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Thriving in Turbulence Qube Global Vision Conference - London September 14 th 2011 Rohit Talwar CEO - Fast Future [email protected] www.fastfuture.com 1
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Thriving in Turbulence
Qube Global Vision
Conference - London
September 14th 2011
Rohit Talwar
CEO - Fast Future
www.fastfuture.com
1
Contents
Presentation p. 3
About Fast Future p. 86
Background Materials p. 97
Image Sources p. 204
2
Emerging Business Drivers
• Total
Sustainability
• Business
Models
• Science
• Emerging
Markets3
The World in 2015
4
How do we get there from Here?
Continuous Innovation
Customer Insight
New
Business Models 5
Growth is not Guaranteed…Growth is not Guaranteed…
6
…Thinking is Back in Fashion
7
UK Economy
8
UK Property Trends
9
A Dying Breed?
10
Olympic Opportunity
11
Scenarios for Europe
12
Love is in
the Air
Road to
Nowhere
Suspicious
Minds
Dancing in
the Dark
GDP
Growth
India
and
China
8-10%
6-7%
1-2%
Recession 0% 1-2% 2-3%
GDP Growth Europe, the USA and Japan
Strategic Adaptability -
Prepare for Alternative Scenarios
13
Transformational Change?
It’s Only Just Begun
14
10 Key Patterns of Change Shaping the Next DecadeEconomic turbulence, a shift in wealth from west to east and political
uncertainty are shaping the landscape
Technology
and Science
Rethinking
Talent,
Education,
Training
Demographic
Destinies
Society in
Transition
Natural
Resource
Challenges
Geo-political
Complexity
Generational
Crossroads
Source: Designing your Future – Key Trends, Challenges and Choices – Fast Future
Economic Crisis
and Power Shift
Global
Internet
Expansion
Enterprise 3.0
15
Demographic Destinies 2 billion more people in 40 years –
Demographics is Driving Economics
1998
448 691
729
5231
4157
739
1030
344
585
Source : United Nations2010 205016
Life Redefined –
Lifespans are Increasing
Under 50’s have 90%
chance of living to 100.
Aubrey de Grey suggests
we could live to 500 or 1000
What are the health,
consumption and resource
implications?
What kind of opportunities
will be created?
17
BCG’S 2011 Global Challengers
and Emeriti: Origin Countries33
20
14
86
54
3 32 2
1 1 1 1 1
0
5
10
15
20
25
30
35
Source: Boston Consulting Group, January 2011
18
New Industry Models and Mindsets
19
Swoopo - The $17,739 iPad
20
Access vs. Ownership
21
Real Time / Predictive Analytics
22
Think Like the Customer
e.g. Open Innovation
23
Complexity
24
Complex Systems
25
Chaordic Systems
26
Mess
27
28
Telephony• Voice
• Messaging
• SIM card
• Phonebook
• Ring Tones
• Security
Connectivity• Cellular
• Up to 14 bands
• WLAN/BT
• GPS
• NFC
• FM
Data/
Enterprise• 100Mbps
• IMS
• Browsing
• VPN
• PIM
• Ecommerce
• Payments
Software• Protocols
• Middleware
• Applications
• User Interface
• Minimize fragmentation
Multimedia• Camera 8-16M
• Camcorder
• 24M Color Display
• Memory (160GB)
• Multiformat A/V • HD Video/TV out
• Games
(50-100M Tps)
• DRM
TMT – Convergence and Immersion
29
Next Generation Smart Phones
30
Daily Social Media Offers e.g. Twitter
31
Holographic Displays
32
Augmented Reality at
Copenhagen Airport
33
Gesture Interfaces
34
Touchable Holograms
35
Interactive Surfaces
36
‘Virtual Assistants’
37
Ambient Intelligence
38
3D Printing
39
Cloud Computing
40
New Measurement Models / Tools
41
Security
42
Are Biometrics the Answer?
43
Where are the Opportunities?
44
Combating Climate Change
45
Innovative Recycling
46
Green Buildings - $600Bn by 2015
Source: PR Log, December 2010
47
Green Skills Deficit
From the end of 2012
the Green Deal will be
launched, providing up
to 200,000 jobs
UK 3rd in global green
building league
48
Ultra-Quick Construction
49
New Building Systems
50
More Efficient Design
51
Award Winning Concepts
52
Wooden Cities?
53
Floating Houses?
54
2010 Turner Prize for Innovation in
Construction Technology
55
Self-Healing Concrete
56
Fly Ash Concrete
57
Wool and Seaweed Bricks
58
Improving Indoor Air Quality
59
The Need for ‘Systems Thinking’
60
Future of Financing
61
Future Growth Industries
62
Science Based Future Jobs
1. Body Part Maker
2. Nano-Medic
3. Pharmer of Genetically
Engineered Crops and
Livestock
4. Memory Augmentation
Surgeon
5. ‗New Science‘ Ethicist
6. Vertical Farmers
7. Climate Change Reversal
Specialist
8. Alternative Vehicle Developers
9. Quarantine Enforcer
10. Weather Modification Police 63
Science Enabled Future Jobs11. Old Age Wellness Manager /
Consultant Specialists
12. Space Pilots, Architects and
Tour Guides
13. Virtual Lawyer
14. Avatar Manager / Devotees -
Virtual Teachers
15. Narrowcasters
16. Waste Data Handler
17. Virtual Clutter Organizer
18. Time Broker / Time Bank
Trader
19. Social 'Networking' Worker
20. Personal Branders 64
Rising Infrastructure Spending
• CIBC projects up to $35 trillion in public works by 2030 (1)
• Annual spend:
– North America $180Bn
– Europe $205Bn
– Asia $400Bn
– Africa $10Bn
65
Reinventing Retail
66
Opening Up Education
67
Transforming Healthcare
68
Green Transport Revolution
69
New Energy Solutions
70
Nanomaterials - $100Bn
71
European Smart Grid - $200Bn+
72
Bio-pharma - $300Bn+ by 2020
73
Industrial Biotech - $650Bn+ by 2020
74
How are Leaders Responding?
75
Make Time and Space for Change
76
Be Magnetic
77
Create Tolerance of Uncertainty
78
Broad Scans and Deep Dives
79
Map the Development Timeline
for Your Sector
80
Embrace Networks and Associations
81
Incubate New Business Models
82
Seek Breakthrough Innovations
83
Conclusions - Crafting Strategy
• Total Sustainability Agenda
• Understand emerging drivers
• Pre-empt or respond?
• Service is the ‗killer app‘
84
Thank You
Rohit Talwar
CEO
Fast Future
Tel +44 (0)20 8830 0766
Mob +44 (0)7973 405145
Twitter http://twitter.com/fastfuture
LinkedIn http://www.linkedin.com/in/talwar
www.fastfuture.com
www.convention-2020.com
Blog http://widerhorizons.wordpress.com
Signup for our newsletters / Download past editions at www.fastfuture.com
Watch a short video of Rohit at http://www.travelmole.tv/watch_vdo.php?id=14300
Download the Hotels 2020: Beyond Segmentation Report at
http://www.amadeus.com/hotelit/beyond-segmentation.html85
About Fast Future
86
Fast Future –
Retail and Real Estate
Industry Services • Live Events - Speeches, briefings and workshops for executive
management and boards of retailers, property and construction firms,
airlines, airports, hotels, venues, CVB‘s and associations
• Future Insights - Customised research on emerging trends, future
scenarios, technologies and new markets
• Immersion - ‗Deep dives‘ on future trends, market developments,
emerging issues and technology advances
• Strategy - Development of strategies and business plans
• Innovation - Creation of business models and innovation plans
• Engagement - Consultancy and workshop facilitation
87
Fast Future • Research, consulting, speaking, leadership
• 5-20 year horizon - focus on ideas, developments, people,
trends and forces shaping the future
• Clients
– ING, ABN Amro, Laing O‘Rourke
– Marks and Spencer
– Airports - Aeroports de Paris / Schiphol Group
– Vancouver Airport Services
– Industry Associations – ICCA, ASAE, PCMA, MPI
– Corporates - GE, Nokia, Pepsi, IBM, Intel, Orange,
O2, Siemens, Samsung, GSK, SAPE&Y, KPMG,
Amadeus, Sabre, Travelport, Travelex, ING,
Santander, Barclays, Citibank, DeutscheBank
– Governments - Dubai, Finland, Nigeria, Singapore,
UK, US
– Convention Bureaus – Seoul, Sydney, London, San
Francisco, Toronto, Abu Dhabi, Durban, Athens,
Slovenia, Copenhagen
– Convention Centres – Melbourne,
Adelaide, Qatar, QEIICC
– Hotels - Accor Group, Preferred,
– Intercontinental
– PCO‘s - Congrex, Kenes 88
Hotels 2020 – Objectives
• Identify key drivers of change
for the globally branded hotel
sector over the next decade
• Examine the implications for:
Hotel strategy
Brand portfolio
Business models
Customer targeting
Innovation
89
• Global strategic foresight study to help the meetings industry prepare for
the decade ahead - Industry-wide sponsors
• Multiple outputs Nov 2009 – December 2011
• Current studies on future strategies for venues and destinations
Convention 2020
90
Future Convention Cities Initiative• Members - Cities aiming to be global leaders in delivery of business events
• Focus - Maximising long term economic benefit of events
• Core Activities - Research, sharing of expertise and best practices
• Engagement Model - Meet four time a year prior to major industry events
• Management - Initiated and co-ordinated by Fast Future
91
Rohit Talwar• Global futurist and founder of Fast Future Research.
• Award winning speaker on future insights and strategic innovation –
addressing leadership audiences in 40 countries on 5 continents
• Author of Designing Your Future
• Profiled by UK’s Independent Newspaper as one of the Top 10 Global
Future Thinkers
• Led futures research, scenario planning and strategic consultancy
projects for clients in telecommunications, technology,
pharmaceuticals, banking, travel and tourism, environment, food and
government sectors
• Clients include 3M, BBC, BT, BAe, Bayer, Chloride, DTC De Beers, DHL,
EADS, Electrolux, E&Y, GE, Hoover, Hyundai, IBM, ING, Intel, KPMG,
M&S, Nakheel, Nokia, Nomura, Novartis, OECD, Orange, Panasonic,
Pfizer, PwC, Samsung, Shell, Siemens, Symbian, Yell , numerous
international associations and governments agencies in the US, UK,
Finland, Dubai, Nigeria, Saudi Arabia and Singapore.
