The Way I see the Building & Real Estate Industry - A Local and Global Perspective of Accomplishments, Challenges and Directions for Surveyors Subtitle
The Way I see the Building & Real Estate Industry - A Local and Global Perspective of Accomplishments, Challenges and Directions for Surveyors Date: March 6, 2009 (Friday) Time: 6:30 – 8:00pm Venue: Chiang Chen Studio Theatre, The Hong Kong Polytechnic University Speaker: Mr. Kam-hung Yu Senior Manager Director Valuation & Advisory Services Greater China CB Richard Ellis FHKIS FRICS RPS(GP) FHIREA
Flowchart 1. Real Estate Development Process 2. Local vs Regional vs Global 3. Opportunities and Challenges 4. Our Future CB Richard Ellis | Page 3
Demand and Supply of Land � Demand for various uses: Housing, Working, Tourism… etc � Change of Harbour (Reclamation) � Change of Green Area � How to balance ??? Back to Flowchart CB Richard Ellis | Page 4
Town Planning � Public consultation � Master planning / Economic planning � Formulation of the land use pattern � Development density control � Site boundary formation � Feasibility study of the land � Land allocation via various methods Others: � Town Planning Application � Land administration Inputs - Land exchange, Lease modification, Payment of Premium Main Professional Involved: Main Professional Involved: Back to Flowchart � Planner � General Practice Surveyor � Land Surveyor CB Richard Ellis | Page 5
Real Estate Financing and Site Acquisition � Carry out development feasibility study � Form optimum development scheme � Site Valuation � Site acquisition � Carry out financial analysis � Preparation of budgets � Formulate optimum capital structure Main Professional Involved: Main Professional Involved: � Architect � Financial Analyst � General Practice Surveyor � Building Surveyor � Accountant Back to Flowchart CB Richard Ellis | Page 6
Development Design � Preparation of budgets and master plan � Formulate design and layout � Submit building plans � Conduct Market Study Main Professional Involved: Main Professional Involved: � Architect � Engineer � Quantity Surveyor � General Practice Surveyor � Building Surveyor � Arbitrator Back to Flowchart CB Richard Ellis | Page 7
Procurement � Tendering and Procurement � Budgeting and Cost estimation � Insurance and contractual advice Main Professional Involved: Main Professional Involved: � Quantity Surveyor � Architect � Engineer � Arbitrator � General Practice Surveyor � Building Surveyor Back to Flowchart CB Richard Ellis | Page 8
Project Development and Construction � Development and construction project management � Financial management – progress payment and claims settlement � Design amendments and drawings submission � Construction Monitoring – Time, Cost and Quality � Final Account settlement � Dispute settlement Main Professional Involved: Main Professional Involved: � Architect � Quantity Surveyor � Engineer � Building Surveyor � Arbitrator Back to Flowchart CB Richard Ellis | Page 9
Marketing � Evaluate the market situation and conduct research � Formulate the marketing plan � Conduct marketing campaign � Formulate Property Management Strategy Main Professional Involved: Main Professional Involved: � General Practice Surveyor � Property and Facility Management Surveyor � Property Agent / Marketing Expert Back to Flowchart CB Richard Ellis | Page 10
Legal Formality � Obtain various approvals and documents from government � Advice on various building control measures Main Professional Involved: Main Professional Involved: � Legal Professional � Building Surveyor � General Practice Surveyor Back to Flowchart CB Richard Ellis | Page 11
Asset Management � Design optimum tenant-mix and maintain optimum tenant Profile � Building and Facility Maintenance and Management � Building Safety � Refurbishment and renovation � License application � Enhancement the building value � Corporate Real Estate management Main Professional Involved: Main Professional Involved: � General Practice Surveyor � Property and Facility Management Surveyor � Building Surveyor Back to Flowchart CB Richard Ellis | Page 12
Redevelopment � Determine the needs for redevelopment � Feasibility study on redevelopment � Compulsory Sale � Land Resumption � Master Planning Main Professional Involved: Main Professional Involved: � General Practice Surveyor � Planner � Building Surveyor � Land Surveyor Back to Flowchart CB Richard Ellis | Page 13
