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26th January 2015

Singapore Economy

Smart Nation initiative set to change Singapore's urban landscape

The next generation of buildings is set to become a lot smarter, thanks to the increasing convergence of new data streams, sensor technology and breakthroughs in building material science.

Source: Channel News Asia / Singapore

SINGAPORE: The relentless march of technological innovation has transformed the way we communicate. Soon it will change the urban landscape in Singapore.

The next generation of buildings is set to become a lot smarter, thanks to the increasing convergence of new data streams, sensor technology and breakthroughs in building material science.

Singapore has come a long way since horse drawn carriages plied Commercial Square in the mid-19th century. The area was later renamed Raffles Place and it still stands as Singapore's prime commercial district.

Skyscrapers have replaced many old buildings, but experts said they could themselves be transformed - as society's needs and technology evolve.

Chong Keng Hua, assistant professor of architecture and sustainable design at Singapore University of Technology and Design, said: "Starting from the 60s, 70s, 80s, 90s, we have different needs of the society that the architects or the urban planners are trying to fulfil. From the basic needs in the 60s, to a more society needs in the 80s and 90s, when we talk about identity, when we talk about tropical architecture, what is Singapore architecture to the 2000s when we talk about sustainability and liveability."

Singapore's built environment has evolved over the past decades and in the last 10 to 20 years, there has been a greater focus on sustainable development, improving accessibility in buildings as well as boosting labour productivity in the construction sector.

One key initiative that has taken off is the Green Mark Scheme, launched by the Building and Construction Authority in 2005, to encourage developers to adopt more environmentally-sustainable practices.

The number of green buildings in Singapore has grown from just 17 in 2005 to more than 2,100 today. Last year, the BCA introduced a new masterplan that would drive the Singapore's green building strategy for the next five to 10 years.

Buildings are getting greener and industry players say they will get a lot smarter too in the not so distant future as new technology integrates with building design. A big part of it will ride on Singapore's Smart Nation initiative, with greater use of data analytics, and a range of infocomm and media technologies.

Developer CapitaLand said it is open to new ideas which innovation may bring. CapitaLand's chief of Design Review Unit, Poon Hin Kong, said: "With your phone you can control your switches, your washing machines or your ovens, and in the States they are also intelligent enough where the fridge can tell you that it's time to buy a new carton of milk because your are running out.

"Or the moment you step in, it remembers what you have, the music you like or the lighting level you like and it will automatically turn it on to accommodate what you want. We are certainly keen to explore all these ideas and tap on the latest and newest technology to keep up with what the market wants."

Meanwhile Keppel Land highlighted the potential for sensor technology to offer optimised energy usage solutions in commercial buildings. "Imagine, we can put in sensors in such a way that if the system detects that there are heavier people workload in a particular floor or area, then more air-con cooling capacity will be directed to that location to make it cooler," said Tan Swee Yiow, Keppel Land's president (Singapore).

"For meeting rooms, for example, if they are empty, they are not occupied, then there is no need to blow cool air over there. Imagine if we can develop a system that can automatically do this, that will save a lot of cooling load and yet at the same time provide comfort for the occupier," Mr Tan added.

Arup, a global multi-disciplinary engineering and consulting firm has pieced together what buildings could potentially look like in 2050 when the world's population may hit nine billion, with 75 per cent living in cities.

Arup projects that buildings in the future are not passive shells, but rather "living and breathing" structures plugged into the smart urban infrastructure. They will boast a network of sensors that provide real time data to the building system, allowing it to respond accordingly to environmental changes. And the city will be seamlessly linked by cable cars.

Arup says skyscrapers of tomorrow could comprise modular components which can be rearranged and assembled by robots. The buildings will also be able to harness energy and convert carbon dioxide into oxygen.

Andrew Henry, principal of Arup Singapore, said: "At the moment, there are trials for solar paints, we would be able to paint our buildings with solar technology, so if you can imagine, all our buildings being able to harness technology, the effect that will have on the sustainability of our buildings, the look and feel of our buildings will be amazing.

"And I think a huge potential is using buildings for food production. So we are developing facades and skins of buildings that can not only act as energy storage elements, but also act as food generation element."