• To receive Fast Future’s newsletters please email
92
• 50 key trends
• 100 emerging trends
• 10 major patterns of change
• Key challenges and choices for
leaders
• Strategic decision making framework
• Scenarios for 2012
• Key futures tools and techniques
• Published August 2008
• Price £49.95 / €54.95/ $69.95
• Email invoice request to
Designing Your FutureKey Trends, Challenges and Choices
93
Our ServicesBespoke research; Identification & Analysis of Future Trends, Drivers & Shocks
Accelerated Scenario Planning, Timelining & Future Mapping
Identification of Opportunities for Innovation and Strategic InvestmentStrategy Creation &
Development of Implementation Roadmaps
Design & Facilitation of Innovation, Incubation & Venturing Programmes
Expert Consultations & Futures Think Tanks
Personal Futuring for Leaders and Leadership Teams
Public Speaking, In-Company Briefings, Seminars and Workshops
94
Example Projects• Public and private client research e.g. :
– Development of Market Scenarios, emerging trends and strategies for key clients
– Government and OECD Scenario Projects – e.g. Migration 2030, Future of Narcotics, Chemical Sector, Family 2030
– Scenarios for the global economy for 2030 and the implications for migration
– Designing Your Future (Published August 2008) – book written for the American Society of Association Executives & The Center for Association Leadership
– Global Economies – e.g. The Future of China – the Path to 2020
– The Shape of Jobs to Come – Emerging Science and Technology Sectors and Careers
– Winning in India and China
– The Future of Human Resources
– Exploiting the Future Potential of Social Media in UK Small to Medium Enterprises
– Convention 2020 – the Future of Business Events
– Future Convention Cities Initiative – Maximising Long-term Economic Impact of Events
– One Step Beyond – Future trends and challenges for the events industry
– Hotels 2020: Beyond Segmentation – Future Hotel Strategies
– The Future of Travel and Tourism in the Middle East – a Vision to 2020
– Future of Travel and Tourism Investment in Saudi Arabia
– Aviation and Airports e.g. Aviation 2030
95
Example Clients
96
Background
Materials
97
UK Economic Outlook
Source: PwC, July 2011 http://www.pwc.com/im/en/assets/document/UK_Economic_Outlook_July_2011.pdf
98
UK Economic Outlook
Source: PwC, July 2011 http://www.pwc.com/im/en/assets/document/UK_Economic_Outlook_July_2011.pdf
99
Public Sector Net Debt to GDP
Ratio
Source: PwC, July 2011 http://www.pwc.com/im/en/assets/document/UK_Economic_Outlook_July_2011.pdf
100
Alternative Inflation Scenarios
Source: PwC, July 2011 http://www.pwc.com/im/en/assets/document/UK_Economic_Outlook_July_2011.pdf
101
Medium Term Independent
Forecasts for UK Economy
Source: PwC, July 2011 http://www.pwc.com/im/en/assets/document/UK_Economic_Outlook_July_2011.pdf
102
Projections of UK Age-Related
Public Spending (% of GDP)
Source: PwC, July 2011 http://www.pwc.com/im/en/assets/document/UK_Economic_Outlook_July_2011.pdf
103
E7 vs. G7
The contenders Estimated overtaking
dates based on GDP at
PPPs
Estimated overtaking
dates based on GDP at
MERs
E7 vs G7 2017 2032
China vs US 2018 2032
India vs Japan 2011 2028
Russia vs Germany 2014 2042
Brazil vs UK 2013 2023
Mexico vs France 2028 2046
Indonesia vs Italy 2030 2039
Turkey vs Canada 2020 2035
Source: PwC, January 2011
http://www.ukmediacentre.pwc.com/News-Releases/UK-risks-playing-in-the-slow-lane-of-history-as-economic-power-shifts-from-the-G7-to-the-E7-fcb.aspx
104
The Big 4 Share of Global GDP
(PwC)
% of global economy (ppp)Source: PwC: January 2010
http://www.ukmediacentre.pwc.com/Content/Detail.asp?ReleaseID=3547&NewsAreaID=2
UK* - Fast Future calculation using IMF projections – www.imf.org/weo
105
HSBC: World in 2050
Source: HSBC: The World in 2050: Quantifying the Shift in the Global Economy, January 2011 106
107
OECD Debt
Levels (2010)
Country2010 deficit, % of
GDP
2010 public debt,
% of GDP
Germany -5.3 54.7
France -8.6 60.7
Italy -5.4 100.8
United Kingdom -13.3 59
Austria -5.5 42.9
Belgium -5.6 85.4
Czech Republic -5.6 5.3
Denmark -5.4 1.6
Finland -4.8 -46.4
Greece -9.8 94.6
Hungary -4.1 62.1
Ireland -12.2 38
Luxembourg -4.3 ..
Netherlands -5.9 36.5
Poland -7.8 32.4
Portugal -7.6 62.6
Slovak Republic -6.3 13.3
Spain -8.5 41.6
Sweden -3 -13.1
Source: OECD, 2011 https://spreadsheets.google.com/ccc?key=0AonYZs4MzlZbdDZsU2k2VEQ2elkwcnNDOTNHS3ZwRkE&hl=en#gid=0
Background Note
108
2011-2030 Annual GDP Growth (%)
0
0.5
1
1.5
2
2.5
3
3.5
4
Latv
ia
Esto
nia
Irela
nd
Rom
ania
Slo
vakia
Lithuania
Hungary
Pola
nd
Bulg
aria
Slo
venia
Sw
ed
en
Cypru
s
Fin
lan
d
Austr
ia
Czech R
ep.
Ne
the
rla
nd
s
Denm
ark
Fra
nce
UK
Belg
ium
Spain
Port
ug
al
Germ
any
Gre
ece
Italy
Source: Economist Intelligence Unit, January 2011 http://country.eiu.com
109
GDP per capita, Real GDP,
Labour productivityGrowth of real GDP per head Growth of real GDP Labour productivity growth
2011-20 2021-30 2011-30 2011-20 2021-30 2011-30 2011-20 2021-30 2011-30
Brazil3.7 3.3 3.5 4.4 3.7 4.1 2.8 3.0 2.9
Russia3.7 3.2 3.5 3.3 2.7 3.0 3.5 3.5 3.5
India5.8 4.4 5.1 7.3 5.6 6.5 4.8 3.9 4.3
China6.5 4.1 5.3 7.0 4.3 5.7 6.3 4.3 5.3
Canada1.7 1.7 1.7 2.6 2.5 2.5 1.9 2.3 2.1
France1.3 1.7 1.5 1.7 1.9 1.8 1.4 1.8 1.6
Germany1.8 1.4 1.6 1.8 1.3 1.5 1.7 2.2 1.9
Italy1.0 1.4 1.2 0.9 1.1 1.0 0.9 1.8 1.4
Japan1.2 1.8 1.5 0.8 1.1 1.0 1.6 1.9 1.8
UK1.0 1.4 1.2 1.7 2.0 1.8 1.4 1.4 1.4
USA1.6 1.9 1.8 2.5 2.7 2.6 1.6 2.3 2.0
Source: Economist Intelligence Unit, January 2011 http://country.eiu.com
Background Note
110
Fastest growing cities to 2025
Guangzho
u
Ho Chi
Minh
City
Hanoi
Xian
Changchun
Lucknow
Addis
Ababa
Growth
p.a %
Economy in $ billion (2025) Bubble size denotes size of economy in
2008Source: PwC ‗Which are the largest city economies in the world and how might this change by 2025? 111
Biggest city economies in
2025Growth
p.a %
Economy in $ billion (2025)
TokyoNew
YorkL.
A
Chicago
Sao
PauloMexico City
Shanghai
Mumbai
Paris
Buenos Aires
Moscow
Bubble size denotes size of economy in
2008Source: PwC ‗Which are the largest city economies in the world and how might this change by 2025? 112
Average Disposable Income Growth
2010-2020
Page 113
Global Competitiveness Index
2010–2011 rankingsGCI 2010 - 2011 rank Country/Economy GCI 2009 - 2010 rank
4 United States 2
5 Germany 7
6 Japan 8
12 United Kingdom 13
15 France 16
16 Australia 15
22 Korea 19
27 China 29
44 Indonesia 54
51 India 49
58 Brazil 56
63 Russia 63
Source: WEF, 2010-2011 http://www3.weforum.org/docs/WEF_GlobalCompetitivenessReport_2010-11.pdf
114
Global Innovation Index 2010Country GG 2009-10 Score Rank
Iceland 4.86 1
Sweden 4.85 2
Hong Kong 4.83 3
Switzerland 4.82 4
Denmark 4.72 5
Finland 4.66 6
Singapore 4.65 7
Netherlands 4.62 8
New Zealand 4.60 9
Norway 4.59 10
US 4.57 11
UK 4.42 14
Australia 4.28 18
Korea 4.24 20
Source: INSEAD, Confederation of Indian Industry http://www.globalinnovationindex.org/gii/main/reports/2009-10/Rankings_09-10.pdf
115
Innovative Cities
Rank City CountryIndex
Score
Cultural
Assets
Human
Infrastructure
Networked
Markets
1 Boston United States 29 9 10 10
2 Paris France 29 10 9 10
3 Amsterdam Netherlands 28 9 9 10
4 Vienna Austria 28 10 10 8
5 New York United States 28 9 9 10
18 Hong Kong Hong Kong 25 7 9 9
19 Melbourne Australia 25 9 9 7
20 Tokyo Japan 25 8 8 9
27 Seoul Korea 24 7 9 8
28 Sydney Australia 24 8 8 8
Source: 2thinknow Innovation Cities™ Program: www.innovation-cities.com
116
The Eurozone crisis - 3 Scenarios• Baseline – the situation in 2011 so far…
• The initial issue of the European Financial Stability Facility (EFSF) was well
received and the emergency meeting of Eurozone heads of government grudgingly
agreed to increase the size of the EFSF/ESM both as measures to reassure
investors
• After what amounted to the failure of its debt auction in early April, Portugal
realised that the future costs were unsustainable.
• The new European Banking Authority has started the 2011 round of bank stress
tests, but stated that banks do not need to make provisions against Eurozone
government bonds held in their ‗banking book‘.
• will investors be able to add back their own assumptions of losses and test the
capital strength of the banking system?
• Will this reveal the fatal flaw in the process?
• Eurozone governments have committed to preparing contingency plans for the
results of the formal tests, but they are unsure whether these will convince
investors of sovereign and bank solvency.
• There is also the problem of banks that face a failure of a major counter-party in
the inter-bank or derivatives market.
http://www.europesworld.org/NewFrancais/Accueil/Article/tabid/190/ArticleType/articleview/ArticleID/21831/language/en-US/Default.aspx 117
Scenario 1 – Inflationary Debt
Spiral• Finance ministers gut the Commission‘s already weak economic
governance proposals, and so make it clear to investors that collectively the
Eurozone's governments are unwilling or unable to enforce serious fiscal
discipline. This weakness may become all too apparent from the probable
stand-off with the European Parliament and the ECB.
