© 2014 NATIONAL UNIVERSITY OF SINGAPORE | DEPARTMENT OF REAL ESTATE (DRE) & INSTITUTE OF REAL ESTATE STUDIES (IRES)

To Develop Landscape Guidelines for Application of Green Plot Ratio in Singapore

Principal Investigator: Tenured Associate Professor (Dr) HO, Kim Hin / David

Research Assistant: Ms Irina ORLENKO Graduate Assistant: Mr. Satyanarain, RENGARAJAN

Under the MND Research Fund for the Built Environment, awarded by the Building and Construction Authority (BCA) on 8 April 2008 to the National Parks Board (NParks), the research project WBS R-294-000-022-490 (about S$1 million in kind and actual funding), and entitled “To Develop Landscape Guidelines for the Application of Green Plot Ratio (GnPR) in Singapore” was formed on 9 July 2009 between NParks (under Dy Director Dr TAN Puay Yok; now A/P with NUS DOA); NUS; JTC Corp; HDB and URA. Fieldwork support was provided by Broadway Malyan Ltd under its partner, Adj Prof (Nottingham University) Jason POMEROY. GnPR is developed by the Dr ONG Boon Lay (formerly SL, NUS DOA; now with University of Melbourne) to guide the provision of greenery in urban settings. GnPR uniquely allows a three-dimensional quantification of greenery on a site through the use the Leaf Area Index (LAI) measure. Specific research objectives:

To provide GnPR optimal levels for various land-use types and to benchmark them against current levels of greenery provision for various types of land uses;

To identify the impact of various levels of greenery provision on capital and maintenance costs;

To develop recommendations and landscape guidelines for implementing optimal levels of GnPR within an urban design framework to facilitate a sustainable landscape for Singapore.

GnPR is defined as the ‘average leaf are index (LAI) of the greenery of a site”, an ecological measure that assigns values to particular plants based on the surface area of greenery (Ong, 2003). NParks defines GnPR as ‘the area weighted average leaf area index of a site’:

∑

LAI values for different types of plants are found in a Guidebook on its use in the Calculation of Green Plot Ratio ‘Leaf Area Index of Tropical Plants’ (NParks, 2009). The RP’s methodology aims to determine achievable GnPR values that can be incorporated in a building type through a series of design simulations and statistical analysis of the data derived from these simulations. Figure 1. shows the hyperbolic slow-to-sharp rising trend of GnPR with the assigned Total Cost (S$) from the Existing to the Ultimate scenarios. Average increase of the GnPR level from the Existing to the Ultimate scenario is observed as follows:

- Residential – by 1.5 with the total cost increase of $10 million; - Mixed (Residential-Commercial) – by 1.3 with the total cost increase of $7.4million; - Commercial – by 1.7 with the total cost increase of $4.9 million; - Factory – by 1.5 with the total cost increase of $8.9 million; - Business Park – by 1.3 with the total cost increase of $6.6 million.

Average increase of the GnPR level from the Maximum to the Ultimate scenarios is observed as follows:

© 2014 NATIONAL UNIVERSITY OF SINGAPORE | DEPARTMENT OF REAL ESTATE (DRE) & INSTITUTE OF REAL ESTATE STUDIES (IRES)

- Residential – by 0.5 with the total cost increase of $5.9 million; - Mixed (Residential-Commercial) – by 0.3 with the total cost increase of $3.7 million; - Commercial – by 0.6 with the total cost increase of $2.0 million; - Factory – by 0.4 with the total cost increase of $4.8 million; - Business Park – by 0.4 with the total cost increase of 3.9 million.

GnPR of 3.1 is achievable with the Total Cost of S$8.4 million for the Ultimate scenario while GnPR of 2.6 with the total cost of $4.6 million is achievable for the Maximum scenario.

