rics modus, americas edition - q4, 2013

the china machineinside the world’s fastest-growing

major economy, page 16

the ch

ina issu

e

Box clever How shipping containers are coming ashore p24 growing up How do the five BRICS nations compare? p30culture clash Facilities management in the Americas p34

Q 4.13 //

mod

us Q4.13 // r

ics.or

g /mo

du

s

MODUS_US_Q4_13_P1_Cover.indd 1 04/11/2013 13:57

MODUS_US_Q4_13_P2-3_Toronto Summit ad.indd 2 04/11/2013 13:59

t

MODUS_US_Q4_13_P2-3_Toronto Summit ad.F1.indd 3 06/11/2013 10:46

Are You Running Out of Time?

All practicing RICS members are required to log 20 hours of CPD online by December 31, 2013. Log-in to your RICS member account today to get started.

RICS knows that a culture of lifelong learning enhances professional success, and RICS members set themselves apart by keeping up-to-date with changes in their field of expertise. For this reason, starting in 2013, RICS has established a new CPD minimum of 20 hours each calendar year, including at least 10 hours of formal (structured) learning.

To access the new user-friendly, online CPD management system, simply go to rics.org/cpdrecord and enter your usual member log-in information. To get a head start on CPD, go to rics.org/ethics to take the online ethics module that counts as one hour of formal learning.

For more information, including a list of what activities count as formal and informal learning, go to rics.org/cpdrequirements. A download of examples is available at the bottom of the page.

Completing 20 hours of Continuing Professional Development each year is required by RICS Regulation as part of your membership.

If you have any questions or concerns, please call us at 212.847.7400 or email us at [email protected].

rics.org/cpdrecord

Don’t wait – record your CPD today

MODUS_US_Q4_13_P4-7_Contents_v2.F1.indd 4 06/11/2013 10:48

NO 8Q4.13 //

APPROACHING THE SUMMITLast October, RICS held its fi rst ever Summit of the Americas. It was a great

success, and helped members and stakeholders to focus on the topics that only

RICS, through its international, multidisciplinary approach, can bring together.

We believe that the event should be an annual ‘destination’ for our members,

which is why we are very much looking forward to the next Summit of the

Americas in May in Toronto – a city at the crossroads of international investment

and at the leading edge of property best practice. What’s more, in March, RICS

Governing Council will hold its fi rst ever meeting in the Americas in São Paulo,

Brazil, followed by a property summit. Both events will be major milestones for

RICS in the Americas. We hope you can join us in Toronto or São Paulo (or both).

NEIL SHAH MANAGING DIRECTOR, RICS AMERICAS

Q4.13 // MODUS AMERICAS 05

Regulars06_FEEDBACKYour views on Modus and the surveying profession

08_INTELLIGENCEGlobal news, plus opinions, reviews and reactions

29_ETHICS ADVICEEvaluating and mitigating the risks inherent in Public Private Partnerships

43_BUSINESS ADVICEHow to enhance your tablet device to improve your effi ciency

Features16_HERE COMES CHINAInsights into what’s driving the world’s fastest-growing economy, and what could eventually slow it down 24_OUT OF THE BOXSome innovative and creative uses for reclaimed shipping containers on dry land

30_BRICS BY BRICSHow China measures up against the other four major emerging national economies

34_BRAINS BEHIND BUILDINGSInvestigating the unique power of facilities managers to reduce a company’s environmental impact, while also boosting productivity

38_TALES FROM THE WOODThree RICS members discuss the ins and outs of working in the timber and forestry sectors

Information45_RICS NEWSNews, updates and a message from the RICS President

48_EVENTSSelected worldwide training and conference dates for your diary

50_THE MEASUREMapping the world’s top container ship trade routes

Contents

38

24

16

MODUS_US_Q4_13_P4-7_Contents_v2.indd 5 04/11/2013 14:06

Feedback //

The MODUS team //

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.

Not one major power has gone green, as our government proposes to do. What’s more, carbon-credit trading is dead in the US and dying everywhere else, except in Europe, where governments have been seriously debating whether or not to create a carbon credits market because the private sector isn’t interested. You couldn’t make it up.

I don’t object to low carbon per se, but not if all it does is provide income for consultancies and foreign windmill manufacturers. I don’t advocate that we should all burn low-grade coal in our fi replaces, but we must be realistic. We are almost fl atlining as a service economy, with bigger debts than almost any other developed country. If we are naive enough to believe that we can start to rebalance the UK economy and regrow our industries, we need to get real about using the cheapest energy we can source in order to compete with the US, the Far East, India, and China. So, when it comes to setting examples, let’s not set one in self-destruction.Ian Gaynor MRICS, Nottingham, UK

MODERN PITCHESIn response to the request in the Q3 issue (page 28) for other innovations in sport, an important area of change right now is the attitude to synthetic turf in soccer and rugby. The recent developments in artifi cial turf technology have meant that the new surfaces play in an identical fashion to high-quality grass pitches. There are no additional injury problems, and the 3G (third generation) synthetic turf pitches allow play in most weather conditions, which is ideal for smaller clubs and those where the weather can adversely affect matches, making organization complicated, and impacting revenues. The pitch can be used around the clock for club matches and renting out. There is no mud and the bounce and roll are true, promoting better quality play.

My soccer club, Maidstone United, which is a semi-professional club in the Isthmian League in the UK, recently developed the fi rst purpose-built 3G-turf stadium in England,

with a 2,500 capacity. It has been a great success, selling out on several occasions and enabling the whole community to get involved intimately with the club because the pitch is available to all and the club is open for business seven days a week.

The only problem in England is that the soccer authorities have yet to show the foresight needed to allow this new turf at professional levels of the soccer pyramid. In many other countries – such as Scotland, Holland, Spain, and Russia – synthetic turf pitches are allowed at most levels, including the professional game. FIFA, UEFA, and the FA all approve of the 3G-turf technology. International matches are played on such turf, as are Champions League matches – and yet the Football League will not allow them. This is a great shame.Oliver Ash FRICS, France

HIGH PRAISECongratulations to the team on the quality of the Americas edition of Modus. It’s clear, contemporary, and readable, and contains interesting articles that expose new ideas and thought, as opposed to the rehash so many professional magazines resort to. Good work.Graeme Young FRICS, Toronto, Canada

SAVING FACEIn response to Eric Carter’s letter in the May global edition, and his belief that the UK should ‘set an example to the world’ and adopt a green energy strategy based on the belief that CO2 is altering our climate, I have to disagree. The issue isn’t whether carbon production is changing the climate – and I admit to scepticism – but whether or not the UK should cripple itself with costly ‘green’ legislation, and give even more money to a foreign-owned, barely regulated, utility cartel in the hope that it will produce cheap energy in the long term. In the meantime, while we wait for this wonderful new world that our politicians promise, we will have to dress like impoverished pensioners, wearing all our clothes at the same time with our feet in double slippers. The only example that sets to the rest of the world is of a laughing stock.

Feedback Feedback Feedback Feedback Feedback Feedback Feedback

FOR SUNDAYEditor Oliver Parsons // Art Director Christie Ferdinando

// Contributing Editor Brendon Hooper // Deputy Editor

Samantha Whitaker // Junior Designer Isabella Fernandes

// Creative Director Matt Beaven // Account Director

Stephanie Hill // Commercial Director Karen Jenner //

Commercial Manager – Display Lucie Inns // Key Account

and Agency Sales Victoria Cunningham // Commercial

Manager – Recruitment Charlotte Turner // Recruitment

Sales Executive Angus Sharpe // Managing Director Toby

Smeeton // Repro F1 Colour // Printers Wyndeham Grange

// Cover Kyle Bean & Mitch Payne // Published by Sunday,

207 Union Street, London SE1 0LN sundaypublishing.com

FOR RICSEditorial board Jaclyn Dunstan and Mark Goodwin (UK)

Sarah Harrell and Tom Pienaar [US] //

(+1) 212 847 7400 // [email protected]

JOIN THE DEBATE

:REACTIONS AND RESPONSES FROM PREVIOUS ISSUESDo you have an editorial comment about this issue of Modus? Please email [email protected].

36 rics.org

HOW MUCH WILL THE LIVE SPORTS EXPERIENCE CHANGE IN THE

FUTURE? IT COULD BE A GREAT DEAL, IF THESE CONSTRUCTION AND TECHNOLOGICAL TRENDS

ARE ANYTHING TO GO BY

05.13 // MODUS 23

Venue innovation //

1: RETRACTABLE ROOFSWhen a transparent, retractable roof was installed over Wimbledon’s Centre Court in 2009, it finally ended the prospect of any future crowd sing-alongs with Cliff Richard during rain delays. Designed by architecture firm Populous, with structural engineer Capita Symonds, and built by Galliford Try and SCX Group, the renovation reportedly cost around £100m, which is money well spent, many would argue, to enjoy the world’s most famous tennis tournament away from the rain – and Cliff.

Retractable roofs are now almost a standard request for the biggest stadium-owning clients. With global audiences to please, they can eliminate match-day delays and keep those inside warm and dry. One of the most astounding retractable roofs is at the Cowboys Stadium in Arlington, Texas. With a capacity of up to 100,000, the venue is the largest domed stadium in the world, and has the world’s largest column-free interior. Two 89m-high arches support its dome and retractable roof, while retractable glass end-zone doors also open up during certain events. At US$1.15bn (£763m), the stadium ended up being one of the most expensive ever built, and to help pay for the overrun costs, the residents of Arlington voted to approve the increase of the city’s sales tax, hotel occupancy tax and car rental tax.

2: AUGMENTED REALITYIt’s nearly half time at the football match, and you’re wondering how on earth you’re going to get to the toilets, queue up for food and drink, and get back to your seat in time for the start of the second half. The queues are going to be so long that it just won’t be possible, right? Well, in the near future, maybe it will. Seer and EYEPLY are just two companies developing software that may change the way we watch live sports events by displaying real-time augmented reality information on your smartphone. From your seat, you may soon be able to know the waiting times at certain queues, check latest scores, or even point the smartphone at a player to get their live performance statistics, such as their number of passes or shots.

3: MOVEABLE PITCHESWhile more and more new sports stadiums are being built with retractable roofs, if there’s enough space in the surrounding area, retractable pitches could soon become a popular design stipulation, too. This innovation is all about allowing the grass on the pitch to grow as naturally and as optimally as possible – away from the shaded and humid conditions inside the stadium – by literally rolling the pitch out after a game. It’s a system already in place at the University of Phoenix Stadium, home to the Arizona Cardinals. Weighing in at around 9m kg, the pitch is contained in a metre-deep tray, fitted with 546 steel wheels rolling on 13 rail tracks. To move the pitch out, 76 motors take around 75 minutes to drive it through a 60m-wide opening, where it stays outside, getting the maximum amount of sunshine and irrigation for the grass to recover for the next game.

4: GOAL-LINE TECHNOLOGYThe debate is finally over: it was announced in late February 2013 that every English Premier League football club will be obliged to install goal-line technology in their stadiums, beginning next season. No more ‘it was/wasn’t over the line’ arguments – we’ll soon all be waiting anxiously as the referee consults an electronic wrist device to decide whether a goal should stand. Three licensed companies, including GoalRef and Hawkeye, which already provide the technology in tennis and cricket, are in line to install the systems after successful tests at FIFA’s Club World Cup in Japan last December, where all 21 goals scored in the tournament were flashed to the referee’s wrist-device. Importantly, the system didn’t register goals when balls hit the woodwork or the side netting. While welcomed by many, some think it will be a shame to remove the essential human element to refereeing.

5: TRIANGULAR CANTILEVER DESIGNBuckminster Fuller’s visionary research involving structurally efficient geodesic domes has been a key influence in the emergence of innovative triangular cantilever design in stadiums. None more so than the AAMI Park in Melbourne, Australia, which was constructed using 50% less steel compared to traditional systems. Built in 2010, by Cox Architects and Planners in collaboration with Arup, and at a cost of A$268m (£185m), the AAMI Park’s design actually enhances the performance of the structure. Rather than having a separate roof, walls and supports, the overall ‘bioframe’ is a continuous steel structure consisting of a series of domes with triangular panelised façades. As well as reducing construction costs, the design also helps capture vast amounts of rainwater for use inside the stadium. >>

GAMETOP 10

CHANGERS

Words by Brendon Hooper Illustrations by Justin Mezzell

No two retractable roofs are the same, with different climates, venue capacities and sporting cultures all affecting the choice of technology used. For example, while most convertible stadiums in Europe use a retractable system with roof panels mounted on rails, Bank One Ballpark in Pheonix, Arizona, uses an unusual system akin to a drawbridge

MODUS ONLINERead the latest and all the previous issues of Modus Americas edition online at rics.org/modus. Download and print the whole issue

or selected pages for later reading Zoom in on articles and images Click through links Email issues to a friend or colleague.

SHAPE YOUR MAGAZINE //

The next edition will be out in February (Q1 2014), and it would be great to include your feedback.

Why not send us at least 50 words on what you found interesting, useful, informative, or inspiring in this edition?

You can send us your comments via an email to the Modus editor directly at [email protected], or at the RICS Americas LinkedIn group.

MODUS_US_Q4_13_P4-7_Contents_v2.F1.indd 6 06/11/2013 10:49

Gain a Leading Edge with RICS Training for the AmericasStarting September 2013, please visit olaamericas.rics.org to find classes featured under the categories of:• The Future of Real Estate • International Valuation Best Practice• P3 and Infrastructure Delivery • RICS Routes to Membership• Facilities Management and Workplace Futures • Global Professional Ethics and• Construction Advisory Best Practice Professional Skills/Managerial Skills

RICS’ wide range of organizational management and professional development courses are designed to help you operate more effectively and build your skills on an ongoing basis. All RICS training courses count towards the 10 formal hours of CPD (Continuing Professional Development) required each year. Go to rics.org/cpdrecord to start recording hours from training courses and other types of learning. For more information on the new CPD requirements, go to rics.org/cpdrequirements.