• Capital flees the Eurozone and short and long-term interest rates rise
significantly in an attempt to prevent the import of rising inflation as the euro
weakens. Extra interest costs add extra strain onto budget deficits and
locks in the debt spiral.
http://www.europesworld.org/NewFrancais/Accueil/Article/tabid/190/ArticleType/articleview/ArticleID/21831/language/en-US/Default.aspx
118
Scenario 2 - Default
• Finance ministers and the European Parliament agree tough governance
package
• But at an risk state rejects the harsh measures called for and baulks
investors leading to default . Steadier states fear a domino effect in other
weakened states
• Potential losses are vast as demonstrated by the stress tests and we see a
spate of bank nationalisations.
• Some Eurozone members leave the EU and revert to their past currencies,
based on large and overly competitive devaluations
• Fury in other Eurozone states quickly leads to the breakdown of the
political and economic union.
• The EU ceases to operate as an organised political system
http://www.europesworld.org/NewFrancais/Accueil/Article/tabid/190/ArticleType/articleview/ArticleID/21831/language/en-US/Default.aspx
119
Scenario 3 – Federal Eurozone
Emerges • A strong, federal ‗Eurozone‘ emerges.
• Eurozone members conclude that it is in their best interest to avoid a collapse of the
euro and decide that anything and everything must be done to save it
• They agree an economic governance package that goes well beyond the
Commission proposals and helps steady the bond markets.
• Tougher regulation ensures that the banking system will not become over-exposed
again.
• Members agree a vastly engorged EU rescue fund
• At risk states will be encouraged to take assistance at an early stage rather than
when disaster is at door
• Collective guarantees ensure recovery in the bonds market
• Europe becomes a little insular in this period, focusing on getting its house in order,
enlargement is put on hold and relations with non-Eurozone members are cooled.
• After a couple of years members finances have improved sharply and the Euro
strengthens, reducing the risk of importing inflation and improved regulations reduce
the risk of a repeat o f the crisis
http://www.europesworld.org/NewFrancais/Accueil/Article/tabid/190/ArticleType/articleview/ArticleID/21831/language/en-US/Default.aspx
120
Population Change 2010-2030
Source: Standard Chartered, reprinted in Business Insider, January 2011 http://www.businessinsider.com/standard-chartered-supercycle-
2030-2011-1#121
House Price Forecasts
• Property values in the UK are set to fall 4.5% this year and 10.5% by the
end of 2015, in real terms, according to the National institute of Economic
and Social Research (NIESR).
• The five-year slump in real terms - after inflation has been taken into
account - is the longest period of decline since records began in the 1960s.
• It would see house prices consistently fail to beat inflation over the period.
• 'The prospects for the housing market are very weak indeed over the next
five years and that will weaken economic growth very significantly,' said
NIESR economist Ray Barrell. 'It will be the longest period of falling house
prices that we have seen,' he added.
• There was better news in the mortgage market with loans for house
purchases up from 46,708 in February to 47,557 in March, according to
figures from the Bank of England.
Source: This is Money, May 2011 http://www.thisismoney.co.uk/money/mortgageshome/article-1722171/House-prices-to-fall-for-the-next-5-
years.html122
House Price Forecasts
• NIESR predicts 'real house prices' - values after inflation has been taken
into account - will fall 4.5% this year and an average of 1.5% a year for the
subsequent four years. It follows a 3% rise last year when prices were
boosted by the Bank of England's £200bn money-printing programme.
• Paul Diggle, property economist at research group Capital Economics, said
NIESR's gloomy house price forecasts were still 'too optimistic'.
• He added: 'The housing market is not going anywhere at all at the moment.
Prices are flat but we think the housing market has considerably further to
fall. Prices are over-valued, perhaps to the tune of 20%.'
• Robert Gardner, chief economist at Nationwide, said: 'A strong rebound in
the market remains unlikely as the recovery is still expected to remain
modest by historic standards. In our view, the most likely outcome is that
house prices will continue to move sideways or drift modestly lower through
2011.'
Source: This is Money, May 2011 http://www.thisismoney.co.uk/money/mortgageshome/article-1722171/House-prices-to-fall-for-the-next-5-
years.html123
New Construction
• Official figures revealed the sharpest fall in new orders for the construction
industry since 1980.
• The Office for National Statistics found that new orders were 16.3% lower in
the second quarter on the previous three months and 23.2% lower than in
the same period last year.
• Analysts said they had been expecting the figures to show a slowdown
across the construction sector – but were shocked by the sheer scale of the
slump.
• Cuts to government school building along with other infrastructure projects
were partly to blame, according to experts, though private sector
housebuilding remains muted and the building of retail outlets and shopping
centres has almost ground to a halt.
Source: Guardian, September 2011 http://www.guardian.co.uk/business/2011/sep/02/uk-construction-new-
orders-fall
124
New Construction
• Areas in the south and west were hardest hit – with north London, Bristol
and the Medway in Kent suffering some of the largest falls. The north-east
also suffered heavily – with new orders in Tyne and Wear dropping by
almost half on the previous quarter.
• A survey of construction industry purchasing managers found a similar
picture, with employment down for the third month in a row. The survey
showed the sector was continuing to expand, albeit slowly, but with lower
margins and confidence at its lowest for eight months.
Source: Guardian, September 2011 http://www.guardian.co.uk/business/2011/sep/02/uk-construction-new-orders-fall
125
UK Investment Trends
• UK real estate investors stayed cautiously positive in the second quarter of
2011 as UK prime property continued to capture interest, according to the
July Jones Lang LaSalle UK Investor Confidence survey. This is despite Q2
2011 UK investment volumes falling 24% over the quarter, following a stellar
Q1 2011 performance that was boosted by the £1.6-billion Trafford Centre
transaction in Manchester.
• Investors do not expect the current tight supply market conditions to
change, with 43% of respondents anticipating an excess of buyers over the
next 12 months, up from 42% in Q1 2011 and 34% in Q2 2010. However,
investors appear to be more willing to look outside London as only 56%
expect their new activity to be in London and the South East compared with
69% a year ago.
Source: Europe RE, July 2011 http://www.europe-re.com/system/main.php?pageid=2616&articleid=18553126
UK Investment Trends
• Robert Stassen, Head of EMEA Capital Markets Research at Jones Lang
LaSalle, noted: ―Whilst there has been a widening disconnect between
investment activity in Central London and the rest of the UK over the first
half of 2011, key city center and town center locations are beginning to
enjoy a surge in interest from domestic investors, particularly for retail
assets.
• ―However, this is yet to be translated in to transactions as regional
investment volumes are still relatively low.‖
There was no material change in planned activity for the next 12 months
with 73% of respondents expecting to be net buyers, up marginally from the
70% recorded in Q1 2011.
Source: Europe RE, July 2011 http://www.europe-re.com/system/main.php?pageid=2616&articleid=18553127
UK Investment Trends
• Continued growth is expected in the second half of 2011, but investors
might be moving down the risk curve with an increased percentage opting
for less risky (core or core+) strategies (48% vs. 42% in Q1 2011), while the
percentage opting for higher risk value added strategies dropped to 36%
from 42% in Q1 2011, while highest risk opportunistic strategies remained at
16%.
• Stassen concluded: ―These results underline that, despite the constraints on
suitable prime investment grade product, investors still appear reluctant to
explore opportunities within the secondary market, but might be considering
better quality assets outside the London market‖.
Source: Europe RE, July 2011 http://www.europe-re.com/system/main.php?pageid=2616&articleid=18553
128
Return Forecast
• The All Property total return forecast for this year is 8%, down from Collier‘s
quarter two forecast of 8.4% due to the rise in negative sentiment and the
increased likelihood of a near term ‗double dip‘ recession in Europe and the
United States.
• Currently, interest in prime real estate assets remains strong across
commercial segments, it says. Sub 3% retail transaction yields have been
recorded in London on Old Bond Street (Cartier) and in Knightsbridge
(Rolex). Despite falling bond yields, Central London pricing may be finding a
base.
• Central London office demand for new space has been steady with further
rental growth expected due to supply constraints. Some 13 requirements,
active and potential, of over 100,000 square feet are focused on the City.
Demand for medium sized units of 10,000 to 40,000 square feet, has also
been steady with supply also limited.
Source: Property Wire, September 2011 http://www.propertywire.com/news/europe/uk-commercial-property-market-201109065529.html129
Return Forecast
• ‗The strongest returns are expected in 2013 as the economy begins to
approach trend growth. From 2012 to 2016, we expect All Property to have
an annualised 7.9% return led by the City of London offices and a rebound
in shopping centres further along the horizon,‘ says Rahim Jiwani, Property
Economist at Colliers International.
• ‗All Property equivalent and initial yields have fallen slightly in the year to
date and may see further marginal compression by year end as rental
growth trends begin to strengthen. Rental growth for All Property over the
12 months ending in July nudged positive for the first time since October
2008, according to the July IPD Monthly Digest. Rental growth for 2011 is
forecast to be 0.1%, but will strengthen over the next couple of years at an
annualised 2% from 2012 to 2016,‘ he added.
Source: Property Wire, September 2011 http://www.propertywire.com/news/europe/uk-commercial-property-market-
201109065529.html
130
Geographic Variation
131
Geographic Variation
• London has been well documented as experiencing a boom in buy to let,
but there is some evidence to suggest that real estate investors are now
looking further North where prices are cheaper.
• Experienced investors are now looking elsewhere to capitalize on the
current market and according to Platinum Portfolio Builder, the North on
England is generating greater interest.
• Nick Carlile, who is Founding Partner of Platinum Portfolio Builder and has
worked in the property construction and investment industry in and around
Yorkshire since the age of 16, believes that renewed faith in the market has
sparked a surge of interest.
• ‗Even though a 25% deposit is still required, this is more achievable on a
£100,000 property in the North than on say, a £250,000 plus property in the
South, where prices are still considerably higher,‘ said Carlile.
Source: Property Community, August 2011 http://www.propertycommunity.com/property-in-the-uk/real-estate-investors-in-uk-looking-
north.html
132
Geographic Variation• He believes that experienced investors are recognizing that
stagnant house prices and high demand for rental properties from those who
cannot afford to make a purchase, are making investments more accessible
with greater security of a good return.
• ‗The north, versus the south, offers much greater opportunity to buy more
than one property, building a portfolio over a faster period of time. If managed
correctly, it has the potential to return much higher returns than in the South
where yields are often half what is achieved in the North,‘ he explained.
• ‗Having made many such investments myself in Yorkshire, I believe investing
in property here has many opportunities. Of course, there are thousands of
micro markets in the UK and this is just one, but successful property investing
is about understanding these micro markets,‘ he added.
• He pointed out that regional towns and cities in Yorkshire benefit from high
yields, robust rental income and strong prospects of future capital growth,
offering ideal conditions for those with money behind them or a decent
deposit.Source: Property Community, August 2011 http://www.propertycommunity.com/property-in-the-uk/real-estate-investors-in-uk-looking-
north.html
133
Geographic Variation
• ‗Capital growth is part of a medium to long-term investment, especially in
the current market, so rental yield is crucial. Yorkshire offers a secure buy to
let investment from a more affordable starting point. There is more scope to
purchase properties with a significant discount; on average we achieve 26%
below survey value for our clients with an average gross yield of 8.9%.
