NUS Real Estate News
A QUARTERLY e-NEWSLETTER OF DEPARTMENT OF REAL ESTATE (DRE) AND
INSTITUTE OF REAL ESTATE STUDIES (IRES)
20 January 2016 (Issue No. 1)
Market Updates
______________________________________
Singapore Residential Price Index (SRPI)
NUS SRPI – the NUS SRPI flash overall value weighted index
and sub-indices inched slightly up from August to September
except for the sub-index of central region that was down from
previous month. The overall SRPI rose 0.1 percent month-onmonth while sub-indices of non-central region and small units
rose 0.3 percent and 0.4 percent respectively. The SRPI sub-index
for central region fell 0.4 percent from August to September.
Read more…
NUS-REDAS Real Estate Sentiment Index (RESI)
The 3Q15 NUS-REDAS Real Estate Sentiment Index (RESI) Survey shows that the Composite Sentiment Index,
a derived indicator for the overall real estate market sentiment in Singapore, went down to 3.7 from 3.9 in 2Q15.
The Current Sentiment Index decreased to 3.7 from 3.9 in 2Q15; and the Future Sentiment Index decreased to 3.7
from 4.0 in 2Q15. A score under five indicates deteriorating market conditions, while scores above five indicate
improving conditions. Read more…
NUS/Wharton/Tsinghua Chinese Residential Land Price Indexes (CRLPI)
The NUS/Wharton/Tsinghua Chinese Residential Land Price Indexes (CRLPI) reports series on real constant
quality land prices across 35 major markets in China. See our white paper for more information on the underlying
data and technical issues in the creation of the index. After dropping by 8.4% in the first quarter of the year, the
aggregate index increased by 15.1% in the second quarter. This leaves the aggregate index 8.1% above its level
one year ago in the second quarter of 2014. Read more…
Events
______________________________________
Ecosperity Young Leaders’ Dialogue 2015
The NUS School of Design and Environment (SDE) and the NUS Institute of Real Estate Studies (IRES) jointly
collaborated in organizing the Young Leaders’ Dialogue (YLD). The YLD is a track organised under the broad
umbrella of Ecosperity 2015, a global forum on ‘Urbanisation: Developing Cities for a Sustainable Future’.
Ecosperity 2015 is organised by Temasek, who is also the sponsor of the YLD event. Read more…
1
China's New Urbanization Forum Series
Inaugural Session - Innovations in China's New Urbanization:
Opportunities and Challenges
The NUS Institute of Real Estate Studies (IRES) Global Logistic Properties (GLP) Research Centre, together with
the Center for New Urbanization, Zhejiang University and the Dongwu Business School, Soochow University
jointly collaborated and organized the first in a series of Forums on China's 'New Urbanization'. Read more…
“Land Acquisition in India” - Panel Discussion Chaired by IRES Director
Prof Deng Yongheng
IRES Director Prof Deng Yongheng was invited to ISAS’ 10th International Conference on Politics and
Economics of Land in South Asia. The event was held over 2 days (29-30 Oct 2015) at the Grand Copthorne
Waterfront Hotel, Singapore. Prof Deng chaired a panel discussion titled ‘Land Acquisition in India’. Read
more…
IRES-CLC Joint Public Lecture
The NUS Institute of Real Estate Studies (IRES) and the Centre for Liveable Cities (CLC) jointly organized a
public lecture on 12th November, titled: “Lessons from 2008-2015: How Should Governments and Private
Developers Manage Real Estate Cycles?” Read more…
NUS-IRES China Real Estate Entrepreneurs Executive Training Program
On 13th Nov 2015, IRES hosted and delivered a Real Estate Entrepreneurs Executive Training Program
customized to the requirements of the China Index Academy and its delegates, comprising of real estate developers
and property management companies. Read more…
Department/ Faculty News and Staff Achievements
______________________________________
Research Project: Green Installations, Green Property Management and
Green Building Energy Saving
Both the National University of Singapore (NUS) team led by A/P Tu Yong & Prof Deng Yongheng and the
SSTEC team led by Ms Wang Ying, have worked together to produce an initial evaluation on the performance of
green office buildings owned by the SSTEC. Read more…
Research Project: Switching Volatility and Dynamic Interdependence in
International Securitized Real Estate Markets by Professor Liow Kim
Hiang, Department of Real Estate
This research aims to investigate the interdependence between major securitized real estate markets (Table 1) and
assess a more efficient investment strategy on international portfolio diversification from a regime-switching
volatility perspective. Read more…
Establishment of Lum Chang Professorship
IRES has established a new Professorship focusing on the sustainable built environment in honour of the late Mr
Lum Chang and his many contributions to society. Named the Lum Chang Professorship, the endowment fund is
supported by a generous pledged gift of $2 million by the Executive Chairman of Lum Chang Holdings, Mr
Raymond Lum, Managing Director Mr David Lum and the Group’s construction arm Lum Chang Building
Contractors. Read more…
2
Professor Sumit Agarwal’s Papers Published in Acclaimed Journals
Congratulations to Prof Sumit Agarwal who has recently published the following papers in acclaimed journals:
1. "Policy Intervention in Debt Renegotiation: Evidence from Home Affordability Modification Program" (with
Amromin, G., I. Ben-David, S. Chomsisengphet, A. Seru and T. Piskorski), forthcoming, Journal of Political
Economy. Read more…
Professor Deng Yongheng
Development
Presented
at
Dialogue
on
Suzhou’s
IRES Director Professor Deng Yongheng has been invited to speak at the Dialogue on Suzhou’s Development
with Suzhou City Government Party Secretary, Dr. Shi Tai Feng, and Suzhou Mayor, Dr. Zhou Nai Xiang, in
Suzhou, China on 25 September, 2015. Read more…
Professor Deng Yongheng Won Aareal Award of Excellence
IRES Director Professor Deng Yongheng’s paper, “The Role of Debt Covenants in the Investment Grade Bond
Market – The REIT Experiment,” co-authored with with Erik Devos, Shofiqur Rahman and Desmond Tsang won
the Aareal Award of Excellence in Real Estate Research in the 16th EBS Real Estate Conference 2015, Germany.