RICS offers three types of online training:• Web classes – live and interactive computer-based training (sessions are recorded)

• E-learning – online learning in your own time and at your own pace

• Distance learning – extended learning courses, often offered in collaboration with top educational institutions

RICS also offers customizable in-house training opportunities, both online and in person. For information on this, or if you would like to share your professional expertise and become an RICS trainer, please contact Training Operations Coordinator Mikhael Grossmann at [email protected].

MODUS_US_Q4_13_P4-7_Contents_v2.indd 7 04/11/2013 14:06

08 r ics.org

Intelligence :news :reviews :opinions :reactions

Imag

e Fa

irFa

X M

eDia

Wor

ds b

y iai

n M

acin

tyre

MODUS_US_Q4_13_P8-9_News opener.indd 6 04/11/2013 14:08

01.11 // MODUS 09

This innovative cardboard cathedral will soon enter service as a temporary yet 100% earthquake code- compliant substitute for the nearby Anglican cathedral, which was damaged in the crippling 2011 Christchurch earthquake. Estimated to cost NZ$5.3m (US$4.3m), the transitional facility is made from 320 6m-long cardboard tubes on concrete foundations and floor slab, with a polycarbonate roof. Filled with laminated veneer lumber, with additional waterproofing from a polyurethane coating, the tubes are an ideal building material, given how readily available, recyclable, and surprisingly strong cardboard is. Led by contractor Naylor Love, construction on the project commenced in July 2012 after more than a year’s planning with the renowned Japanese architect Shigeru Ban, who has been designing temporary emergency structures since the mid-1980s. ‘The strength of the building has nothing to do with the strength of the material,’ says Ban. ‘Even concrete buildings can be destroyed by earthquakes very easily – but paper buildings cannot.’ Built with a life expectancy of 50 years, the cardboard cathedral will ultimately serve as an inner-city church for the large congregation of St John’s when a permanent replacement for the cathedral is finished in around 10 years’ time.cardboardcathedral.org.nz

:TransiTional CaThedral ChriSTChUrCh, NEw ZEALANd

MODUS_US_Q4_13_P8-9_News opener.indd 7 04/11/2013 14:09

08 r ics.org

Knight Frank is gearing up to enhance its global graduate recruitment program. From September this year, the fi rm will be looking to recruit more graduates from around the world – particularly those with RICS-accredited degrees, as it is an overall objective to bring

more RICS-accredited degree holders into global graduate programs. ‘We’re targeting our marketing at all RICS-accredited degree courses in our global offi ce locations and will be setting up Assessment of Professional Competence training programs in some

locations where we’ve not had them previously,’ said Sally Chacatté, partner and group head of HR at Knight Frank. The fi rm will also boost its Broadening Horizons program, which supports people wishing to gain work experience in other locations in the Knight Frank

Group. One part of the Broadening Horizons program enables a hand-picked group of young talent to take up international secondments in locations such as Shanghai, Singapore, Dubai, and Australia. For more information, visit knightfrank.com/recruitment.

Property KNIGHT FRANK GRADUATE PROGRAM GOES GLOBAL

Intelligence //

10 r ics.org

Imag

es J

aspe

r San

idad

| © Ti

m G

riffi t

h

Opinion

INFRASTRUCTURE: KEY TO RESILIENCE AGAINST DISASTER

In February, I visited the Solomon Islands for the World Bank to look at integrating disaster management into their rural infrastructure program. The Solomon

Islands currently rank sixth in the World Risk Index, and over the past 30 years have witnessed six major natural disasters (fl ood, earthquake, tsunami and volcanic hazards), resulting in loss of life, risk of disease outbreaks and severe adverse economic impacts.

By coincidence, while I was there, a tsunami hit that killed 10, destroyed 600 houses and displaced thousands. Following local press coverage of the events that followed, it became apparent that comprehensive infrastructure improvements were needed to enable families responding to future disasters to escape safely, and have access to clean water, medical services and means of cooking.

Although emergency provision of shelter and hygiene kits from governments and donors can help reactively, basic infrastructure improvements help communities become more resilient to climate change events. Typical improvements include: upgrading rural water supply systems, and sanitation for schools and clinics, to ensure there is at least one protected toilet and community storage tank above fl ood level that can meet immediate needs; fi tting or retrofi tting disaster-resilient community buildings to serve as refuges by raising fl oors above fl ood levels and improving hurricane restraints; ensuring access so that escape is possible and emergency services can easily reach communities; and installing basic flood protection measures such as sand bags, and more robust technology at critical locations, such as gabions.

There are also various other low- or no-cost resilience actions that communities can take to improve their ability to respond rapidly and recover quickly following a major disaster, therefore reducing fatalities. These include the promotion of fl ood-tolerant crop varieties, incorporation of effective drainage, avoiding construction on steep and unstable slopes, and control of solid waste, which is often a major cause of drain blockages.

It’s important that these interventions are designed to be socially and environmentally appropriate to meet a wide range of community needs. A fundamental component of this process is to understand the various grades of risk, such as fl ood return periods and safety levels for different infrastructure types. Also, to ensure future-proofi ng of rural infrastructure and mitigation of climatic and geological hazards, communities should be provided with basic capacity building, and training in climate change adaptations and disaster-risk resilience. As an absolute minimum, this should include the development of community disaster preparedness, evacuation and recovery plans – all of which will rely on there being basic infrastructure in place.

John Tracey-White FRICS RICS International Sustainable Development Advisor

ROAD TO RECOVERYTougher, more resilient basic infrastructure will lessen the reliance of vulnerable communities on outside aid following a natural disaster

MODUS_US_Q4_13_P10-15_News_v2.indd 10 04/11/2013 14:16

01.11 // MODUS 09

PropertyUS: HIGH DEMAND FOR CREATIVE OFFICESAlthough the high-tech industry comprises only 8.8% of offi ce-using employment in the US, its impact on local commercial real estate markets has been tremendous, says a report by Jones Lang LaSalle. Employment in high-tech manufacturing and services grew one and a half times faster than the total employment growth in the 12 months through to May. But for high-tech occupiers, the lack of creative offi ce space has sparked a wave of development across the country, resulting in a construction pipeline of more than 2.1m m2 across 12 core markets – nearly half of all offi ce construction taking place in the US. Read the report at bit.ly/JLL_HighTech.


:ONE BIG QUESTION CONSTRUCTION 2025: WHAT DOES IT MEAN TO YOU AND THE SURVEYING PROFESSION?

Take part in discussions by joining the RICS Americas group at linkedin.com.

London A simple thing would be to realize the potential of the industry data that we have. That’s what we’re doing at Turner & Townsend, and it’s been very successful. Surveyors should be the ‘go to’ professionals for all evidence-based data to enable improved performance.

David Crewe MRICS, Turner & Townsend

Chicago I believe that signifi cant initial and life-cycle cost effi ciencies will be achieved through more off -site and modular construction over the next decade, which will also save time, reduce costs, increase safety, and maximize the power of Building Information Modeling.

London Hopefully by 2025, BIM will have really taken off and we’ll have true 4D and 5D BIM. Improving the fl ow and quality of information will benefi t facilities management and improve the accuracy of estimates to help deliver projects on time and, importantly, on budget.

Lukasz Rarowski (student member), Idess Retail

Cassandra Francis FRICS, Kariatid

CommercialUK LEADS ONLINE RETAIL MARKETThe UK is the world’s most developed online retail market, according to Cushman & Wakefi eld’s inaugural Global Perspective on Retail report. The report examined online retailing in more than 100 countries focusing on 13 indicators, and placed the UK just ahead of the US due to its high volume of online sales per capita, large online market share and openness to new online business, and social media. However, the US is still the largest online retail market, representing almost a third of global sales. The report also notes that the rise of mobile commerce could shift the balance of future retail power in favor of emerging markets where mobile penetration is higher. Download the report at bit.ly/CW_Retail.

ConstructionDUBAI’S LATEST SUPERLATIVEThe world’s tallest twisting tower has been unveiled in Dubai. Developed by Saudi Arabia-based Cayan Investment & Development, the 306m-high Cayan Tower (formerly the Infi nity Tower) features an astonishing 90-degree shift of its fl oorplates between the base and top, designed by architects Skidmore, Owings and Merrill (SOM). To achieve the twist, and create the shape of a helix, each fl oor of the reinforced concrete tower is rotated by 1.2 degrees to achieve the full 90-degree spiral. The project initially began in 2006, but was put on hold due to technical problems and the impact of the 2008 economic downturn. More than 80% of the tower’s 490 residential units have already been sold.

PREDICTED SKYSCRAPER GROWTH IN CHINA

China US

Sour

ce: M

otia

nCity

2012 2017 2022

470533 539

802

563

1,318


08 r ics.org

Property NY IS NEARLY WORLD’S MOST EXPENSIVE CITYNew York is the second most expensive city in the world to rent business and residential space for employees, according to research from Savills. In its World Cities Review 2013, the fi rm found Hong Kong to be the world’s most expensive city for businesses to locate to, while New York rose from being the fi fth most expensive city at the beginning of 2010 to the second by June 2013, having seen total costs rise 36% since the end of 2009. In its ‘total costs’ measure, Savills took into account the costs of accommodating core international business units in both prime fi nancial and secondary ‘creative’ locations, plus the associated residential rental requirements of 14 households. View the report at bit.ly/WorldCities.

The strong appeal of investing in emerging equity markets is pretty well established, with the sector

delivering signifi cant outperformance over developed markets through the course of most of the last decade. However, more recently there have been some signs that this trend is not just running out of steam, but could actually be going into reverse.

In the fi rst six and a half months of this year, while the MSCI World Index has risen by around 16%, the MSCI Emerging Markets Index has actually declined by 5%. Moreover, this divergence in performance is just as marked in the area of property equity, with the MSCI World Real Estate Index climbing 7% over the same period as against a drop in the MSCI Emerging Real Estate Index of some 9%.

For the time being, the results we are receiving from members who contribute to the RICS Global Commercial Property Survey suggest that the appeal of physical real estate in much of the developing world is still proving rather more resilient. Even so, it’s noteworthy that over the past few quarters, there has been a shift in the RICS data rankings that’s consistent with the general feeling that some developed property markets are regaining popularity among investors at the expense of a number of emerging markets.

It’s also interesting that all of this has coincided with a small but perceptible change in macro fundamentals. Most emerging economies are still on course to comfortably beat the developed world when it comes to growth over the next couple of years, but the gap between the two blocs is clearly narrowing – the differential is now around 1% less than a month ago.

Ultimately, this may prove to be little more than a temporary pause within the longer-term secular trend favoring the emerging world, but even if that turns out to be the case, my suspicion is that it will be hard to replicate the returns this area generated during the ‘noughties’.

In the immediate future, it’s not simply country-specific issues that will hit emerging market performance – although China’s need to grapple with excessively rapid credit growth, and Brazil and India’s battles against infl ation, will inevitably take their toll. However, a more fundamental contrast with the last decade will be the benefi t reaped by emerging economies from the decline in real interest rates in the US during that time. This effectively contributed not just to lower fi nancing costs, but also easier fi nancial conditions in virtually all parts of the globe.

We are now moving into a new era. While the US Treasury market may have jumped the gun on the Federal Reserve calling time on the quantitative easing program – following chairman Ben Bernanke’s talk of ‘tapering’ – the direction of travel over the next few years is clear. The process of ‘normalizing’ monetary policy will start at some point, and that, if nothing else, will make it just that bit tougher for the emerging world to maintain its stellar growth.

Simon Rubinsohn, RICS Chief Economist

Intelligence //

12 r ics.org

Column

TABLES TURN FOR EMERGING MARKETS

App of the month

SUN SURVEYOR LITEWhat is it? A free smartphone or tablet app that predicts and visualizes the sun’s position throughout the day.Who’s it aimed at? Anyone from architects and real estate professionals to fi lmmakers or photographers who need to know the exact location of the sun at a certain time of day. It would be particularly useful for deciding the optimal positions for solar panels, or calculating the direction of sunlight or shadows cast on buildings.

Search ‘Sun Surveyor Lite’ on your device’s app store.

One World Trade Center, New York


01.11 // MODUS 09Q4.13 // MODUS AMERICAS 13

Construction RACE CIRCUIT REVAMPGleeds has been appointed cost manager on the £260m (US$420m) redevelopment of one of the world’s most famous motor racing circuits, the Daytona International Speedway in Florida. The consultant will be responsible for delivering the biggest overhaul of the venue in its 54-year history, including extending the grandstand area with 101,000 new seats and creating 60 new suites for corporate entertaining. New concourse areas will also be designed to encourage fans to socialize during events without missing any on-track action. The project is expected to complete in January 2016, in time for the 58th DAYTONA 500.

BOOKS We like

TERMITE HOMESWhy termites?Researchers at Nottingham Trent University’s School of Architecture, Design and the Built Environment are investigating how termite mounds’ walls ‘breathe’. A termite mound has a unique structure that helps the exchange of stale and fresh air, while maintaining a comfortable temperature inside – the only known animal habitat that’s able to do this. Can this be applied to buildings?The three-year project will seek ways to create buildings with walls that breathe in the same way, therefore reducing the need for energy-hungry central heating or air-conditioning. Dr Rupert Soar, an expert in sustainable technologies and biomimetrics at the university, will travel to India and Namibia to analyze termite mounds and digitally scan them to create models using 3D printing. ‘Current construction thinking is to super-insulate buildings and seal them up, separating us from the outside,’ he says. ‘This saves energy, but it leads to the accumulation of stale and damp air inside. In nature, walls are permeable to allow the passage of gases, while retaining the temperature and moisture inside. We believe that termite mounds use the complex energy in turbulent wind to allow their buildings to breathe.’

ntu.ac.uk/adbe

Industrial3D PRINTING TO KICK-START PROPERTY MARKET3D printing will transform certain parts of the manufacturing industry, increasing opportunities for real estate developers and investors, says a report by Jones Lang LaSalle (JLL). The report, The evolution of manufacturing, notes that, although it’s still developing, 3D printing has the long-term potential to radically change how and where manufacturing takes place, the types of facilities required, and the make-up of the workforce. ‘Instead of large factories, it will create demand for more smaller buildings, which companies would be more likely to lease than own. This will open up opportunities for developers and investors,’ said Jon Sleeman, director of EMEA Logistics & Industrial Research at JLL.

