Speech by 2M Desmond Lee at the ARA 15th Anniversary Dinner

Nov 3, 2017

It is my pleasure to join you for ARA’s 15th anniversary celebrations this evening.
 
ARA is indeed a homegrown Singaporean firm that has grown into one of the leading integrated real estate fund managers in Asia, employing about 1,300 people in 19 cities across seven countries. With a startup capital of US$1 million in 2002, ARA was last valued at S$1.8 billion.

The firm is also a good corporate citizen – ploughing back into the community and investing in people for the future. One good example would be ARA-Lim Hoon’s tie-up with the Singapore Management University over the last many years to invest in bright young people with financial needs so that they can contribute to Singapore and society.
 
ARA reached a milestone this year, with the privatisation of the company in April. You are part of a very fast-paced and exciting real estate sector here in Singapore. There are many players in this sector – developers, contractors, specialist buildings, consultants, estate agents, lawyers, bankers, asset managers (like ARA) and facility managers.
 
The Built Environment (BE) sub-committee, under the FEC, which I chair together with Mr Lim Ming Yan from CapitaLand – we are both working on the whole value chain of the built environment.
 
This sub-committee is not a government-driven endeavour, but it brings together many partners from industry, unions, Institutes of Higher Learning (IHLs) and the Government to propose strategies for the entire built environment cluster to seize future opportunities.
 
One key piece of our work is to oversee the Industry Transformation Maps (ITMs) for the construction, security, environmental services, landscape and real estate sectors. In short, the entire value chain that designs, builds, sells, manages and maintains the infrastructure in our city.
 
Each one of these ITMs is meant to be a roadmap for these various sectors to embark on a journey of transformation. It sets the direction for upgrading and upskilling across each sector, and will address how enterprises can (i) increase productivity; (ii) uplift jobs and skills for Singaporeans; (iii) harness the power of innovation; and (iv) internationalise and spread our wings across the region and around the world. Ultimately, these roadmaps are a first but important step to ensure that every sector of the Singapore economy can remain competitive in a future of increased international competition, greater technological disruption, and keener and more acute manpower constraints. 

We just launched the ITM for the construction sector last week – an important component in the value chain of real estate and the built environment. Our aim there is to push this manpower intensive sector to be more like the manufacturing sector, with technology, automation and skills leading the way.
 
Real estate management is one of ARA’s key businesses, and I would like to take just a few moments to share with you some of the early plans, strategies and ideas we are formulating for the Real Estate ITM – and this is a tripartite effort, not a Government effort. Specifically, I would like to speak a little bit about how we can better carry out facilities and real estate management.
 
As Singapore becomes more built-up, there will be a growing stock of both new and ageing infrastructure, which need to be properly maintained. Despite the need for maintenance, we continue to think of facilities management as a downstream concern. When in fact, they can be designed upfront to be maintained well and to be maintained easily. This has sometimes resulted in the need for expensive retrofitting, reactive maintenance practices, and an increased reliance on labour-intensive jobs.
 
In addition, low fees for FM work have prevented service providers from investing in smarter and more innovative solutions. This has made it difficult to attract and keep good people in the industry. This is even as many countries around the world are adopting and embracing cutting edge FM technology. In this regard, Singapore has a bit of catching up to do.
 
How can we do FM better and more efficiently, so that our buildings are better maintained and require lesser manpower? Let us start by considering how FM can play a more integral part in the entire building development life cycle.
 
At the highest level, we have to be disciplined in considering FM even during master-planning. For example, if shared infrastructure such as district cooling systems and waste conveyance systems can be installed across several buildings, cost savings can then accrue over time.
 
Even when individual buildings are designed, they have to be designed with maintainability in mind. We are looking into how we can more systematically require plans for FM to be overlaid through existing tools such as the Building Information and Modelling (BIM) system. We are also studying how to increase the uptake of smarter FM technology even in existing maintenance practices and in older buildings with legacy systems.
 
If we can accomplish this together as a whole ecosystem, we can undertake predictive maintenance and replacement, and provide building users like your tenants and clients with a better experience.
 
But systems and computers alone will not help us to reach this. We need capable and committed people in order to achieve this vision. We need to work closely with both industry players as well as IHLs to ensure that we train FM professionals with the right skills to take on the jobs they will need to perform in a more technologically-advanced FM workplace. 
 
That is not all. We are also identifying synergies across the various industries within the BE cluster to see how we can provide all-in-one integrated services horizontally.
 
One example relevant to FM is the adoption of Integrated Digital Delivery (IDD) – a key transformation area in the Construction ITM we launched last week.  Through IDD, we can make use of cloud and digital technology like BIM to integrate stakeholders in the building life cycle management, from design to fabrication, to assembly on-site and finally to the operations and maintenance of buildings well after construction has ended and throughout the life cycle of the building. This will reduce abortive work, speed up construction and provide useful information for future maintenance or retrofitting of a building.
 
In fact, when I spoke to many FM companies and the industry, they shared that as a rule of thumb, the cost of running and maintaining a building could cost as much as four times the initial cost of constructing the building in the first place.
 
This evening, I have shared a little glimpse into our tripartite vision to transform the BE cluster to benefit the Singapore economy, Singapore firms and Singaporean workers.
 
First, by upgrading our industries and offering advanced products and services, our BE cluster will become more vibrant and successful. Second, our firms will be more progressive and can thrive locally. They will have an edge over regional and international competitors, and be exposed to more market opportunities. Third, existing jobs may be redesigned and require higher skills. New jobs in new niche areas will also be created. There will be good jobs, better upside and better environments for Singaporeans.
 
But the Government cannot drive this transformation alone. We need a sustained tripartite effort to chart the path ahead for these major sectors in our economy. To make this transformation a reality, we need each and every one of our partners in the BE cluster to work together with us, play a role and collaborate with one another.
 
On that note, we welcome ARA to contribute your feedback and ideas, come on board this journey with us and work with us collectively to build a future-ready built environment, catalyse growth for our economy, transform our firms and create good jobs for Singaporeans.
 
Before I end, let me congratulate ARA again on your crystal jubilee this year. I look forward to seeing ARA chart greater heights in future. Thank you and enjoy your dinner.