Read more…
Professor Liow Kim Hiang’s Appointment as the Guest Editor
Appointed as the guest editor for the special issue of Journal of Property Research, “The Financial Economics of
Commercial Real Estate: Issues, Theory and Evidence” for the period August 2015 to December 2016. Read
more…
Dr Malone-Lee Lai Choo’s Re-appointment
Dr Malone-Lee has been re-appointed by the Minister for National Development as a member of the National
Parks Board for another three year term, from August 2015 to July 2018. Read more…
Assoc. Prof. Joseph Ooi Won Two Best Paper Awards
Assoc. Prof Joseph Ooi won two best paper awards at the American Real Estate Society’s (ARES) 31st Annual
Meeting in Ft. Myers, Florida (held from 14-18 April 2015). His first paper, co-authored with his former student,
Dr Wong W.C. of University Utara Malaysia, “Financial Flexibility & REIT Security Issuance”, won the best
paper on Real Estate Investment Trusts, sponsored by the National Association of Real Estate Investment Trusts
(NAREIT). Read more…
Member of the University Teaching Excellence Committee (UTEC)
IRES Deputy Director Professor Joseph Ooi was invited to serve as a member of the University Teaching
Excellence Committee (UTEC) for the 2014/2015 awards on 25 Aug 2015. Read more…
AsRES Best Paper Award
IRES Deputy Director Professor Sing Tien Foo won the Best Paper Award, 3rd level, AsRES 2015 Annual
Conference 2015 with the paper “Are Chinese House Buyers Superstitious? Evidence from Housing Transactions
during Hungry Ghost Months in Singapore”. Read more…
3
AsRES Best Paper Award
Prof Tu Yong’s paper co-authored with Dr Wang Yourong (CUFE) and Li Wen Bin “Neighbourhood Land-use
Patterns and Housing Prices in Beijing” won the Best Paper Award, 3rd level, at the Global Real Estate Summit
and AsRES 2015 Annual Conference. The meetings were held on July 6-9, 2015 at Fairmont Washington, D.C.
USA. Read more…
Student Achievements
______________________________________
Outstanding Undergraduate Researcher (OUR) Prize 2014/2015
The OUR Prize was launched in AY 2006-2007. The objective of this annual, university-wide competition is to
encourage research among undergraduates at NUS by presenting opportunities for them to participate in research
while integrating teaching and research at various levels of experience and expertise. This allows undergraduates
to develop the capacity for discovery through research. Read more…
Outreach@DRE
______________________________________
NUS Real Estate Information & High-Tea Sharing Session
Department of Real Estate organized an Information and High-Tea Sharing Session on 14 May 2016 (Saturday)
at the University Town, NUS. Prospective students and their parents were invited to attend the informative session
where they heard from our eminent alumni and Professors. Read more…
Real Estate Ambassador Programme (REAP)
Department of Real Estate has recruited a team of student ambassadors for the Real Estate Ambassador
Programme (REAP), a new initiative to promote the brand name of NUS Real Estate and particularly, the B.Sc.
(Real Estate) programme and our undergraduates. Read more…
Alumni Talks – 1st Interactive Sharing Session
Senior Investment Manager from Frasers Centrepoint Ltd, Ms Chew Yi Wen was invited to an interactive sharing
session with a group of 15 RE students who are in their Year 1 to 4 on 16 September 2015. Read more…
4
Preface
The NUS Real Estate News is a quarterly publication of the Department of Real Estate and the
Institute of Real Estate Studies. It documents data releases and analyses through market updates
of the Singapore Residential Price Index (SRPI), the NUS-REDAS Real Estate Sentiment
Index (RESI) and the NUS/Wharton/Tsinghua Chinese Residential Land Price Indexes
(CRLPI). It also provides highlights on market relevant research and disseminates information
on industry activities which the NUS Real Estate either organizes or participates in.
The production of the NUS Real Estate News is coordinated by the Institute of Real Estate
Studies under the general direction of Professor Deng Yongheng (Provost’s Chair Professor,
Director of Institute of Real Estate Studies and Head of Department of Real Estate).
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5
Market Updates
_________________________________________________________
Singapore Residential Price Index (SRPI)
The NUS SRPI Updating for the Month of November 2015
Date of data feed from URA: 21 December 2015
NUS SRPI – the NUS SRPI flash overall value weighted index and three sub-indices all
declined from October to November. The overall SRPI index fell 0.6 percent while the range
of the sub-indices varied from 1.2 percent decrease for small units to 0.4 percent decrease
for non-central region. The sub-index fell 0.8 percent month on month at central region.
The revised NUS SRPI overall value weighted index in October remained unchanged from
its flash value that was reported the previous month, while the revised sub-indices adjusted
moderately. The revised sub-index at central region in October was 0.5 percent increase from
previously reported 0.3 percent increase; for non-central region, the revised index was 0.3
percent decrease in comparison with the unchanged flash value reported the precious month;
the revised sub-index for small units was 0.4 percent decrease from previously reported 0.6
percent decrease.
From November 2014 to November 2015, the overall NUS SRPI dropped by 3.9 percent.
Compared to the latest crisis low in March 2009, the overall NUS SRPI was 45.3 percent
higher. The overall NUS SRPI was 10.9 percent below the recent peak in July 2013.
The NUS 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 NUS SRPI, please see the Index Methodology at
http://www.ires.nus.edu.sg/srpi/srpi_im.aspx.
The next release will be on 28 January, 2016 and will include monthly NUS SRPI flash data
for December 2015 and revised data for November 2015.
data for October 2015 and revised data for September 2015.
6
NUS SRPI Updated Value-weighted Index
November 2015 Flash SRPI Values
NUS SRPI Basket as at December 2013
Index Value
(Mar 2009=
100)
Month-on-month
change
NUS SRPI Overall
145.3
-0.6%
NUS SRPI Central (excluding small
units)
132.4
-0.8%
NUS SRPI Non-Central (excluding small
units)
158.5
-0.4%
NUS SRPI Small
164.5
-1.2%
(Reflective of transactions received as at 21 December 2015)
October 2015 Revised SRPI Values
NUS SRPI Basket as at December 2013
Index Value
Month-on-month
(Mar 2009= 100)
change
NUS SRPI Overall
146.2
0.1%
NUS SRPI Central (excluding small
units)
133.5
0.5%
NUS SRPI Non-Central (excluding small
units)
159.1
-0.3%
NUS SRPI Small
166.6
-0.4%
(Reflective of transactions received as at 21 December 2015)
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.
7
NUS SRPI up-to-date Value-weighted Index Charts
1) The SRPI,
Central Region
SRPI (excluding
small units),
non-Central
Region SRPI
(excluding small
units) and SRPI
Small
(December 2005
to November
2015;
2005.12=100)
2) The SRPI,
Central Region
SRPI (excluding
small units),
non-Central
Region SRPI
(excluding small
units) and SRPI
Small (March
2009 to
November
2015;
2009.03=100)
8
3) Overall
NUS SRPI,
Crisis Trough
vs. Recent Peak
(valueweighted)
(December
2005 to
November
2015;
2005.12=100)
4) Overall
SRPI Flash,
Sales Volume
by 1st Revision
(valueweighted)
(December
2005 to
November
2015;
2005.12=100)
9
NUS-REDAS Real Estate Sentiment Index (RESI)
“The sentiment in the market continues to weaken in 3Q2015. The weak sentiment has
also spilled over to prime retail and office sectors. More respondents have called for the
removal of some of the cooling measures, such as ABSD and SSD to arrest the worsening
market condition”- Associate Professor Sing Tien Foo of NUS’ Department of Real Estate
Developer sentiment remains weak
The 3Q15 NUS-REDAS Real Estate Sentiment Index (RESI) Survey shows that the Composite
Sentiment Index, a derived indicator for the overall real estate market sentiment in Singapore,
went down to 3.7 from 3.9 in 2Q15. The Current Sentiment Index decreased to 3.7 from 3.9 in
2Q15; and the Future Sentiment Index decreased to 3.7 from 4.0 in 2Q15. A score under five
indicates deteriorating market conditions, while scores above five indicate improving
conditions.