Typical yields for London are said to be around the 4% mark due to much
higher property prices,‘ he said.
• Platinum Portfolio Builder has recently seen an 18% increase in the number
of clients wanting to invest in the last quarter, in particular from investors
based overseas.
• ‗There seems to be a distinct improvement and renewed faith with investing
in property and 2011/2012 is offering the prime time to do so. During 2010
the discount achieved equaled to over two million in equity for the benefit of
our clients and shows the strength of such investments in the North of
England,‘ he added.
Source: Property Community, August 2011 http://www.propertycommunity.com/property-in-the-uk/real-estate-investors-in-uk-looking-
north.html
134
Buy-to-Let
• Investors in student properties have benefited from the imbalance between
the supply of accommodation and the high demand for university places in
the UK.
• According to the Knight Frank Student Accommodation Index, total returns
for student property across England and Wales were 13.5 per cent in the
year to December 2010, and 8.41 per cent in London.
• Average yields were 6.25 per cent a year.
• However, property experts have warned of a growing divergence in the
investment performance of student accommodation – with some university
towns forecast to perform better than others, as a result of the
government‘s reform of university funding in 2012.
• Savills, the property agent, believes the changes will lead to a market where
there are distinct winners and losers, making it essential that investors
research locations more carefully than before.
Source: FT, August 2011 http://www.ft.com/intl/cms/s/2/c45d8874-ce4e-11e0-99ec-00144feabdc0.html?ftcamp=rss#axzz1XCQ2Wnwz
135
Buy-to-Let
• Its research of 114 universities in England shows that there are a number of
university towns that will continue to provide attractive returns, such as
Exeter, Brighton, Manchester and London. These are still rated as ―buy‖
locations. But it has also identified ten universities towns where demand will
weaken, due to a combination of funding reform and the inability to attract
full-time and foreign students.
• Rental demand can also be affected by the growing trend for more students
to live at home and commute for economic reasons – a trend that is
expected to accelerate with the raising of tuition fees.
• Research from LV= found that the number of stay-at-home students is set to
more than double by the year 2020, to reach 793,000 – which represents 47
per cent of all UK higher-education students.
Source: FT, August 2011 http://www.ft.com/intl/cms/s/2/c45d8874-ce4e-11e0-99ec-00144feabdc0.html?ftcamp=rss#axzz1XCQ2Wnwz
136
Buy-to-Let
Source: FT, August 2011 http://www.ft.com/intl/cms/s/2/c45d8874-ce4e-11e0-99ec-00144feabdc0.html?ftcamp=rss#axzz1XCQ2Wnwz
137
Commercial Rental Growth
Forecasts
Source: GVA, Q3 2011
www.gva.co.uk/WorkArea/DownloadAsset.aspx?id=12884909144
138
Investment Market Outlook
Source: GVA, Q3 2011 www.gva.co.uk/WorkArea/DownloadAsset.aspx?id=12884909144139
The UK Property Sector
140
House Price Could Rise 14% by
2015• The Centre for Economics and Business Research says house prices will
increase by 14% over the next four years.
• It predicts house prices will drop 1.3% in 2011 but then gradually rise
between 2012 and 2015, up 2.4% in 2012, 3.4% in 2013, 3.6% in 2014 and
4% in 2015.
• The ongoing shortage of housing, a gradual increase in the availability of
mortgage finance and a prolonged period of loose monetary policy will
cause the upsurge in house prices, it says.
• Cebr says house building will remain depressed for the next four years and
this, combined with population growth, will result in an increasing shortage
of accommodation.
• It says this is likely to elevate house prices, making home ownership less
affordable and placing further pressure on the rental market.
• Cebr also predicts that the base rate is unlikely to rise above 2% before
2015.Source: Mortgage Strategy, August 2011 http://www.mortgagestrategy.co.uk/housing-market/house-prices-will-rise-14-by-2015-says-
cebr/1036500.article141
House Price Could Rise 14% by
2015• Shehan Mohamed, economist at Cebr, says: ―We forecast an average of
110,000 new homes to be built every year over the medium term.
• ―This is significantly lower than the 225,000 homes that need to be created
every year to keep pace with current housing needs, population growth and
the trend towards reduced household sizes.‖
• Douglas McWilliams, chief executive of Cebr, says: ―We do not expect a
house price boom, but the housing shortage is likely to push prices gently
upwards.
• ―Because we have revised down our forecast for economic growth from
2012 to 2015, we have also cut our forecast growth in house prices to 2015
from 15.8% to 14.0%.
• ―By 2015, our updated forecast price for the average house is £200,700.
The previous peak level was £191,200 in 2007.‖
Source: Mortgage Strategy, August 2011 http://www.mortgagestrategy.co.uk/housing-market/house-prices-will-rise-14-by-2015-says-
cebr/1036500.article142
UK Housing Forecasts
143
UK Housing Forecasts
• UK Ministers themselves expect to deliver and exceed the stated target of
150,000 new homes by 2015.
• Appetite for the Affordable Homes Programme has surpassed expectations,
with 146 providers sharing almost £1.8 billion to build 80,000 homes under
the programme - putting the Government on track to deliver up to 170,000
new homes by 2015, and safeguarding some 80,000 jobs in construction
and related trades.
• The programme allows social housing providers to charge a rent of up to 80
per cent of the local market level, and use the additional income to support
delivery of more affordable homes. Providers may also offer flexible
tenancies to new tenants.
Source: Property Talk Live, 18/07/2011, http://propertytalklive.co.uk/social-housing/6999-new-affordable-homes-programme-set-to-exceed-
expectations144
UK Housing Forecasts• The National Housing Federation has predicted home ownership in England
to slump to just 63.8 percent over the next decade, the lowest level since
the mid-1980s.
• The Federation argues that huge deposits, combined with high house prices
and strict lending criteria, have sent home ownership into decline.
• In England, the proportion of people living in owner occupied homes could
fall from a peak of 72.5 per cent in 2001 to 63.8 per cent in 2021, the
Federation forecast.
• In London, the majority of people living in the capital will rent by 2021 with
the number of owner occupiers falling from 51.6 per cent in 2010 to 44 per
cent by 2021, it added.
• The North East will be the only English region to see any increase in owner
occupier numbers over the next decade, rising marginally from 66.2 per
cent to 67.4 per cent, the Federation predicted.
Source: This is Money, 30/08/2011, http://www.thisismoney.co.uk/money/mortgageshome/article-2031434/Housing-market-crisis-home-
ownership-tumbles-house-prices-soar.html
145
UK Housing Forecasts
• The average house price in England will meanwhile rise by 21.3 percent
over the next five years from £214,647 in 2011 to £260,304 in 2016,
according to Oxford Economics, who were commissioned to produce the
forecasts.
• Average rents in the private sector are forecast to increase sharply by 19.8
per cent over the next five years fuelled by high demand and a shortage of
properties.
• Oxford Economics predicted that means rents would increase on average in
England from £486 a month in 2011 to £582 a month in 2016, meaning
tenants would be paying £1,152 more a year in total.
Source: This is Money, 30/08/2011, http://www.thisismoney.co.uk/money/mortgageshome/article-2031434/Housing-market-crisis-home-
ownership-tumbles-house-prices-soar.html
146
Green Skills Deficit
• John Alker of the UK Green Building Council says that the green skills
deficit is the major challenge facing the construction industry, but suggested
that once professionals have knowledge of sustainability, they can integrate
it into all of their work.
• From the end of 2012 the Green Deal will be launched, providing up to
200,000 jobs, but requiring good skills in retrofitting homes to a high
standard of energy efficiency.
Source: SAP Designs, April 2011 http://www.sapdesigns.co.uk/article36.html
147
UK 3rd in Green Building league
• Norway has topped a global league of green building for the second year in
a row, followed by Brazil in second place and then the UK, which climbs to
third place for the first time.
• The 2009 Royal Institute of Chartered Surveyors (RICS) Global Zero
Carbon Capacity Index is based on International Energy Agency(IEA) data
and covers 34 countries looking at factors such as energy efficiency in
households, offices and transport, as well as investment in renewable
energy and policies to reduce carbon consumption from buildings.
• The building sector – both residential and commercial – currently accounts
for around 40% of emissions, more than either the transport or industrial
sectors.
• The UK has climbed a place in the league since last year, mainly as a result
of the new policies introduced by the previous government, including zero-
carbon housing, the Code for Sustainable Homes and tightened building
regulations.
Source: UCL, July 2010 http://www.ucl.ac.uk/news/news-articles/1007/10071901
148
Climate Change
• According to a 2011 report released by consultancy group Mercer, along
with the World Bank's International Finance Corporation, climate change will
significantly impact the transportation, construction, and manufacturing
industries over the course of the next 20 years.
• In fact, the report states that damages caused by climate change could cost
over $8 trillion globally by 2030.
Source: AutoBlog, March 2011 http://green.autoblog.com/2011/03/03/why-green-cars-matter-climate-change-could-cost-8-trillion-by/
Background Note
149
Ecosystem Services and
Biodiversity Loss
150
Imperatives
• ‗The UK‘s embedded and unconscious dependence on environmental
resources, largely unaccounted for and unvalued in market terms, will mean
no sector or business will escape unaffected by changes to the availability
of environmental goods and services,‘ says PwC.
• Business blind spots on future consumer behaviour, reporting, valuation and
regulation are already emerging. Unpredictable pricing and supply chain
scenarios made business action on environmental conservation ―the
economically rational thing to do.‖
• Water used in food and drink production, timber for packaging, furniture and
paper, productive land for fruit and vegetables, and fibres for clothes, are
amongst just some of the biodiversity and ecosystem ‗services‘ whose
economic value and protection is examined in the study.
Source: PwC, July 2010 http://www.ukmediacentre.pwc.com/News-Releases/UK-business-is-biting-the-hand-that-feeds-as-
unchecked-environmental-resource-loss-threatens-to-bite-UK-economy-back-ee4.aspx
Background Note
151
Imperatives
• Despite the potential impact, research by PwC for the TEEB study, found
that of the world‘s largest 100 companies - including many UK household
names - only two see biodiversity loss as a strategic business risk. Only 18
companies made any mention of biodiversity or ecosystems in their annual
report. In high – dependency or impact sectors including food producers
and primary industrial sectors, nine identified it as a key sustainability issue.
• Regional differences in business perceptions of the threat are also
stark. Over 50% of CEOs in Latin America and 45% in Africa see declines
in biodiversity as a challenge to business growth. In contrast, less than 20%
of their counterparts in Western Europe share such concerns, dropping to
15% in the UK.