Dr John Keung, CEO of Building and Construction Authority, said: "Many of those features that are proposed for these buildings in 2050 are happening now. We can give you many examples like rainwater collection, recycling, energy generating lifts although we have not put everything together in one single building.

"Going forward, if we can integrate more and more such sustainable practices for our buildings, through our Green Mark assessment system ... I think we are going to be able to get there quite soon - we probably don't have to wait till 2050."

But as the city changes over time, there is also a need to preserve buildings of architectural significance or are representative of its time. The Singapore Institute of Architects says it is keen to work with the Urban Redevelopment Authority (URA) to look into it.

"Perhaps URA could say that every 10 years, we have a concerted effort, or let's review the top 10 buildings of the past 10 years and give it some form of status - that would be one way to preserve the better architecture buildings for generations to come ... and perhaps some of the first generation HDB flats," said president of Singapore Institute of Architects Theodore Chan.

"Because to my mind, the architectural character of Singapore, you cannot divorce it from HDB because no where in the world you'll find public housing of that kind of scale. For instance, the mall at Toa Payoh Central - if you walk through, the lovely scale of the small little shops downstairs and the residential units upstairs, it is a very humanistic, social kind of scale, which is quite void now in the big shopping centres," he added.

The institute also suggests that incentives be provided to encourage developers to "free up" the first two storeys of new buildings and turn them into public spaces with parks or atriums to enrich the quality of life in the city.

As waves of technology sweep across Singapore, the urban landscape will continue to change - just as Raffles Place did, from the 1980s till now. So Singapore's skyline today - iconic as it is - may well look very different in the not-too-distant future. 

- CNA/al

Singapore Real Estate

Oversupply of ECs 'hits sales, land bids'

New projects coming up in areas with many existing ECs: Analysts

Source: Straits Times / Money

AN OVERSUPPLY of executive condominium (EC) projects is hitting unit sales and driving down land bids, according to analysts.

R'ST Research noted that many new projects are in areas that already have an abundance of EC projects.

Its research showed that 13 EC developments representing 7,149 units have been launched in Punggol and Sengkang since 2010, with about 5,700 sales.

Recent launches in the area include The Amore, which moved about 70 of 378 units during its opening weekend a week ago, and The Terrace, where 150 of 747 units have been sold since its December launch.

A 1.75ha site in Anchorvale Crescent, Sengkang, was also the subject of a tender last week that attracted just three bids. Sim Lian Land's top offer of $157.8 million, or $280 per sq ft (psf) per plot ratio (ppr), was the lowest since the Twin Waterfalls EC site in Punggol Field was sold 31/2 years ago at $270 psf ppr.

Five projects with a total of 2,568 units have been launched in Pasir Ris and Tampines since 2010.

About 2,490 units had been sold as at Dec 31, noted R'ST Research director Ong Kah Seng.

Three projects with a total of 1,577 units have been launched in Yishun and Sembawang since 2010, with 1,418 units sold as at Dec 31.

A further five EC sites in the area were sold last year but the projects have not yet been launched.

With such a supply of land, it is no wonder that the sale of an EC site in Sembawang Road last September closed with just two bids - one of the poorest participation rates ever for an EC tender.

Three projects in Woodlands with a total of 1,632 units have been launched since 2010, with 1,056 sold as at Dec 31.

Bellewoods was launched in the area in November, selling about 78 of 561 units as at Dec 31.

Given the burgeoning supply in these areas and low land prices for recent sites - those which transacted last year were sold at about $350 psf ppr or less than that - it is possible that the average selling price for new projects could dip this year, said Mr Ong.

Average EC prices have increased from about $700 psf in 2010 and 2011, to about $800 psf in the second half of 2013, he noted.

"Demand for ECs is still quite positive but it is very cost-sensitive and buyers are getting more selective due to ample choices," he said, adding that reverting to a roughly $750 psf average selling price for new projects would still allow developers to enjoy marginal profits.