The three sectors with the lowest net balance scores in the 3Q15 are the office, prime residential
and prime retail sectors. The prime retail sector was the worst performing sector with a current
net balance of -57% and a future net balance of -57%. The office sector showed a current net
balance of -48% and a future net balance of -58%; while the prime residential sector showed a
current net balance of -50% and a future net balance of -52% in 3Q15.
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
“decrease”).
92.2% and 76.6% of the respondents surveyed in 3Q15 anticipate that the slowing down in the
global economy and rises in inflation and interest rates will adversely impact market sentiment
in the next 6 months. 42.2% of them indicate that property market will face excessive supply
from new launches.
72.5% of the developers surveyed in 3Q15 expect new launches to increase moderately and to
hold at the same level in the next six months. 20% of them indicate that they will launch
moderately less units, which is up from 19.0% reported in the last quarter. On price changes,
60.0% of the developers anticipate a moderate decrease in residential property
prices in the next six months. In 3Q15, 30.0% of them expect price to hold, which is a decrease
by 8.1% from the number reported in the last quarter.
83.1% of the respondents felt that the government should lift or tweak the existing cooling
measure over the next six months. 60.8% of them indicated that the additional buyers’ stamp
duty (ABSD) should be lifted, and 56.7% of them indicated that the sellers’ stamp duty (SSD)
should be lifted.
“The sentiment in the market continues to weaken in 3Q2015. The weak sentiment has also
spilled over to prime retail and office sectors. More respondents have called for the removal
of some of the cooling measures, such as ABSD and SSD to arrest the worsening market
condition,” says Associate Professor Sing Tien Foo of NUS’ Department of Real Estate.
10
82.3% of the respondents felt that real estate developers should review prices of new launches
downward to move unsold stocks.
However, one of the respondents commented that “By reducing price, it is not going to bring
the market back to steady state though we may see some short term reactions and buying
interest. It will lead consumers to expect further price reduction. By reducing price, it will
cause a downward spiral momentum without generating demand.”
For Full Report: Please click here
NUS/Wharton/Tsinghua Chinese Residential Land Price Indexes
(CRLPI)
Prof Yongheng Deng
Institute of Real Estate Studies
National University of Singapore
Prof Joseph Gyourko
The Wharton School
University of Pennsylvania
A/Prof Jing Wu
Hang Lung Center for Real Estate
Tsinghua University
The Wharton/NUS/Tsinghua Chinese Residential Land Price Indexes (CRLPI) reports series
on real constant quality land prices across 35 major markets in China. See our white paper
below for more information on the underlying data and technical issues in the creation of the
index.
Figure 1’s plot of the aggregate index of the 35 cities shows that real appreciation in Chinese
land markets rebounded in the second quarter of 2015. After dropping by 8.4% in the first
quarter of the year, the aggregate index increased by 15.1% in the second quarter. This leaves
the aggregate index 8.1% above its level one year ago in the second quarter of 2014.
Figure 2 shows that the number of residential land parcels sold increased modestly last quarter,
leaving it 8% higher compared to the same quarter one year ago. However, transactions
volumes across the 35 markets covered in our index remain relatively low compared to
previous years. Parcel sales last quarter were 31% below the level of sales in 2013(2).
Updated semi-annual price indexes for the three regions of China on a semi-annual basis show
almost no change in prices for markets in the East and West regions. Real land prices rose by
just over 16% last quarter in the Middle region. Price indexes for a dozen large cities are
reported on an annual basis and will be updated at the end of the year.
For more on CRLPI: Please click here
11
Figure 1: Chinese
National Real Land Price
Index
35 Markets, Constant
Quality Series
(Quarterly: 2004q1 –
2015q2)
Figure 2: Number of
Parcels Sold
35 Markets (Quarterly:
2004q1 – 2015q2)
Figure 3: Chinese
Regional Real Land Price
Index
East, Middle and West
Regions, Constant
Quality Series
(Semi-annually: 2004h1 –
2015h1)
12
Figure 4: City-Level Real Land Price Index, Twelve Cities, Constant Quality Series
(Annually: 2004 – 2014)
13
Table 1: National Price Index Growth (35 City Aggregate)
2004(1)-2015(2)
46 quarters
318%
Total Appreciation
Compound Quarterly Growth Rate
3.5%
Annualized Compound Quarterly Rate
15%
Table 2: Regional Price Index Growth
2004h1-2015h1
23 half years
East
Middle
West
Total Appreciation
327%
399%
236%
Compound Semi-Annually Growth Rate
6.80%
7.60%
5.70%
Annualized Compound Semi-Annually Rate
14.10%
15.70%
11.60%
Table 3: City Price Index Growth
2004-2014
11 years
Total
Appreciation
Compound
Annual
Growth Rate
20062014
9 years
2007-2014
8 years
Beijing
Changsha
Chengdu
Chongqin
g
Dalia
n
Hangzh
ou
Nanjin
g
Tianjin
Wuhan
Shanghai
Guangzho
u
Xian
1036%
248%
201%
449%
101
%
273%
248%
332%
102%
342%
169%
78%
27.5%
13.3%
11.6%
18.6%
7.2%
14.1%
13.3%
15.7%
7.3%
20.4%
15.2%
8.6%
14
Events
Ecosperity Young Leaders’ Dialogue 2015
Video links
https://youtu.be/x_f3lqMlZCE
https://youtu.be/rtTARULcno8
https://youtu.be/qXfuvbMltE4
https://youtu.be/O-m7B0qFuB8
The NUS School of Design and Environment (SDE) and the NUS Institute of Real Estate
Studies (IRES) jointly collaborated in organizing the Young Leaders’ Dialogue (YLD). The
YLD is a track organised under the broad umbrella of Ecosperity 2015, a global forum on
‘Urbanisation: Developing Cities for a Sustainable Future’. Ecosperity 2015 is organised by
Temasek, who is also the sponsor of the YLD event.
The YLD event, held from 18-19 September 2015, is an annual forum that aims to connect
leaders of tomorrow with industry experts to dissect, discuss, and discover sustainable urban
planning strategies. This event saw an overwhelming participation of 140 students from over
15 countries.
Foreign participating universities included New York University, Tsinghua University, Indian
Institute of Technology, Bombay, Peking University, the University of Hong Kong, Keio
University, Thammasat University, University Of Malaya and Yokohama City University,
amongst many others. Aside from NUS, the event also drew wide participation from other local
universities such as the Singapore Management University, Nanyang Technological University
and the Singapore University of Technology and Design.
