http://www.echarris.com/blogs/feedRSS Feed for The Built Asset Blogen   I've seen an article in the Economist recently talking about the changing face of Chinese society.  The article correctly identified the rapidly growing elderly population as a potential barrier to the country’s future economic growth. However, by looking at this issue in purely financial terms I thought the author underplayed a more pressing concern – the inadequacy of the country’s current healthcare facilities to care for this group. The need to build new hospitals in China has long been discussed however elderly care provision calls for specific requirements. Illnesses such as cardio-vascular disease, dementia and other aged link conditions are more common in addition to the increase in so called “lifestyle diseases” of diabetes and obesity. With a need to provide specific care for more elderly people, the solution lies not just in creating additional capacity but in ensuring that the next generation of hospitals and senior care homes, have the right level of skills in place to meet the demands of this set of patients. The key to success will be ensuring that these new facilities operate as efficiently as possible, and that the staff who work there have access to and are trained in using the sophisticated technology that they need to do their jobs as well as possible. This dilemma is not unique to China however it finds itself playing catch up at a time when the average life expectancy is rising faster than many other countries. Progress has been made in the last three years however unless there is a much higher level of expenditure on a GDP per capita basis, there is a risk that the generation currently driving China forward could ultimately end up as victims of this rapid ascension. Either caring for their elderly parents or trying to find the right level of care for themselves. Karen Prosser http://www.echarris.com/blogs/positive_outcomes/China_grow_olderTue, 15 May 2012 06:08:26 Zhttp://www.echarris.com/blogs/positive_outcomes/China_grow_older    I have attended a number of conferences recently  including RICS “Fit for the Future” Conference in Beijing. Opinions from these conferences together with feedback from our own clients regarding the current status of Property and Facility Management in China prompted me to write this blog. In regions with rapidly developing built assets and an apparent rush to beat competitors, it’s little wonder there is a focus on development management, and project and construction management rather than facility management in terms of professional services. In my opinion, China, like the UAE before it, has adopted a “Build it and they will come” approach, particularly in asset classes such as residential, commercial offices and shopping malls.  The growing economy in China, rapidly increasing middle class and eye popping rates or urbanization have fuelled the need for property and let’s be honest, in such a rising market, most investors can make money, if they get out before the bubble bursts that is! With the Government in China having introduced a number of measures to cool the economy and as competition increases generally, poorly designed, built and operated assets will struggle to give owners and investors the size of returns they are looking for.  I recall a quote from a well respected industry expert who said of the 3,000 shopping malls in China, less than 10% are profitable.  This is not sustainable.  For the unprofitable malls, property and facility management will need to improve, costs will need to reduce, and the building may need to be repositioned or even re-developed.  Hotels and commercial buildings are also suffering from poor design and even worse property management!  As customers, end users and office workers become more demanding and increasingly exposed to international / overseas practices, their expectations in terms of retail experience, hospitality experience, customer service and office environments will increase leaving many built assets and associated property services falling short. Generation Y (born in the 80’s) will soon exceed 200 million in China.  This generation have different expectations from the workplace than their parents did.  Generation Y will expect to be able to work more flexibility, mix work with pleasure, socialize at work, and have access to modern technology for communicating.  They may need smaller desks and no filing space but they expect breakout areas and more facilities. Rising energy costs will force a more innovative / aggressive approach to energy management in existing buildings.  Property will increasingly become a source of competitive advantage and the get rich quick Developers will need to re-think their strategy. The challenge in China or course is finding  skilled and experienced professionals to better manage buildings.  