FIGURE 1. GNPR VS TOTAL COST

Empirical data for the Marginal Cost (MC) analysis model was obtained from the building audit of the 100 buildings. The lowest Marginal Cost is found to be at the GnPR levels for 5 land uses:

Residential land use: existing condition (option) is 3.41 while the combined option is 3.67 with the total cost of $1,536,819

Mixed (residential-commercial) land use: existing condition is 1.03 while the combined option is 2.71 with the total cost of $5,125,360

Commercial land use: existing condition is 0.56 while the combined option is 2.13 with the total cost of $425,440

Industrial land use – business parks: existing condition is 1.73 while the combined option is 1.97 with the total cost of $265,992

Industrial land use – factories: existing condition is 0.25 while the combined options is 1.66 with the total cost of $14,274,033.

$-

$2,000,000

$4,000,000

$6,000,000

$8,000,000

$10,000,000

$12,000,000

$14,000,000

$16,000,000

0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0

Co

st

GnPR

GnPR vs Cost by Building Type Use : Existing to Ultimate HDB

Condo

Pub Mixed

PrivateMixed

Hotel

Office

Retail

© 2014 NATIONAL UNIVERSITY OF SINGAPORE | DEPARTMENT OF REAL ESTATE (DRE) & INSTITUTE OF REAL ESTATE STUDIES (IRES)

The GnPR optimisation adopts a heuristic algorithm that conforms to the usual practice of imposing constraints on a maximising objective function. Such an increasing function for GnPR is represented by incrementing the standard deviation from the mean GnPR (SD) within the boundary range of between +0.25SD and +2.0SD. In practice, for normally distributed GnPR, approximately 95 percent of the data points would fall within the spread of +1.96SD, i.e. +2.0SD from its mean. The 4-step rules of the GnPR heuristic optimisation model are devised as follows: the lowest and closest GnPR value for an incremented SD to the Ultimate GnPR is chosen as that particular highest boundary for the optimal GnPR level. Results of the heuristically modeled Optimal GnPR for 10 building types are summarised in Table1. Finally, the Landscape Guidelines Report combines findings from the International Best Practices Review, Building Audit and Design Report, and Statistical Analysis. The guidelines provide the environmental, economical, aesthetic and social benefits of greenery for urban built-up areas. They examine the current landscape strategies, requirements, technologies and present GnPR as a tool for greenery measurement and the Optimal GnPR levels for various land use categories in Singapore.

TABLE 1. OPTIMAL GNPR

Land Use Building Type Optimal GnPR (design and

economic)

low high

Residential Public 3.1 4.7

Private 2.7 4.1

Mixed Residential-Commercial

Public 0.2 0.5

Private 2.2 4.2

Commercial

Hotel 1.2 2.4

Office 1.1 3.1

Retail 0.9 2.6

Mixed 0.8 2.6

Industrial Business Park 2.3 3.7

Factory and Warehouse

0.6 1.4

© 2014 NATIONAL UNIVERSITY OF SINGAPORE | DEPARTMENT OF REAL ESTATE (DRE) & INSTITUTE OF REAL ESTATE STUDIES (IRES)

© 2014 NATIONAL UNIVERSITY OF SINGAPORE | DEPARTMENT OF REAL ESTATE (DRE) & INSTITUTE OF REAL ESTATE STUDIES (IRES)

Does new construction activity affect the electricity consumption of nearby residents?

Sumit Agarwal, Rengarajan Satyanarain, Tien-Foo Sing

Department of Real Estate, NUS and

Derek Vollmer Singapore-ETH Centre, Future Cities Laboratory

Based on a recent research on the Singapore’s residential electricity consumption, the answer is “YES”, and it may even lead to a permanent increase in consumption. Singaporean households experience negative externalities generated by primarily air and noise pollution from nearby construction sites. Complaints about these externalities have been on the rise in Singapore and, residents usually close their windows and rely on indoor air conditioning to mitigate construction noise and pollution. In Singapore, the air conditioner remains the single largest consumer of electricity in an average household (36.7 %), and the amount of energy used by an air-conditioner is ten times larger than that in fans, according to the National environmental Agency (NEA) estimates. This leads us to study whether the negative externalities of nearby construction could be detected in household electricity consumption data, and if so, how long might the effect persist? This paper tested the hypothesis using unique datasets on construction activities (courtesy of BCA) and electricity consumption in HDB blocks (courtesy of NEA) for the years 2009 to 2011 (Figure 1). By mapping the construction data with the block level electricity consumption data, we separate our electricity consumption data into a treatment group (HDB blocks within 1km of an active construction site) and a control group (all other blocks). Our regression models that control for unobserved spatial heterogeneity are used to test for differences between household’s electricity consumption during (at the start of) and after a construction event. The models regressed the

