avoiding technical jargon. Sentences and paragraphs should be short and punchy, with headlines and sub-headlines to break up the text. Before briefing a website designer, scope out your website flatplan – the number of pages you’re planning and the purpose of each. Your homepage is your shop window. When a visitor lands on it they should be able to see at a glance what’s on the other pages and should be no more than one click away from the page that interests them. Don’t stuff your homepage with thousands of words – 200-300 is usually enough. You may also want an ‘about us’ page to introduce your business, the key players in your team, your experience and your customer service. You need pages that describe your individual services with links to other relevant pages. If you’re going to have a news page, update it on a monthly basis. If this seems a tall order, make it a ‘news and hot topics’page to widen your scope for content. Don’t commit to a blog if you can’t post at least one arti-
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cle a month. Yes, video is great, but don’t get sidetracked. Focus in the first phase on being brilliant at the basics; you can always add video later. Include a contact form on your website with a link to it on each page. Other options for pages include case studies (half a dozen decent case studies that showcase your expertise and ability); clients (a few paragraphs describing the clients you work with and how they benefit from your services); and career opportunities (if you’re looking to recruit). Add all your professional qualifications and logos (you can download the RICS logo at rics. org/brand or request it by emailing brand@rics.org). Update your website regularly. Most websites nowadays include a full content management system (CMS). Keeping copy and images relevant and up-to-date is important in maintaining that great first impression. Any photographs of you, team members, your offices, literature and logo etc must be professional and pin-sharp in quality. If this means enlisting the help of a professional photographer and designer, regard these as an investment in building your online brand. Before appointing a website designer, speak to a few of their clients. How attractive on the eye, easy to navigate and easy to read are the websites they’ve built? Examine their quotes in detail so you know what’s included in the price and any extras. Only add social media symbols – LinkedIn, YouTube, Twitter etc – when you’re actively engaging in social media as opposed to simply showing off these shiny new buttons with nothing of note behind them to add value. Dee Blick is a chartered marketer and CIM Fellow, and one of the UK’s bestselling small business marketing authors. Her latest book, The Ultimate Small Business Marketing Book, reached number one on Amazon UK with 60 five-star reviews. themarketinggym.org
Information :rics news :diary :benefits :resources
60+
member institutions form the FSB, which is chaired by Bank of Canada governor Mark Carney
It is clear that landlords are actively seeking new ways to give themselves a competitive edge in the market
Bill Jones MRICS, Director RICS ASEAN at the Asia Office Space Congress in June
rics recognition The RICS Red Book and the International Valuation Standards have been recommended by the Financial Stability Board (FSB), an international body that monitors and makes recommendations for the global financial system, in its Principles for Sound Residential Mortgage Underwriting Practices. The FSB Principles, published in April 2012, aim to provide a framework for different jurisdictions to set minimum acceptable underwriting standards so as to limit the risks mortgage markets pose to financial stability, and to better safeguard borrowers and investors worldwide. rics.org/redbook
RICS asia +852 2537 7117 General enquiries APC guidance Subscriptions Events Training Bookshop Regulation helpline +44 (0)20 7695 1670 confidential helpline +44 (0)20 7334 3867 Dispute Resolution Services +44 (0)20 7334 3806 switchboard +44 (0)20 7222 7000
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RICS news//
Do responsible companies outperform peers? RICS has published the first study of the relationship between environmental, social and governance performance (ESG) and financial performance in the real estate sector. A consistent result is that a relatively high overall ESG rating affects a company’s
market value positively. When distinguishing between strengths and concerns, it is concerns about ESG issues that have the strongest effect on company value. While there does not appear to be a significant effect of ESG strengths, companies with a
relatively high number of concerns tend to have significantly lower market values. The result was found to be consistent across numerous model specifications for both balanced and unbalanced panels. rics.org/research
Joint memberships
RICS has entered into an agreement with the Hong Kong Institute of Housing (HKIH) on reciprocal recognition of memberships. Under a proposed reciprocity arrangement, members of RICS (FRICS and MRICS) who have at least 10 years of postmembership qualification, qualified through the facilities management pathway, or have already opted interest in facilities management and have 10 years of relevant local experience in Hong Kong, may also be admitted to the corresponding grades of membership of HKIH. Members of HKIH (FHKIH and MHKIH) who have at least 10 years of post-membership qualification and 10 years of relevant local experience in Hong Kong may also be admitted to the corresponding grades of RICS membership in Facilities Management. For further information, contact RICS Hong Kong Manager David Cheung at dcheung@rics.org or +852 2116 5512.
