How Singapore is transforming its real estate for the future
Singapore’s government is making a concerted effort to keep its real estate market competitive in an increasingly technology-driven environment.
Technological transformation has disrupted industries around the world, and it’s impacting a range of property sectors. The effects are far-ranging, from the way people buy and rent homes to the disruptive force of co-working players coupled with tech giants in China leaping into the real estate market.
With its new directive, Singapore is aiming to keep pace by encouraging more public institutions and companies to adopt new technologies and integrate them into their real estate, observes Tay Huey Ying, Head of Research and Consultancy, JLL Singapore.
Real estate firms from the island nation have started gearing up. Developer Capitaland’s Corporate Venture Fund has a S$110 million war chest to invest in Series A to C companies while construction conglomerate Hop Hup revealed its investment arm, Aurum, has pumped US$1.5 million seed money into Singapore’s first co-living start-up Hmlet and is looking to invest in more.
The Industry Transformation Map (ITM for short) for real estate was launched by the Singapore Government last month. It is a strategic roadmap aimed at helping companies drive innovation and productivity in a rapidly-changing economic climate.
Already, the residential market has seen significant change. Three property agencies, PropNex Realty, ERA Realty, and Huttons Asia launched an online platform that aims to make it easier for buyers and sellers to transact securely, while agents and consumers are able to share data with one another.
Two of Singapore’s biggest property agencies, Propnex and Dennis Wee Group, merged last year. The Housing Development Board also introduced a resale portal on January 1 will halve the time required to complete transactions with checks done online instead of in person.
On the commercial real estate front, expect more smart buildings to crop up. While they already exist in Singapore, the ITM is expected to push more innovative and sophisticated solutions “such as predictive maintenance and automation through machine learning,” says Lee Chee Leong, Regional Directional of Integrated Facilities Management, JLL Asia Pacific.
He cites JTC, one of Singapore’s largest government agencies, as an example of industry bigwigs leading the way. JTC introduced a S$15 million Integrated Command Centre that can remotely track, study and optimise the performance of its buildings and manage its Facilities Management operations island-wide.
Singapore is one of the most tech-savvy countries in the world. A 2016 World Economic Forum Global Information Technology Report places the city-state among the top seven in terms of generating economic impact from investments in information and communications technologies (ICT).
This status, along with its traditional strengths in sectors such as finance, have served the country well. Fintech investment reached a record US$227 million in funding in 2017, according to KPMG research.
And with investors returning to Singapore real estate after the downturn in the last couple of years, the ITM is a timely demonstration of the government’s commitment to the sector.
The government has designated One-North as Singapore’s first Drone Estate for approved enterprises and research users to test urban solutions, UAS (unmanned aircraft systems) technologies and “the better design of future precincts in Singapore to incorporate new technologies, and accelerate their adoption”.
The annual budget showed concern that Singapore needs to reposition itself and build a more vibrant and innovative economy as Asia plays an increasingly larger role in global trade and investment flows. Competition from other cities was also highlighted.
A future-ready real estate industry is imperative “not only to prepare and help the real estate industry ride this wave so that it can continue to grow, but also show investors that Singapore is serious about maintaining its competitive advantage and relevance in this digital age,” according to Tay.
Click to read about whether Singapore’s residential market is set for a rebound.