log electricity consumption by block on a fixed district effect variable (i), and a fixed time effect

variable (t). The results show that negative externalities from construction sites have a statistically and economically significant effect on the electricity consumption of nearby households. We find that electricity consumption for households within 1km of construction zones increases 6.0% for the duration of the construction activities. If we assume that the typical household’s air conditioning use constitutes ~37% percent of total household electricity consumption, then this increase actually equates to >16% increase in air conditioning use! Taking the average monthly block-level electricity consumption during our study period (50,256 kWh) as a basis, we estimate an excess consumption of 3,105 kWh per block per month, which translates to S$9,770 per block per annum at the 2009 average electricity tariff of S$0.27/kWh. After the completion of construction, we find that households in our treatment group did not revert to their pre-construction behavior meaning the high electricity consumption persists. When controlling for district-level fixed effects (such as regional temperature variation), we find a statistically significant (p < .05) increase in the post-construction consumption behavior of households in our treatment group, estimated at 6.8% relative to the control group over the study period of 2009-2012.

© 2014 NATIONAL UNIVERSITY OF SINGAPORE | DEPARTMENT OF REAL ESTATE (DRE) & INSTITUTE OF REAL ESTATE STUDIES (IRES)

With global concerns about energy consumption and household concerns about electricity bills, we think we have identified an externality that is worth exploring further. There are of course many caveats in extrapolating long term trends from a relatively short time series dataset.

Figure 1: Map of Singapore showing location of construction activity in Singapore during 2009-2012

For the full paper, please click here

© 2014 NATIONAL UNIVERSITY OF SINGAPORE | DEPARTMENT OF REAL ESTATE (DRE) & INSTITUTE OF REAL ESTATE STUDIES (IRES)

Singapore Residential Price Index

The SRPI Updating for the Month of January 2014. URA data feed date: 21 January 2014 NUS SRPI – the SRPI value weighted index in December 2013 dropped for overall and three

sub-indices from November. The December SRPI change marks the fifth consecutive monthly

price decrease for the completed non-landed private condominium in the SRPI basket. The

SRPI index decreased from November by 0.7 percent for overall, 0.3 percent for central

region, 0.9 percent for non-central region and 0.6 percent for small units respectively. The SRPI overall revised index of November 2013 adjusted downwards with 0.5 percent

decrease from previously reported 0.1 percent increase. The central region sub-index adjusted

similarly from previously reported 0.3 percent increase to 0.9 percent decrease. For non-

central region the previously reported SRPI sub-index remained unchanged. The revised sub-

index for small units was 0.5 percent decrease (previously reported 0.6 percent decrease). The SRPI is a transactions-based index that tracks the month-on-month price movements of

private non- landed residential properties in Singapore. For detailed information concerning

the monthly SRPI, please see the Index Methodology at

http://www.ires.nus.edu.sg/srpi/srpi_im.aspx. The next release will be on February 28, 2014 and will include monthly SRPI flash data for

December and revised data for November. The SRPI up-to-date Value-weighted Index Chart 1) The SRPI, Central Region SRPI (excluding small units), non-Central Region SRPI (excluding small units) and SRPI Small (December 2005 to December 2013; 2005.12=100)

© 2014 NATIONAL UNIVERSITY OF SINGAPORE | DEPARTMENT OF REAL ESTATE (DRE) & INSTITUTE OF REAL ESTATE STUDIES (IRES)

2) The SRPI, Central Region SRPI (excluding small units), non-Central Region SRPI (excluding small units) and SRPI Small (March 2009 to December 2013; 2009.03=100)