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3-5%
Grade-A office rents in Beijing are reaching their peak, but are expected to increase modestly
The RICS Asia Commercial Property Professional Group Board has been officially launched. Chaired by Nigel Smith FRICS, the Board will provide professional insights and adapt international standards in relation to the commercial property specialisation, so as to ensure that RICS is seen as an industry leader in terms of thought leadership, knowledge development and the promotion of international best practice in Asia. In addition, board members will also represent Asia in the development of global guidance notes and research initiatives. The Board comprises members from Hong Kong, China, Malaysia, Singapore and Japan including Nigel Smith, Clement Lau, Francis Chiu, Jeremy Sheldon, Maureen Fung, William Taam, Low Han Hoe, Guy Baber and Yuko Tomizuka.
2.1% Rents for Grade-A offices in Shanghai continued to rise, reaching RMB281 per m2 per month
6-8% The Shanghai Grade-A office market is expected to grow by 6-8% by the end of the year
Illustration Oscar Bolton Green, Bernd Schifferdecker
Commercial launch
S Insight
‘RICS Asia is moving ahead with a restructuring that will see greater efficiencies and more services’ Darren Jensen, Director RICS Asia
ince arriving in Hong Kong in 2005 I have witnessed many changes at RICS Asia. Change has been a ‘constant’, in terms of the economic climate in Asia, and more markedly in Europe and North America. The property and construction industry in Asia has faired extremely well and RICS members have reaped the benefits of working in this exciting region. Though we still live in uncertain times, I know I would rather be in Asia than anywhere else. RICS Asia has now grown to serve the needs of the 7,700 fully qualified members and 10,000 trainees and student members across 21 countries in Asia. In 2005, we had a main office in Hong Kong with four staff. Now, we have a solid and experienced team of 35 with an expanded office in Hong Kong, four offices in China and one each in Singapore, Malaysia, Thailand and Vietnam. This growth has been achieved without any financial resources required from RICS HQ in London. Our increased portfolio has been the result of increased interest in joining RICS, and thus our membership has grown organically over time, ensuring that standards remain high. We have also dramatically increased our services in the form of Continuing Professional Development (CPD), conferences, publications and policy output.
Change is ever-present and to achieve our goals, RICS Asia is moving ahead with a restructuring that will see greater efficiencies, more services, accelerated commercial growth and higher levels of recognition. This restructuring is for the operational and staff side of the organisation, and not for the membership structure. RICS has followed the fairly standard corporate organisational structure and formed Global Business Units (GBUs) for the UK, Middle East, Europe, Near East, Africa (MENEA), Americas and Asia Pacific. Kaye Herald is leading the RICS Asia Pacific GBU out of our Sydney office and has the additional role of Director, RICS Oceania. Sachin Sandhir is Director, RICS South Asia, Bill Jones is Director, RICS ASEAN and Jason Ho is the newly appointed Director, RICS North Asia. The RICS Asia staff structure is thus split into RICS ASEAN and North Asia. Personally, I have moved into a commercial development role across the Asia Pacific GBU. RICS is committed to the recognition and delivery of professional standards and to develop services for members to enhance their professional competence and service to their clients. These are exciting times and with the establishment of a Wholly Owned Foreign Entity in China and the launch of RICS Japan we are well placed to forge ahead.
the value of land New RICS research provides an understanding of the importance and influence of land leverage on property issues and policies, using Perth in Western Australia as a case study. Land leverage
1m
Around 1m m2 of Grade-A offices will come on stream in 2012-13 in Shanghai
is the proportion of total property value embodied in the value of land as distinct from improvements. Within the land leverage framework, total property price change is viewed as a weighted
135%
Guangzhou’s Grade-A office investment sales market increased 135% quarter-on-quarter
average of change in land value and improvements. An improved knowledge of the influence of land leverage has important implications in understanding how property markets operate.