15
Prof. Deng Yongheng, Director, NUS-Institute of
Real Estate Studies, Head, Department of Real
Estate, delivering an opening address to welcome
all participants of YLD.
Topics of Discussion
Industry leaders were invited as panel
speakers to share their thoughts and
insights. A student moderator facilitated
the discussion with the panelists, raising
topics to engage opinions from both the
panelists and participants. The industry
speakers invited to the YLD as follows:
-Mr Khoo Teng Chye (Executive Director, Centre for Liveable Cities, Singapore)
-Mr Jordan Schwartz (Head of Global Infrastructure Facility, World Bank Group)
-Dr Chris Luebkeman (Global Director, Arup)
From left: Mr Khoo Teng Chye, Dr
Chris Luebkeman, and Mr Jordan
Schwartz
Discussions and presentations by
students centred around the following
topics:
-Are developing countries equally
responsible
for
sustainable
development as developed countries?
-Should sustainable urban planning
prioritise society over the natural
environment?
-Moving forward, what are some sustainable urban planning strategies and technologies that
should be explored further?
Site Visits
Site visits were conducted
on the second day of the
YLD event. The delegates
visited the URA Centre
where the evolution of
Singapore’s
landscape
and the thought process
behind the city’s urban
planning were elaborated
on. The other site visited
by the delegates was
Gardens by the Bay.
16
China's New Urbanization Forum Series: Inaugural Session-Innovations in
China's New Urbanization: Opportunities and Challenges
First Keynote Speech: The Five
Baselines
for
Wholesome
Urbanization
Dr. Qiu Baoxing Former Vice
Minister, Ministry of Housing and
Urban-Rural Development of the
People’s
Republic
of
China;
Counsellor, State Council of China;
President, Chinese Society for Urban
Studies
On 10th October 2015, the NUS
Institute of Real Estate Studies (IRES)
Global Logistic Properties (GLP) Research Centre, together with the Center for New
Urbanization, Zhejiang University and the Dongwu Business School, Soochow University
jointly collaborated and organized the first in a series of Forums on China's 'New Urbanization'
in Hangzhou, China.The event drew more than 300 people consisting of thought leaders,
prominent industry players, academics and leading experts in policy think tanks. The Forum
provided a common platform where leaders of the field come together to contemplate, debate
and examine issues related to China's 'New Urbanization'.
This forum featured 3 keynote speeches and 3 panel discussions, focusing on Innovations in
the following aspects within China's New Urbanization, namely, 'social governance',
'financing', and 'land systems and policies'. Amongst other very well-respected and
distinguished speakers are Dr. Qiu Baoxing (Former Vice Minister, Ministry of Housing and
Urban-Rural Development of the People's Republic of China; Counsellor, State Council of
China; President, Chinese Society for Urban Studies), Dr. Zhuang Juzhong (Deputy Chief
Economist and Deputy Director General, Economic Research and Regional Cooperation
Department, Asian Development Bank), and Professor Lu Dadao (Academician, Chinese
Academy of Sciences (CAS); Researcher, Geographical Sciences and Natural Resources
Research, CAS).
The NUS Institute of Real Estate Studies
(IRES) GLP Research Centre is supported
by IRES' unique advantages such as: strong
existing networks with China's policymakers and real estate leaders; growing
international recognition of research
expertise on China's property and hand
markets, related policies and regulations;
close linages and partnerships with leading
universities in China and international
institutions.
Panel 2: Innovations in Financing within China's New Urbanization
From left: Professor Deng Yongheng, Dr. Zhuang Juzhong, Professor Chen Kang, Dr. Zhu
Haibin, Mr. Sun Jianjun
17
“Land Acquisition in India” a Panel Discussion Chaired by IRES Director
Prof Deng Yongheng
IRES Director Prof Deng Yongheng was invited to ISAS’ 10th International Conference on
Politics and Economics of Land in South Asia. The event was held over 2 days (29-30 Oct
2015) at the Grand Copthorne Waterfront Hotel, Singapore. Prof Deng chaired a panel
discussion titled ‘Land Acquisition in India’.
Panel Discussion: Land
Acquisition in India
Chairperson:
Prof Deng Yongheng
From left:
Dr Amitendu Palit,
Prof Deng Yongheng,
Prof Sanjoy Chakravarty
and
Prof
Venkatesh
Panchapagesan
The issues surrounding land ownership and land usage occupy a crucial place within the larger
public policy debate in India, especially so in the last decade. Decisions over land ownership
and land use often have important ramifications for individuals dependent on land for their
livelihoods as well as for industrial development, job creation and overall economic growth.
These public policy debates over land ownership and land use resonate beyond India and
emerge in various forms, within the other countries of South Asia as well.
The 10th ISAS Annual International Conference looked into these issues under the banner of
‘Politics and Economics of Land in South Asia’.
The Guest of Honour for the Conference was Singapore’s Minister for Finance, Mr Heng Swee
Keat, who delivered the opening address. The special guest for this event was Mr. B.J. Panda,
Member of Parliament (Lok Sabha), from the Kendrapara Constituency in the state of Odisha,
India. He delivered the keynote address.
IRES-CLC Joint Public Lecture
The NUS Institute of Real Estate Studies
(IRES) and the Centre for Liveable Cities
(CLC) jointly organized a public lecture on
12th November, titled: “Lessons from 20082015: How Should Governments and Private
Developers Manage Real Estate Cycles?”
Speaker: Professor Joseph Gyourko
The lecture, held at Hotel Jen Tanglin, saw an
overwhelming response of close to 300
attendees, comprising a good diverse mix of
industry leaders (including, amongst others,
representatives from banks, real estate
developers, property consultancy firms and
18
investment
entities),
experts
from
the
academia/think tanks, and policy makers from
various government agencies. The vibrancy of
discussions during the session was also augmented
by representations that included a rich mix of Csuite
executives,
business
entrepreneurs,
researchers, market analysts, economists and
Professors.
The lecture and moderated question and answer
session which followed took into context the
recovering global economy since the 2008/09
‘Great Recession’ where persistently low global
interest rates and sub-prime credit expansion had
Professor Joseph Gyourko and the audience
led to the growth and eventual collapse
of real estate bubbles and financial
markets in many countries. Setting the
stage for the lecture were other pertinent
issues such as the financial deleveraging
of institutions and households which
had acted as a drag on global growth and
the subsequent massive quantitative
easing programmes which contributed
to house price inflation in several major
emerging economies.