3) Overall SRPI, Sales Volume by 1st Revision (value-weighted) (December 2005 to December 2013; 2005.12=100)

© 2014 NATIONAL UNIVERSITY OF SINGAPORE | DEPARTMENT OF REAL ESTATE (DRE) & INSTITUTE OF REAL ESTATE STUDIES (IRES)

December 2013 Flash SRPI Values

(Reflective of transactions received as at 21 January 2014) November 2013 Revised SRPI Values

(Reflective of transactions received as at 21 January 2014) With effect from 28 July 2011, IRES will publish the overall SRPI, two regional sub-indices that exclude small units and a small unit sub-index. A small unit has floor area of 506 square feet or below.

SRPI Basket as at December 2011 Index Value (Mar 2009=

100)

Month-on-month change

SRPI Overall 157.9 -0.7%

SRPI Central (excluding small units) 143.6 -0.3%

SRPI Non-Central (excluding small units) 172.3 -0.9%

SRPI Small 178.6 -0.6%

SRPI Basket as at December 2011 Index Value (Mar 2009=

100)

Month-on-month change

SRPI Overall 159.0 -0.5%

SRPI Central (excluding small units) 144.1 -0.9%

SRPI Non-Central (excluding small units) 173.9 -0.1%

SRPI Small 179.6 -0.5%

© 2014 NATIONAL UNIVERSITY OF SINGAPORE | DEPARTMENT OF REAL ESTATE (DRE) & INSTITUTE OF REAL ESTATE STUDIES (IRES)

NUS-REDAS Real Estate Sentiment Index (RESI) Press Release 30th January 2014

Real Estate Developers Maintain Cautious Stance in 4Q13

Real Estate Developers’ sentiment improved marginally in the 4Q13 NUS-REDAS Real Estate

Sentiment Index (RESI) Survey. The Composite Sentiment Index, a derived indicator for the

overall real estate market sentiment in Singapore, increased from 3.9, to 4.0 in 3Q13. The

Current Sentiment Index stood at 4.1, up from 3.9 in the last quarter. The Future Sentiment

Index increased to 4.0 from 3.9 in 3Q13. A score under five indicates deteriorating market

conditions and one above five, improving conditions.

Sentiments in the prime residential sector showed a current net balance of -53% and a future net

balance of -44%; while suburban residential sector showed a current net balance of -47% and a

future net balance of -57% in 4Q13. Office sector had a current net balance of +27% and a future

net balance of +20%; while hotel / services apartment sector indicated a current net balance of -

11% and a future net balance of -18% in 4Q13.

A “current and future net balance percentage” is used to indicate current and future sentiments

about real estate development and market conditions in Singapore. It is the difference between

the proportion of respondents who have selected the positive options (“better” and “increase”)

and the proportion of respondents who have selected the negative options (“worse” and

“decease”).

38.9% of the developers surveyed in 4Q13 expect residential property launches to hold at the

same level in the next six months, up from 38.5% in 3Q13. 22.2% of them expect moderately

more launches in 4Q13 and 13.9% of them indicated that they will launch substantially more

units, up by 3.6% in the last quarter. 22.2% of them expect moderately less units of new

launches; down by 4.3% in the last quarter. On price changes, 31.4% of them anticipate that

residential prices will hold in the next six months, down from 35.9% in 3Q13. 62.9% of them

expect moderately lower price in the near term, up from 51.3% in the last quarter.

In 4Q13, 46% of the developers were very concerned with rising land cost. The high land cost

over these few years could be due to stiff competition from hungrier developers who may have

access to foreign capital to bid aggressively. Labour cost continues to be the major concern over

the next six months as indicated by 54.3% of the developers in 4Q13, down from 59% in 3Q13.

The government had announced an increase of low-skilled foreign workers levies, earlier this

year.

71% of the respondents selected the ‘Greater Southern Waterfront Development’ as the most

exciting plan in the draft Master Plan 2013. They were least thrilled by the ‘Jurong Gateway and

Lake Districts Plans’ in the draft Master Plan 2013, which was selected by 19% of the

respondents.