• Malcolm Preston, CEO, sustainability and climate change,
PricewaterhouseCoopers LLP said:
• ―Current business strategies and plans in the UK are biting the hand that
feeds stable consumer prices, business prospects and long term investor
security and returns.
Source: PwC, July 2010 http://www.ukmediacentre.pwc.com/News-Releases/UK-business-is-biting-the-hand-that-feeds-as-unchecked-
environmental-resource-loss-threatens-to-bite-UK-economy-back-ee4.aspx
Background Note
152
Imperatives
• ―When estimates in the study put economic impact of biodiversity loss at
between $2-4.5 trillion annually, you realise that this is not just about
environmentalists and scientists, but economically rational conservation that
protects the long term prospects for business.
• ―That means putting more value on the resources that supply and sustain
UK business, including companies and projects the financial services sector
is investing in.‖
• Focusing in on issues for UK companies ranging from SME suppliers to
large corporate, to international financial services companies and pension
investors, contributors from PwC to the UN study highlighted five potential
blind spots for UK business to focus on:
– Possible changes in corporate reporting to recognise resources that are
material to the business‘s future, that will require auditing and
assurance
Source: PwC, July 2010 http://www.ukmediacentre.pwc.com/News-Releases/UK-business-is-biting-the-hand-that-feeds-as-
unchecked-environmental-resource-loss-threatens-to-bite-UK-economy-back-ee4.aspx
Background Note
153
Imperatives
– Unpredictability in supply chain pricing and availability, with knock on
affects for consumers of price rises and product availability
– Consumers disregarding products that do not take ethical and
environmental considerations into account
– Investors expecting more data, and factoring in more value for
resources that supply and sustain businesses and funds they are
investing in
– New environmental regulations, tax and subsidy reforms as new
analysis gives governments better valuation and pricing measures for
biodiversity; the introduction of new markets such as UK based habitat
banking or other environmental market mechanisms.
Source: PwC, July 2010 http://www.ukmediacentre.pwc.com/News-Releases/UK-business-is-biting-the-hand-that-feeds-as-
unchecked-environmental-resource-loss-threatens-to-bite-UK-economy-back-ee4.aspx
Background Note
154
Imperatives
• Jon Williams, partner, sustainability & climate change,
PricewaterhouseCoopers LLP said:
• ―We‘re effectively in an environmental recession for which few businesses
appear to have a real accounts or a recovery plan. Identifying and
managing the risks that arise from our impact on biodiversity in the UK is
not about greenwash, or CSR, it‘s about the economics and security of
supply and demand, and in a shorter time frame than climate change.‖
Source: PwC, July 2010 http://www.ukmediacentre.pwc.com/News-Releases/UK-business-is-biting-the-hand-that-feeds-as-
unchecked-environmental-resource-loss-threatens-to-bite-UK-economy-back-ee4.aspx
Background Note
155
Global Challengers
• In a January 2011 report, The Boston Consulting Group (BCG) identifies
100 so-called emerging global challengers, about half of which could qualify
for inclusion in the Fortune Global 500 within the next five years.
• The 100 challenger companies grew annually by 18 percent and averaged
operating margins of 18 percent from 2000 through 2009.
• Overall, the global challengers generated revenues of $1.3 trillion in 2009.
BCG notes that if these new challengers ‗…continue on their current growth
path, they could collectively generate $8 trillion in revenues by 2020—an
amount roughly equivalent to what the S&P 500 companies generate today.‘
Source: Boston Consulting Group, January 2011
http://www.bcg.com/media/PressReleaseDetails.aspx?id=tcm:12-70018
Background Note
156
Talent
• Having access to the best talent continues to be a challenge for CEOs and
business leaders—with 97 percent of CEOs in PwC‘s annual global CEO
survey saying that having the right talent is the most critical factor for their
business growth (1).
• In its annual May release of 2010, Manpower noted that 9 percent of UK
employers are having trouble filling vacancies (2), despite an 8 percent
unemployment rate in the three months to January 2011 (3).
Source (1): PwC, ‗Talent Mobility 2020,‘ 2010 http://www.pwc.com/gx/en/managing-tomorrows-people/future-of-work/pdf/talent-mobility-
2020.pdf
Source (2): Manpower, May 2010 http://www.manpower.com/investors/releasedetail.cfm?ReleaseID=471751
Source (3): Office for National Statistics, March 2011
http://www.statistics.gov.uk/cci/nugget.asp?id=12
Background Note
157
Skills Shortages
• Half of employers (51%) are concerned they will not be able to fill posts
requiring the right graduate level or higher skills in the coming years, and a
third (32%) don't believe it will be possible to fill intermediate level jobs,
requiring skills equivalent to A level. A third (30%) of employers predict the
need for lower-level skills will decrease, while just 17% say it will increase.
• The survey formed the CBI report, Ready to grow: business priorities for
education and skills.
• Asked how satisfied they were with school and college leavers'
employability skills, two-thirds (68%) of employers were dissatisfied with
levels of business and customer awareness, over half (57%) were unhappy
with self-management skills, and over two-fifths (44%) with young recruits'
ability to solve problems.
Source: HR Magazine, May 2010
http://www.hrmagazine.co.uk/hro/news/1017856/employers-struggle-recruit-skilled-staff-post-recession-war-talent-rages
Background Note
158
Skills Shortages
• Despite the recession, nearly half of employers (45%) say they are already
having difficulty recruiting staff with skills in science, technology, engineering
and maths (STEM), with manufacturers and science-related businesses
having the most difficulty finding highly-skilled people to fill their posts. Even
more companies (59%) expect to have difficulty finding STEM-skilled people
in the next 3 years.
• Employers are concerned about the basic skills of their current workforce.
The biggest problem is with IT skills, where two-thirds (66%) of employers
report concern. But half of employers are also troubled by employees' basic
literacy (52%) and numeracy (49%) skills.
• In the past year alone, a fifth of employers have arranged remedial training
for young people they have recruited from school or college, in literacy
(18%), numeracy (18%), and IT (22%). When it comes to the existing
workforce, employers are also providing basic training in literacy (22%) and
numeracy (18%), with the need for IT training even higher (43%).
Source: HR Magazine, May 2010
http://www.hrmagazine.co.uk/hro/news/1017856/employers-struggle-recruit-skilled-staff-post-recession-war-talent-rages
Background Note
159
Change on the Horizon?
160
Change on the Horizon?
• A March 2011 report on housing demand up to 2025 by the Institute of
Public Policy Research, predicts the average demand for new homes in
England will total 252,017 per year, and demand for social housing will rise
in most regions, whether the economy recovers or continues to struggle.
• It claims demand for all housing tenures will rise by between 20 to 25 per
cent, or more than 30,000 each year, in the east of England, with the north
west seeing the lowest increase of between 9 and 15 per cent.
Source: Inside Housing, March 2011
http://www.insidehousing.co.uk/news/development/east-of-england-to-top-demand-for-housing-in-next-20-years/6514016.article
161
Change on the Horizon?
• 2011 will see major changes to the framework within which housing
operates.
• The changes range from planning and affordable housing to funding and
mortgage finance.
• 2011 will be a year of adaptation and innovation for the UK housing industry
but participants will step up to the plate.
Source: King Sturge, 2011
http://www.kingsturge.co.uk/news/~/media/Events/Property%20Predictions/2011/KING%20STURGE%20PROPERTY%20
PREDICITONS%202011%20FULL%20PAPERS%20FINAL.ashx
162
Innovation In The Property Sector
163
Ultra-Quick Construction
• The most recent example of the striking capability of the Chinese building
industry took place in Changsha, Hunan province a few months ago.
• China's Broad Group showcased their rapid building technology by
constructing the 15-story Ark Hotel in less than six days. Using a team of
200 workers the structural framework was erected in just 46.5 hours and the
external cladding and internal non-structural surfaces were completed in
another 90 hours.
• The Ark Hotel used one sixth the material of an equivalent sized building
with a cost saving of 20% while still being able to withstand a 9.0 magnitude
earthquake.
Source: Gizmag, 10/08/2011, http://www.gizmag.com/15-story-hotel-built-in-less-than-6-days/17711/
164
Ultra-Quick Construction
• In addition the building uses several technologies to result in energy
efficiency five times that of comparable buildings. This includes triple pane
windows, external solar shades, 6 inches of thermal insulation, heat
recovery ventilation, and LED lighting systems. The plan is to construct 15
similar structures in China and 30 more in other countries.
• However, the foundations and other below-ground construction were
completed prior to starting the clock and the construction system makes
significant use of prefabricated components produced in a dedicated
factory.
Source: Gizmag, 10/08/2011, http://www.gizmag.com/15-story-hotel-built-in-less-than-6-days/17711/
165
Floating Houses?
• The FLOATEC project research project is developing "amphibian houses―
that are designed to float in the event of a flood.
• This technology would be of immense benefit to low-lying countries such as
the Netherlands and small island-states in the Indian and Pacific Oceans,
that are at the risk of disappearing in the next 100 years due to rising sea
levels. Thus these states could maintain their claim to statehood through
the use of artificial, floating structures.
• The lead research partner in the FLOATEC project is Dura Vermeer, a
Dutch company that over the past 12 years has become a market leader in
the floating building market.
• FLOATEC is a European R&D project underwritten by EUREKA, an
intergovernmental network established to support market-oriented R&D and
innovation projects by industry, research centres and universities across all
technological sectors.
Source: Gizmag, 01/09/2011, http://www.gizmag.com/floatec-floating-house-project/19670/
166
Floating Houses?• The key to floating structures lies in their foundations, which are made up of
multiple layers of light plastic foam supporting the concrete. However, the
technology used up until now has had limitations as there is a maximum
size and weight beyond which a structure loses its buoyancy and simply
sinks.
• To solve this problem Dura Vermeer teamed up with Spanish company,
Acciona Infrastructures, and a Spanish engineering consultancy, Solintel, to
develop a new way to build floating structures that were simpler, more solid
and used lighter materials.
• The new building method they developed uses expanded polystyrene
(EPS), which Blon says is, "the same kind as is used for packaging and
which people are familiar with: little white balls glued together."
Source: Gizmag, 01/09/2011, http://www.gizmag.com/floatec-floating-house-project/19670
167
Floating Houses?
• This modified polystyrene is inserted in multiple layers in between stratums
of composite and concrete and divided into beam-like modules that can
easily be assembled into a bigger supporting structure a bit like building
blocks. The modules are arranged in a floating grid into which the concrete
is cast.
• Blom says that the new technology is much cheaper than traditional
methods as there is a reduction in the amount of material used. "Smaller
blocks can now support bigger structures and, in the end, the cost of the
whole building is reduced," he said.
Source: Gizmag, 01/09/2011, http://www.gizmag.com/floatec-floating-house-project/19670
168
Wooden Cities?