RedEye’s industrial 3D

printing factory

LandIS THE US FARMLAND BUBBLE ABOUT TO BURST?Land values are rising very strongly in some parts of the US, with some commentators warning that a farmland values ‘bubble’ may be set to burst. According to data from the United States Department of Agriculture (USDA), in North Dakota, cropland values rose by 41.5% between 2012 and 2013 to US$1,910 per acre. Meanwhile in Iowa, which has the highest land prices outside New Jersey and California, values rose by almost 18% to $US8,600 per acre. The USDA says prices have jumped 112% over the past fi ve years. By comparison, the average land price growth over the same period in England was 26%, according to Knight Frank.

This 31st edition of the price book contains a major works and a minor works volume, and is still the best pricing information available.rics.org/shop: 19652£165.99 (US$264)

This new edition is essential for anyone advising landlords or tenants on the costs of complying with Schedules of Dilapidations.rics.org/shop: 19682£202 (US$322)

This book describes the important lessons that architects and city planners can learn from temporary users. ISBN: 978-3869222615 RRP £32 (US$51)

Through a range of case studies, this book explores the growing interest in temporary and pop-up uses for land and buildings.ISBN: 978-0415670562 RRP £30.99 (US$49)


08 r ics.org

Greening BrazilTo help drive greater sustainability in Brazil’s construction industry, the Building Research Establishment (BRE) has partnered with the Brazilian National Service of Industrial Learning (SENAI). BRE will also create a bespoke version of BREEAM for SENAI to use on its program to construct innovation institutes across Brazil.

Focus on 2025According to a report from Global Construction Perspectives and Oxford Economics, construction will grow by more than 70% to become a US$15tn market by 2025. India, China, and the US will account for 60% of this growth, while Western Europe is predicted to shrink by 5% against the pre-recession peak of 2007.

New horizonsTogether with its North American joint venture partner VVA, Sweett Group has opened an offi ce in Los Angeles – its fi rst on the US west coast. Meanwhile, McBains Cooper has expanded its Latin America profi le with the opening of its fi rst offi ce in Bogotá, Colombia.

Speed checkIn New York, a new certifi cation system has been launched to rate broadband connectivity in offi ce buildings. More than 150 buildings have already been included in the WiredNYC program, which aims to boost the uptake of broadband technologies. The rating will also help landlords to better market broadband connectivity as a building asset.

LATEST NEWS

14 r ics.org

Opinion

WE NEED FRESH PERSPECTIVES ON REAL ESTATE CHALLENGESJohn O’Bryan FRICS CBRE Canada

This May 4-6, RICS will host the second Summit of the Americas in Toronto, Canada – an event that will attract the

senior tier of professionals from across the real estate, construction, and property sectors in the Americas. I agreed to chair the RICS Toronto 2014 Steering Committee because I could see that this event has the potential to offer a platform for genuine cross-pollination of best practices – both national and international – across the full spectrum of related sectors. This is also why we decided to call the summit a ‘crossroads conference’.

At the summit, we plan to avoid rehearsed discussions about similar issues, and instead offer genuinely fresh perspectives on subjects that cross disciplines and locations. In many cases, delegates will be hearing from internationally signifi cant investors, clients, regulators, and industry experts, and will be able to engage with the sessions, which are designed to be as interactive as possible.

From my own personal experience, I always found the best events were those where I’ve gained insight and knowledge, rather than just

information. So it is with this objective in mind that we have designed our program. Every one of the different sessions on the event days, along with the Personal Property and Business Valuation day on the May 7, are united by a common theme. While perhaps the two themes running across RICS’ membership are value and measurement, I also like to think that every discipline relates to the investment, increase, and management of capital. For this reason, we were careful to begin the summit with a keynote session where delegates will hear from well-known fi gures at the top of the investment chain. There’s no doubt that the summit marks a milestone in RICS’ growth in the Americas, and I am confident that it will be an ideal forum for property professionals from across North America and beyond to network, learn, and do business. I very much look forward to seeing you in Toronto.

JOHN O’BRYAN FRICS is chairman of CBRE Canada, and Chair of the RICS Summit of the Americas 2014 Steering Committee.

One thing I know...

BUSINESS MOVES RAPIDLY IN CHINAKim Berry MRICS MD Asia Pacifi c, Sweett Group China‘China is still moving at breakneck speed towards becoming the world’s dominant economic superpower – and that process brings a whirlwind of change in its wake. The pace of progress is rapid and relentless, and the goalposts are always moving, which takes some getting used to.’

What’s your business tip? Email [email protected]

FIGHTING TALK: CONSTRUCTION DISPUTE LENGTHS AND VALUES

Middle East Asia US UK

Dispute values (US$ millions) Length of dispute (months)

Source: EC Harris’ Global Construction Disputes Report 2013

2010 20110

40

80

60

20

120

100

2012 2010 20116

9

12

15

2012



Expose your company to thousands of senior professionals in real estate, construction, valuation and associated industries across the Americas

Infl uence top industry decision-makersPublished four times a year and mailed to a regional audience of more than 3,000 professionals across North America, the Caribbean and Latin America, Modus Americas edition is the regional magazine of the Royal Institution of Chartered Surveyors, delivering unrivaled RICS and industry news, features, analysis and interviews.

For more information about Modus Americas edition advertising opportunities and to download an advertising pack, email Sarah Harrell, Communications Manager, RICS Americas at [email protected] or call +1 (202) 775-6936.

05.13 //

MODUS 05.13 // RICS.ORG /M

ODUS

THE CARBON

ISSUE

FUTURE-PROOFED Christchurch’s new, more resilient city p14

CATCH THE WIND Carbon capture and storage dissected p24

TIMES CHANGE The expertise you need to keep ahead p36

BRICKS:

0.24kg CO2e/kg

STEEL:

1.46kg CO2e/kg

CEMENT:

0.74kg CO2e/kg

ALUMINIUM:

9.16kg CO2e/kg

COPPER:

2.71kg CO2e/kg

WHAT’S THE

EMBODIED CARBON

IN OUR BUILT

ENVIRONMENT?Page 32

Christchurch’s new, more resilient city

Carbon capture and storage dissected

The expertise you need to keep ahead

COPPER:

2.71

SOCIAL NETWORK Growing your business on and offline p14GLOBAL GATEWAY The growing number of airport cities p30 PEOPLE POWER Crowd funding projects in the community p38

MOD

US 08.12 // R

ICSAMERICAS.O

RG/MODUS

THE CO

MM

UN

ICATION

ISSUE

08.12 //

2.71kg COPPER:

2.71kg CO2

OUT OF OFFICE Ready for the virtual working revolution? p22

UP TO DATA How to get ahead in the data centres sector p28

WATER WAYS The great leap forward in flood modelling p36

MODUS 12.12 // 01.13 RICS.ORG/M

ODUS

THE VIRTUAL ISSU

E

02.13 //

THE VIRTUAL ISSUE

Advertise in Modus magazine Americas edition


16 rics.org

here comes

chinawelcome to a country like no other. from asset bubbles to a lack of expertise, what are the consequences of becoming the fastest- growing major economy for china and for the rest of the world?

Where next for the housing ‘bubble’?despite calming measures, prices are still rising in china’s cities

In the wake of government measures to calm China’s roaring housing market in March – which saw increases in minimum

down payments and bans on single-person households buying a second home – property prices in Beijing and Guangzhou jumped again at a rate equivalent to 20-30% a year. In Shanghai, the pace of construction has been so hot that at the end of 2012, developers were left with record levels of unsold residential inventory. And in the first three months of this year, prices in the luxury market are still inching up. However, in common with the rest of China, Shanghai’s residential market is turbulent, and average prices within the inner ring road fell 12%.

This is a housing market like nowhere else: fueled by the rapidly expanding wealth of the world’s most populous nation, shaped by one of the fastest ever migrations from the countryside to the city, and now reined in by a government anxious to avoid public anger at unaffordable prices. But the question for investors and agents is this: is China sitting on a housing bubble and, if so, has Beijing acted too late to stop it from bursting?

In less than two years, from the beginning of 2009 to September 2011, average residential property prices rose 90% in China’s 20 biggest cities, including Beijing, Shanghai, Shenzhen,

and Chongqing. ‘House-price inflation started around 2003, driven partly by individuals lacking any other place to put their money,’ says James Macdonald, head of research at Savills China. ‘Investment options in China were limited and it was hard to take money off shore, so most people parked their wealth in property and, by the mid-2000s, many investors were buying multiple properties.’

As homes became at risk of becoming unaffordable for the masses, the then Chinese premier, Wen Jiabao, imposed sales taxes and applied greater levies to luxury homes. There were also limits on the number of properties a single household could own, causing some determined couples to divorce and officially create two households to circumvent the law. Over the past couple of years, the measures have impacted volumes and cooled price growth, although prices did not correct significantly. However, construction slowed in some areas and transaction volumes fell, leaving developers with increasing unsold inventory, according to Macdonald.

By the first quarter of 2012, there were signs that levers pulled by the Chinese leadership were working and some steam was coming out of the market. A quarter less housing was sold in the 20 biggest cities than over the same period in 2011, but price inflation was harder to shift. ‘The fundamentals are strong, with demand driven by migration to the cities, but the problem is that the government is under pressure to clamp down on price growth because of the political issue of affordability,’ says Liam Bailey, head of residential research at Knight Frank. ‘The calming measures have dampened speculative buying, but there is still

strong growth in prices in Shanghai and Beijing, fueled by growing debt – but it’s still way behind Western levels of mortgage debt.’

In March this year, Beijing announced a 20% capital gains tax on profits from the sale of homes. The tax has always existed but was rarely enforced, as it required sellers to volunteer their original purchase documents, making avoidance easy. The idea now is to rely on official sales registers maintained in the biggest cities, which created a flurry of panic transactions as owners sought to trade before the rule kicked in. Beijing sales almost tripled in March (year on year) – an indication of the volatility in Chinese markets that can be precipitated by government intervention.

However, there is uncertainty over how far this tax will be enforced, commented Frank Chen, head of research in China for CBRE. ‘The other measure that’s likely to have an impact is differentiated mortgage loans,’ he adds, ‘where down payment and the rate for a second-home mortgage are expected to increase further to curb investment.’

But there is a view that, in a housing market driven by such huge amounts of capital from China’s burgeoning middle class, the only way to avoid boom and bust is to give people somewhere else to put their money. Investing overseas and in other products – such as private equity and venture capital funds – should be encouraged, says Macdonald. ‘You want to gently release the pressure from the market, but it will take a number of years for the alternative avenues for China’s wealth to open up,’ he adds. ‘It’s happening slowly, but they are heading in the right direction.’Robert Booth

photography by Alexander gronsky/institute

MODUS_US_Q4_13_P16-23_China_v2.indd 16 04/11/2013 14:21


China’s growth //


China’s growth //

18 r ics.org



The rise and rise of commercial properTyIS an overSupply of offIce and retaIl Space a greater concern?

Hardly a week goes by without some mention of China’s residential property bubble. But while the

housing market and the headlines froth, should professionals be more worried about the commercial property market? The latest figures suggest they should: in the first three months of this year, residential investment grew 22%, while commercial property grew 26%. A year ago, in Q1 2012, the disparity was even greater: investment in office buildings and retail properties grew by 43.4% and 34.2% respectively, compared with 19% in the residential sector.

Much of the investment is in second-tier cities, such as Tianjin, Shenyang, and Chengdu, and is largely driven by a planned approach to city building, rather than market forces. For these provincial capitals, the result is oversupply and bad prospects for rents – in the short term at least. ‘In cities where there’s a lot of new supply coming on at the same time, we are going to have a couple of years of higher structural vacancy and downward pressure on rents,’ says Chris Brooke FRICS, chairman and CEO at CBRE China, and chairman of the RICS Asia board. Anecdotal evidence paints a starker picture. Gillem Tulloch, founder and director at Forensic Asia, says that as soon as you get out of the prime locations, you find there are vast quantities of unused commercial space. ‘In some cities – even those as big as Chongqing – they’ve started boarding up the commercial space, and converting it back to residential where they can,’ she adds.

Despite these poor prospects for occupancy, demand is being driven on several fronts. There are international investors looking to build for the long-term hold, as well as domestic insurance companies buying real estate for on-block investment purposes. What’s more, Chinese domestic investors that historically focused on residential are now buying commercial assets to reduce their residential investment risk. ‘A number of major developers have got 10 to 15 projects going on around the country that are all commercial, and that they’re looking to hold long-term,’ explains Brooke. This overcapacity is creating a ‘timing mismatch’, he adds, ‘because the product will be there but it won’t be fully utilized until the medium term’.

The final demand driver is the inexorable march of Chinese credit growth. Tulloch puts this at between 37% and 45% of GDP since 2009, and says that this, combined with a period of five to 10 years where interest rates

have been kept artificially low, and the fact that it’s difficult to get money out of China, has resulted in bubbles in almost every asset class – whether it’s pigs, tulip bulbs, or diamonds. The biggest bubble of all, though, is in commercial property: realizing the tax revenue benefits of commercial space, local governments are now making sure there’s some form of retail and office space in almost every residential complex that’s being built.

In China’s primary cities, there’s less cause for alarm. Prime office space is still being absorbed relatively quickly in Beijing, and rates are continuing to increase. Despite China’s economic growth hitting a three-year low of 7.6% in 2012, Brooke says that the Beijing market has remained particularly strong because of a shortage of supply and expanded demand, as many companies in the capital are focused on industries benefiting from the drive for domestic consumption, such as automotive, pharmaceuticals, financial services, and IT.

In Shanghai, where companies are strongly linked to manufacturing and exports, there has been a softening of demand from

multinationals over the past two quarters as a result of economic woes abroad in Europe and the US. However, domestic Chinese demand remains strong and initial yields for office space are down to 4-5% – although they could drop further, according to Jack Measom MRICS, assistant manager in commercial services for Knight Frank China, who believes the office market will see a supply boom in late 2014 and 2015 with buildings such as Shanghai Tower in Pudong coming online. ‘Around a million square meters of Grade A office space will arrive on the market in the space of 12 months, which will inevitably put downward pressure on rents, and swing the market more in an occupier’s favor,’ he says.