With the revision of measures on executive condominiums on 10th December 2013, 72% of the

respondents indicated that ‘Capping mortgage servicing ratio to 30% of borrowers’ gross

monthly income’ had significant impact the demand for ECs. 60% of them stated that ‘Resale

levy on second-time buyers of ECs’ had moderate impact on the demand for ECs. 70% of the

© 2014 NATIONAL UNIVERSITY OF SINGAPORE | DEPARTMENT OF REAL ESTATE (DRE) & INSTITUTE OF REAL ESTATE STUDIES (IRES)

participants mentioned that the ‘Reduction of cancelation fees from 20% to 5%’ had no or

minimal impact on the demand for ECs.

“Despite the slight increase in the sentiment index in 4Q13, the overall market sentiment was

still below the neutral line of five. Developers will be more cautious in the projection of future

launches and prices for new development projects over the next six months,” says Associate

Professor Sing Tien Foo of NUS’ Department of Real Estate.

For enquiries, please contact:

1) REDAS: Lim Jiang Fu, Benjamin, Tel: 6336 6655, E-mail: benjamin@redas.com

2) NUS DRE: Associate Professor Sing Tien Foo, Tel: 6516 4553, E-mail: rststf@nus.edu.sg

For the full paper, please click here

© 2014 NATIONAL UNIVERSITY OF SINGAPORE | DEPARTMENT OF REAL ESTATE (DRE) & INSTITUTE OF REAL ESTATE STUDIES (IRES)

Honors and Achievements

Professor Deng Yongheng Has been elected as the 50th President of the American Real Estate and Urban Economics Association (AREUEA) at the AREUEA-ASSA Annual Conference 2014 in Philadelphia. Prof Deng’s appointment as AREUEA President enhances NUS’ formidable global network and will further strengthen NUS’ research capabilities in the area of real estate finance and economics, particularly on Asia.

Assoc. Professor Sumit Agarwal Has been promoted to full Professor with effect from 1 January 2014.

Dr Diao Mi Served as a board member of the International Association for China Planning (IACP) for another two-year term (2013-2015). Founded in 2005 and located in Washington DC, USA, IACP is an independent non-profit organization of scholars, students, and practitioners interested in planning issues in China

Dr Liao Wen-chi Has been promoted to Associate Professor with effect from 1 January 2014.

Assoc. Professor Lim Lan Yuan Awarded a MND Medal on 8 November 2013, for his years of volunteer work at the Strata Titles Board and his expertise in water leakage. He is one of the 97 individuals who received the award from the Ministry of National Development for his dedicated service.

Dr Malone-Lee Lai Choo Received a National Day award, the Commendation Medal.

© 2014 NATIONAL UNIVERSITY OF SINGAPORE | DEPARTMENT OF REAL ESTATE (DRE) & INSTITUTE OF REAL ESTATE STUDIES (IRES)

Assoc. Professor Yu Shi Ming Re-appointed as Member of the Council of Council for Estate Agencies (CEA) for another 3-year term, from 22 October 2013 to 21 October 2016.

© 2014 NATIONAL UNIVERSITY OF SINGAPORE | DEPARTMENT OF REAL ESTATE (DRE) & INSTITUTE OF REAL ESTATE STUDIES (IRES)

The Institutions of Land Rights and Sustainable Asian Urbanization Symposium 2013

The Department of Real Estate hosted the Institutions of Land Rights and Sustainable Asian Urbanization (ILRSAU) Symposium from 18th to 19th November 2013. It was co-organized by the Global Asia Institute in National University of Singapore (NUS) and the Ronald Coase Center for Property Rights Research in University of Hong Kong (HKU). The symposium provides a platform for researchers to exchange research ideas on property rights and sustainable development of Asian cities.

There were four sessions in this two-day meeting and a total of fourteen papers were selected for presentation, each assigned with a discussant. The symposium discussed a wide range of currently hot topics related to the institution of property rights, involving built-environment, housing, governance of common-pool resource, urban regeneration and so on.