Local vs Regional vs Global
Local vs Regional vs Global � Local: • Private sector (Developers, Institutional Companies, Investors and Consultancy firm) • Public sector (Government and quasi- government organization) � Regional: • China market • Other Asian cities � Global: • EMEA • North America � Others CB Richard Ellis | Page 15
Local Market Local: Total No. of Transactions Last decades: real estate Last decades: real estate 50,000 8,000 profession prospered due to 45,000 7,000 profession prospered due to Total no. of transactions (Domestic Units) 40,000 blooming economy of Hong 6,000 (Office, Commercial and Flatted blooming economy of Hong 35,000 Total no. of transactions Kong, which was real estate- 5,000 30,000 Kong, which was real estate- 25,000 4,000 Factories) driven driven 20,000 3,000 15,000 2,000 10,000 1,000 5,000 0 0 1997 Asian Financial Crisis: 1997 Asian Financial Crisis: 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 the rate of economic growth the rate of economic growth Domestic Total Office Commercial Flatted Factories dropped significantly and dropped significantly and property market suffered property market suffered from a long downturn period from a long downturn period Hong Kong GDP and GDP Growth � Demand for properties � Demand for properties 1,800,000 11 dropped significantly 1,600,000 Year-on-year % change 9 dropped significantly GDP (HK$ million) 1,400,000 7 � Oversupply of real in nominal term � Oversupply of real 1,200,000 5 estate-related professional 1,000,000 estate-related professional 3 800,000 services 1 services 600,000 -1 400,000 -3 200,000 0 -5 2000 2001 2002 2003 2004 2005 2006 2007 2008 2003: HK’s economy was 2003: HK’s economy was recovered Year recovered CB Richard Ellis | Page 16
Local Market – General Practice Surveyor 25% Private sector: Developer, Public Sector Public Sector Investors and private consultancy and institutional Private Sector Private Sector firms � Private sector faces “cut- 75% throat competition” Public sector: Government and quasi-government organizations � Higher demand of services by the public � increase the daily duties and workloads of professionals in the public sector � The job nature of the non-civil-service contract (“NSCS”) staff and civil servants is almost identical, but their remuneration package and benefits are significantly different � Salaries of new civil servants are geared to their civil service experiences only, but not those in private sector CB Richard Ellis | Page 17
Local Market – General Practice Surveyor GP GP Valuation, Asset and Property Valuation, Asset and Sales & Property Consulting & Sales & Facilities Development Consulting & Facilities Marketing Development Marketing Advisory Management Advisory Management Public Sector Public Sector � Government Organization � Quasi-government Organization Private Sector Private Sector � Consultancy Firms � Institutional Firms � Developers / Investors CB Richard Ellis | Page 18
Local Market – General Practice Surveyor General Practice Surveyor: General Practice Surveyor: Challenges: Challenges: Limited Job Limited Job Limited Job Opportunities??? Opportunities??? Opportunities??? More Demand?? More Demand?? More Demand?? Strong Strong Strong Competition ?? Competition ?? Competition ?? Rapid Changing Rapid Changing Rapid Changing Environment?? Environment?? Environment?? CB Richard Ellis | Page 19
Local Market – Planning and Development Surveyor P&D P&D P&D Property Property Planning Planning Development Development Public Sector Public Sector � Government Organization Confidential Projects Confidential Projects Confidential Projects � Quasi-government Organization Private Sector Private Sector � Consultancy Firms Institutional Firms X � Developers / Investors Confidential Projects Confidential Projects Confidential Projects CB Richard Ellis | Page 20
Local Market – Planning and Development Surveyor � Planning and Development Surveyor: � Planning and Development Surveyor: Role of Surveyor Role of Surveyor � Strategic director � With foresight and planning and Government Organization/ development knowledge Quasi- � Involve in planning stage as well as government property development stage Organization � Director of planning � AO grade government official, with Developers / Investors AO type training CB Richard Ellis | Page 21
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