-By Rennie Whang

Companies' Brief

Popular appoints financial, legal advisers for privatisation offer

Source: Business Times / Companies & Markets

Popular Holdings said it has on Friday appointed PrimePartners Corporate Finance as the independent financial adviser to advise its directors on the privatisation offer tabled by the group CEO and his wife. Grand Apex, jointly owned by Popular's group CEO and executive director Chou Cheng Ngok and his wife Hu Nan Lee had on Jan 14 launched a voluntary conditional cash offer for all the issued and paid-up shares in Popular that they do not already own at 32 cents per share.

Views, Reviews & Forum

Board's ruling on safety grille in condo laudable

Source: Straits Times / Forum

THE Strata Titles Board's decision that "children's safety must be paramount" when it ruled that an owner of a condominium unit can install a grille, even if it may affect the appearance of the building, was a pragmatic ruling that should be lauded ("Family wins case to install grille in condo balcony for child's safety"; last Saturday).

In all work-related sectors, safety is never compromised and the strong arm of the law comes down very hard on those who infringe safety regulations.

Thus, why should one compromise on safety at residential units? Shouldn't the same approach apply?

I am appalled at the callous attitude of the management corporation of 7 One North Residences, even when the resident, Dr Sujit Singh Gill, had informed it that he had seen his four-year-old daughter trying to climb over the glass wall in the balcony. Thus, the Strata Titles Board's stern words on the management corporation - that it was "unreasonably difficult" with Dr Singh's request - was fully justified.

Dr Singh's lawyers rightly highlighted that the condo's by-laws had to be consistent with the 2005 Building Maintenance (Strata Management) Regulations, which allow the installation of safety grilles to prevent accidents.

I hope that, in the light of the new ruling, the condo's management corporation will do the right thing and amend its by-laws so that they are in sync with the 2005 Building Maintenance (Strata Management) Regulations.

This important ruling by the board would surely be a benchmark for future disputes. Other management corporations should heed this ruling and allow such safety requests without owners having to take them to task.

-By Rajasegaran Ramasamy

Calls for condos to lift ban on safety grilles

Lawyers, experts, MP say safety should come before aesthetics of buildings' facades

Source: Straits Times / News

Condominium management bodies need to stop banning residents from installing safety grilles on balconies and windows just because it may spoil the look of the building, said lawyers and real estate experts.

If they insist on a uniform look for the estate, then they should come up with a set of approved grille designs instead.

This was the reaction to a ruling last week by the Strata Titles Board, which let a family with two young children install grilles in the balcony of their Buona Vista condo unit after their estate's management corporation (MC) twice refused to let them do so.

Members of the board ruled that "children's safety must be paramount, even if the grilles may affect the appearance of the building". This, they said, has been part of the Building and Construction Authority's (BCA) rules since 2005.

Ms Lee Bee Wah, who heads the Government Parliamentary Committee on National Development and Environment, hopes the latest case will serve as a precedent for management committees, that "if they were to insist and go to court, they would still lose".

"All condos should put safety before aesthetics," she said. "They should stop banning grilles based on appearance - we don't want to wait till somebody falls down, because then it would be too late."

Mr Toh Kok Seng, a strata dispute specialist who represented Dr Sujit Singh Gill in last week's case, also hopes other MCs which have said "no" to grilles in the past will "change their policies". MCs are made up of residents elected by their neighbours.

Mr Tang Chee Charn, executive director of real estate management services at Colliers International, said the condos his firm deals with typically agree on a standard grille for their residents.

"But I do know that some are very strict about maintaining the facade. I suppose they think that an ugly facade will result in a devaluation," he said, urging both residents and management committees to be more aware of the rules.

Ms Lee, an MP for Nee Soon GRC, believes there should be more dialogue between those running condos and the relevant authorities, such as the BCA. She said: "Some management committee members are not sure what they can and cannot do."

Disputes over grilles have been a longstanding issue. In 2012, the Urban Redevelopment Authority and the BCA wrote to The Straits Times to clarify that a unit owner shall not be prevented from installing safety devices to prevent harm to children.

Firms which install "invisible" grilles - typically made up of thin wires that do not obstruct views and are hard to detect from afar - said more condominiums have been approaching them for their services.