The participants were from Fudan University, Massachusetts Institute of Technology, National Chengchi University, National Taipei University, National University of Singapore, Peking University, Singapore-ETH Centre for Global Environmental Sustainability, University of Tokyo, Tongji University and University of Hong Kong.

Selected Papers:

The paper “Fragmented Peri-urbanization Led by Autonomous Village Development under Informal Institution in High-density Regions: the Case of Nanhai, China” by Jieming ZHU (NUS) and Yan GUO (NUS) examines under what institutional arrangement the physical landscape of peri-urban areas on the urban outskirts become fragmented. The research found that in the case of Nanhai rapid urbanization has been chiefly driven by the numerous small–area autonomous rural collectives, which creates a fragmented urbanizing landscape. The fragmentation and excessive conversion of farmland for industrial uses are brought about by the new institutions of village-based land shareholding cooperatives and their informal leasing of collective land. Extremely scarce land resources are not utilized optimally, and ecological environment is deteriorating. Urbanization in the high-density peri-urban Nanhai is made unsustainable for the long term future.

The paper “The Conflicts over Land Rights and Benefits in China: an Analysis of Informal Housing on the Urban Fringe of Beijing” by Pengjun Zhao (Peking University) examines the impacts of several socioeconomic inequalities on informal housing. The inequalities include the increasing inequalities in social and economic developments between urban and rural areas, the income inequalities between the rich and the poor, the unfair fiscal rights and responsibilities for local development between the central and local governments, and the unfair distribution of incremental value from farmland developments between the farmers and governments. The results suggest that informal housing is attributed to the complex urban process. Informal housing has played a positive role in improving low-income people’s housing ownership. Stronger planning solutions designed to control informal housing would be inequitable and inefficient unless the growing socioeconomic inequalities and institutional constraints of existing land tenure system are resolved.

© 2014 NATIONAL UNIVERSITY OF SINGAPORE | DEPARTMENT OF REAL ESTATE (DRE) & INSTITUTE OF REAL ESTATE STUDIES (IRES)

Mr Donald Han of Chesterton International received a token of appreciation from A/Prof Tay Kah Poh.

A Report on the DRE Career Fair 2014 by Isaac Leo Yen, BSc(Real Estate) Year 4 student

The 2014 DRE Career Fair saw us walking among the giants of the real estate industry. These giants included GIC, JLL, Cushman and Wakefield, CBRE, IRAS and SLA, amongst others. It was extremely inspiring to be able to learn from, question and interact with the managing directors, division heads and alumni. Career and financial planning talks were also specially arranged for us, arming us to make that

next big step. On behalf of all who

benefitted from the talks, we thank Professor Tay Kah Poh and the organizing team behind the 2014 DRE Career Fair. Here are my main takeaways. Plan to Succeed The fair kicked off with a career planning talk by Mr. Chang Siew Kang. I found this significant because it is all too easy to get caught up in the job hunt. Before taking our first steps, we should first make sure of our intended destination. To do this, Mr. Chang advocated engaging the market through career fairs, internships and best of all, starting a business (no matter how small). By personally testing the waters, we learn where our strengths and weaknesses lie. Fret not about where everyone else is rushing off to because we are all running our own races. Instead, take time to reflect, considering also the personal values you hold dear in order to make meaningful decisions. Demonstrate Drive As fresh graduates, employers are more concerned with how driven we are and less with what we currently know. Hannah, a DRE alumna now working at Argus shared that the main reason she was chosen was due to her interviewers deeming her highly eager to learn. Toby Dodd, managing director of Cushman and Wakefield echoed this, stating that drive is the one and only factor he seeks in candidates. With reference to the previous paragraph, Mr. Chang’s suggestion of starting your own business is also an excellent way to demonstrate drive. Draw Strength from Failure Finally, a word of encouragement: Summer, another DRE alumna, shared how she had to go through ten interviews and rejections before finally securing a job at Standard Chartered. She meticulously reflected on improving her performance after each interview and believed that her eventual success was a culmination of her learning points from all ten prior interviews. It was clear that all the speakers were highly energized by what they did. May we all too find passion in our lives, and our lives in passion.