More worrying, though, is the growing trend for cash-strapped developers to sell prime buildings by the floor, rather than the entire lot, which points to a lack of depth in rental demand. ‘It’s not uncommon for buildings in Shanghai, even some of the prime investment buildings – such as The Exchange Soho – to be increasingly strata-title owned by developers selling off floors,’ says Measom. ‘While helping the developer’s cash flow in the short-term, it has a strong impact on the appetite from tenants to occupy space in buildings with strata landlords.’

So what’s the overall outlook? Commercial property investors will need to be financed well enough to ride out a choppy short-term market, particularly in China’s second- and third-tier cities. ‘I don’t think it’s a situation where capacity is being built that will never be occupied,’ says Brooke. ‘But, in some of the markets where there’s significant short-term supply or oversupply, you need to have a long-term view – an eight-to-10-year scenario – to make money.’George Bull

in some ciTies, They’ve sTarTed boarding up commercial space and converTing iT back To residenTial

Professional’s view

‘China can’t meet the demand for qualified people’

andrew chan mrics DIRECtOR AnD gEnERAl MAnAgER, lAngDOn & SEAh (BEIjIng)

‘When I first arrived in China from hong Kong to open our Beijing office 19 years ago, there was no such thing as quantity surveying in China. At that time, most of the building work was done under the planned economy system, so they didn’t need cost control experts – but slowly private investors and projects appeared. the problem now, and over the past few years, is that the industry is expanding so fast that China’s universities, developers, and companies can’t meet the demand for qualified people, and quality has suffered in the past decade as a result.

‘however, there is huge job satisfaction in being able to see the impact we’ve had on the development of the industry. What’s more, world-famous architects, such as OMA and Zaha hadid, have projects in China, so we can be involved with projects and people that we just wouldn’t be able to anywhere else in the world. And, if you look at the gDP – 7-8% growth each year – and the rapid urbanization in China, it’s clear that there will be a huge demand for all types of construction and industry jobs for years to come.’


overseas investmenta financial exodus is seeing chinese companies increasingly looking to invest in the west

In an attempt to avoid a scenario like Japan’s ‘lost decade’, the Chinese government has been introducing dramatic measures to

cool its overheated domestic property market. As a result, over the past 18 months, Chinese property developers and investors have started to look overseas for opportunities – and the scale of the financial exodus has been eye-watering. A decade ago, just 2% of all Chinese capital invested in real estate was going overseas. Last year, this figure stood at 26%, according to Jones Lang LaSalle – and in 2012 alone, money flowing out of China into direct real estate investment overseas reached US$4bn – 33% higher than in 2011.

The trend has continued in the first quarter of 2013, with Chinese investors allocating US$1bn to overseas real estate projects. In fact, David Green-Morgan, research director of global capital markets at Jones Lang LaSalle, expects it to continue for the next 20 years: ‘We think that Chinese investment into overseas markets could reach US$5bn this year, which is a 20% increase on 2012 levels,’ he says. ‘Over the past few years, we’ve seen a global rebalancing towards real estate as an investment asset class. Concurrently, we’ve witnessed a rise in savings rates among the BRICS group, providing insurance and pension funds with increased access to capital. We believe this will transform the commercial property investment market to such an extent that it will be a US$1tn market by 2030.’

According to Jones Lang LaSalle’s research, Chinese developers at the moment are

targeting super-prime assets – particularly residential and hotel developments – in ‘super cities’, such as New York, London, Paris, Tokyo, and Hong Kong. But investment isn’t being made in these areas just because they are high-profile global metropolises, says Frank Chen, head of research at CBRE in China: ‘Our research, which is still ongoing, found that the popular destinations of outbound investment for individual Chinese investors overlaps the premier destinations for immigration and study abroad.’

It’s a view supported by Shaun Brodie MRICS, head of China strategy research at DTZ. ‘Some Chinese residential developer investment is following the flow of affluent Chinese money pouring into cities that already have a significant Chinese population,’ he says. ‘Whereas other investment money is flowing into these city markets because of strategic partnerships already formed between a Chinese developer and an overseas developer that’s already active in the China market.’ An example of a relationship between companies driving investment is China Vanke’s recent deal to acquire a 30% stake in Keppel Land’s Sherwood Development residential project in Singapore. But it’s not alone: last year, Chinese developer Xinyuan Real Estate secured a deal to develop a prominent waterfront site in New York. And this year, Shanghai-based property developer Greenland Group announced plans in March to invest US$498m in a property project in Sydney, Australia, and in May, Chinese developer Advanced Business Park struck a deal with UK project partner Stanhope to develop a mixed-use site near London City airport.

But this is not just about Chinese developers identifying opportunities to spread their wings overseas, says Chen. ‘These Chinese giants seek to learn about development, asset

management, retail etc – and then bring back know-how to China. Through a joint venture or acquisition with mature players in the world, they can surely shorten their learning curve and transfer the knowledge from overseas trials to their home market.’

They are going to need this sort of expertise if their overseas forays are to be successful, says Brodie, because as Chinese developers step up their international investment activity, they will face increasing competition from local market developers who are also looking to attract Chinese buyers. ‘Chinese buyers, like many buyers, are very interested in the quality of the finished product, and they will be able to see which of the local developers has a strong track record in delivering best-in-class projects in a particular overseas market,’ Brodie explains. ‘As such, Chinese developers will have to produce outstanding products in that market from the get-go if they wish to largely rely on the pool of Chinese buyers.’

To date, Chinese developers have relied heavily on funds from Chinese buyers struggling to invest in their homeland due to the government restrictions. However, it’s anticipated that Chinese property developers will have to change this strategy going forward, providing an opportunity for local professionals to cash in. But, says Brodie, when it comes to Chinese developers, the main point for professionals to bear in mind is the business relationship track record – the strength of the trust between the professional and a developer/investor, and the strength of delivery track record of service from the professional to the developer/investor.’ If they are able to build these sorts of business relationships, it looks like there might be a major opportunity for professionals around the globe to pinch a slice of this projected US$1tn cake.Simon Creasey

20 r ics.org

China’s growth //


Log-in to your RICS account at rics.org/cpdrecord to start recording your hours. Use your standard member log-in information and make sure to favorite the page for easy access.

Is your CPD record still blank?

MODUS_US_Q4_13_P21_CPD ad (blank).indd 52 06/11/2013 10:54

22 r ics.org

China’s growth //



Infrastructure: the new frontIerchina’s new five-year plan shifts the focus to development

China is not short on infrastructure: it has the world’s longest high-speed rail network, 70% of all toll roads on the

planet, and Shanghai is home to the world’s busiest container port, according to KPMG. But, to meet the demands of a nation where 100 cities have a population of more than a million, much more infrastructure is needed.

In 2011, at the same time as introducing a series of measures to slow down the property market, the Chinese government launched its 12th Five-Year Plan (FYP) to outline key economic and development targets. This FYP takes the emphasis away from property and puts the accelerator firmly down on infrastructure development: ‘The thinking behind the plan is to encourage better quality, longer-term growth,’ explains David Crosthwaite, an economist at Davis Langdon. ‘Whereas non-residential property was leading China’s growth, now infrastructure is playing that role.’

A enormous amount of new infrastructure is planned to meet the targets set by the current FYP. In September 2012, 55 major infrastructure projects were approved, including seven port and channel reconstruction projects, 13 new highways, and 25 rail and intercity transit projects, as well as a variety of water and environmental projects, according to KPMG’s recent Infrastructure in China report. ‘Broadly, the plan aims to bring the West of China up to the more developed level of the Eastern coast,’ says Simon Baxter, partner at EC Harris in China.

To link up China’s cities – which number over 600 – the target is to bring the nation’s total rail track up to 120,000km, and the National Trunk Highway System to 83,000km by 2015. Stephen Ip, China lead partner in government and infrastructure at KPMG, says: ‘More than RMB1tn (US$163bn) is being invested in rail and roads annually, with forecast spending closer to RMB2tn (US$326bn) for some years.’ What’s more, to ease congestion in fast-expanding cities, an estimated 2,100km of metro and light rail track is to be laid, and to facilitate transport between the cities, 50 new airports will be built between 2011 and 2015 – bringing China’s total up to 230 airports.

With China the world’s largest emitter of carbon, in the power sector, the emphasis under the current FYP has shifted away from coal – China’s main source of power – to renewable energy. The nuclear new-build program is now back at full throttle after a pause in 2012, following the Fukushima disaster, with 100 new plants planned. And extensive development of hydro, wind, solar, and biomass power is also in the pipeline.

But plans to develop renewable energy may falter: ‘There’s a lot of work to do in putting the legal framework in place,’ says Baxter. He

adds that, at present, the lack of clarity on the legal framework and energy tariffs means that clients are unwilling to invest in renewables.

However, all this planned construction doesn’t fit comfortably with the government’s ambition to be greener. ‘It’ll be interesting to see how the government tackles sustainability,’ says Crosthwaite. ‘For one, some would question how sustainable nuclear power is,’ he adds. Procurement for all projects will be another challenge, adds Kim Berry MRICS, managing director for Asia Pacific at Sweett Group: ‘The fast pace of infrastructure development in China dictates that projects often don’t have the rigour in capital efficiency seen in most developed countries.’ This leads to inefficiencies, she says, which will prove an increasing headache if it’s not addressed.

Interestingly, the infrastructure push will boost the property market, according to Berry, as office, retail, and residential development is enabled by the new infrastructure. In addition, China’s burgeoning middle class – Ernst and Young forecasts that 500m Chinese will enter the middle class this decade – will likely spark a residential property boom at the start of the 2020s. ‘By this stage, property will probably take over from infrastructure in terms of the pace of growth, although infrastructure will remain the larger market in terms of volume of construction,’ says Crosthwaite.

So despite some challenges, infrastructure development is set to plough ahead. For RICS members, the challenges mean that China is increasingly opening up to foreign participation: ‘A key problem is the lack of expertise in design, engineering, and project management,’ explains Crosthwaite. ‘While this could put a break on growth, it also means that there are significant opportunities for foreign firms.’ Roxane McMeeken

50 new aIrports wIll be buIlt – brIngIng chIna’s total up to 230 aIrports by 2015

Professional’s view

‘The Chinese are grateful to receive advice from RICS professionals’

allan Knapp MrIcs pARtnER At ChARlES AllAn ASSOCIAtES

‘I’ve been based in Shanghai for just over two years, working with Chinese clients with a real estate investment appetite for

the UK and European markets. While the property market, as a whole, is arguably one of the largest and most important sectors in China, there is a lack of trust in professional third-party advisers. Being a foreigner often helps, but there’s the complication of the language and cultural barriers. however, once relationships have been built, the Chinese are loyal people and very grateful to receive honest advice from RICS professionals.

‘A Chinese property fund asked us to assist in their investment strategy for a

specific European country. this included arranging meetings with key personnel from six pan-European banks at short notice on the basis of a handshake agreement. however, the investors honored their commitments, and now the trust has been gained, the potential investment volumes total hundreds of millions of euros. In my experience, there are few UK or European clients with this type of investment firepower who do not already have retained advisers in their preferred target markets. Our niche firm, therefore, has been

able to benefit from being present in China’s maturing market, where the desire to invest overseas in all asset classes is growing rapidly – whether from individuals, institutional investors or government-owned bodies.

‘the business opportunities in China are huge, but so are the barriers to entry. the key is to recognize that it will take more time than in some other jurisdictions to gain momentum. But, providing you come with realistic expectations and enjoy the experience, China is a unique and fascinating place to be.’


24 r ics.org

Shipping containers //

Opened in 2011, BOXPARK pop-up mall brings more than

60 carefully chosen brands to derelict land in Shoreditch, east London, each housed in a refitted shipping container

MODUS_US_Q4_13_P24-29_Ship containers_v2.indd 24 04/11/2013 14:27

Out thebOx

Of


AffordAble, mobile And prActicAlly indestructible, shipping contAiners Are increAsingly being put to use on dry lAnd As stores, offices And eVen homes. AmAndA Birch inVestigAtes this promising property trend

‘My first reaction was…what?! The idea of converting a shipping container into a home

seemed crazy,’ says Andy Winter, chief executive of the Brighton Housing Trust (BHT). But it took him only 10 minutes to be convinced of the concept’s potential.

Located between the sea and the South Downs, there is little room for Brighton to expand much further, and the UK city is experiencing an acute shortage of affordable housing. BHT works with around 12,000 people a year who, as well as battling other issues such as drug or alcohol abuse, are all in need of accommodation. By installing 36 converted shipping containers at Richardson’s Yard to provide temporary housing for Brighton’s homeless men and women, important spaces will be freed up in BHT’s services, enabling more people to get off the streets. Winter says that those who use BHT’s services particularly liked the self-contained nature of the units, which feature their own shower, toilet, and >>


kitchen: ‘For people who have experienced an unsettled way of life and have lived on the streets, having your own facilities and your own front door is very important.’

The joint venture between BHT and development partner QED Property has been granted five years’ temporary planning permission, as the site is earmarked for long- term redevelopment. The tenants will live in the units for between six months and two years. During that time, the accommodation will be monitored closely for such things as soundproofing and heating costs, and after five years, the homes will be transported to another vacant site.

But QED is by no means the only company to realize the unique potential of container conversions. Transforming the corten steel boxes typically seen stacked 10-high on huge container ships into usable spaces for commercial and residential projects abound across the world, ranging from offices and pop-up stores to bird hides and schools. Some architects have produced quirky one-off pieces by cutting openings in the container walls and reconfiguring them, and elsewhere, containers have been used in conjunction with other building materials to create strong, cheap, and unique spaces.