Historically the property industry has been fragmented and somewhat linear (Acquisitions & Transactions / Planning / Design / Construction / Operation / Future Modification) and there is clearly a need for the industry to be more joined up and more integrated. Unfortunately in China there has been a major focus on engineering and construction management related careers. University courses and property related associations alike have concentrated on the skills necessary for designing and constructing new buildings rather than operating them.  With a large number of underperforming assets, rising energy costs and more demanding end users this needs to change but unfortunately I cannot see any easy short cuts. The solution probably revolves around the need to import experience from overseas and learning lessons from more mature markets.  In the long term, the government will need to focus as much on operating, maintaining and professionally managing their built assets as they did constructing them. I am very curious to hear your thoughts! Andrew Macpherson http://www.echarris.com/blogs/positive_outcomes/property_facility_management_chinaTue, 24 Apr 2012 08:43:02 Zhttp://www.echarris.com/blogs/positive_outcomes/property_facility_management_china Off the plane at Luton airport after RealGreen event in Warsaw, Poland! We had a great evening at the CEEQQ (Central Eastern European Quality Awards) Gala dinner and were well represented by EC Harris and ARCADIS colleagues from across the region. Big success all round, Richard Clare from EC Harris, received the lifetime achievement award and we also picked up the award for 'Development Services Company of the year' fantastic achievement and so good couple of days all round. The RealGreen symposium & fair, during the day, was about the opportunities for green or sustainable buildings in the region and although there is an appetite for sustainable buildings the debate focussed on how to make them stack up financially, so ‘It’s all about the Money’. There was also a particular focus in upgrading existing stock in a sustainable way.  My slot “A deep dive assessment of operational costs savings delivered by green building best practice and its impact on the overall business proposition in 2012” focused on the premium for green buildings, the operational gains (direct and indirect financial benefits), the benefits of taking a whole life approach and the potential market value. I also managed to get 'blogged' myself by the Financial Times, see the blog here  Contact me to find out more about  sustainability and the opportunities in CEE. Nick http://www.echarris.com/blogs/positive_outcomes/RealGreenApostscriptFri, 20 Apr 2012 13:38:41 Zhttp://www.echarris.com/blogs/positive_outcomes/RealGreenApostscript I was invited to be interviewed by Bernie Lo on CNBC Asia yesterday morning to talk about the property prices' drop in China. Below are few points I thought I could share with you regarding this, this is good follow up on last month blog written by our China Location Leader. Why are property prices across China dropping? Prices are decreasing due to a suite of measures that the government introduced last year – these include property taxes, higher mortgage deposit and single mortgage restrictions As a result volume of sales has decreased both for new apartments and  the second hand market Do you think this will prove to be a long-term trend? Prices have dropped now for 6 consecutive months which reflects a certain degree of consistency and whilst these measures are in place it is realistic to expect this will continue However by introducing a suite of measures the government has the flexibility to address this by adjusting one of them. This would enable them to loosen market conditions without undermining their current approach to cool prices Have these measures been effective? Yes they have – the aim of the government was to reduce residential prices, the figures over the last 6 months show this has happened: yesterday’s data showed that prices have dropped in 37 cities across China compared with the same point in 2011 and 46 out of 70 cities in the last month alone Do you think there will be an uplift again in the near future? Whilst the measures are all in place it may be difficult, following a partial release we will see recovery but this will also depend on the current inventory available in each city In some cities the market is over-supplied and where that is the case it becomes difficult to see prices rising in the next 2 quarters What impact is this likely to have on China’s wider economy? Construction slowdown may have partially contributed to the lower GDP level of 8.1%  growth that was announced last week however China’s economy is not wholly dependent on the residential market Over the past few years there has been significant growth in hard infrastructure – roads, airports, etc. and there is also massive growth predicted over the coming years in social infrastructure e.g. education, health and affordable housing. These schemes will create a demand for construction activity (materials and labour) which should help maintain an active industry and therefore its effect upon the economy. Is this continued drop in property prices the main reason behind Chinese