The speaker who addressed these issues
at the lecture was Professor Joseph
Gyourko. Professor Gyourko is the
Martin Bucksbaum Professor of Real Estate, Finance and Business & Public Policy at The
Wharton School of the University of Pennsylvania. He serves as the Nancy Nasher and David
Haemiseggar Director of the Zell/Lurie Real Estate Center at Wharton. Professor Gyourko is a
Research Associate of the National Bureau of Economic Research, and served as Co-Director
of the special NBER Project on Housing Markets and the Financial Crisis. He is the co-editor
of the Journal of Urban Economics and serves on various journal editorial boards.
From left: Professor Joseph Gyourko and Dr John Sequeira
Moderating the one-hour long
question and answer session
which followed after, was
Principal Economist and Head of
the Modelling Division at the
Monetary
Authority
of
Singapore, Dr John Sequeira.
From left: Mr Khoo Teng Chye,
Dr Seek Ngee Huat, Prof Joseph
Gyourko, Dr John Sequeira, and
Prof Deng Yongheng
19
NUS-IRES China Real Estate Entrepreneurs Executive Training Program
The NUS Institute of Real Estate Studies (IRES) strives to advance real estate research and
executive education in, amongst others, real estate finance, urban development, demography
and environmental policies. Working in partnership with leading real estate developers,
professionals and organizations, IRES develops relevant content for the business and academic
communities.
The Program
On 13th Nov 2015, IRES hosted and
delivered a Real Estate Entrepreneurs
Executive Training Program customized to
the requirements of the China Index
Academy and its delegates, comprising of
real estate developers and property
management companies. The China Index
Academy is an independent property
research organization which provides
property/land data and generates key market
insights for its customers. The China Index
Academy forms part of publicly listed Soufun which operates a leading real estate Internet
portal in China.
The program also provides a platform for industry professionals to interact and to stay
connected with the real estate community.
Provost's Chair Professor Deng
Yongheng who is the Director of IRES
and head of the Department of Real
Estate at the National University of
Singapore conducted the opening
session of the program. This initial
session covered key features of real
estate finance and included discussions
of risk analyses of real estate capital
markets.
Associate Professor Sing Tien Foo,
Deputy Director of IRES, conducted
the latter part of the training program
designed to provide applicable
knowledge in the area of Real Estate
Investment Trusts (REIT). Trends and
developments of Asian REIT markets
were elaborated upon. These provided
important references for participants
looking to tread, deepen or develop the
nascent REIT market in China.
20
Participants
From left:
Associate Professor Sing Tien Foo, Deputy
Director of IRES; Huang Yu, Deputy Director of
China Index Academy; Professor Deng
Yongheng, Director of IRES at the course
certificate presentation ceremony
Course participants:
Soufun
representatives,
business
executives, professionals and entrepreneurs
from the Chinese real estate industry
China Urban Landmark Building Research Achievements Launch Event
In conjunction with the training program, the
China Index Academy also organized its 20152016 China Urban Landmark Building
Research Achievements Launch Event at the
NUS Guild House. This was the 2nd time
Singapore and NUS, in particular, were chosen
as their preferred venues for this annual event.
Professor Deng was invited as the guest of
honour and delivered the opening address.
21
Department/ Faculty News and Staff Achievements
______________________________________
Research Project: Green Installations, Green Property Management and
Green Building Energy Saving
Sino-Singapore Tianjin Eco-City (SSTEC) is symbolized by its green building constructions.
The city also serves as a platform for companies to showcase their green building capabilities.
It was bilaterally initiated, invested and developed by the Singapore government and the
Chinese government. As a flagship project, the eco-city model is expected to be replicated to
meet the long term goal of the Chinese government in pursuing the development of low carbon
urban developments to limit carbon dioxide and other greenhouse gas emissions. Featuring
benefits such as savings in energy consumption, environmental protection and indoor comfort,
green buildings naturally incur higher construction costs. Since SSTEC was in full operation
in 2014, both the developers and
public authorities would like to
know if the benefits of green
buildings in the eco-city
compensate for and justify the
additional construction costs
incurred. The answer is critically
important as it determines
whether green technologies and
renewable energy sources can be
widely applied at the building,
township as well as household
levels.
Both the National University of Singapore team led by A/P Tu Yong & Prof Deng Yongheng
and the SSTEC team led by Ms Wang Ying, have worked together to produce an initial
evaluation on the performance of green office buildings owned by the SSTEC. This evaluation
report is the first study that depicts the energy-saving effects of green installations and green
property management using real building operational data, and it reveals that the greenest
building outperforms other types of green buildings in energy consumption reduction, and
green property management can substantially raise green buildings’ energy efficiency.
The SSTEC has developed and managed four types of green office buildings differentiated by
the distinctive green technologies adopted, which consist of 11 building blocks in total. The
green installations in the SSTEC office buildings include two categories: 1) energy-saving
related green technology installations such as heat recovery system and energy management
system; 2) non-energy saving related green technology installations such as CO & CO2 sensor,
outdoor greenery, water-efficient irrigation system and solar power generation, which serve the
purposes such as water saving and indoor environment improvement. The construction of the
Low Carbon Living Lab (LCLL) also adopts environmentally friendly construction materials
such as steel structure and fly ash bricks, which serve the purpose of reducing pollution and
prolonging building life.
Among the four types of buildings, the LCLL contains one office building block and claims to
be the greenest building in terms of green design and green technologies adopted. The ETP
(The Enterprise) and the LM (The Landmark) each contains one office building block, and the
22
RBO (Ready-Built Office) contains 8 office building blocks. Compared to the LCLL, the ETP,
LM and RBO employed less green technologies as a whole and focus more on energy saving.
The green property management in the SSTEC innovatively advances the conventional
property management strategy through a learning-by-doing procedure. For example, the
property management office designs the building operation strategy by following the outdoor
weather changes. They set up a new personnel arrangement as well as an incentive/penalty
system which requires that the building should be regularly monitored and examined to
improve the building performance.
The team finds that the four types of the SSTEC green office buildings are much more energyefficient using the American green building energy consumption benchmarks and their energy
consumption intensity (annual energy use per square meter) are below the benchmarks of China
cold area green building energy consumption. We note that this could also be due to the lower
occupancy rates in the SSTEC office buildings.
Accrued benefits of green buildings include not only savings in energy consumption, but also
environmental protection and indoor comfort. Due to the short data span and low building
occupancy rate, the present work cannot directly demonstrate the relationship between the
building energy consumption and the green technologies adopted. However, we find that green
property management can substantially improve green buildings’ energy efficiency and the
impact is stronger for greener buildings. Although higher green cost (higher intensity of green
installations) does not necessarily lead to lower energy consumption in a green building, green
property management can effectively tap the existing potential of green benefits arising from
green technologies.
The team also found that the LCLL which claims to be the greenest office building in the
SSTEC, in general, outperforms other types of green buildings in energy consumption
reduction. Green property management effectively reduces energy consumption in
outdoor/indoor lighting, fan system motor and water pump for air-conditioners in the LCLL.
In addition, since it adopts green design and other types of green technologies, it should provide
the most comfortable working environment.