According to Drewry Maritime Research, there are more than 21m shipping containers worldwide. And with the slump in global

Right and below: Container City II, the second phase of the original project at

London’s Trinity Buoy Wharf, and the 24 containers that

comprise LOT-EK’s PUMA City, a transportable retail and event building, which was assembled at several

different international ports

26 r ics.org


shipping trade during the recession, an increasing number of containers are now collecting in ports, resulting in many being recycled. This glut means that they are also relatively cheap, with 40-foot (12.9m) units costing around US$5,000, depending on their condition. But these are not the only benefits of the humble shipping container: they are also very mobile, and can be easily lifted on to a truck and relocated to another site, making them suitable for a multitude of temporary uses, such as emergency shelters, pop-up shopping malls and mobile art galleries. Since Hurricane Katrina in 2005, emergency container shelters are being used increasingly in the US and elsewhere to house victims of natural disasters. ‘The main reason for their growing popularity in this field is their ability to be shipped virtually anywhere in the world,’ says Caitlin Clark, of Auburn University in Alabama, who has written a thesis on using shipping containers for

student housing. ‘In most cases, the interiors of containers are fitted out using traditional construction methods, and shipped with the windows and doors loose inside. Once the containers arrive on site, the windows and doors are punched in and installed.’

The mobility, low cost, and rapid off-site fabrication of shipping containers were the main reasons why Quinten de Gooijer, CEO of Tempohousing, used them to provide a quick housing solution for 1,000 students near Amsterdam. Keetwonen is believed to be the biggest ‘container city’ in the world and, according to de Gooijer, has been such a success that there is now a waiting list. Planning permission for the complex has been extended to 2020.

Development consultant Urban Space Management pioneered an even more usable space by joining two containers together when they built the groundbreaking Container City in London’s Docklands. The company has subsequently carved out a successful business niche and developed more than 60 other container projects, including marketing suites, a sports hall for south London’s Dunraven School, and a traveling theater called the Electric Hotel. They also designed the temporary BBC television studios for the London 2012 Olympics, the ‘Big Blue’, which was made from 114 shipping containers painted >>

Below: Richardson’s Yard in Brighton, a temporary housing project that will use 36 refitted containers to create self-contained unitsTop left: Completed in 2010, LOT-EK’s APAP OpenSchool, an art school and exhibition space in South Korea, is made from eight containers cut along a 45-degree angle and raised 3m above ground

Above: The modular design of ECOntainer Bridge, by Israeli architects Yoav Messer, allows for total flexibility and means that much of the construction work can be done off-site, minimizing disruption. The bridge will connect Arial Sharon Park near Tel Aviv to its car-parking areas



Imag

es S

ergi

o Pi

rron

e; K

im M

yung

-Sik


bright blue and stacked nine storeys high. ‘To make a 16ft-wide (4.9m) space, we join two containers and remove the adjoining walls,’ explains John Burton MRICS, project manager at Urban Space Management. ‘Then we use columns at certain distances to stop the roof from bowing. If you start cutting along the length of a container to make it shorter in order to fit into a plot, you’re cutting into the structural integrity and spending a lot of money cutting and then re-welding it. Containers are really good when you’re clever about the engineering and don’t reduce the length.’ Burton adds that, overall, the advantages of converting containers far outweigh the disadvantages. If building costs are quite high, he says,

there’s an immediate benefit as labor costs are much lower and shipping containers don’t require deep, complex foundations.

What’s more, the finished product is usually starkly different from the original metal box. ‘It feels just like a normal office,’ says Glenn Payne MRICS, associate director of construction consultancy ig9, which rents studio space in the Riverside Building on Trinity Buoy Wharf, part of Container City. ‘The internal partitions have been removed so we have the width of three containers, and you don’t feel confined at all. Before I came here, there seemed to be a stigma towards working in a container environment, but now I think attitudes are changing. If people are willing to go with a less conventional space, and if it suits the needs of the business, why not consider it?’

It seems that more and more people are now considering container conversions, and attitudes are changing. Many now see the robustness, flexibility, and mobility of containers as a real opportunity, and given their availability and recyclability, it’s also a sustainable practice that’s long-lasting and relatively cheap.

:From ship to shoreCustomizing a Container for use on landpop-up placesAs the containers only need a power source to operate, they can literally ‘pop-up’ anywhere, making them ideal for temporary retail outlets and exhibitions. In New Zealand, for example, salvaged shipping containers

were used to create Re:START (pictured top), a bright, funky temporary shopping mall in the city of Christchurch following the devastating 2011 earthquake. Meanwhile, as part of the radical transformation of the 61-year-old Pier 57 on the Hudson River in New York (pictured above), the use of containers will reference the river’s shipping history and the pier’s previous port function. The ambitious program by architects LOT-EK and developer Young Woo & Associates will see the abandoned pier redeveloped into an innovative retail, food, art, and cultural center.

modular constructionAt Portishead Marina in Somerset, 28 shipping containers have been stacked four-high at either end of a traditional concrete frame to house a new pub and restaurant for UK brewery Hall & Woodhouse. The second part of the project, by architects Mackenzie Wheeler, will see a further 108 containers converted into hotel accommodation and stacked on top at a later date, when the funds are available. A few of the containers will be fitted out as they are to be single rooms, while the double rooms will be made from two 20-foot-

long (6.1m) containers welded together to create more space.

strength and durability Shigeru Ban is one architect who has found an entirely new use for the container’s form. His community center (pictured above) for the tsunami-ravaged town of Onagawa in Japan uses shipping containers as robust, disaster-proof outside walls to support the center’s timber roof. They also provide ample storage space. The building is compelling in its simplicity and beauty, and shows what can be done when containers are left intact.

28 r ics.org


Below: re:start temporary shopping mall, new zealand

Bottom: Plans for the dramatic conversion of the abandoned Pier 57 on the Hudson river in new York

Bottom right: onagawa community center, Japan


Risk is a part of any activity, but when millions of dollars of public money are involved, and contracts are being signed for 25 years or more, it takes on a whole new level of importance. Public Private Partnerships (P3) pose particular challenges in terms of risk management. For the public authority, the primary benefi t of a P3 is the ability to transfer the risks of design, construction delays, cost overruns and fi nance to a single project company. But, in most cases, the P3 project company is established as a Special Purpose Vehicle (SPV) – a highly geared ‘empty box’ that has limited capacity to bear risk. So whether your organization or client is a public authority, an investor

in the SPV, or a construction or facilities management subcontractor, appreciating the risk of taking part in a P3 project is crucial, and due diligence and risk evaluation are essential. In a well-designed P3, each risk is identified, allocated and mitigated to ensure the continuity of services and fi nancial viability.

EVALUATING, ALLOCATING AND MITIGATING RISKThe evaluation of market risks includes consideration of future demand for the facility, which will depend, particularly, on whether payments are based on the availability or usage of the facility or infrastructure. For example, for a shadow-tolled road, payments are based – at least in part – on the number of vehicles using a section of road, rather than simply the fact that it is available for use, which might be the case for a new hospital.

For an availability-based P3, analysis of market risks will likely focus on infl ation and fi nancing risk, and technical risks will include faulty building techniques, design and engineering failing to perform as expected and cost escalation during construction. In the construction phase, the main risk is that the actual cost will be higher than the budget on which funding has been based. Also, if completion is delayed, compensation payments may be triggered, the cost of servicing debt will rise and revenues may be deferred or lost. And if the facility is not available, or the services are poor, deductions to the unitary charge may be made.

Project companies must ensure that the key risks associated with project delivery are passed on to subcontractors, as this provides a strong incentive to deliver the construction works on time and on budget.

Also, any reduction in revenues due to lower-than-contracted standards of delivery should result in a fi nancial penalty for the subcontractor – which, ideally, should be suffi cient to fully offset the loss.

Although risks relating to ‘routine’ maintenance can be passed to the maintenance subcontractor, the degree of risk-transfer relating to life-cycle facilities management is lower. This is typically provided on the basis of a cost-plus contract, leaving the risk of unanticipated cost changes with the project company. This risk can be managed through the establishment of a maintenance reserve account, which provides a contingency fund.

PERFORMANCE MANAGEMENTContractual clarity is at the heart of managing the risks associated with availability and service quality. The ideal is a performance management system that secures the public authority’s interests, without imposing unmanageable risks on the project company and its contractors. The performance management framework needs to be supported by a sophisticated information infrastructure, which provides the public authority with a transparent view of the quality of service delivery and an audit trail. Many P3s utilize specifi c service delivery and performance management software to deliver trusted and transparent data management, and to ensure that issues are resolved quickly.

Ultimately, successful partnerships thrive on good information. The different organizations involved in a P3 contract need to understand that successful risk management requires good information fl ow in order to enable risk-sharing, and to foster a culture of trust.

GARY WATKINS is CEO of Service Works Group, providers of P3 operational performance software solutions. swg.com

SUCCESSFUL RISK MANAGEMENT REQUIRES GOOD INFORMATION FLOW TO FOSTER A CULTURE OF TRUST

Ethics advice //

P3: How to

MANAGE THE RISKSBy P3 software expert Gary Watkins

Illus

trat

ion

Borja

Bon

aque



SA 49 ◊ RUSSIA 143 ◊ BRAZIL 201 ◊ INDIA 1,221 ◊ CHINA 1,350

RUSSIA 237INDIA 894BRAZIL 244SA 64CHINA 986

P O P U L A T I O N (millions)

G D P G D P G R O W T H R A T E

O B E S I T YM O B I L E U S E R S

U R B A N & R U R A L P O P U L A T I O N (millions)

(billion US$) (US$)

SA 578BRAZIL 2,362CHINA 12,380INDIA 4,784RUSSIA 2,504

CHINA 9,100SA 11,300INDIA 3,900RUSSIA 17,700BRAZIL 12,000

G D P P E R C A P I T A

502

UR

BAN

RU

RAL

295

782

2002 2011

2002 2011

2002 CHINA

2002

2011

2011 INDIA

CHINA

INDIA

756

691

657

377

833

CHIN

A 7.

8%

IND

IA 6

.5%

BRAZ

IL 1

.3%

T R A N S P O R T

R A I L R O A D S I N O P E R A T I O N H I G H W A Y S

SA362,099

BRAZIL1,736,000

RUSSIA728,000

INDIA3,090,000

CHINA4,193,000

SOUTH AFRICA21,000

RUSSIA 86,000

INDIA 64,000

CHINA 98,000

BRAZIL 29,000

SA 1,219,090 ◊ INDIA 3,287,263 ◊ BRAZIL 8,514,877 ◊ CHINA 9,596,961 ◊ RUSSIA 17,098,242

T O T A L A R E A (km2) I N D U S T R Y & A G R I C U L T U R E

I R O N O R EP R O D U C T I O N

(million tons)

U N E M P L O Y M E N T W H O ’ S V I S I T I N G ?

CHINA 1,309 ◊ BRAZIL 434

ST E E LP R O D U C T I O N

(million tons)

CHINA 717 ◊ INDIA 684

P E T R O L E U MP R O D U C T I O N

(million tons)

CHINA 207 ◊ RUSSIA 517

E L E C T R I C I T YP R O D U C T I O N

(billion Kwh)

CHINA 4,938 ◊ RUSSIA 1,064

PRIMARY ENERGYPRODUCTION(million tons of

oil equivalent - mtoe)


C U LT I VAT E D L A N D

(million hectares)


C E R E A LS P R O D U C T I O N

(million tons)


E N E R G YC O N S U M P T I O N

(mtoe)


W H O ’ S V I S I T I N G ?

SA:ZIMBABWE 1,553,008LESOTHO 1,526,597MOZAMBIQUE 1,076,753

BRAZIL: ARGENTINA 1,593,775USA 594,947ITALY 229,484

RUSSIA:GERMANY 375,285ISRAEL 85,955SPAIN 70,291

INDIA:USA 980,688UK 798,249BANGLADESH 463,543

CHINA:SOUTH KOREA 4,070,000JAPAN 3,518,000RUSSIA 2,426,000

B R A Z I L R U S S I A I N D I A C H I N A S O U T H A F R I C A

(foreign tourist arrivals from, person-times)(km)

RUSS

IA 3

.4%

SA 2

.6%

CHINA 5.7%

INDIA 1.9%

RUSSIA 26.5%

SA 31.3%

BRAZIL 18.8%

SA 2

2.7%

RUSS

IA 5

.7%

IND

IA 9

.9%

CHIN

A 6.

4%

BRAZ

IL 6

.2%

(millions)

30 rics.org

brics by bricsgrowth, population, industry: how does china compare to the world’s other leading emerging economies? illustration by La Tigre

MODUS_US_Q4_13_P30-33_BRICS.indd 30 04/11/2013 14:33







(billion US$) (US$)




502

UR

BAN

RU

RAL

295

782

2002 2011

2002 2011

2002 CHINA

2002

2011

2011 INDIA

CHINA

INDIA

756

691

657

377

833

CHIN

A 7.

8%

IND

IA 6

.5%

BRAZ

IL 1

.3%

T R A N S P O R T


SA362,099

BRAZIL1,736,000

RUSSIA728,000

INDIA3,090,000

CHINA4,193,000

SOUTH AFRICA21,000

RUSSIA 86,000

INDIA 64,000

CHINA 98,000

BRAZIL 29,000




(million tons)




(million tons)



(million tons)



(billion Kwh)






(million hectares)



(million tons)



(mtoe)










RUSS

IA 3

.4%

SA 2

.6%

CHINA 5.7%

INDIA 1.9%

RUSSIA 26.5%

SA 31.3%

BRAZIL 18.8%

SA 2

2.7%

RUSS

IA 5

.7%

IND

IA 9

.9%

CHIN

A 6.

4%

BRAZ

IL 6

.2%

(millions)


BRICS //








(billion US$) (US$)




502

UR

BAN

RU

RAL

295

782

2002 2011

2002 2011

2002 CHINA

2002

2011

2011 INDIA

CHINA

INDIA

756

691

657

377

833

CHIN

A 7.