The results suggest that house price fluctuations are primarily driven by changes in the price of the land component. To read more about this and other research, visit rics.org/research.
7.6%
In Q2 2012, the year-onyear economic growth of China was 7.6%, the lowest for three years
*Highlights from Knight Frank’s Greater China Property Market Report Q2 2012. Visit my.knightfrank.com/research
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RICS news//
Events For rics events bookings and enquiries ricsasia@rics.org // +852 2537 7117
Singapore RICS Asia Valuation Conference 2012 4 September, Pan Pacific Hotel, Singapore Building on last year’s success, the conference will be organised with the theme ‘Valuation and investment
– an assessment of partnership’. It will highlight the intricate relationship between valuation and investment and provide an update on International Valuation Standards. Prominent international speakers will share their experiences
MIPIM Asia 7-9 November, Hong Kong
L
aunched in Hong Kong in 2006 to serve high-level real estate professionals, MIPIM Asia has become the leading annual property rendezvous in the Asia Pacific region, with more than 1,900 participants from 42 countries in 2011. MIPIM Asia is the Asia Pacific version of Reed MIDEM’s highly successful MIPIM property exhibition and conference event held annually in Cannes, France, which was launched in 1990 and is now the leading annual international tradeshow for the property industry, attracting more than
on assessment of partnership and application of the latest internationally recognised valuation methods in financial environment. ricsasia.org/ asiavaluation conference
Japan ARES Real Estate Investment Forum 12 September, Tokyo Organised by The Association for Real Estate Securitization (ARES), the forum will focus on the Japanese and AsiaPacific real estate
investment markets as well as crossborder investment trends. A selection of distinguished speakers and panel guests from industry, government and academia will share their insights on these topics. For more information and details on registration, contact the Secretariat of ARES Real Estate Investment Forum at ares-forum@ creative-net.co.jp or call +81 3515 92216 or visit the Forum homepage at ares. or.jp/forum2012/en
19,400 professionals from 83 countries in 2012. This year, MIPIM Asia will feature a unique 3-in-1 format to address the region’s hottest real estate topics: investment, retail and sustainability. Gathering property professionals from every sector, MIPIM Asia opens the door to the entire Asian real estate industry in one single event. RICS members special rate Register before or on 1 October and pay only US$790 (a 53% discount). From 2 October, save 32% on the full price (entrance will be US$1,150). Contact anne-marie.sanchez@reedmidem.com +33 (0)1 4190 4520, ormipimasia.com.
Who manages design delivery? Managing design delivery is an activity of project management, but is not always carried out by a project manager. In fact, it is a process often carried out by more than one team member. RICS has published guidance on design delivery management, with specific recommendations on each part of the process. Design is rarely completely linear, and often involves experimenting and revisiting previous solutions. Getting design right is therefore a process that requires insight, flexibility and collaboration. Planning and managing design delivery inherits these considerations, too. The guidance includes where design starts and finishes, defining best practice, the importance of hard and soft skills, and the art of design team management. rics.org/designdelivery
APC guidance As part of the Assessment of Professional Competence (APC) supporting services, the APC mentor scheme has been running in Hong Kong, China and Malaysia for a number of years. All the mentors in each region are qualified members who are willing to offer advice and assistance. For more information about APC mentors where you are, contact: RICS Asia (Hong Kong) +852 2537 7117 ricsasia@rics.org RICS Beijing (China) +86 10 6581 4082/83 ricschina@rics.org RICS Malaysia +603 7957 9184 ricsmalaysia@rics.org The next Assessment of Professional Competence in Hong Kong will be held in October 2012. For more details, email Iris Choi at ichoi@rics.org.