• 3 billion will need new affordable housing in next 20 years.
• 100,000,000 effectively homeless worldwide. Means 100,000 new houses
per day.
• Modular, containers, rammed earth, are great ideas but… these are rural or
suburban solutions, but we need solutions for the 50% who live in urban
areas(70% by 2050, mostly in developing world).
• 3 tonnes of concrete are produced per person per year globally
• Needs: 1) Reduce carbon emission & 2) Remove carbon from system
• Wood is lighter and has a much smaller carbon footprint, indeed it can even
store carbon.
• New technology which involves heating and pressing pulp into large sheets
could create a product that is stronger then steel.
Source: TED, accessed info via scienceforums.net, March 2011
http://www.scienceforums.net/topic/55923-wood-the-best-material-for-skyscrapers/
169
Wooden Cities?
• Apart from the foundations, wood can replace the use of steel and concrete
in buildings and becomes the new structural backbone of the skyscraper!
• Wood weights half as much as concrete which improves the strength of the
building in an earthquake
• Wood buildings have survived earthquakes better than heavy steel and
concrete buildings
• Can lead to an enormous reforesting business worldwide, and an enormous
sequestration of Co2.
• As a material the wood is more expensive but …
• It so drastically reduces the labour costs associated with buildings as it can
go up so much faster. It takes a week to pour a concrete floor in a
skyscraper before the next floor can be constructed. Wood skyscrapers can
build 6 floors a day.
Source: TED, accessed info via scienceforums.net, March 2011
http://www.scienceforums.net/topic/55923-wood-the-best-material-for-skyscrapers/
170
Green Buildings
171
Installed PV as a Trend
172
Installed PV as a Trend• Installations of PV systems in United Kingdom amounted to 96 Megawatts
(MW) in 2010, up an astounding 1,500 percent from 6MW in 2009. Starting
from a nearly negligible level in 2009, the expansion dramatically outpace
the growth of the next fastest-growing nation – Spain – which rose by
approximately 730 percent in 2010.
• The United Kingdom in 2010 adopted attractive Feed-in-Tariffs (FIT) to
promote PV adoption.
• While growth in the United Kingdom is expected to slow down from such a
blistering rate after 2010, PV installations will continue to rise in the 50
Percent range for each year through 2014.
Source: Design Spark, 01/02/2011, http://www.designspark.com/content/fastest-growing-solar-market-2010
173
Green Buildings• Researchers at the Ningpo, China campus of the University of Nottingham
(UNNC) have created a new heat-regulating material that could be used to
cut the heating and cooling costs of buildings.
• The non-deformed storage phase change material (PCM) can be fixed so
that it starts absorbing any excess heat above a pre-determined
temperature and releasing stored heat when the ambient temperature drops
below the set point.
Source: Building4Change, 11/08/2011, http://www.building4change.com/page.jsp?id=905
174
Green Buildings
• The researchers say the material can be manufactured in a variety of
shapes and sizes, even small enough so that it can be sprayed as a
microscopic film to surfaces in existing buildings.
• The researchers at UNNC's Centre for Sustainable Energy Technologies
say the novel material possesses a larger energy storage capacity with
faster thermal response than existing materials and could be cheaply
manufactured.
• They believe it has the potential to save up to 35 percent of energy in a
building and could also be used to enhance the efficiency of solar panels
and LED lighting.
Source: Building4Change, 11/08/2011, http://www.building4change.com/page.jsp?id=905
175
Innovative Recycling• Mexico's Tubohotel, which opened in 2010, is a unique and affordable
holiday destination created from recycled concrete tubes.
• The original pipe hotel concept comes from German architect, Andreas
Strauss, who created Dasparkhotel in 2006. The T3arc architects drew
inspiration from Strauss and expanded on the idea to create two-story
triangular modules.
• By stacking one tube on top of two base tubes, they were able to create a
striking visual display without impacting the surrounding natural
environment.
• The Tubohotel offers 20 concrete rooms, each measuring 2.44 m wide and
3.5 m long (8 ft x 11.5 ft) and is simply furnished with a queen size bed,
desk light, fan, and under-bed storage.
• Unfortunately they couldn't come up with an idea to squeeze in a bathroom
but guests have access to two communal bathhouses located on the hotel
property.
Source: Gizmag, 10/08/2011, http://www.gizmag.com/mexicos-recycled-concrete-tube-hotel/19142/
176
Innovative Recycling
• Because they are sturdy, waterproof, transportable, and perhaps only a little
bit smaller than some low-rent apartments, disused shipping containers
have become very popular for conversion into low-impact buildings.
• Past efforts have included using them as emergency housing, trendy
relocatable bachelor pads, pop-up shops and portable restaurants.
Source: Gizmag, 29/06/2011, http://www.gizmag.com/building-made-from-65-shipping-containers/19069/
177
Innovative Recycling• The Los Angeles design group APHIDoIDEA has proposed putting containers
together to create an environmental education centre for the city of Long
Beach.
• The building would consist of classrooms, offices, an exhibition hall, and a
public plaza. On the outside, it would also feature an open amphitheater, and
a rooftop garden incorporating a rainwater collection system.
• In order to create the building, the shipping containers would first be stacked
together in a two-row rectangle. The middle of that rectangle would then be
raised up in an arch, to create the plaza underneath it. The two rows would
then be separated, to allow access to the inside of the containers. Finally, the
arched containers would be angled toward the Sun, to maximize solar gain -
some of them would be glass-fronted.
• It should be noted that while the outer shells of the containers would form the
walls and roof of the complex, the rooms themselves would not all consist of
single containers. That said, however, systems such as power and water
could be contained within individual containers, and essentially "plugged in" to
the complex.
Source: Gizmag, 29/06/2011, http://www.gizmag.com/building-made-from-65-shipping-containers/19069/
178
Innovative Recycling
179
The ‘Nano’ Flatpack House
180
The ‘Nano’ Flatpack House
• Tata Group, the company behind the ‗world‘s cheapest car‘ – the $2500 Tata
Nano - is now looking to offer the world‘s cheapest house on the market.
• Dubbed the Nano house, the flatpack dwelling comes with pre-fabricated
materials, including doors and windows, for a house of around 20 square
metres in size. Materials consist of coconut or jute cladding complete with
interior layouts. The proposed price of the ready-to-assemble kit is said to
be just $700.
• The houses are said to have a life expectancy of around 20 years.
• Tata says the homes will be sold in their native India to those living in village
areas and could also be sold to councils in bulk that are looking to build up
areas. Mr Das also said the company was bouncing ideas off local councils
to develop the most suitable style homes. This can hopefully bring shelter
to some of the world‘s poorest communities.
Source: Car Advice, 18/08/2011, http://www.caradvice.com.au/128924/tata-announces-worlds-cheapest-flatpack-house/
181
New Building Systems
• Culminating a decade of extensive development, Gemite developed a
universal structural building system Omni-Globe, suitable for residential
and commercial multi-storey projects.
• Omni-Globe System is surprisingly simple. Each structure is built out of
Omni Elements, a large, but lightweight sections that are prefabricated off-
site, or on-site (depending on the size of the project).
• It is almost as if assembling a well designed puzzle utilising giant Lego
building blocks. Omni Elements, usually 1.2 x 2.4 m (4‘ x 8‘), are joined to
form walls, floors and roof of the structure and are light enough to handle
manually, without a need for any heavy equipment. Once the concrete slab
is completed, an entire building can be erected in a matter of days using
Omni Elements.
• Omni-Con, a high performance Structural Concrete is spray applied to the
exterior and interior of all walls to complete the Omni-Globe Structure
Source: Gemite, retrieved April 2011 http://www.gemite.com/MarketSegments/omniglobe.PDF 182
New Building Systems
• The finished structure is exceedingly strong and durable even when
attacked by hurricane or earthquake. Tests performed at the University of
Toronto showed that one Omni-Globe element carries a load of 30 metric
tons (70,000 pounds).
• Therefore, a small 60 m² (600 ft²) house can carry the load of 40 fully
loaded trucks.
• Omni-Globe System fulfils the urgent demand for quick production of high
quality, inexpensive, and safe housing anywhere in the world. Omni-Globe
Building System is structurally and economically suitable for projects
ranging from low cost housing to prestigious commercial buildings.
Source: Gemite, retrieved April 2011 http://www.gemite.com/MarketSegments/omniglobe.PDF183
New Building Systems
• Structural Components of Omni-Globe System
• Lightweight Steel Channels form the perimeter of the element.
• Insulating Core provides high insulating and acoustical value.
• Structural Skin, a fibre-reinforced, non-combustible and high performance
composite
• Features & Benefits of Omni-Globe System
• Flexibility & Adaptability to local market requirements and design versatility.
• Local Materials are used whenever available.
• Low Labour Cost & Local Employment. Unskilled labour can be easily
trained to assemble and erect Omni-Globe System elements.
• Set-up Costs are extremely low.
• Rapid Construction - a total house can be erected in 3 to 5 days using only a
3 to 4 man crews. A 55 m2 (600 ft2) unit takes only 250 man-hours.
Source: Gemite, retrieved April 2011 http://www.gemite.com/MarketSegments/omniglobe.PDF
184
New Building Systems
• Environment Friendly - all materials in the systems are non-toxic and can be
recycled. All the materials resist decay, termites and other vermin.
• High Insulating Factor - climatic conditions from the extreme heat of the
Sahara to the icy cold of the Arctic can be satisfied. The thickness of Omni-
Globe System wall and roof elements can be easily and economically
modified from 10 - 250 cm (4" - 10") without any tooling or equipment
expenses.
• The The Omni-Globe System houses can be built, on a mass production
basis, for less than US $250.00 per m² (US $25.00 per ft²) of floor area.
This price includes all materials and labour for exterior and load bearing
walls, floor, roof and interior partitions including wall & roof finishes.
Utilities (electrical, plumbing, heating), kitchen & bathroom fixtures and
cabinets, doors, windows, concrete slab, architectural and structural design
and any approvals & fees are not included.
Source: Gemite, retrieved April 2011 http://www.gemite.com/MarketSegments/omniglobe.PDF185
More Efficient Design
• Super-efficient PassivHaus construction makes for warmer homes and
lower energy bills. These houses can cost just £75 to heat a year.
• The rigorous, meticulous design principles were developed by
the PassivHaus Institute in Germany at the beginning of the 1990s. Since
then more than 10,000 buildings, including houses, schools and offices,
have been built to the standard, mostly in Germany and Austria.
• Put simply, the PassivHaus ethos is about embedding high levels of energy
efficiency into the house while it is being built. The result is a house that
uses very little energy for heating and cooling – around 90 per cent less
than standard UK buildings.
• The emphasis is on super-insulation and stringent levels of airtightness to
create a ‗tea-cosy effect‘ (or minimal thermal bridging). The houses are also
designed to optimise heat from the sun (passive solar gain).