But the general manager of grille company Legate, Ms Jenny Goh, said some older condominiums typically are more restrictive. "Certain MCs can be very stubborn."

Just last month, a two-year-old boy fell to his death from an eighth-storey bedroom window in Kovan Melody condo.

For Dr Singh, a vascular surgeon, the waist-high glass wall at the balcony of his 13th-floor unit was not enough to prevent his four-year-old daughter from trying to climb it. "As parents, the safety of our children is extremely important," he told The Sunday Times yesterday. "I hope other MCs will follow this ruling and allow their residents with small children to protect them."

-By Hoe Pei Shan & Linette Lai

Short-term rentals a boon if properly regulated

Source: Straits Times / Forum Letters

SHORT-TERM home rental, or "peer-to-peer property rental", is just one aspect of the sharing economy, based on the premise that unused value is wasted value. Such rentals are already popular and have proven to be a viable alternative to hotels in many parts of the world.

Before we dismiss this industry as unworkable, we should consider if a properly regulated system may, in fact, be a boon rather than a bane.

In Singapore, accommodation for visitors is not just expensive but often unavailable during peak periods, such as major holidays or events like Formula One races.

In the private health-care industry, for example, I often hear of foreign patients cancelling their appointments here as hotel rooms are unavailable. Foreign patients seeking treatment here are already staying (probably illegally) in apartments in Orchard and Chinatown.

If short-term rentals are legitimised, the country will earn more tax revenue.

Problems such as overuse of common amenities or loss of privacy can be managed with regulations. For instance, HDB flats should not be allowed to offer short-term rentals, since they are subsidised housing.

Private condos can choose to allow such rentals if strata title members agree to them, and adjust the by-laws accordingly.

There is no guarantee that these condos' prices would fall. Demand for such apartments may go up if buyers see more potential income streams.

Landed private housing, such as semi-detached and terraced houses, should be allowed to take part as long as tenants abide by existing laws. If they are noisy or cause congestions, police action should suffice.

Owners must be held accountable and keep proper registers of tenants to ensure proper tax submission.

If properly regulated, this will make our hotel industry more competitive and take our tourism industry to the next level.

-By Huang Shoou Chyuan (Dr)

Global Economy & Global Real Estate

At Home Group moves in just as JC Penney moves out

Home decor retail chain had already researched JCP's over 1,000 US locations and knew which ones it wanted

Source: Business Times / Real Estate

Vietnam architect builds low-cost, high-tech home

Bamboo and coconut leaf house is strengthened by steel struts and wall panels

Source: Business Times / Real Estate

London home-value gains slow in Q4 as market cools

Source: Business Times / Real Estate

Is Hong Kong still Li Ka Shing's playground?

Restructuring plan raises question as to whether it is purely a business move

Source: Straits Times / World

AN ICON in Hong Kong's skyline, Cheung Kong Center is a glittering edifice to one man's shrewdness and ambition.

Mr Li Ka Shing's glass and steel tower holds firm to its prime spot in the business district of Central. But the businesses underpinning it could soon change their addresses of registration to one somewhat farther away.

Two weeks ago, Asia's richest man announced that he is restructuring his two flagship conglomerates - Cheung Kong and Hutchison Whampoa - and incorporating their new incarnations in the British overseas territory of Cayman Islands instead of in Hong Kong.

Since then, the media has seethed with excitement, with headlines ranging from "The Biggest Threat since Handover" to "Li Ka Shing Drops Bombshell".

The ballyhoo is not unexpected. Mr Li, whenever asked if he is yanking his investments from his home, had always denied contemplating such a move. In an interview in November 2013, he stated: "Cheung Kong's base is in Hong Kong; I definitely will not be relocating its domicile."

But in the past year, winds of change have swept through the city and the country, and Mr Li appears to have taken stock - and taken action.

The move is purely a business decision, he maintained at a press conference. "It's not about confidence but convenience," said the 86-year-old, adding he was "following the trend" of the past decade where 75 per cent of Hong Kong-listed companies have incorporated in the Caymans, a tax haven with more lax business rules.

The move, which shareholders have to approve, will expedite the "watershed event" of cleanly splitting his sprawling empire into two, one focusing on property and the other on globally diversified operations ranging from telecoms to ports.