8%

IND

IA 6

.5%

BRAZ

IL 1

.3%

T R A N S P O R T


SA362,099

BRAZIL1,736,000

RUSSIA728,000

INDIA3,090,000

CHINA4,193,000

SOUTH AFRICA21,000

RUSSIA 86,000

INDIA 64,000

CHINA 98,000

BRAZIL 29,000




(million tons)




(million tons)



(million tons)



(billion Kwh)






(million hectares)



(million tons)



(mtoe)










RUSS

IA 3

.4%

SA 2

.6%

CHINA 5.7%

INDIA 1.9%

RUSSIA 26.5%

SA 31.3%

BRAZIL 18.8%

SA 2

2.7%

RUSS

IA 5

.7%

IND

IA 9

.9%

CHIN

A 6.

4%

BRAZ

IL 6

.2%

(millions)

32 r ics.org

Sour

ces:

cia

.gov

, BRI

CS J

oint

Sta

tistic

al P

ublic

atio

n 20

13








(billion US$) (US$)




502

UR

BAN

RU

RAL

295

782

2002 2011

2002 2011

2002 CHINA

2002

2011

2011 INDIA

CHINA

INDIA

756

691

657

377

833

CHIN

A 7.

8%

IND

IA 6

.5%

BRAZ

IL 1

.3%

T R A N S P O R T


SA362,099

BRAZIL1,736,000

RUSSIA728,000

INDIA3,090,000

CHINA4,193,000

SOUTH AFRICA21,000

RUSSIA 86,000

INDIA 64,000

CHINA 98,000

BRAZIL 29,000




(million tons)




(million tons)



(million tons)



(billion Kwh)






(million hectares)



(million tons)



(mtoe)










RUSS

IA 3

.4%

SA 2

.6%

CHINA 5.7%

INDIA 1.9%

RUSSIA 26.5%

SA 31.3%

BRAZIL 18.8%

SA 2

2.7%

RUSS

IA 5

.7%

IND

IA 9

.9%

CHIN

A 6.

4%

BRAZ

IL 6

.2%

(millions)

BRICS //



MODUS_US_Q4_13_P34-37_FM feature.v4.indd 34 04/11/2013 14:38

Far From simply looking aFter the bills and the bathrooms, Roxane McMeeken

discovers how Facilities managers can help companies maximize their assets

illustration by Leandro Castelao


Facilities management //

Over the past two to three years, facilities management (FM) has begun to emerge worldwide as a critical element of corporate and public sector strategy. ‘FM used to be

seen as just cleaning and maintenance, but now it’s increasingly viewed as a new professional class,’ says Johnny Dunford MRICS, Global Commercial Director at RICS. Encouragingly, the importance of FM is being recognized – at least to some extent – throughout the Americas: ‘There is a groundswell of change in the property industry, as people are realizing that facilities managers are better placed to look at sustainability and efficiency than any other professional group,’ observes Scott McMillan FRICS, who is chief of facilities at the International Monetary Fund in Washington DC. And while architects and engineers have been called upon to make the construction process greener, McMillan points out that it’s facilities managers who look at how to make the building work as efficiently as possible in the long term. ‘Sustainability has become a buzzword recently, but facilities managers have always been looking at how to minimize the consumption of energy and water, and how to manage waste,’ McMillan adds.

In the Americas, the status of FM is being boosted further as more organizations make the link between the

condition of their built assets and the effectiveness of the people and systems they house. For example, fewer power outages in a factory leads to increased output for manufacturers, while a more comfortable working environment might improve staff productivity in a financial services company. The quality of the facility is also being recognized as important for recruiting and retaining employees.

US health insurer SCAN Health Plan demonstrates the approach that some forward-thinking clients are taking to FM. In 2007, the California-based company wanted to attract employees and grow, but without occupying extra real estate. Through an FM strategy, SCAN reduced the space occupied by staff in their office from 250ft2 to 150ft2 by replacing traditional office cubicles with open-plan layouts, and having more staff working from home – 25% now work at home two to three days a week. The project was delivered by a team including Dr James Ware, founder of workplace consultancy The Future of Work… unlimited, as well as architect Urquiza Group and academics. ‘Working from home means that employees collectively drive 450,000 fewer miles per year,’ says Ware, adding that the team also helped SCAN become more sustainable – for example, by reducing paper use by 22 tons per year. >>

The brains behind The

building

MODUS_US_Q4_13_P34-37_FM feature.v4.F1.indd 35 06/11/2013 10:55

36 r ics.org

Facilities management //

But even within Brazil, FM varies, he adds, with Rio de Janeiro and São Paulo providing a more sophisticated service than elsewhere in the country.’ Meanwhile, FM is being held back in other South American countries. ‘In Argentina, political and economic problems means few companies are looking to invest in developing FM,’ says Teixeira. Similarly, Venezuela is facing reportedly the world’s highest inflation rate, as well as political tensions and recent failures in public services following the death of President Hugo Chávez in March 2013.

LeveL pLaying fieLdThe fragmentation of FM in the Americas presents a serious barrier to the discipline completing its transition from just cleaning and maintenance to an integral part of the client’s overall strategy. Ware says that raising the standard of FM in countries that are currently lagging behind the US would benefit its reputation throughout the whole region, including the US, where the discipline still has further to go. Ware co-authored the RICS report Raising the bar: enhancing the strategic role of facilities management on FM, published in November 2012. The report makes it clear that the alternative for the industry is stark: where FM becomes simply ‘a commodity, rather than a professional skill in many organisations, to be procured at the lowest cost’.

So how can FM be standardized in the Americas? A key step is to develop a uniform method of measuring it: ‘A standard set of metrics would provide opportunities

Unfortunately, however, facilities management is progressing at different rates across the Americas. ‘It’s a real patchwork,’ says Dunford. ‘In the US, FM is often outsourced to large companies, such as Johnson Controls or CBRE. But, at the same time, there are huge chunks of the industry where the service is fairly rudimentary, with basic functions being delivered by low-paid staff rather than by automated services based on technology that captures critical data.’ According to Dunford, Canada is lagging behind the US: ‘Canada has large occupiers, but FM is still being delivered in a fairly basic way,’ he says, citing the lack of international companies as a possible reason, as it’s often the multinationals that are pursuing a more strategic approach to FM.

In South America, meanwhile, FM has even further to go – although the presence of multinationals here is helping. Walter Palacio FRICS, executive director for South America at Cushman & Wakefield, says: ‘Here, there is not a complete misunderstanding of facilities management, but it’s often just seen as comprising cleaning, maintenance, security, and gardening. This ignores the fact that we can provide a wide range of solutions, and also be involved in strategic discussions.’ However, Palacio adds that now many companies headquartered in the US and Europe are establishing operations in South America, and bringing with them the concept of FM as a strategic tool.

Despite this positive development, FM within South America is fragmented: ‘Between the countries, you can find a totally different understanding of FM,’ explains Alexandre Teixeira MRICS, executive director of the Brazilian FM firm eNOVARUM. ‘Brazil and Mexico are more advanced, and Mexico’s geographical proximity to the US means they are closer to US ways of working.’

‘We need to raise awareness of the impact FM has on the financial value of properties and businesses’

MODUS_US_Q4_13_P34-37_FM feature.v4.F1.indd 36 06/11/2013 10:55

:mobilizing fm to boost energy efficiency

A Cushman & Wakefield project for Adobe Systems shows how clients with a heightened awareness of sustainability are calling on their facilities managers to deliver green strategies. In 2005, Adobe Systems asked Cushman & Wakefield to help increase the commercial market value of its headquarters, Adobe Towers, in San Jose, California, while also upgrading the existing buildings’ sustainability standard. In an ongoing program, Cushman & Wakefield brought Adobe Towers into line with LEED Platinum standard, and then went even further.

The work has included replacing older fluorescent, incandescent and high-pressure sodium lamps with more energy-efficient newest generation bulbs, and by installing real-time energy meters and motion sensors at desks to turn off equipment when it’s not being used. Power consumption was cut even further, by installing variable frequency drives, supply fans and chillers, and by modifying the cooling tower staging to reduce power by 50%. The project also cut water use in the building significantly. Overall, Adobe has saved at least US$1m so far – but, interestingly, the company has also reported greater staff productivity as a result of the improved working environment.

to compare services,’ explains Ware. This, in turn, would encourage providers to compete and raise their own levels of quality. Raising the bar reports that some 80% of facilities providers are measured solely against budget: ‘In many organizations, it appears that it almost doesn’t matter if the FM group is helping the workforce be more productive, helping attract and retain staff, or reducing environmental costs. If costs haven’t been driven to an absolute minimum, nothing else really appears to matter.’

McMillan warns that the measurement of FM must be more subtle in order to help clients properly assess its contribution: ‘The benefits of FM are more complex than just reducing costs. You can look at how much energy is consumed per square foot, but it’s more important to look at what impact the FM strategy is having on the overall performance of the organization,’ he explains. Diane MacKnight FRICS, head of MacKnight Associates, a Virginia-based FM firm operating internationally, agrees: ‘At the moment, FM is measured in pedantic ways, such as recording power outages. We need to measure many other factors, such as how the lighting and carpet in the workplace affect staff productivity.’ As complex as it seems, the task of measuring FM is becoming much more feasible with the help of new technology. ‘We’re now able to collect and analyze much more FM data,’ says Neil Shah, Managing Director of RICS Americas. ‘We can even put mobile devices in the hands of technicians and collect real-time information.’

Another key step is to further professionalize facilities management in the Americas. According to Dunford, FM practitioners must be encouraged to join organizations such as RICS, which is itself working towards greater professionalization through Raising the bar, which is due to be updated in early 2014, as well as a FM guidance note, available from November 2013. But clients must also recognize professional FM standards, adds Shah: ‘If we want facilities managers to be seen as professionals, we need to raise awareness of the impact FM has on the financial value of properties and businesses among end- users and institutional investors,’ he explains, adding that professional bodies such as RICS are already actively working towards this.

So, FM has further to go in the Americas before it becomes the strategic service and regionally recognized profession that would benefit both practitioners and clients. However, the example being set by enlightened clients, together with the widespread recognition of the need to develop the industry further, show that the discipline is definitely moving in the right direction. ‘FM is becoming more vibrant every day, and I’m thrilled to see RICS joining the efforts to boost its reputation,’ says MacKnight. ‘These efforts will really help to elevate the surveying profession.’


MODUS_US_Q4_13_P34-37_FM feature.v4.indd 37 04/11/2013 14:38

Timber industry //

38 r ics.org

Forestry valuationtiM HoWarD MRICS, CANADA

As a tangible asset surveyor at Deloitte’s Vancouver office, Tim Howard works with the Business Valuation and Real Estate teams,

covering a number of industrial sectors. Howard is originally from the UK, and has been involved in valuations of timberland, saw mills and paper mills right across Canada. ‘Forestry is a very challenging and rewarding sector to work in,’ he says. ‘I’m involved in a wide range of cases and clients, of different sizes and in various locations, and I really enjoy the traveling side.’

The forest products industry is a foundation of the Canadian economy, and Deloitte works with the largest, most profitable forest products companies in the world, as well as small, local operations. ‘It’s an interesting time to be working in this sector because there are so many fluctuating global demands,’ Howard explains. ‘Today’s industry operates in a dynamic landscape of political, environmental, and economic interaction on a global scale. Successful companies must not only react to changes, but also anticipate them. Cost reduction, product differentiation, fiber-supply security, forest policy administration, certification, and globalization are all issues at the forefront of the industry.’

The economic conditions of the past few years have had a significant impact on forestry in North America, but indicators of recovery are now strong. ‘There was a drop-off in demand for timber in the North American construction industry because of a lack of new homes being built between 2007 and 2011, with the result that lumber prices plummeted,’ says Howard. But, he adds, the housing sector began to recover in 2012, with growth expected to ramp up by late 2014, and the North American forest

products industry forecast to return to growth during the period 2011-2016.

According to Howard, there is also demand due to the growth in exports to China: ‘The building industry in China imports most of its lumber from Russia and North America. A 25% tariff on log exports in Russia [implemented in 2008] has shifted log imports to North America – and with Chinese housing volume expected to continue to grow, demand is set to increase over the coming years.

‘Because wood product suppliers had been steadily reducing output, the temporary and permanent closures of facilities created demand pressure, boosting lumber prices, which should now remain high until the capacity catches up with demand. Then, the increased construction activity should ensure that demand remains buoyant.’

As a result, forestry is being viewed as a more popular investment sector, says Howard. And industry figures back this up: MarketLine Industry Profile figures from the Forest products in Canada February 2013 report indicate that the Canadian forest products market grew by 3.7% in 2011 to reach a value of US$18.2bn. It’s forecast that, by 2016, the Canadian forest products market will be valued at US$27.7bn – an increase of 51.7% since 2011.

Howard confirms that both demand and reforestation in many countries is being boosted by regulations that focus on green certification and sustainability: ‘Many market players aspire to be certified by the Forest Stewardship Council to promote their forest management practices, which provides an aid to a sustainable future for timber,’ he explains. ‘Country-specific building regulations are also boosting demand for “ecological” materials to be used in construction, resulting in the increasing popularity of forest products – provided costs can be kept economically viable.’ >> deloitte.ca

Tim Howard is confident that the forest products market in Canada will see a strong recovery over the next few years

MODUS_US_Q4_13_P38-43_Tree Int_and_Bus_Adv.indd 38 04/11/2013 14:41


Tales from

The wood

tIMbER IS ExpERIEnCIng SOMEthIng Of A REnAISSAnCE

AS A fUEl SOURCE AnD AS A lOw-IMpACt bUIlDIng

MAtERIAl. wE MEEt thREE pROfESSIOnAlS CURREntly

wORkIng In DIffEREnt StAgES Of thE pRODUCtIOn CyClE

phot

ogra

phy

Gran

t Har

der

words by Cherry Maslen


Timber consTrucTionsimon corbey MRICS, London, UK

Simon Corbey MRICS is an associate at the Alliance for Sustainable Building Products (ASBP), a not- for-profit membership organization

committed to promoting a low-impact and healthy built environment. Based in London, ASBP conducts and commissions research, organizes seminars and lobbies government to introduce policies to push forward the green building agenda.

‘Using timber in buildings is a “win-win” on so many counts, from the sustainability angle, but also when you consider issues such as speed of construction, reduced tolerances, waste minimization, and the ability to build in any weather,’ says Corbey. ‘We believe structural timber should be considered as equal to steel and concrete, although we do also want to see more reused steel and low-impact concrete used.’