Source: The Ecologist, October 2010
http://www.theecologist.org/green_green_living/home/641800/passivhaus_construction_the_future_of_uk_housebuilding.html
186
More Efficient Design
• The only techie bit is the mechanical ventilation and heat-recovery system
(MVHR), which provides the house with fresh air and helps to warm it by
recovering heat from the extracted air and transferring it to the incoming air.
• In addition, most of the of heat generated inside – body heat from people
and animals, heat from lighting and cooking, as well as solar gain – is
retained within the building. As a result you hardly need any traditional
heating or air conditioning systems.
• Building to PassivHaus standards does cost approximately 14 per cent
more than conventional construction methods, but because the energy
costs are next to nothing the payback period is just 14 years.
Source: The Ecologist, October 2010
http://www.theecologist.org/green_green_living/home/641800/passivhaus_construction_the_future_of_uk_housebuilding.html187
Award Winning Concepts
• Manchester-based architect Dwelle has won the Small House of the Year
category at the 2010 British Homes Awards. The big dwelle.ing design was
inspired by the recession, which led to the architects investigating an
alternative housing solution that would create smaller dwellings that could
be adapted to suit a variety of applications.
• The sustainable buildings have two-storey living space and plenty of
storage space: the interior is more spacious than first impressions suggest.
It can be easily adapted to meet a client's needs too
• People love the building's form and the space it provides, but sometimes
want two bedrooms or a slightly larger living space. By simply extruding the
section, or by placing two together side-by-side, you can create many
different variations.
Source: Green Build News , July 2010
http://www.greenbuildnews.co.uk/news-details/Dwelle-wins-housing-award/211188
Self-Healing Concrete
• Self-Healing Industrial Coatings
• Autonomic Materials is a company that sells self-healing coatings for ships
and large industrial equipment. Most of these machines are coated in
polymers that protect against weathering which can lead to fatal
malfunctions. This company offers a number of coatings that sense cracks
and use tiny capsules filled with resins to fill the damaged areas with a new
layer of the shell.
• Self-Healing Concrete
• Civil engineer Henk Jonkers mixes bacteria into concrete to create what he
calls bio-concrete, a substance that fills in its own cracks and holes. What
happens is that the bacteria grow into cracks as they form, releasing
calcium carbonate, a substance similar to limestone. The result? The cracks
are filled in with what is essentially the waste material of these bacteria,
which are engineered from extremophile bacteria that thrive in extremely dry
conditions.
Source: io9, March 2011 http://io9.com/#!5780827/two-new-building-materials-that-are-about-to-revolutionize-the-world
189
Fly Ash Concrete
• Coating concrete with residual ash from burning coal can make it strong
enough to withstand harsh conditions — and save governments millions of
dollars. Fly ash is an industrial byproduct from coal power plants, which
used to be pumped into the atmosphere, but is now collected.
• In the USA 130 million tons of it is produced annually, of which 70% ends up
in landfills — but it turns out this stuff makes concrete nigh on indestructible.
• A coating made from the ash can be used on both the rebar inside the
concrete and to repair the material itself, and the modified building material
becomes impressively strong. Called Blue Crete Coating, researchers have
put the modified concrete through simulated environments of hot, cold and
rain far worse than exist on earth, including air pollution 100,000x as acidic
as we currently suffer from. The result? The concrete survives more than a
year, where the normal stuff crumbles in days.
Source: io9.com, April 2011 http://io9.com/#!materialsscience/5784962
190
Improving Indoor Air Quality• A new method using minerals in particleboard could significantly reduce
formaldehyde emissions indoors.
• Formaldehyde, one of the many VOCs (volatile organic compounds) that
have been classified as dangerous to human health by organizations such
as the World Health Organization (WHO), can be found in the adhesives
that are commonly used for gluing particleboard.
• According to the US Environmental Protection Agency (EPA), pressed wood
products that use adhesives with urea-formaldehyde (UF) resins are one of
the most significant sources of formaldehyde in homes.
• According to an article published in January 2011 on the website
ScienceDaily, researchers in Germany have developed a new method using
mineral compounds with zeolites that were modified with amino groups to
boost adsorption rates. When they put the zeolite powder into the sample
particleboard, they measured a reduction in formaldehyde emissions of 40
percent in both long-term and short-term tests.
Source: Electro Corp Air Purification, March 2011
http://electrocorpairpurification.wordpress.com/2011/03/22/new-building-materials-use-minerals-to-reduce-indoor-air-pollution/191
Wool and Seaweed Bricks
• In experiments conducted at the University of Seville in Spain and the
University of Strathclyde in Glasgow, Scotland, researchers added wool
fibers to the claylike soil used to make bricks, then threw in alginate
conglomerate, a polymer made from seaweed, according to a study
published in the journal Construction and Building Materials.
• The bricks with wool were 37 percent stronger than conventional bricks and
were more resistant to cracks and fissure, the researchers reported. Wool
bricks are also energy savers as they‘re made without firing, they said.
• "This is a more sustainable and healthy alternative to conventional building
materials such as baked earth bricks and concrete blocks," the study‘s
authors, Carmen Galán and Carlos Rivera, said.
Source: CNN, October 2010 http://news.blogs.cnn.com/2010/10/05/seaweed-wool-make-traditional-bricks-tougher/
192
Future of Financing
• While many governments stepped in to support the I&PF markets with cash
and/or guarantees, this support is no longer sustainable due to the
significant deficits and sovereign debt levels in developed
countries. Furthermore the infrastructure stimulus packages will
understandably reverse as governments look to bring their finances under
control. The re-emergence of sovereign credit risk as a factor in developed
markets is another feature of the post GFC world.
• The regulatory landscape will continue to evolve as Basle 3 works its way
through the infrastructure and project finance (I&PF) finance markets. The
regulations are likely to increase the price and reduce the supply of long
term debt.
• Mutlilaterals, state owned infrastructure banks and ECAs will continue to
play an important role in the provision of project finance to infrastructure
projects in both developed and developing countries.
Source: PwC, retrieved April 2011 http://www.pwc.co.uk/eng/issues/what_is_the_future_for_infrastructure_financing.html
193
Future of Financing
• Despite the difficult markets, equity infrastructure funds will succeed in
raising new money as the insatiable demand for lower-risk returns provided
by infrastructure continue to attract long term pension fund and other
institutional investors. Specialist funds may arise while pension funds and
sovereign wealth funds will increasingly look to take direct stakes in
infrastructure projects and companies.
• The key challenge for the I&PF debt markets remains attracting institutional
pension fund money. While pre GFC institutional money was invested
directly into projects with monoline credit enhancement or helped relieve
banks‘ balance sheets through CDOs/CLOs, these structures are no longer
a realistic option. Large I&PF portfolio debt sales by banks to institutions
will continue, however, all market participants will continue to try to create
multi-investor institutional I&PF debt funds or find structured products that
de-risk senior debt. The capital debt markets need to be the prime source
for I&PF refinancing rather than relying on the rollover of bank debt.
Source: PwC, retrieved April 2011 http://www.pwc.co.uk/eng/issues/what_is_the_future_for_infrastructure_financing.html
194
Evolution of ppp’s
195
Case Study- Evolution of ppp’s
• Puolarmetsä hospital, Espoo
• City of Espoo is developing a new hospital in Puolarmetsä area that will
provide basic healthcare services, as well as, specialized services for
elderly people. The hospital centre is planned to create an active and
humane campus area where patients are surrounded by everyday life
activities in a comfortable environment with many recreational possibilities
and services.
• The hospital centre comprises of rehabilitation facilities for 240 people and a
regional healthcare centre for 35 000 citizens. The senior centre comprises
of housing and social facilities for 160 patients. Also, all the required
supporting functions and associated facilities are accommodated in the
development including a parking garage, loading area, personnel social
areas, logistic centre, archives, chapel and maintenance related spaces.
• The scope of the project is 67 050 m2 and 304 000 m3. Espoo has set
targets for the development in relation to the project procurement practices.
Source: ERES, June 2010 http://www.eres2010.org/contents/papers/eres2010_252_Leinonen_NEW_AND_INNOVATIVE_I.pdf196
Case Study- Evolution of ppp’s
• These targets include realization of investments and services by utilization
of partnerships, and a service contract including a usability component and
a flat rate component.
• Also, in case the contract partner dissolves the contract City of Espoo is
entitled to continue the rent contract with original conditions without the
maintenance and other related services, or alternatively reclaim the
building.
• Based on these targets and project properties, three procurement models
were chosen for closer examination. These models include real estate
company approach, partnership approach with a project company and
partnership approach with collateral security. In the real estate model Espoo
procures all the services through a real estate company that is capitalized
with a loan that City of Espoo will secure, thus enabling more affordable
interest rates. In the partnership approach that is based on establishing a
project company, all the services and construction activities are managed by
the project company. Source: ERES, June 2010 http://www.eres2010.org/contents/papers/eres2010_252_Leinonen_NEW_AND_INNOVATIVE_I.pdf
197
Case Study- Evolution of ppp’s
• The project company based approach utilizes bound capital as an effective
risk transfer mechanism and motivation for efficient service production. The
third model is a partnership approach that is based on collateral security.
This model utilizes securities set by the service provider and funding
arrangements based on a lease to transfer risks.
Source: ERES, June 2010 http://www.eres2010.org/contents/papers/eres2010_252_Leinonen_NEW_AND_INNOVATIVE_I.pdf
198
Tax Increment Financing
199
Tax Increment Financing
• Plans to introduce TIF have been confirmed in the Comprehensive
Spending Review by George Osborne and in the recent White Paper on
Local Growth. A recent business plan published by the Department for
Communities and Local Government states that it will introduce a bill for TIF
powers and retention of business rates in July 2011. The expectation is that
TIF powers will be introduced locally by April 2012.
• TIF is a fiscal tool that uses future tax gains to finance current
redevelopment and infrastructure projects. TIF rests on a simple premise:
the redevelopment and provision of new infrastructure to an area will both
stimulate commercial activity and increase commercial property values for
that area. This in turn generates increased business rates for that area - the
tax increment. The local authority can then secure financing for the
proposed development against the projected uplift in business rates. The
actual tax increment from the redevelopment is then used to repay the
enabling finance.
Source: Eversheds, December 2010
https://www.eversheds.com/uk/home/articles/index1.page?ArticleID=templatedata%5CEversheds%5Carticles%5Cdata%5Cen%5
CLocal_government%5CTax_Increment_Financing
200
Tax Increment Financing
• There are 3 models for securing TIF financing:
• Bonds: the authority issues bonds secured against the projected tax
increment. In the US, tax reliefs are also available to encourage investment in
the bonds.
• Local Authority-funded: the local authority borrows to provide the initial
capital. The authority then repays its borrowing from the actual tax increment.