Looking ahead, with the Tianjin Eco-city gradually moving towards its full occupancy in the
years to come and more data becoming available, it is necessary to continuously conduct costbenefit analyses from the aspects of green property management, green behaviours and green
governance. This would better justify if the benefits of green buildings in the eco-city do indeed
compensate for the additional construction costs incurred.
23
Research Project: Switching Volatility and Dynamic Interdependence in
International Securitized Real Estate Markets by Professor Liow Kim
Hiang, Department of Real Estate
This research aims to investigate the interdependence between major securitized real estate
markets (Table 1) and assess a more efficient investment strategy on international portfolio
diversification from a regime-switching volatility perspective. Previous researches have
acknowledged the importance of securitized real estate as a potential alternative investment
asset to obtain diversification benefits in a mixed-asset portfolio. As markets are subject to
different shocks at different times, international diversification strategy may help investors
reduce risks that come from idiosyncratic shocks. However, financial market returns have
exhibited significant volatility clustering due to shocks originated from the financial crises. The
trend of globalization and economic integration has also reduced the benefits of international
diversification. With the emergence of a global real estate securities market since the 90’s, it
has become important for investor to understand better the time-varying correlation between
major international real estate securities markets and their co-movement with the global stock
market. In this study, we attempt to employ both univariate and bivariate version of Hamilton’s
regime switching models (Hamilton, 1989; Hamilton and Susmel, 1994; Edwards and Susmel,
2001) and a Switching Regime Beta Model developed by Billio and Pelizzon (2003), to assess
volatility regime switching and regime interdependence of real estate stocks and financial and
macroeconomic factors, as well as establish a more pragmatic efficient real estate securities
portfolio model that is both time- and state-varying. Four major findings emerge from this
research:
(a)
We find that global developed public property markets can be adequately characterized
by a SWARCH model. In particular, most of the persistence in real estate stock price volatility
can be attributed to the persistence of low, medium and high-volatility regimes in international
developed public property markets (see Figure 1 for Singapore securitized real estate market).
Moreover, there is a significant volatility increase during the crises periods for all markets
examined. However, the identified high volatility regime appears short-lived. Moreover, the
dynamic linkages among the markets are positively dependent on volatility regime. The
responses of public real estate market returns to the selected macroeconomic conditional risk
variables are asymmetric in the regime switching context. Our results imply risk-reduction via
international diversification in public property markets may only hold true in low volatility
period. Consequently portfolio managers need to understand and implement volatility statedependent optimal asset allocation in order to better advise their clients.
(b)
As international markets are more closely correlated during volatile periods, we detect
maximum cross-market correlation and minimum benefit of risk reduction always happened in
the joint high volatility regime shared by the individual and world markets. However, by
incorporating the volatility regime-switching and state-varying correlation into the
construction of international portfolios, investors are able to derive a more efficient portfolio
with minimum risk or higher return within a given risk.
(c)
Following from the success of univariate SWARCH modelling, our bivariate
SWARCH model indicates that high volatility episodes are generally short-lived and that there
is some evidence of volatility co-movements /synchronization across markets especially when
the two markets comes from the same continents. In particular, we observe high volatility
synchronization between the HK and SG, as well as between the HK and FR pairs. Moreover,
there is adequate evidence of simultaneous regime-switching behaviour in all real estate
24
markets (Figure 2: Hong Kong and Singapore). Finally, the state-dependent correlation
behaviours are observed for 24 pairs (87.5%) of market combinations. These results imply that
the multivariate MS-VAR variance-covariance models can be beneficial to detect cross-market
contagion.
(d)
Given the context of economic globalization and frequent occurrence of financial crises
over the past two decades, our results from both the univariate and multivariate switching
regime beta models indicate that the public property markets examined have responded
significantly to the global financial crisis (GFC) with a significant increase in the volatility
parameter compared to normal period. Moreover, the linkages of the public property markets
with the two world market indices have been altered by the financial crisis, and are significantly
enhanced in the post-crisis period for the European region. In contrast, the three major Asian
public property markets display reduced risk spillover effect in high volatility state from the
world market in recent years. Our findings offer important and different implications for
investors in their pursuit for portfolio diversification and policymakers in contagion
management in the Asian and European public property markets. (Figure 3)
To our knowledge, this is probably one of very few real estate research studies that adopt this
volatility switching idea in capturing the volatility persistence and regime switching
characteristics of real estate securitized market returns. As a result of this endogenous
determination of volatility regimes, we can assess the degree of market interdependence and
linkages under the different volatility states (e.g. high, medium and low) Therefore, this study
can contribute to the literature on the issue of dynamic market linkages in international
developed real estate securities markets from a structural break and non-linear perspective.
Finally, portfolio managers are able to implement state-dependent optimal real estate securities
allocation in order to better advise their clients.
References
Edwards, S., Susmel, R. 2001. Volatility dependence and contagion in emerging equity
markets. Journal of Development Economics 66: 505-532.
Billio, M., Pelizzon, L, 2003. Volatility and shock spillover before and after EMU in Europrean
stock market. Journal of Multinational Financial Management 13, 323-340.
Hamilton, J.D., 1989. A new approach to the economic analysis of nonstationary time series
and the business cycle. Econometrica: Journal of the Econometric Society, 357-384
Hamilton, JD, Susmel, R., 1994. Autoregressive conditional heteroskedasticity and changes in
regime. Journal of Econometrics 64: 307-333
25
Table 1
Descriptive statistics of weekly stock market returns for 9 real estate securities
markets: January 1990 – January 2012
Mean (%)
S.D (%)
Kurtosis
Skewness
Min (%)
Max (%)
rho(1)
JB test
ARCH(5)
AU
FR
GER
HK
ITA
JP
SG
UK
US
0.017
2.043
19.588
-1.513
-20.263
14.730
0.027
136221
131.51
0.090
2.128
7.988
-0.683
-12.957
9.790
0.2031
12821
147.31
-0.009
2.848
8.419
-0.713
-17.530
14.980
0.2731
15041
221.11
0.138
3.893
7.127
-0.388
-26.565
19.125
0.2351
8451
62.91
-0.065
3.394
8.760
-0.677
-23.390
13.852
0.248
16781
105.51
-0.071
3.768
4.542
0.033
-17.861
19.751
0.1751
1141
43.21
-0.003
3.983
11.300
-0.505
-36.414
20.519
0.2001
33501
93.71
-0.033
2.609
10.501
-0.823
-20.293
13.526
0.226
28251
217.71
0.114
2.423
11.455
-1.012
-17.040
12.089
0.2171
36211
353.91
Legend: Australia (AU), France (FR), Germany (GER). Hong Kong (HK), Japan (JP),
Singapore (SG), United Kingdom (UK), United States (US). Rho (1) is the first-order
autocorrelation. *, - indicates statistical significance at the 1% level
Figure 1. Three volatility regimes-Singapore securitized real estate markets
26
Figure 2 Bivariate SWARCH Smoothed Probability Plots (HK and SG)
Hong Kong-Singapore
Prob(St = 1)
1.00
0.75
0.50
0.25
0.00
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
Prob(St = 2)
1.00
0.75
0.50
0.25
0.00
Prob(St = 3)
1.00
0.75
0.50
0.25
0.00
Prob(St = 4)
1.00
0.75
0.50
0.25
0.00
Figure 3
Smoothed Probabilities of low volatility regime from multivariate switching
regime beta model
US real estate
1.0
0.6
0.4
0.2
0.0
1992
1995
1998
2001
2004
2007
2010
2013
All
S & P global developed stock
1.0
0.8
Prob(St = 0)
Prob(St = 0)
0.8
0.6
0.4
0.2
0.0
1992
1995
1998
2001
All
27
2004
2007
2010
2013
Establishment of Lum Chang Professorship
From left: Mr David Lum, Mr Raymond Lum, Prof Tan Chorh
Chuan and Dr Seek Ngee Huat at the cheque presentation
ceremony
The Institute of Real Estate
Studies (IRES) at NUS has
established
a
new
Professorship focusing on
the
sustainable
built
environment in honour of
the late Mr Lum Chang of
the Lum Chang Group and
his many contributions to
society. Named the Lum
Chang Professorship, the
endowment
fund
is
supported by a generous
pledged gift of $2 million
by the Executive Chairman
of Lum Chang Holdings
Mr
Raymond
Lum,
Managing Director Mr
David Lum and the
Group’s construction arm
Lum Chang Building
Contractors.