For the potential benefits to be realized, though, Corbey and ASBP believe the current Building Research Establishment (BRE) Green Guide to Specification for building products, sometimes used as a planning instrument, as well as a means of gaining credits under the Code for Sustainable Homes and BREEAM, might be considerably improved. ‘Our first point is that there is nowhere near enough focus on embodied carbon in building materials [the energy used in manufacturing materials],’ says Corbey. The emphasis, as speakers at recent ASBP seminars have testified, has tended to be on energy in use, both in commercial and residential buildings. The Code for Sustainable Homes allocates less than 1% of available credits to embodied carbon, yet research by the National House Building Council and BRE suggests the split is 35/65, embodied/operational.

‘An important benefit of using timber is sequestered carbon,’ adds Corbey. ‘Trees absorb large amounts of carbon, around 50% by mass, so using timber, and other biogenic materials, locks up carbon within a building.

We would like to see this natural carbon capture and storage number quoted separately from embodied energy. The potential effects of policies designed to increase the use of biogenic materials in UK buildings suggests that the net carbon

sequestration could be as high as 10 MtCO2 in 2020, and 22 MtCO2 by 2050. To put this into context, the total embodied carbon emissions from all UK construction activity in 2010 are calculated to be 33 MtCO2e.

‘One of the issues is that assumptions are made on current rates of wood going to landfill at the end of a building’s life, with that subsequent carbon release. But, as we recommended in our paper submitted to the All Party Parliamentary Group on Excellence in the Built Environment, the reduction to zero wood to landfill would immediately resolve that issue. Wood can be down-cycled into timber board products or used for fuel: none of it should be chucked in a big hole in the ground and wasted.’

‘Using timber in buildings is a “win-win” on so many counts. It should be seen as equal to steel and concrete’

Timber industry //

40 r ics.org


Stuart Goodall, chief executive of Confor

‘The use of wood in construction is increasing because of a combination of factors: it’s versatile, attractive, renewable, thermally insulating, stores carbon, and can be recycled into wood products or burnt for renewable energy at the end of useful life. Architects and specifi ers are realizing that wood is the solution to many modern challenges, and we’re seeing inspirational use of timber in both public and residential architecture. However, there is huge potential for wood to play an even more important role. At Confor – a membership organization that supports the market for wood and forest products – the message we are trying to get across now is that wood can be used in almost any building situation.

‘Of course, if we want the demand to increase for UK timber, it’s vital that we manage existing woodland productively and plant more trees. There is huge scope to develop forestry nationally, as we currently import about 80% of the timber we use – mainly from Scandinavia, North America, and Latvia. Now, the Grown in Britain campaign is bringing together major procurers and timber suppliers to make best use of domestic timber.

‘Timber prices and forest land values are increasing, so we are now seeing landowners and farmers looking at timber as a more viable use of their land than, for example, sheep farming, which has been uneconomical without a large subsidy in many areas for years. Grants are available for initial planting, and then annually for up to 15 years, when thinning starts to take place. And, income can be generated from the young wood, which can be used for MDF or as fuel.

‘The Wood for Good manifesto calls on the government to take measures to make it easier to choose wood – including a reduction of VAT to 10% on sustainable timber and timber products – and uphold the expansion of productive woodlands by providing a planning and support system that will promote commercial forestry.’

Opinion

‘WOOD IS THE SOLUTION TO MANY MODERN CHALLENGES’

ASBP believes the government should support the speedy development of EPDs (Environmental Product Declarations), which adequately recognize the role of carbon sequestration. ‘We need the right tools for the job: accurate EPDs that can be fed into Building Information Modeling so that a calculation can be made on the effects of replacing a concrete frame with a timber one at the touch of a button,’ adds Corbey.

‘If it’s an issue that the majority of timber used in construction is not UK-sourced, then we should gear up to produce cross-laminated timber, like the Scandinavians do. Of course, it means investment, but the Forestry Commission should support the production of biogenic building materials.’

As Corbey points out, progressive local councils are asking for timber to be specifi ed in building projects. In Hackney, for instance, the planning policy is ‘wood fi rst’, and in Shoreditch, the innovative nine-storey Stadthaus apartment building was the fi rst of its height to use timber load-bearing walls and fl oor slabs, as well as stair and elevator cores. The building locks up an impressive 186 tons of carbon over its lifetime.

‘Engineered timber is more expensive than some equivalent building materials,’ admits Corbey. ‘But that pales into insignifi cance when you consider the speed of construction, thermal performance, and the sequestered and embodied carbon.’asbp.org.uk


Phot

ogra

phy

Oliv

ier H

ess


Forestry stewardshipMathew Maguire MRICS, UK

Mathew Maguire MRICS is a land agent with the Forestry Commission (FC), which operates under Defra and

manages the Public Forest Estate in England. He is involved in commercial forestry and woodland protection.

The FC plants millions of trees a year and harvests some 4m tons of wood annually – more than a third of total domestic production – from public forests. The harvested timber is used in both the building industry and for fuel, with income helping to offset forest management, and enabling public access and recreation. The FC also acts as an information source for owners of private woodland, advising on sustainability and disease control, and protects wildlife habitats and historic woodland sites.

The multiple facets of the FC make Maguire’s role an ever-changing one: ‘I could be looking at timber harvesting one day, and our recreation and tourism side the next,’ he says. ‘Commercial plantations used to be dark and dingy places but, where appropriate, we’ve developed areas where people can stay

in log cabins and appreciate the beauty of the forest around them. We have miles of cycle trails and paths, and people can learn about our woodlands at the visitor centers.’

Maguire is one of a two-man team covering the East of England, based at Thetford Forest on the Norfolk/Suffolk border. He worked in forestry for commercial firms, and qualified in Rural Estate Management in 2001, before joining the Forestry Commission in 2005. As a land agent, Maguire is also involved in sporting facilities, including shoots, outdoor concerts, deer management, and even green burial sites. As he explains, recreation and commercial forestry are complementary when well managed, though balancing the FC’s various objectives is a constant challenge. ‘On the operational forestry side, we are experiencing strong demand for our

timber, partly because we can demonstrate through certification that our woodlands are well managed and sustainable. With rising energy prices, there’s also increasing demand for low-grade timber to use as fuel for woodburners and biomass boilers, which means we’re now getting a return on some of our lower-value produce, and previously unmanaged woodland in private ownership is now being brought back into management. Our forestry land has increased in value, but that is less significant for us as we hold our forests for the nation: everything earned from the estates that we manage is reinvested.’

With increased demand for timber, the question of whether sufficient trees are being planted for the future has been addressed by the Independent Panel on Forestry, set up to advise the government on the future direction of forestry and woodland policy in England. ‘A core message is that the FC should work more with third parties and stakeholders to increase planting and actively manage woodland,’ explains Maguire. ‘With the positive response from the government, and wider opportunities for initiatives on the non-operational side of woodland management, I’d say it’s an exciting time to be working in forestry. The future is bright.’ forestry.gov.uk

Timber industry //

42 r ics.org

‘With rising energy prices, there’s increasing demand for low-grade timber to use as fuel’

Phot

ogra

phy

oliv

ier h

ess



The iPad, and other mobile devices, are revolutionizing the building surveying process by allowing us to complete many elements of the job more quickly and effi ciently. But with a few additions and peripheral items, you can make your device work even harder.

FAULTLESS DATA TRANSFERThe laser measuring device has long been the building surveyor’s friend. Now, manufacturers are offering Bluetooth-enabled models, which can talk directly to your iPad so that the collected measurements can be uploaded to the system automatically and wirelessly, removing all room for human error. While there are a number of different models on the market, we fi nd that the most popular is the Leica DISTO D3a BT, priced at around US$520. Also, a growing number of professionals are using barcode readers to tag assets. A common example is the Opticon OPN2002, which at around US$500 is a signifi cant investment, but one that could quickly pay back in saved

time and increased accuracy.

DEVICE PROTECTIONA common concern for professionals is how suitable a mobile device is for taking into harsh environments, such as construction sites. There are a number of solutions on the market to protect your device, but by

far the most widely used cases are Griffi n’s Survivor and Otterbox’s Armor series. The Survivor is designed to exceed US military specifi cations, while the Armor is waterproof for 30 minutes in 2m of water, survives 3m drops, and can withstand two tons of crushing force – which is probably enough protection for most professionals. At the extreme end of the scale, there’s the XCRiPad, a completely sealed unit designed for the most hazardous environments, including those classifi ed as carrying a risk of explosion or ignition, such as oil fi elds.

LOW-LIGHT PHOTOGRAPHYThe beauty of using the iPad camera is that the photos can be uploaded automatically and stored correctly using surveying software. Usually, the iPad camera is more than adequate for a professional, but there may be times when lighting is poor, or other survey requirements are requested, such as thermal imaging, which means that a more advanced camera is needed to capture a visual record.

However, this can also mean reverting to the days of manually uploading the images from the camera to the computer, and wasting hours painstakingly labeling and filing them. Not any more, thanks to the technology provided by Eye Fi – a nifty camera memory card that automatically uploads photos and videos from digital cameras via wifi . As long as the surveying software being used is designed to communicate with the technology, professionals can use their own state-of-the-art cameras and still upload and store the images automatically.

SUPERIOR SURVEYSWhile some of these sophisticated add-ons are very useful, the majority of professionals using mobile technology are satisfi ed with the basic iPad. In fact, the most popular is the iPad mini, as most surveying software performs exactly the same way on this smaller, lighter, less expensive version. Today’s surveying software can be fully customizable in terms of form layouts, drop-downs, and photo labeling, and touch-screen technology allows users to swipe between buildings, spaces, and elements to record defects in seconds and see real-time savings.

In the past, technology providers seemed to operate in a different world to the surveying industry, but now they are increasingly identifying our needs and designing solutions that really help professionals embrace mobile technology and all the benefi ts it can bring in terms of quality, speed, and accuracy. The right technology forces consistency across multiple surveys and professionals, and dramatically improves the quality of data across building portfolios. What’s more, multiple apps can be used at the same time on mobile devices – for example, to synchronize surveys with Building Information Modeling software.

EDWIN BARTLETT MRICS is CEO of Kykloud, providers of mobile surveying and asset management software.kykloud.com

THE RIGHT TECHNOLOGY FORCES CONSISTENCY ACROSS SURVEYS AND DRAMATICALLY IMPROVES THE QUALITY OF DATA

Illus

trat

ion

Borja

Bon

aque

Business advice //

How to adapt your

IPAD FOR SURVEYINGBy effi ciency expert Edwin Bartlett MRICS


:rics news :diary :benefits :resources

The College of Estate Management (CEM) is the leading provider ofsupported distance learning for real estate and construction professionals.

We offer a range of Diplomas and Degrees at Undergraduate and Postgraduate level whichare accredited or recognised by leading professional bodies such as RICS and CIOB.

Our supported distance learning gives you the fl exibility to fi t study around your life. Using our Virtual Learning Environment you’ll have everything you need (at your fi ngertips) to gain a respected qualifi cation.

learn today, lead tomorrow

www.cem.ac.uk

To fi nd out more call +44 118 921 4696 or email [email protected]

“ My decision to pursue my MBA with The College of Estate Management was based on their long and distinguished reputation for providing tuition within the built environment. CEM also has a long standing relationship with the RICS and this complimented my long term goals perfectly.”

Ronald LewisMBA Real Estate and Construction ManagementAssociate Director, Faithful+Gould Advance your career

in real estate and construction

xxxxx-ModusAmericas-FullPage-290713.indd 1 29/07/2013 09:18MODUS_US_Q4_13_P44-49_Info + ad.v3.indd 44 04/11/2013 14:50

01.11 // MODUS 09

Information

USEFUL NUMBERSRICS aMERICaS +1 212 847 7400

General inquiriesMembershipSubscriptionsEventsTrainingRegulation

REgULatIoN CoNFIdENtIaL hELpLINE +1 646 442 4437


Altus Group, one of the world’s leading real estate advisory firms, has become the first RICS firm to be regulated across its entire operations worldwide. Bob Courteau, Altus Group’s CEO, commented: ‘We’re committed to helping our clients by staying on top of the changing regulations and by providing excellence in quality, transparency, and integrity. This designation reinforces our commitment to leading the industry on an international scale.’ Altus Group has more than 1,800 employees in multiple offices around the world, including in Canada, the US, the UK, and Asia Pacific.altusgroup.com

LEadINg thE way

Altus Group was involved in the construction of Trump

International Hotel & Tower, Toronto, Canada

aS CLIENtS woRLdwIdE dEMaNd hIghER LEvELS oF qUaLIty aSSURaNCE, RICS-REgULatEd FIRM StatUS IS a CLEaR MaRkEt dIFFERENtIatIoN

Sean tompkins, RICS Chief Executive

RICS now regulates

98,525 members and

10,611 firms around the world

:rics news :diary :benefits :resources

The College of Estate Management (CEM) is the leading provider ofsupported distance learning for real estate and construction professionals.

We offer a range of Diplomas and Degrees at Undergraduate and Postgraduate level whichare accredited or recognised by leading professional bodies such as RICS and CIOB.

Our supported distance learning gives you the fl exibility to fi t study around your life. Using our Virtual Learning Environment you’ll have everything you need (at your fi ngertips) to gain a respected qualifi cation.

learn today, lead tomorrow

www.cem.ac.uk

To fi nd out more call +44 118 921 4696 or email [email protected]

“ My decision to pursue my MBA with The College of Estate Management was based on their long and distinguished reputation for providing tuition within the built environment. CEM also has a long standing relationship with the RICS and this complimented my long term goals perfectly.”