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No
discussion points
New ethical standards
Act in a way that promotes trust in the profession
Both in your professional life and private life, act in a manner that promotes you, your firm or the organisation that you work for, and the profession in a professional and positive way.
Behaving ethically goes to the heart of what it means to be a professional, and distinguishes us from others in the marketplace. RICS has published a set of professional and ethical standards for members and member firms to ensure they remain relevant in today’s marketplace. The previous 12 standards have been replaced with five, stating that members must…
N
o
2 Be honest and
Act with integrity
No
straightforward in all that you do.
1
Be accountable for all your actions – don’t blame others if things go wrong, and if you suspect something isn’t right be prepared to do something.
No
3
Take responsibility
4
Ensure that your client, or others Always provide to whom you have a professional a high standard of service responsibility, receives the best possible advice, support or performance of the terms of engagement you have agreed.
If you are in a position where you have concerns then you will want to:
∫
Gather the facts that you have. Do you have enough facts to come to a decision? Speak to someone about your concerns. ∫ In the first instance you may want to raise your concerns with someone with whom you feel comfortable.
Treat people with courtesy, politeness and consideration, No no matter their race, religion, size, age, country Treat others of origin, gender, sexual with respect orientation or disability. It also means being aware of cultural sensitivities and business practices.
5
If you still have concerns then you will want ∫ to raise these more formally with, and take
advice from, an appropriate person, for example the people involved in the situation, your manager, a colleague, another RICS member, another professional, a community leader, or RICS or any other appropriate organisation, including the police.
Once you have taken advice you will want to ∫ make a decision and ensure that something is done. This may mean that you actually take the issue forward, or it may mean that someone more appropriate takes it forward.
Read case studies and check the decision tree at rics.org/ethics.
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(3.4% e east middl up 2,244%
NA up 1merica 52% (12%)
Measure//
get connected communication network growth
150m
The predicted increase in the number of African internet users by 2015.
)
) 2%
Illustration by Ian Dutnall
. (6
% ca 88 i r ,9 Af p 2 u
Internet user distribution by world regions and growth (2000-11)
/ erica(10.4%) m A Lat bbean Cari ,205% up 1 2011
)
% Asia (44.89% 8 7 up
Oceania Austral ia
2.096bn
(1.1%)
up 214%
The number of global internet users as of 31 March 2011 – 30.2% of the world’s population.
up 528%
eu up rop 37 e (2 6% 2.1 %
28,000km
The length of the Fibre-Optic Link Around the Globe (FLAG), a submarine communications cable containing optical fibre, running from the east coast of the US across Europe and Asia to Japan.
2009 2007
97%
51% Percentage of all telecommunicated information carried over the internet 1%
The year the first transatlantic telegraph cable was laid across the floor of the Atlantic Ocean, from Ireland to Newfoundland.
The first longdistance telephone line was established to connect French Corral with Bowman Lake in California, US. It was 97km.
The year TAT-1 (Transatlantic No.1), the first transatlantic telephone cable system, was laid between Scotland and Newfoundland.
1858
1877
1955
50
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400m
2000
1.3%
4m Global growth of broadband subscribers
The increase in GDP for every 10% increase in broadband connectivity, according to a World Bank study.
1993 1990
The year Tim Berners-Lee published a proposal to build a hypertext project called ‘WorldWideWeb’.
1982
The year the Internet Protocol Suite was standardised and the concept of a worldwide network of TCP/IP networks called the internet was introduced.
Sources: bbc.co.uk, iscpc.org, internetworldstats.com, nationmaster.com, planningportal.gov.uk, wikipedia.org, w3.org
)
T: +44 (0) 20 7871 5734 or E: charlotte@sundaypublishing.com T: +44 (0) 20 7871 2667 or E: angus@sundaypublishing.com