NUS President Professor Tan Chorh Chuan received the cheque on behalf of IRES during a
reception held at the Shaw Foundation Alumni House on 11 August. “The establishment of this
Professorship is very important because the university itself is a talent-driven institution. When
we are able to appoint top professors who are international leaders in their field, the quality of
our teaching will further improve, our students will benefit and we are able to attract and mentor
even better junior faculty,” said Prof Tan.
The Professorship seeks to attract outstanding academics and intellectual leaders of
international repute with a demonstrated ability to contribute substantially in the field of
sustainable built environment. The appointed professors will engage in new lines of research,
develop innovative teaching methods and mentor junior faculty members and students. Areas
of focus will include sustainable development, urban planning and green buildings, critical
elements in the field of sustainable built environment that are integral to the study of real estate.
IRES recognises the need to deepen cutting-edge expertise and promote a culture of innovation
in such areas that permeates not only the academic circles but also for the good of society.
Benefactor Lum Chang has long been an advocate of community projects, both local and
overseas. Established in the 1940s, its community efforts over the years include supporting
various charitable organisations dealing with the underprivileged and providing scholarships
for students keen on a career in the built environment. With its origins in construction, the
Group has since expanded its portfolio to include property development and investment. Its
construction arm, Lum Chang Building Contractors, is one of Singapore's leading construction
companies. The firm is also responsible for having constructed much of NUS’ Kent Ridge
campus from 1973 to 1982.
28
Prof. Sumit Agarwal’s Papers Published in Acclaimed Journals
Congratulations to Prof Sumit Agarwal who recently published the
following papers in acclaimed journals:
1. "Policy Intervention in Debt Renegotiation: Evidence from Home
Affordability Modification Program" (with Amromin, G., I. Ben-David, S.
Chomsisengphet, A. Seru and T. Piskorski), forthcoming, Journal of
Political Economy
2. "Rushing into the American Dream? House Prices Growth and the Timing
of Homeownership" (with Hu, L., and X. Huang), forthcoming Review of
Finance
3. "Why do Borrowers Make Mortgage Refinancing Mistakes?" (with Rosen, R., and V. Yao),
forthcoming Management Science.
4. "The Composition Effect of Consumption around Retirement: Evidence from Singapore"
(with co-author Dr Wenlan Qian).
5. "Consumption and Debt Response to Unanticipated Income Shocks: Evidence from a
Natural Experiment in Singapore" (with co-author Dr Wenlan Qian) both published in
American Economic Review.
6. “Access to Home Equity and Consumption: Evidence from a Policy Experiment” (with Qian,
W), forthcoming Review of Economics and Statistics
7. “Systematic Mistakes of Borrowers in the Mortgage Markets” (with Ben-David, Z., and V.
Yao), forthcoming Journal of Finance Economics.
8. “Golf Buddies and Board Diversity” (Qian, W., D. Reeb and S. Tien-Foo), forthcoming
American Economic Review – Papers and Proceedings.
Professor Deng Yongheng
Development
Presented
at
Dialogue
on
Suzhou’s
IRES Director Professor Deng Yongheng has been invited to speak at the Dialogue on
Suzhou’s Development with Suzhou City Government Party Secretary, Dr. Shi Tai Feng, and
Suzhou Mayor, Dr. Zhou Nai Xiang, in Suzhou, China on 25 September, 2015. This is an
annual high level economic development dialogue organized jointly by the Suzhou municipal
government and Suzhou Think Tank at Suzhou University. He shared his thoughts on
“Innovation and Reform on Financial Capital Market and the Urbanization in China”. During
the half day long dialogue, scholars, experts and Suzhou city senior government officials had
a good conversation and debate on the thirteenth “Five Year Development Plan” of Suzhou
city development.
29
Professor Deng Yongheng Won Aareal Award of Excellence
IRES Director Professor Deng Yongheng’s paper, “The Role of Debt
Covenants in the Investment Grade Bond Market – The REIT Experiment,”
co-authored with with Erik Devos, Shofiqur Rahman and Desmond Tsang
won the Aareal Award of Excellence in Real Estate Research in the 16th EBS
Real Estate Conference 2015, Germany. Read more about the paper. “The
Role of Debt Covenants in the Investment Grade Bond Market – The
REIT Experiment”
Professor Liow Kim Hiang’s Appointment as the Guest Editor
Appointed as the guest editor for the special issue of Journal of Property
Research, “The Financial Economics of Commercial Real Estate: Issues,
Theory and Evidence” for the period August 2015 to December 2016.
Dr Malone-Lee Lai Choo’s Re-appointment
Dr Malone-Lee has been re-appointed by the Minister for National
Development as a member of the National Parks Board for another three year
term, from August 2015 to July 2018.
Assoc. Prof Joseph Ooi Won Two Best Paper Awards
Assoc. Prof Joseph Ooi won two best paper awards at the American Real
Estate Society’s (ARES) 31st Annual Meeting in Ft. Myers, Florida (held
from 14-18 April 2015). His first paper, co-authored with his former student,
Dr Wong W.C. of University Utara Malaysia, “Financial Flexibility & REIT
Security Issuance”, won the best paper on Real Estate Investment Trusts,
sponsored by the National Association of Real Estate Investment Trusts
(NAREIT). The second paper co-authored with Dr Geoffrey Turnbull from
University of Central Florida, “Restricting Private Property Rights & House
Prices: Evidence from a Natural Experiment”, won the best paper on Apartments, sponsored
by National Multi Housing Council (NMHC). Research in the 16th EBS Real Estate
Conference 2015, Germany.