Ronald LewisMBA Real Estate and Construction ManagementAssociate Director, Faithful+Gould Advance your career

in real estate and construction

xxxxx-ModusAmericas-FullPage-290713.indd 1 29/07/2013 09:18 MODUS_US_Q4_13_P44-49_Info + ad.v3.F1.indd 45 06/11/2013 10:58

08 r ics.org

facts, stats & surveys

RICS news //

46 r ics.org

Illus

trat

ions

Osc

ar B

olto

n Gr

een,

Ber

nd S

chiff

erde

cker

The occupier sentiment index in Canada is the

lowest it’s been in three years

The US investment enquiries net balance softened but remains

firmly in positive territory

The net balance of new development starts in the US increased to its

highest reading in five years

Linking land law to development rIcs has published new research exploring the theory that land administration activities support a country’s economic, social, and environmental development. the report takes the national land titling program of thailand as a successful example, and the surveying

settlement program in Bangladesh as a case study of a village in the Gharinda union. rIcs International sustainable Development adviser John tracey-White said: ‘this report adds to a body of research focusing on the land rights of low-income rural and urban populations.

surveying professionals are increasingly involved in assessing property values in these conditions, and facilitating the land registration process – both in the field and in setting up land data storage systems.’ rics.org/research

Do smart cities have the answer, and what are the opportunities for professionals? the recent International federation for Housing and Planning centenary World congress addressed the question of ‘smart cities’, and their potential to contribute solutions to some of the world’s most pressing urban challenges. It has been observed that the growth of cities follows the technology of the day: for example, in the 19th century, uK cities were built around railroads and sewers, whereas later, they were built around metro systems. In the us, cities were built almost exclusively around the car, and then in the mid-20th century, they began to be rebuilt around the urban highway - until someone shouted ‘stop!’

With the vast array of information technologies now being employed in everyday life, what are the implications of employing these technologies at the scale of the city? read views from cisco, IBM, siemens, and accenture at rics.org/smartcities.

In June, sir David tweedie, chairman of trustees at the International valuation standards council (Ivsc), hosted a meeting of valuation professional bodies at the International Monetary fund in Washington Dc. a number of organizations – including rIcs, Ivsc, the appraisal foundation, and the appraisal Institute – were in attendance, and participants discussed the importance of developing a global valuation standard. the meeting was very positive, with general agreement among the bodies to support the formation of one international standard of valuation, and to address consistency in qualifications. Based on the discussion and feedback received,the Ivsc will be developing papers for consultation. for further updates, visit rics.org/internationalstandards.

One STandard

sMart cItIes

+27+45

-12

MODUS_US_Q4_13_P44-49_Info + ad.v3.indd 46 04/11/2013 14:50


Available space for lease continued to increase in

Brazil, while occupier demand decreased

(-36)

Brazil’s investment sentiment index turned negative this quarter for

the first time in more than four years

more respondents in Brazil expect decreases in rental values over the

coming months than increases

Highlights from the RICS Americas and Brazil Commercial

Property Surveys Q2 2013. rics.org/economics

The International Property Measurement Standards (IPMS) Coalition recently garnered the support of two high-profile Americas organizations: the US-based Counselors of Real Estate

(CRE) and Brazil-based Secovi-SP, who will join as members of the coalition. Meanwhile, the government of Dubai in the UAE has also announced its support for the creation of IPMS and its

intention to adopt the standards next July. The standards, which are being developed by a coalition of 22 professional and not-for-profit organizations from around the world,

including RICS, will help to address the global inconsistencies in the way in which property is measured, lending greater accuracy in financial reporting and increased investor confidence.

Support growS for the IpMS CoalItIon

PRESIDENT’S COLUMN

Michael Newey FRICS rICS president

‘As professionals, we need a global outlook. Success at home is no longer possible without recognition abroad’

The fast-paced interconnected world we know today is almost unrecognizable from the one I knew when I entered the profession in

1981. Enormous political and technological change has transformed our everyday lives; what we now take for granted would have seemed like science fiction 30 years ago.

In the business environment, globalization is arguably the biggest change we’ve witnessed. Today, governments and business leaders acknowledge that no developed or developing nation can be self-contained and hope to succeed; the very few that persist with isolationism are failing. Isolationism is a bad business model. As professionals, therefore, we need a global outlook and to understand international business dynamics.

Take investment flows, for example. Money moves around the globe in an instant – rapidly flowing into new investment opportunities, but leaving just as fast if investors become nervous. Consequently, the corporate ownership of many companies is increasingly international. In 2012, the UK alone benefited from around £42bn (US$67bn) of foreign direct investment, and companies such as Jaguar and Land Rover have thrived under international ownership while retaining a UK brand identity.

This phenomenon extends beyond major employers: the UK small business market is currently the most favored inward investment location in Europe, attracting 40% of Japanese, US, and Asian investment within the EU. As CEO of a housing association, I see this every day: we house people in the east of England, but we couldn’t do it without international interaction. We source funding, building technology, and even some consultancy services from outside the UK, which ensures our viability so that we remain able to provide work for local small and medium-sized enterprises.

But while clients and employers take an increasingly global perspective, they still demand professional services to the highest technical and ethical standards. For example, UK investors acquiring a project in Asia want to know they can access good advice from RICS members in that market. As developing economies become more developed, the demand for professionalism increases. And as we respond by giving access to our standards, our status as qualified members is enhanced.

Whichever market we operate in, we need external investors to recognize our standards and choose our services. Success at home is no longer possible without recognition abroad. Isolationism is not an option.

-456%

+64


08 r ics.org

48 r ics.org

RICS news //

EventsFor rics events bookings and enquiries [email protected] // +852 2537 7117

europeMiPiM 2014 March 11-14 2014, Cannes, France 20,000 real estate professionals from every continent will gather in Cannes for the annual MIPIM exhibition and conference program. RICS – an official partner of the event – will have a strong presence and members attending are encouraged to use the RICS stand as their home base for meetings, networking and refreshments. Among activities led by RICS President Michael Newey and RICS CEO Sean Tompkins, will be a conference to present and debate RICS’ ‘Futures’ project: ‘Just imagine: Real Estate 2030’. For more details on the event, visit mipim.com.

Chinarics urbanization summitFebruary 27 2014, BeijingThe one-day summit will gather investors, developers, contractors, corporate occupiers, economic analysts, government officials and professional advisers to map out the future of asset management. Topics will include how to minimize risks accompanied

ameriCasrics international summit, brasil 2014March 26 2014, São PauloRICS International Summit will gather investors, developers, contractors, corporate occupiers, economic and sector analysts, professional advisers, and government representatives to look at the big issues facing the real estate market in Brazil and key growth regions across Latin America, as well as other emerging and established international markets. rics.org/internationalsummit

rics summit of the americasMay 4-6 2014, Westin Harbour Castle Hotel & Conference Centre, Toronto, Canada The summit will provide an excellent opportunity to network with senior professionals from around the world, and engage in discussion forums and educational seminars. Experts from the financial services, business, government, and real estate sectors will be in attendance to talk about the ideas that are moving the profession forward. Visit toronto2014.rics.org.

by development opportunities; the key features of the Chinese market; growth potentials of cities in China; investment strategies and benefits for global investors; and how to increase investors’ confidence using new technologies and standards.

maLaYsiaFig-risM-rics summit June 2014, Kuala Lumpur This week-long summit will be held in conjunction with RISM (the Royal Institution of Surveyors Malaysia) and FIG (the International Federation of Surveyors) Undergraduates Conference, with an expected attendance of around 2,000 surveyors. RICS President Michael Newey, President-Elect Louise Brooke-Smith and Past President See Lian Ong will be keynote speakers.

For more details, visit rics.org.

Recovery in the United Arab Emirates (UAE) continues to gain traction and Asia remains an upbeat story, according to the latest RICS global commercial property survey. Reversing the generally negative pattern that characterized the UAE market from the end of 2009 until the middle of last year, further improvements in sentiment in both the occupier and investment real estate markets show that the tone in the property industry is continuing to gain ground.

Results for Asia also demonstrate promise, with Japan leading the way on the investment side while also delivering a strong result for the occupier market. Headline numbers for China remain firm, generally, despite a slight loss of momentum in the economy and growing concerns over the rapid increase in credit. In India,

meanwhile, the real estate picture holds broadly flat, indicating a degree of caution as the central bank grapples with the challenge of a subdued economy and volatility in the currency.

By way of contrast, the picture in Brazil is rather more downbeat, particularly in the occupier market. However, the Brazilian investment market is continuing to display a greater degree of resilience, with data suggesting that, for the time being, property investors are willing to take a longer-term view of the prospects for the economy.

Unsurprisingly, Europe’s headline indicators reflect the ongoing recession in the region, with occupier and investment markets remaining generally weak. However, the numbers for Canada remain firm, and results for the US are encouraging, with further evidence of rising investor appetite and a stronger tenant demand driving rents and capital value expectations in an upward direction despite some mixed economic data. rics.org/marketsurveys

UAE RECOVERy GATHERS PACE

Countdown to CPd ComPletiondon’t run out of time! RiCS reminds all practicing members that they must complete and log at least 20 hours of continuing professional development (CPd) online by december 31, 2013. if you haven’t already done so, don’t leave it until the last minute – go online now to add your CPd activities at rics.org/cpdrecord. if you need any help understanding the CPd policy or using the online tool, call RiCS Regulation on +1 212 847 7400 or email [email protected].


01.11 // MODUS 09


DISCUSSION POINTS

Learn and thriveIn January 2013, RICS introduced new continuing professional development (CPD) requirements. Each calender year, all members must complete and register online (at rics.org/cpdrecord) 20 hours of CPD, including at least 10 hours of formal learning. They must also complete an online ethics module once every three years (rics.org/ethics). Here, members explain why continued learning is absolutely essential for all qualifi ed professionals in any fi eld.

IF YOU HAVE A PERSONAL STORY you would like to share about how CPD has helped you over the course of your professional career, email [email protected].

‘Employers want staff who provide a high quality of work and add value to the organization. As a project manager, most of the education is based on hard numbers, but soft skills are increasingly proving valuable. Through CPD, members improve their ability to produce good results. Also, staying current in your fi eld is linked to good leadership: real leaders don’t require force, but are an example of excellence, which people naturally follow.’

‘In the valuation and related property industries, we tend to get caught up in our own specialization, and can lose sight of how the wider sector is developing. In many areas, technological advancements have changed methods of practice, even though the basics, founded in theory, remain the same. CPD is important to keep this basic theory fresh, and helps to expand your professional horizons.’

‘Meeting your CPD requirements is important to remain fresh in your current position, and also to aspire to higher positions. But many people are asking, “With everything I have going on, how do I complete 20 hours of CPD each year?” One of the most important factors in completing CPD is having the support and fl exibility of your employer. I’m lucky to have a boss who has always supported me in attending workshops and seminars, and in participating directly as a speaker or lecturer. CPD should be part of your career development within the fi rm you work for.’

‘The return on investment of continuous learning is undeniable, and perhaps greater than that of other types of learning. Knowledge that’s relevant to the here and now makes you a more valuable employee, as the ideas and skills you bring to the table are more up to date. To reach your full potential, you should engage in training that really interests you. The insight you gain stays with you throughout your career, lending a rich, informed perspective that’s unique to you.’

JAMES ANDREWS FRICSSENIOR MANAGING DIRECTOR, INTEGRA REALTY RESOURCES, CARIBBEAN

HEATHER REICHARDT MRICSDIRECTOR OF LODGING PROPERTY TAX, MARRIOTT INTERNATIONAL, WASHINGTON DC

ADAM MUGGLETON MRICSMANAGING DIRECTOR, CDML, CANADA

JAMES ARROW FRICSSENIOR RISK ANALYST AND MMLS PROGRAM RISK COORDINATOR, SHELL INTERNATIONAL EXPLORATION & PRODUCTION, HOUSTON


2.9

Source: worldshipping.org

Greater China exportS 28.9 Imports 12.2

other aSia exportS 16.2 Imports 13.2

United StateS Exports 3.4

importS 15.6

Latin ameriCa

exportS 2.4 Imports 2

eUropean Union Exports 11.5 importS 11.9

middLeeaSt &afriCa

Exports 1.9 importS 9.4

2.4

2

3.3

2.9

3.1

2.93.4

1.9

2.1

3.12.7

2.6

2.8

5

8.55.3

6.9

3.4

Unit: million tEUs (twenty-foot equivalent unit)

Illustration by ian dutnall

trade windS Top conTainer exporT rouTes

Measure //

50 rics.org

MODUS_US_Q4_13_P50_Measure.indd 58 04/11/2013 14:55

The leading multidisciplinary provider of independent,

professional real estate services – and value-added data and

analytics – Altus Group is redefining the industry, combining

experience, intelligence and expertise on a local level with

the capacity and know-how to operate globally.

altusgroup.com [email protected]

Cost Consulting and Project Management Property Tax

Research, Valuation and Advisory Geomatics

ARGUS Software

� Assessment Appeal & Negotiations

� Tax Budgeting/Forecasting and Tax Bill Processing

� Tax Due Diligence

� Vacancy Rebate Administration

� Valuation & Appraisal

� Decision-Making Support

� Financial Due Diligence

� Market Information & Perspective

� Tenant Satisfaction Studies

� Well Site, Pipeline & Construction Surveys

� Internet Mapping

� Municipal, Utility & Mining Surveys

� Environmental & Forestry Services

� Budgeting & Forecasting

� Asset Valuation

� Asset & Portfolio Management

� Leasing Management

� Feasibility Studies

� Cost Planning & Reconstruction Cost Estimating

� Loan Monitoring

� Risk Management & Post-Contract Cost Control

MODUS_US_Q4_13_P51_Altus ad.indd 58 04/11/2013 14:56

RICS International Summit, BrasilMarch • 26 • 2014 | Hilton • São Paulo

2030. The Future of Real Estateand the Built Environment

RICS International Summit, Brasil is a unique event that will bring together renowned market leaders in the Real Estate and Construction sectors from all over the world.

The event will expand attendees’ global network and will be an excellent opportunity to discuss new technologies, strategies and trends that directly impact the built environment on a global scale.

For more information about RICS International Summit, Brasilplease visit: rics.org/br

anuncio rics summit brasil ingles 274 x 202 mm.indd 1 10/31/13 6:27:06 PMMODUS_US_Q4_13_P52_Brazil Summit ad.indd 52 04/11/2013 14:56

rics modus, americas edition - q4, 2013

Documents