• Developer-funded: the developer borrows to provide the initial capital. The
authority then reimburses the developer using the actual tax increment which
the developer uses to repay its borrowing. This method shifts the risk from
the authority/government to the developer.
• Based on the White Paper: Local Growth, it appears that the model being
considered by the government are only local authority-funded TIFs. This has
caused considerable dismay in the property industry where many private
sector groups have identified schemes which they could unlock with TIF
funding but which may now be unavailable.Source: Eversheds, December 2010
https://www.eversheds.com/uk/home/articles/index1.page?ArticleID=templatedata%5CEversheds%5Carticles%5Cdata%5Cen%5
CLocal_government%5CTax_Increment_Financing
201
Tax Increment Financing
• The UK‘s first TIF scheme is in Edinburgh. Scotland is forging ahead of
England using their devolved powers to enable TIFs. Edinburgh City
Council has been working alongside the Scottish Futures Trust to obtain
approval in September 2010 to use the funding model to regenerate the
Leith waterfront. The project requires £84m to invest in infrastructure,
including a new cruise liner terminal, lock gates, esplanade and link road. It
is anticipated that the project has the potential to raise £310m in additional
business rates over next 25 years leaving them with sufficient resources to
repay the loan.
• Local authorities in the UK have also set out proposals where TIF schemes
could plug an infrastructure funding gap:
• Leeds - Aire Valley regeneration scheme: 400ha brownfield site earmarked
for 8,000 homes and employment space. Secured £32m public sector
funding but need an additional £250m in infrastructure investment. It could
raise an extra £900m in business rates over 30 years.
Source: Eversheds, December 2010
https://www.eversheds.com/uk/home/articles/index1.page?ArticleID=templatedata%5CEversheds%5Carticles%5Cdata%5Cen%5
CLocal_government%5CTax_Increment_Financing
202
2010 Turner Prize for Innovation in
Construction Technology• Engineers Without Borders-USA received the 2010 Turner Prize for Innovation
in Construction Technology.
• The award recognizes EWB–USA‘s efforts to build much-needed sustainable
infrastructure—for clean water, energy, healthcare, and other basic needs—in
remote and developing regions.
• The nonprofit partners engineering students and professionals with local
communities in more than 45 countries.
• Arthur Gensler, who served on the prize jury, said in a statement, ―Programs
like Engineers Without Borders-USA provide the technical knowledge and
working solutions to enable people to help themselves. This organization
gives locals hope and talented engineering professionals the opportunity to
share their knowledge with countries that can so greatly benefit from their
efforts.‖
• The Turner Prize recognizes innovation and exceptional leadership in
construction technology. This includes construction techniques, innovations
and practices, construction and project management, and engineering design.Source: Architects Magazine, July 2010 http://www.architectmagazine.com/award-winners/engineers-without-borders-selected-for-2010-turner-
prize.aspx203
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28. http://freshpeel.com/wp-content/uploads/2009/11/Future_of_Work.jpg
29. http://www.reghardware.com/2010/08/11/video_rim_blackberry_torch_9800/
30. Left to Right
1. http://blog.core-ed.net/derekarchives/NokiaFanPhone.jpg
2. http://www.geek.com/wp-content/uploads/2010/08/Steve-Jobs-hologram-on-iPhone.jpg
32. http://www.livetradingnews.com/wp-content/uploads/hp_3d_laptop.jpg
33. http://www.argophilia.com/news/wp-content/uploads/2011/03/copenhagen-airport-app.jpg
34. http://www.tuvie.com/wp-content/uploads/your-life-in-2020-frog-design1.jpg
35. http://www.flickr.com/photos/lukedebruijn/3991431571/
36. http://4.bp.blogspot.com/_LYLNQSJkOcM/TMOyFH7Hv3I/AAAAAAAAACE/ISxznCcG6gw/s1600/SkinputImg1.jpg
37. http://www.tensator.com/blog/post/2011/01/31/London-Luton-Airport-Introduces-Two-New-Staff-Members-Holly-and-
Graham.aspx
38. http://www.limsi.fr/~jps/enseignement/examsma/2004/BHATTI/images/mb_ubicom2.jpg
39. Left to Right
1. http://www.psfk.com/wp-content/uploads/2009/06/pic-rapid-prototyping-and-jewelry.png
2. http://www.treehugger.com/files/2010/10/on-demand-3d-printing-cut-waste-increase-efficiency.php
40. http://krisarunews.com/wp-content/uploads/2009/11/cloud-computing.png
41. http://www.downloadsoftware4free.com/screen/full/3d-graph-generatorswan-studios.jpg
42. Clockwise
1. http://gremlindog.com/wordpress/wp-content/uploads/2008/11/airport-security.jpg
2. http://media.thestar.topscms.com/images/e8/1f/fb5f3c0641e09f4b91ffa6550bf5.jpeg
3. http://www.smartplanet.com/blog/thinking-tech/video-airport-security-checkpoint-of-the-future/7384
4. http://www.cranfield.ac.uk/soe/postgraduatestudy/airportplanning/9826_lg_airport1size_270x175.jpg
205
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44. http://www.waytogoal.com/Portals/0/images/binoculars_ladder_closeup.jpg
45. http://www.socialistrevolution.org/wp-content/uploads/2010/07/climate-change_1509200c.jpg
46. http://images.gizmag.com/gallery_lrg/tubohotel-0.jpg
47. http://farm5.static.flickr.com/4086/5060314869_1173fc15ef.jpg
48. http://www.ucl.ac.uk/news/news-articles/1007/energy_building.JPG
49. http://images.gizmag.com/gallery_lrg/arkhotelchangsha.png
50. http://www.gemite.com/images/Omni-Globe_01.jpg
51. http://blog.urbangreencouncil.org/wp-content/uploads/2011/03/passive_house_thermogram.png
52. Left to Right
1. http://www.alternativeconsumer.com/wp-content/uploads/2011/RD_2011/march_april/dwelle4.jpg
2. http://inhabitat.com/wp-content/blogs.dir/1/files/2010/08/dwelle-prefab-dwelleings-12.jpg
53. http://thinkoutsidetheboxtoday.com/wp-content/uploads/2009/10/city-scale-model-art1s.jpg
54. http://images.gizmag.com/gallery_lrg/floatec-1.jpg
55. http://teachers.egfi-k12.org/wp-content/uploads/2010/09/EWB_Logo.jpg
56. http://www.graphicconcrete.com/images/kuva05.jpg
57. http://www.caer.uky.edu/kyasheducation/images/howto/7170-concrete-final2.jpg
58. http://images.gizmag.com/gallery_lrg/bricks.jpg
59. http://home.howstuffworks.com/home-improvement/household-safety/tips/indoor-air-pollution.htm
60. http://www.amo.on.ca/AM/Images/Infrastructure/Infrastructure_Collage.gif
61. http://thumbs.dreamstime.com/thumblarge_487/1268776168TpQwfr.jpg
62. Left to Right
1. http://teamaltman.com/wp-content/uploads/2010/10/industry-and-data.jpg
2. http://picturesofcar.blogspot.com/2009/07/future-concept-car-pictures.html
3. http://www.technologylodging.com/wp-content/uploads/2010/05/food-biotechnology.jpg
63. Top to Bottom
1. http://biotechnologyjobssites.com/images/biotechnology/biotechnology_250x251.jpg
2. http://okledokle.files.wordpress.com/2009/02/bionichand.jpg 206
Image Sources p. 464. http://www.pgsuite.com/stories/2009/09/Eldercare.jpg
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66. http://karmatrendz.wordpress.com/2009/03/29/michelin-amazing-retail-store-interior-by-eventscape/
67. http://www.patelsmith.com/wp-content/uploads/2008/11/village-classroom-1.jpg
68. http://www.eurescom.eu/message/messageNov2006/images/Telemedicine.jpg
69. Left to Right
1. http://solar.calfinder.com/blog/wp-content/uploads/2009/05/electric-car-station.jpg
2. http://www.topcarpictures.com/wp-content/uploads/2009/07/2009-brabus-tesla-roadster.jpg
70. Clockwise
1. http://windy-future.info/wp-content/uploads/2009/09/wind-turbines-5963.jpg
2. http://newmexicoindependent.com/wp-content/uploads/2008/12/solar-power-image.jpg
3. http://www.rainharvest.co.za/wp-content/uploads/2010/07/biofuels.jpg
4. http://www.treehugger.com/verdant-power-turbine-j003.jpg
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72. http://smartgrid.epri.com/App_Themes/Default/Images/smart_grid_network_image.gif
73. http://www.imperial-consultants.co.uk/files/biopharmaceuticals.jpg
74. http://www.celsias.com/media/uploads/admin/biofuel_1.jpg
76. http://news.nationalgeographic.com/news/bigphotos/images/090305-daylight-saving-time-facts-history_big.jpg
77. http://www.ripleys.com/assets/img/upload/bions/magnet_man.jpg
78.
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pg
79. Left to Right
1. http://www.codeproject.com/KB/grid/DrawingRadarDisplayWithCS/Radar1.jpg
2. http://www.realmscuba.com/Logos/Dive%20Course/group%20underwater.jpg
81. Outside in.
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2. http://i36.tinypic.com/vrxzll.jpg 207
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84. http://www.oytun.co.uk/wp-content/themes/mimbo2/images//innovation.jpg
107. http://www.viewsoftheworld.net/wp-content/uploads/2010/03/EUdebt2010.jpg
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131. http://i.telegraph.co.uk/multimedia/archive/01514/north-south_1514455c.jpg
140. http://topnews.net.nz/data/UK-Housing.jpg
143. http://hansafx.net/blog/wp-content/uploads/2011/07/UK-housing-view.jpg
150. http://kab3ey.files.wordpress.com/2010/09/ecosystem-degradation-threats9dec05.gif
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163. http://www.thevarguy.com/wp-content/uploads/2008/07/innovations.jpg
171. http://www.socalofficerealestateblog.com/wp-content/newuploads/2009/09/green-brick.jpg
172. http://www.caerdelyn.co.uk/blogg/wp-content/uploads/2011/07/2009-2011-PV-installs.png
173. http://www.designspark.com/files/ds/imagepicker/4/thumbs/uk-photovoltaics.png
174. http://images.gizmag.com/hero/heat-regulating-material.jpg
177. Left to Right
1. http://www.gizmag.com/the-us55000-port-a-bach-relocatable-home-in-a-shipping-container/10477/picture/59116/
2. http://www.gizmag.com/muv-box-portable-restaurant/12162/picture/85567/
179. http://images.gizmag.com/gallery_lrg/ecorre-2.jpg
180. http://cdn8.caradvice.com.au/wp-content/uploads/2011/07/Tata-house.jpg
196. http://www.wcu.edu/ceap/houghton/all/team-teaching/hands-holding-world.png
199. http://ifgfunding.com/images/picture20.png
208