developers filing for bankruptcy? Hard to comment on an individual case but what is evident is that the extended tightening is creating a more challenging marketplace If prices continue to decrease we may well see increased levels of consolidation and M&A activity or developers beginning to focus on other areas that are less constrained What’s your outlook for China’s wider property market in 2012? Those developers who adopt a more diversified approach and look at mixed-use components are likely to do well Commercial office prices in Shanghai and Beijing are currently going up and with demand high and inventory low costs are likely to continue to rise even further In tier two cities there should be a continued focus and investment in infrastructure e.g. creating airport hub cities, high-speed rail as this offers realistic payback. Drop me a line if you would like more insight or simply comment on those points! Simon Baxter http://www.echarris.com/blogs/positive_outcomes/Drop_in_property_prices_ChinaFri, 20 Apr 2012 07:34:36 Zhttp://www.echarris.com/blogs/positive_outcomes/Drop_in_property_prices_China I arrived yesterday at the Marriott Warsaw at the Central Eastern European RealGreen Symposium to see our recycled cardboard stand coming out of its boxes. Surprisingly by the morning the exhibition was fully dressed and our stand looked fantastic! Lots of positive comments!! The symposium offered an impressive selection of presenters from clients and consultants followed by a very positive discussion. There is a clear interest in green building in CEE but the key theme of the day was 'it's all about the money'. Now we look forward to tonight's awards ceremony, hopefully we will pick up an award. Keep you posted. Nick http://www.echarris.com/blogs/positive_outcomes/real_green_symposiumWed, 18 Apr 2012 13:01:40 Zhttp://www.echarris.com/blogs/positive_outcomes/real_green_symposium I have attended a session on flexible workplace during the Singapore Corenet Summit last month discussing why 80% of respondents worldwide now offer flexible working including: improved productivity, reduced overhead, and an improved work-life balance for staff. It was very interesting to share how we can apply strategies to increase employee productivity and satisfaction and how to connect benefits of a wider talent pool to fast scalability of the business. Both public and private sector organisations now demand that their workplaces contribute to improving performance. High performing organisations are redefining their workplaces beyond the traditional office. When implemented successfully, and underpinned by effective stakeholder management and internal communications, the benefits of workplace optimisation can be significant. As an example, we moved our Headquarter in London as part of an overall programme to deliver higher performance, the empirical data arising from creating a building that was designed to impact on organisation and workplace was outputs that achieved fee turnover per head increased, overhead costs as % of staff costs reduced by 14% and utilisation of workspaces increased from 62% to 85%. The benefits of workplace optimisation can be grouped around three key drivers of organisational success: People Performance Place   An effective workplace optimisation strategy brings together a number of work-streams that are often siloed and aligns them with organisational goals to unlock tangible benefits. These areas include real estate, culture, people, technology, transport, sustainability and service delivery.   Implemented successfully, an integrated optimisation strategy generates a dividend that empowers the organisation to quantify its impact. Jonathan Moore http://www.echarris.com/blogs/positive_outcomes/people_performance_placeTue, 17 Apr 2012 07:10:20 Zhttp://www.echarris.com/blogs/positive_outcomes/people_performance_place The retained ‘presumption in favour of sustainable development’ in the final National Policy Planning Framework  (NPPF) published yesterday has to be viewed as a positive step from a developer’s perspective. This will no doubt eliminate some of the risks associated with planning, whether you are developing large scale strategic land opportunities or compact city centre sites.  On the other hand, there is still likely to be some concern about how this change in policy will play out in practice and in particular how the new document will be interpreted by the local planning authorities.   In light of this, we have highlighted the opportunities as well as the “watch outs” that the new framework brings with it. We concentrate specifically on where the small print of the final NPPF differs from the draft that has been in circulation since July 2011 and which no doubt you will have a working understanding of.   Click here to view our observations on the final NPPF and what this may mean for you http://www.echarris.com/blogs/positive_outcomes/NPPF_developersThu, 12 Apr 2012 18:26:14 Zhttp://www.echarris.com/blogs/positive_outcomes/NPPF_developers Just got back to Shanghai after a really thought provoking Corenet Global Summit in Singapore...  