The infrastructure sector in Singapore covers the real estate and built environment industries, and provides 445,400 jobs (or 12.1% of Singapore’s total employment) in 20181. The total value of construction contracts is expected to rise to S$31 billion in 2018, up from S$24.5 billion in 20172.
Global infrastructure investment is increasing in tandem with urban population growth. By 2020, half of the population in Asia will be urban dwellers3. This puts pressure on infrastructure, from housing to schools and transport, which cannot match the growth in population fast enough. An Asian Development Bank report in 2017 estimated that Asia’s infrastructure needs would top US$26 trillion (S$35 trillion) by 20304.
Technology, digitalisation and the Internet are bringing profound changes to the industry and the urban environment. Countries are calling for more efficient and high-tech construction methods to build new infrastructure faster. They are also incorporating data, sensors and other smart technologies into urban infrastructure. Smart cities are becoming the norm. As of 2018, more than 1,000 pilot smart cities have been built or are being built in ASEAN, China, India and beyond5.
1: Labour Market Report, Manpower Research and Statistics Department, Singapore Ministry of Manpower, 13 September 2018 2: “Construction Demand in Singapore to Increase This Year to Up to $31 Billion: BCA”, The Straits Times, 11 January 2018 3: “68% of the World Population Projected to Live in Urban Areas by 2050, Says UN”, United Nations Department of Economic and Social Affairs, 16 May 2018 4: “ADB Says Emerging Asia Infrastructure Needs $26 Trillion by 2030”, Bloomberg, 28 February 2017 5: “China Has the Highest Number of Smart City Pilot Projects”, The Economic Times, 20 February 2018
If you are in the construction business, there is potential to develop and incorporate new technologies to build efficiently, build smartly and build green, guided by the Construction Industry Transformation Map.
Construction companies can adopt the Design for Manufacturing and Assembly (DfMA) approach whereby building components are prefabricated off-site and assembled on-site. Built this way, construction sites can potentially achieve 40% in manpower savings. Construction projects can be completed faster, with fewer work incidents and cleaner sites.
In addition, firms can use new sustainable building materials such as Mass Engineered Timber (MET) to improve the structural integrity of buildings and shorten construction time.
Digital technology and automation are also enhancing construction productivity. The Building & Construction Authority is championing the use of an Integrated Digital Delivery system to connect all parties in the construction value chain, from design to fabrication, assembly on-site, as well as operations and maintenance. This improves efficiency and collaboration among stakeholders.
The annual BuildTech Asia features the latest robotic technologies such as robots and machines deployed to automate repetitive or dangerous works. For example, robots can paint, scan or inspect buildings for defects. Drones are now used to access dangerous and confined areas for scanning and inspection. You can consider using machines to reduce your reliance on manpower and increase productivity.
Singapore’s well-known strengths and track record in masterplanning, urban design and infrastructure development make real estate companies highly marketable to developing countries in the region.
Singapore companies have been involved in large-scale township and industrial park development projects. Examples include the Suzhou Industrial Park and Tianjin Eco-city in China; and the capital city of Amaravati in the state of Andhra Pradesh, India. Such projects open doors for Singapore companies across the built environment value chain to collaborate on a complete solution for the host country.
The real estate industry is also evolving to incorporate new technologies, meet rising consumers expectations, and cope with slower manpower growth in Singapore.
Guided by the Real Estate Industry Transformation Map, there is potential for your company to look into transforming facilities management and property transaction services using smart technology and data.
You can also explore new growth areas and go beyond conventional residential/ commercial / industrial development projects to expand into new asset classes, to diversify your revenue sources.
One emerging asset class is co-working spaces. A shift towards more flexible work practices is driving the co-working boom in Singapore and the region. Both Mapletree and Ascendas-Singbridge are examples of Singapore-based companies which have seized the opportunity to expand into developing co-working spaces, with Mapletree’s COQOONS and Ascendas-Singbridge’s thebridge.
Another emerging asset class is data centres. The rising demand for data centres is evident in Facebook building a S$1.4 billion data centre in Singapore, its first in Asia6. In a nod to growing regional demand, homegrown firm Ascendas-Singbridge is investing US$1 billion (S$1.4 billion) to develop data centres in India7. You too can set your sights on entering the Indian data centre market, which is likely to double in size by 2019 when revenues hit US$2 billion (S$2.7 billion), up from US$1.3 billion (S$1.8 billion) in 20168.
Lastly, purpose-built student accommodation (PSBA), housing specifically built for students by private commercial developers, is also gaining much traction as an emerging asset class. This is because accommodation is widely viewed as a relatively resilient sub-asset class in the property sector, providing relatively stable returns across economic climates.
Countries where PSBA demand is growing include the UK and Australia. Savills estimates that the sector now provides accommodation for a third of full-time students in over 550,000 purpose built beds across the UK.9 Even so, these figures still fall short of the required supply in some parts of the country.
Whether through investment-only or build-own-operate models, more Singapore companies are turning their attention towards this sub-sector. Singapore firm Centurion is one such firm. The group currently operates over 8 assets accounting for close to 2,500 beds across major UK cities such as Manchester, Bristol and Liverpool.
6: “Facebook to build $1.4b first-in-Asia data centre in Singapore”, The Straits Times, 6 September 2018 7: “Mega data centres coming in Chennai, Mumbai, Hyderabad”, The New Indian Express, 6 February 2018 8: “India’s Datacentre Market to Cross USD2 bn by 2020: WRI Research”, ChannelWorld, 27 October 2017 9: “The Growth of Student Accommodation as an Asset Class”, Market Mogul, 20 June, 2017
Smart cities have sprouted up all over the world today. The estimated value of the global smart cities market is projected to exceed US$2 trillion (S$2.7 trillion) by 202510. There are huge business opportunities for your company to contribute to the masterplanning, design, construction and development of hundreds of smart cities in Asia alone.
As a Singapore company, you can bank on our status as the world’s first smart nation and the best performing smart city for mobility, health, safety & productivity11. Singapore companies also have a good track record in innovating continuously and providing smart city solutions.
For instance, Keppel and ST Engineering have teamed up to build Saigon Sports City, Vietnam’s first one-stop sports, entertainment and lifestyle hub with smart technologies. These include smart street lighting, smart security management, autonomous vehicles and mobile robots, drone network solutions, and smart environment monitoring.
Two Singapore small and medium-sized enterprises (SMEs) and first-timers in China - iFocus Pte Ltd and S3 Innovate Pte Ltd are partnering Surbana Jurong on their first smart lift monitoring project in Guangzhou. Surbana’s “Smart City in a Box” serves as the integrated smart city management platform while the two SMEs complete the solutions package by providing sensors for lift monitoring and user-friendly data visualisation.
More than 10 other SMEs have also partnered Surbana in the larger China market to provide the “Smart City in a Box” solution for other aspects of city management, such as monitoring and management of city traffic conditions, security and energy.
When pitching for overseas projects, teaming up with a ready pool of Singapore companies from all sectors of the smart city ecosystem helps you to meet the demand for comprehensive smart city solutions.
10: “Frost & Sullivan Experts Announce Global Smart Cities to Raise a Market of Over $2 Trillion by 2025”, Frost & Sullivan, 2018 11: Global Smart City Performance Index, 2017