Speech by 2M Desmond Lee at the Singapore Institute of Surveyors and Valuers’ 80th Anniversary Dinner

Nov 8, 2017

I am glad to be here with you for SISV’s anniversary celebrations this evening. SISV has played a key role in the development of our city. You have advanced key areas of knowledge in the real estate industry, and uplifted the professional standards of your members, who now number more than 2000. In your long history, I am sure that many of you have witnessed the ups and downs in the industry. Today, we are once again at the cusp of change. I would like to highlight one of the major trends that will drive growth for the industry, and the role that organisations like SISV can play to position the industry for growth.

The rise of big data

In today’s digital economy, big data is a fuel for innovation that will transform the way we live, work and play. We’ve all heard about cutting-edge companies like IBM or Google solving complex problems through the use of big data. But even traditional businesses are quietly leveraging it to reinvent their business models. Whether you are taking the MRT, going for a walk with your FitBit, or watching YouTube videos, you are contributing to ever growing reservoirs of big data, sitting somewhere out there. Firms are able to tap on this to sieve out trends and improve on their products and services.

Of course, data analytics is not new. But the lower costs of collecting, storing and processing massive chunks of big data has helped even traditional businesses to render large volumes of information and value-add in a way that had been unimaginable in the past. For example, insurance companies are nudging drivers to install telematics devices in their cars, to track acceleration, braking, cornering and speed. Safe drivers are rewarded by insurance companies with a discount on their premiums. In the event of an accident, the data helps insurance companies to verify the authenticity of claims.

Retailers are reducing their brick-and-mortar footprint to venture into e-commerce where they can now collect, interpret, and act on consumer data to serve up personalised choices that shoppers are more likely to buy. By observing seasonality peaks and correlations between product purchases, retailers can even forecast the popularity of an item and adjust its price in real-time based on projected demand. Local companies in Singapore like Crayon Data are already moving into this space to help retailers serve their customers better.

Big data in the real estate industry

I talked about insurance companies, I talked about retailers. But what does this mean for all of us here? The real estate industry in Singapore has not been impacted by big data to the same degree. However, there are signs that this is rapidly changing. Take the area of valuation for example. Some valuation companies, mortgage lenders, and insurers have been developing computer models to assist them in their decision making. An example in Canada - The Canada Mortgage and Housing Corporation has used its database of property information on around 8 million properties to develop a risk assessment system that helps it to assess mortgage insurance applications. As a result, underwriters spend less time tending to straightforward cases, and putting more of their brainpower and manpower on the more complex ones. Computer-aided valuations are also on the rise in China. This has enabled firms to make more informed decisions, and identify cases where human professional judgement is more relevant.

Apart from valuation, there are exciting developments in the facilities management industry too. Under the traditional model, facilities managers conduct maintenance checks according to fixed schedules. Hopefully, no issues surface until the next scheduled maintenance. However, with advancements in sensor technology and data analytics, FM firms can now perform predictive maintenance. With the help of software, facilities managers can detect any sub-optimal performance of key systems such as the air conditioning, lifts and escalators, triggering an intervention before a breakdown even happens. This improved workflow can result in substantial cost savings over time, as it optimises manpower and minimises energy wastage, and prevents complete system failures from occurring.

While there are tremendous opportunities, we all know that adopting big data in the real estate industry will not be easy. You will have to devote a lot of resources to collect and process large datasets. Workers will also have to pick up new skills to interpret and draw meaningful conclusions from the data. In particular, valuers will need to learn how to work with complex computer models to aid in their day-to-day decision making. Crucially, they must understand when the conclusions from a computer model are reliable, and when they require deeper analysis and judgment.

The FM industry will need to look into installing the necessary infrastructure to collect and analyse real time data to facilitate smarter FM. While this approach has a higher upfront cost, this is a one-time investment to ensure that intelligent systems are in place to generate usable insights about a building’s health. When I talk to FM companies about this, they said it’s well and good but please persuade consumers to purchase these services. So that’s a real challenge. A more efficient facility management system can then lead to greater cost savings downstream.

Opportunities aside, given our tightening labour market, we can no longer function in the same way as before. All industries, including the real estate industry, need to find more efficient ways of doing things within our existing manpower limitations.

Beyond that, we also have to seize these opportunities now or risk being rapidly disrupted by others in the very near future. Valuation and FM firms in other countries are already working to incorporate big data into their business models. So we should work together and learn from each other, both at the firm level and at the worker level. Ultimately, how firms harness the possibilities of big data to impact their businesses will determine how well they will do in the near future.

Transforming the sector through the ITM

The Built Environment (BE) sub-committee is a committee comprising not just government officials, but trade associations, the construction sector, the real estate sector, consultants, firms, unions and academics. And this is a sub-committee which I co-chair together with Lim Ming Yan from CapitaLand. He brings in his expertise from the private sector, and we have lots of private sector representatives on the committee. Together with all these partners, we have been working to propose strategies for the entire built environment cluster to seize growth opportunities.

A key piece of our work is to oversee the Industry Transformation Maps (ITMs) for the construction, security, environmental services, landscape and real estate industries – in short, the entire value chain that designs, builds, sells, manages and maintains the infrastructure in our city. The ITMs set the direction for upgrading and upskilling, and will address how enterprises can (i) increase productivity; (ii) uplift jobs and skills; (iii) harness innovation; and (iv) internationalise.

Industry associations like SISV can help position your members to seize key growth opportunities. Let me highlight two ways. First, we have to ensure that our workforce is equipped with the right knowledge and skills for the future. We need the industry to work with Institutes of Higher Learning to make sure that the graduates we generate meet the skillsets that we need for today and tomorrow. That’s the edge we must not lose.

You can continue to build on existing programmes administered by Workforce Singapore (WSG) and SkillsFuture Singapore (SSG) to help our people upskill or transit to areas of growth. I am glad that SISV has invited the outstanding graduates from the various real estate courses in Singapore Polytechnic, Ngee Ann Polytechnic, National University of Singapore, and Singapore University of Social Sciences to attend the dinner this evening. I congratulate you for your outstanding achievements, and look forward to seeing you in future leadership roles in the industry.

Second, industry associations need to take the lead to coordinate industry-wide standards and processes, to facilitate the adoption of new technology, articulate potential career pathways and further professionalise the industry. The real estate industry is very closely interlinked. We need to work together across the stakeholder realms, and get buy-in from key industry stakeholders across the broader real estate industry and this will require forward planning and careful coordination. For example, there is going to be a new office in BCA, known as the Construction Transformation Office, as we realised that we need to work with all stakeholders, e.g. REDAS, SCAL, the engineering institutes and SISV, and to all move together. 

Closing remarks

It has often been said that Singapore has many limitations as a small country. But in this transformation journey, our size is our strength. If we work together, we can be very nimble, and respond quickly to changes. We should be, and we must be. Through the ITM, we can build strong partnerships across the real estate industry, and position ourselves well to seize the opportunities ahead.

Congratulations on your anniversary. It’s a timely occasion for us to relook at what we are doing and make sure we don’t sit still while competition chases us out. We have to keep reinventing, improving and harness big data, for your firm’s sake, for the economy’s sake and for the sake of future Singaporeans.

Thank you.