This years theme was Reimagine: Reorient, Reignite Reinvent and it really brought a lot of dynamic ideas to the sessions and forums.  Summit kicked off with Jonathan Pain with his Pain Report giving a passionate take on submerging and emerging countries.  It was great to hear someone with strong and positive views about China and how the emerging middle class should be dictating how the world responds to the opportunities that presents us all!  He chastised the foreign media for misrepresenting China to the world and criticised the ambiguous focus of US international politics (especially the Tea Party) and how the dirty three letter wordoil is taking precedence over the values on which that great nation was founded.  This beckons the question: what does the 21st century American Dream look like?  This led to a series of forums on surrounding topics that are impacting both Asia and the world and are relevant to our industry.  The most talked about was an introduction by Microsoft to their Integrator solution for out-sourcing much of their real estate functions to CBRE.  This was a model designed by Microsoft and Ernst & Young- and it generated fierce debate at lunchtime with my peers.  I am really looking forward to immersing EC Harris into this process as we take on three of their current largest real estate projects in Beijing and Xian this month….   The closing speech was by a futurist called  Mike Walsh from Tomorrow limited, an excellent public speaker that introduced some eye opening thoughts around what the future could be like… however what was most impactful to me was the future is now… in Japan they use their mobile devises as credit cards- whoever knew that?  He raised some valid points around Generation Y (a topic much discussed) and how their workplace should look like… this just reinforces what an exciting industry we are working in and how it is incredibly exciting to be a built asset consultant in Asia at this time. http://www.echarris.com/blogs/positive_outcomes/future_is_nowThu, 12 Apr 2012 18:25:32 Zhttp://www.echarris.com/blogs/positive_outcomes/future_is_now A restriction on the employment of new foreign workers, introduced in the 2012 Singapore Budget, was a challenge on the Construction industry that I highlighted in my latest blog. The potential impact of this restriction has however been reduced over the last few days with an announcement by the Singapore Government that the maximum period of employment for existing unskilled work permit holders will be increased from six years to ten years. Allowing the retention of skilled operatives in the workforce for an extra four years will support the productivity drive that the industry in trying to achieve, enhance efficiency, and promote the training and develop of a multi skilled workforce. This is a positive move forward and will support the industry’s ability to deliver against future economic growth.     Richard Warburton http://www.echarris.com/blogs/positive_outcomes/Foreign_worker_restriction_SingaporeThu, 12 Apr 2012 18:04:57 Zhttp://www.echarris.com/blogs/positive_outcomes/Foreign_worker_restriction_Singapore  As I walked pass the contractor’s site office this morning, lights were turned on, computers flashing graphics and the air-conditioning working hard (maybe since yesterday?!). And there’s hardly anyone in yet! Here’s a reality check - It is Earth Hour tomorrow and this is a gentle reminder we all need to watch out our energy consumption. This month also marks one year since the tsunami and nuclear crisis in Japan. As we take a solemn moment to reflect on this disaster, the fight for a cleaner (and safer) World continues. We may not be politicians dictating policies, but let's not forget we all have a role to play. At EC Harris, we all have to take an Environmental Management (EMS) Awareness Training session because knowledge is power. You’ll find some interesting and honestly disturbing facts in there...  The World population will reach 9 billion people by 2050, we see ozone depletion at breakneck speed and Eutrophication (depletion of oxygen in water causing death to life in the aquatic system) at an alarming level and the list goes on! When you have finished the training, you can't help but thinking it’s time to act! Start off by monitoring your office energy usage, introduce waste management, lower the air-conditioning set point, take public transportation. These are the least we should all do. We should all challenge our colleague to do the same. Every little things count and we can only make a difference if we are all part in this. Let’s make GREEN the new catchphrase! Back home and closer to heart, did you know the Singapore's government is on track to enforce Green Mark requirement as mandatory for all construction works by 2020? Now, that’s what you call leading by example! Christopher Chiew http://www.echarris.com/blogs/positive_outcomes/Leading_by_exampleFri, 30 Mar 2012 03:06:52 Zhttp://www.echarris.com/blogs/positive_outcomes/Leading_by_example