This will unlock the value of the pair of listed companies, which had been trading at a discount to their asset values due to the currently muddied structure. Indeed, shares of both spiked after the news.

But Mr Li's explanation did not quiet talk that there is more than meets the eye.

This includes the theory that the octogenarian is laying the ground for handing the reins over to his elder son Victor Li, 51 - and thus putting bits of his empire that some estimates put at close to US$100 billion (S$134 billion) beyond the reach of a capricious Chinese regime.

"He's thinking about succession, and about how his kids may not have the connections or skills to deal with imperfect institutions," muses Professor Tao Zhigang, a business academic who heads the Institute for China and Global Development at the University of Hong Kong.

"He is shifting assets to developed countries where rules and regulations are transparent."

Adding more fodder to the mill was the news last week that Mr Li was making a bid for three overseas acquisitions - Britain's mobile phone giant 02 and passenger train provider Eversholt Rail Group, and the Netherlands' Dirx Drugstores. This is even as he steadily divested his investments in Hong Kong and China.

Mr Li, who started out working in his father-in-law's factory making plastic flowers, has never been a trend-follower. Dubbed "Superman" for his business acumen, his moves and words are closely monitored - not just by journalists or investors but also the Chinese government.

And an indication of just how much the latter cares is an editorial in the state-owned Global Times. It snarkily said Mr Li is past his time, and is today neither an ideal role model for the Chinese people nor a bellwether for the Chinese economy. His investments, it added, "are a drop in the ocean" relative to the Chinese economy. "There have been many pessimistic predictions about China but they all proved to deviate from reality," it said.

So what might be the thinking behind the billionaire's decision?

First and foremost, it is about dollars and cents. His moves do seem to signify his belief that the generous property banquet in Hong Kong and China at which he had long feasted is coming to an end, say those who have studied his decisions.

Dr Chan Yan Chong, an author of investment books, said Mr Li's explanation of mitigating against the share discount "is a good story to tell small shareholders".

But he believes the real reason is that by reshuffling the two companies thus, the Li family is diluting its stake in the empire's property arm, mainly in Hong Kong and China, while strengthening its stake in non-property investments in other parts of the world.

This, in turn, reflects a thinking that the current property cycle is peaking. Beyond factors such as rising interest rates putting an end to cheap lending, signs are that in Hong Kong, for instance, the government is trying to increase land supply, to alleviate unhappiness on the ground.

But business is never just about business, and political calculus is likely to be at play as well.

Mr Li is widely known to have a close relationship with former president Jiang Zemin. Both of the powerful men's elder sons have established a bond, but talk is that Mr Jiang Mianheng has fallen out of favour amid the weakening of the so-called Shanghai clique under his father's protection.

This is even as hints are afoot that ties between Beijing's and Hong Kong's traditional tycoons - who had supported current Chief Executive Leung Chun Ying's rival Henry Tang when both were running for the position in 2012 - are under strain.

A report last year in state news agency Xinhua, later retracted, reproached the businessmen for not being explicit enough in opposing the Occupy movement and singled out Mr Li for criticism.

Closer to home, the ongoing political tumult in Hong Kong would have played its part. During the press conference, Mr Victor Li revealed that the decision for the move was taken in the latter half of last year - a time when the Occupy movement was building up to a crescendo. The political uncertainty has festered since, with Beijing visibly tightening its grip on the city, even as the pro-democracy camp digs its heels in.

Meanwhile, there is greater pressure to address grassroots concerns such as income inequality, which could skew the city's laissez-faire pro-business dynamics, says Prof Tao.

A strike by dock workers in 2013 to petition for higher wages while demonising Mr Li as a "blood-sucker" would also have personally affected the titan, who took pride in feeling he had contributed to Hong Kong's progress.

It is likely that inherent in Mr Li's decision was thus a desire to both remind Hong Kongers of the role tycoons play in the economy, as well as to warn Beijing not to squeeze the city too hard.

For so long, Hong Kong has been known as Mr Li's playground. Now, no longer so, he seems to be signalling.

-By Li Xueying, Hong Kong Correspondent