30
Member of the University Teaching Excellence Committee (UTEC)
IRES Deputy Director Professor Joseph Ooi was invited to serve as a member of the
University Teaching Excellence Committee (UTEC) for the 2014/2015 awards on 25 Aug
2015.
AsRES Best Paper Award
IRES Deputy Director Professor Sing Tien Foo won the Best Paper Award,
3rd level, AsRES 2015 Annual Conference 2015 with the paper “Are Chinese
House Buyers Superstitious? Evidence from Housing Transactions during
Hungry Ghost Months in Singapore”.
AsRES Best Paper Awards
Prof Tu Yong’s paper co-authored with Dr Wang Yourong (CUFE) and Li
Wen Bin “Neighbourhood Land-use Patterns and Housing Prices in Beijing”
won the Best Paper Award, 3rd level, at the Global Real Estate Summit and
AsRES 2015 Annual Conference. The meetings were held on July 6-9, 2015
at Fairmont Washington, D.C. USA.
Student Achievements
______________________________________
Outstanding Undergraduate Researcher (OUR) Prize 2014/2015
The OUR Prize was launched in AY 2006-2007. The objective of this
annual, university-wide competition is to encourage research among
undergraduates at NUS by presenting opportunities for them to
participate in research while integrating teaching and research at various
levels of experience and expertise. This allows undergraduates to
develop the capacity for discovery through research.
Goh Kun Han Justin was awarded the Outstanding Undergraduate
Researcher (OUR) Prize 2014/15 for his final year dissertation titled:
“Rethinking URA Incentive Scheme for Underground Connectivity in
Key Urban Areas”, individual category. There were a total of ‘14
Individuals’ and ‘1 Group’ winners.
NUS Real Estate OURP Winner's Testimonial:
Project: Rethinking URA Incentive Scheme for Underground Connectivity in Key Urban Areas
I am deeply honoured to receive the Outstanding Undergraduate Researcher Prize from NUS
and I would like to express my heartfelt appreciation to the following people who assumed an
integral role in bringing this project to fruition. First, I am very grateful to my dissertation
31
supervisor, A/P Yu Shi-Ming, for his mentorship and support throughout the course of
research. Second, I would like to thank A/P Tay Kah Poh for his invaluable insights and
expertise on the topic and A/P Alice Christudason for her legal advice on subterranean property
rights. Third, I would also like to thank the eight interviewees who participated in this research
and shared their experiences, perspectives and ideas. Lastly, I am appreciative of my girlfriend,
Tang Huimin, and my parents for their unwavering support and encouragement throughout my
university education.
About the Project
In land-scarce Singapore, land optimisation is a strategic thrust that is achieved by reclaiming
land, intensifying land use upwards and building downwards. Singapore’s city centre is
envisaged to be a pedestrian-friendly district that synergises both below and aboveground land
uses. To promote the growth of an extensive Underground Pedestrian Network, the URA Cash
Grant Incentive Scheme (URA Scheme) for Underground Pedestrian Links (UPLs) was
introduced in 2004. However, developers have yet to capitalise on the URA Scheme to
undertake a UPL development. This provides the main motivation for this research.
This study evaluates the feasibility of a UPL development from an integrated perspective,
comprising of developers, retailers and the public. The analysis is done by developing a
valuation model and conducting in-depth interviews with eight real estate experts. From a
developer’s perspective, the aggregate of total development cost and subterranean land
premium makes it commercially infeasible to undertake a UPL development. From a tenant’s
perspective, basement two rents are typically lower than levels one to three, except in cases
with direct accessibility to an MRT Station. From the public’s perspective, one would use a
UPL only if it is visible, provides convenience and it is easy to navigate within the UPL.
Four recommendations are proposed to encourage the development of UPLs and to enhance
the URA Scheme. First, the government could undertake the construction of UPLs and sell the
retail spaces to investors. The next two proposals for the URA Scheme include an enhancement
in the subsidy for UPLs and provision of feasibility studies. Lastly, an enhancement in plot
ratio could incentivise developers to undertake redevelopment or major addition and alteration
works. Ultimately, an effective URA Scheme requires a delicate balance between the
objectives of the State (underground connectivity) and market (profit-maximisation).
32
Outreach @DRE
______________________________________
NUS Real Estate Information & High-Tea Sharing Session
Department of Real Estate organized an
Information and High-Tea Sharing Session
on 14 May 2016 (Saturday) at the
University Town, NUS. Prospective
students and their parents were invited to
attend the informative session where they
heard from our eminent alumni and
Professors. The Alumni shared their
experiences while they were pursuing the
programme and how it has helped them in
their career. They also provided study tips
for students.
Thereafter, the guests were treated to a high
tea reception where more mingling and more
sharing took place. Booths on Scholarships,
Curriculum, Outside of Classroom Learning,
Students Life & Career Opportunities were
also set up where students and parents were
able to ask questions and interact with our
alumni and staff. The students and parents
found the session very useful and had a better
understanding of what real estate is really
about.
Real Estate Ambassador Programme (REAP)
Department of Real Estate recruited a team of student
ambassadors for the Real Estate Ambassador Programme
(REAP), a new initiative to promote the brand name of NUS
Real Estate and, in particular, the B.Sc. (Real Estate)
programme. As ambassadors, REAP team members will
partner the department in a range of outreach activities such
as Open Day, Tea sessions, outreach to Junior Colleges and
schools; and the hosting of selected DRE events.
Outreach event at ACJC
Real Estate Talk at ACJC
33
Alumni Talks – 1st Interactive Sharing Session
Senior Investment Manager from Frasers
Centrepoint Ltd, Ms Chew Yi Wen was
invited to an interactive sharing session
with a group of 15 RE students who are in
their Year 1 to 4 on 16 September 2015.
Ms Chew graduated with a Bachelor of
Science (Real Estate) Honours from
National University of Singapore in 2007.
Since then, she has accumulated valuable
experiences from her time in Global
Hospitality Services; CapitaLand Mall Trust and currently Frasers Centrepoint Limited.
During the one and a half hour interactive
session in the cosy DRE meeting room,
students actively asked questions to which
she gladly shared on many aspects of her
life in the corporate world that ranges from
the challenges faced, the satisfaction that
derived from the work, work ethics and
work-life-balance. The students were left
with a new sense of appreciation for Real
Estate studies and look forward to charting
their own path after graduation.
Get Connected!
The NUS Real Estate News may also be accessed on the website of
the NUS Department of Real Estate:
http://www.rst.nus.edu.sg/newsreal/index.html
Institute of Real Estate Studies
National University of Singapore
21 Heng Mui Keng Terrace
#04-02 I-Cube Building
Singapore 119613
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