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Saturday, February 26, 2011

Building Asian cities in a sustainable way

The future of Asia is in its cities. It is the cities and the activities generated therein that will help the continent march forward. But in order for cities to thrive, it needs people. Although still one of the less urbanised continents, Asia's urban population has grown from 32% in 1990 to 42% in 2010, according to the United Nations Population Division.

By 2026, half of Asia's 3.7 billion population from India to China (excluding the Middle East) will be city dwellers.

Are the cities prepared to receive the exodus? But let's not go too far. Is Kuala Lumpur ready to welcome the expected 7.2 million that will be calling Greater KL their home? And what is needed to make KL ready?

By 2020, seven out of 10 Malaysians will be living in what will be known as Greater KL. If this is to materiaise, there is much work to be done. After all, that is just nine years away.

Depending on who one speaks to, there are various issues that contribute to a city's livability.

In a recent study commissioned by Siemens and performed by independent Economist Intelligence Unit (EIU), the Asian Green City Index examined eight categories, namely energy and carbon dioxide emission, land use and buildings, transport, waste, water, sanitation, air quality and environmental governance.

The study, carried over the past few months, covered 22 cities. The cities were chosen independently, without invitations by the respective governments in order to enhance the Index's credibility and comparability.

The study concluded that Singapore is Asia's greenest metropolis, ranked well above average. The study effectively equates being green with livability.

Kuala Lumpur was ranked average, together with Bangkok, Beijing, Delhi, Guangzhou, Jakarta, Nanjing, Shanghai and Wuhan.

Karachi in Pakistan, was ranked well below average while Ho Chi Minh in Vietnam was excluded for lack of available information.

Barbara Kux, a member of the managing board of Siemens AG and the company's chief sustainability officer, says the index is not about choosing winners, but sharing information to enable cities to cope and to plan for their future.

“The Asian Green City Index supports cities in their efforts to expand their infrastructures on a sustainable basis. We want to enable Asia's up-and-coming urban centres to achieve healthy growth rates coupled with a high quality of life. It is not about choosing winners,” said Kux.

Siemens Malaysia Sdn Bhd president and CEO Prakash Chandran says, overall, the index is a good reflection of where KL stands in terms of its sustainability.

“Ranking average overall is a great start for KL and this index is a stepping stone for us to move forward to improve our city's livability factor,” he says.

“With the current government plans and greater awareness, the index could not have come in a timelier manner. Siemens is eager to be part of national initiatives to boost KL's performance for the future. Ultimately, we want to be involved in the transformation of KL into one of the greenest, most liveable cities in Asia,” says Prakash.

Above average

Kuala Lumpur ranks above average for air quality and transport. It also scored well for better-than-average levels of sulphur dioxide, nitrogen dioxide and suspended particulate matter.

It lagged behind in waste and water management.

Head of research of Asian Green City Index and senior consultant for EIU, Jan Friederich, says Kuala Lumpur was given the thumbs up for transport because of its light rail system which measures 0.27km per sq km, making it the fourth longest superior network in the index, and second longest among cities in the mid-income range (GDP per capita of US$10,000-US$25,000). He based it on the length of the track, not usage.

While KL ranked positively in transport, there were negatives in the area of waste and water management. Friederich says there is a high usage of convenience packaging and low waste collection rate. It also does not seem to have strong policies on reusing and recycling, he says. Waste generation is 816kg per capita last year, more than double the index average of 375kg.

Water management was another negative. Water consumption is also high and Kuala Lumpur has one of the highest leakage rates with burst pipes, with leakages estimated at 37% compared with the index average of 22%, says Friederich.

So how prepared is KL to count among the cities of tomorrow?

As Kux puts it: “That's the nice thing about cities. Unlike corporates, cities share information and learn from one another.”

NOTE: The European Green City Index was launched in 2009. Last year, Siemens unveiled the Latin American Green Index.

By The Star

I-Berhad, foreign partner to replicate Lotte World at i-City

SEOUL: I-Berhad, an integrated ICT-based developer, will partner a foreign firm to replicate South Korea's Lotte World at its multibillion-ringgit i-City development in Shah Alam, Selangor.

The idea is to earn new corporate tenants at i-City and improve the company's earnings, said I-Berhad chief executive officer Datuk Eu Hong Chew.

Lotte World, built by Korea's Lotte Group in 1989, comprises a hotel, mall, the world's largest indoor theme park, an outdoor amusement park and retails.

When asked if I-Berhad will partner Lotte or has had any discussions with the group, Eu declined to comment.
"We are looking at the Lotte World concept, an attraction within the city, to build up i-City. We are looking at other things," he said on the sidelines after visiting some of South Korea's major attractions this week.

I-Bhd is building up its tourism products at i-City to generate new income stream. Eu said I-Bhd targets to be profitable in the current year ending December 31 2011 driven by growth within all its three divisions, the newest being tourism.

I-Berhad also targets to generate 50 per cent income from property de-velopment, and 25 per cent each from property investment and tourism.

The company, which has been developing i-City since 2005, was able to break even in the last two financial years mainly because it sold and rented data centres with a combined 500,000 sq ft of space.

"We will be adding new attractions this year. The idea is not to make money from tourism but for it to complement our knowledge centre. We believe having certain tourism products and new ideas will attract multi-national firms and small and medium enterprises," Eu said.

For the nine months ended September 30 2010, I-Berhad posted a net loss of RM1.73 million on revenues of RM6.4 million.

I-Berhad is planning to invest RM10 million this year to equip its existing SnoWalk attraction at i-City with real snow fall.

On Wednesday, I-Berhad signed a strategic alliance agreement with BK Korea, a super snow machine manufacturer, in Seoul for exclusive rights to use the later's machines in Malaysia.

At the signing, Eu said the snow fall will attract more visitors to i-City. Currently, SnoWalk, which has been operating since last December, is attracting 90,000 visitors per week.

BK Korea will assemble the equipment in Seoul and ship them to i-City in March.

By Business Times

MRT and real estate: A union on the right track

The introduction of a rail transit investment brings benefits to the transportation system and accessibility of the population to employment, retail, and recreational facilities. One of the most significant impacts of a rail transit project is the impact on property values.

Numerous accounts on the impact of rail transit on property values have surfaced over the past decades with varied results. Most often appear as isolated anecdotes in documenting the impact of rail transit on property values.

The most prominent way to gauge the value of a property is through the price or value of a home that you own or the rent that you pay. Noteworthy is that the amount of space devoted to residential property is generally greater than that devoted to other uses.

Given that the number of residential property owners and tenants are greater than the number of consumers of other types of real-estate, the effects of rail transit on property values are most acutely felt in the residential sector. Hence, most empirical research on the impact of rail transit on property values focuses on the impact on residential property values.

In a US-based 1999 study to examine the potential for housing near MRT stations, comparisons were made between the property values of new housing developments around several MRT stations and developments well outside of MRT stations. Housing units near the MRT stations were found to enjoy higher rents over those away from the MRT system. For example, one-bedroom apartment units within 500 metres of a MRT station in a suburb of San Francisco rented for approximately 10% more per square foot than one-bedroom units away from the station.

Given the positive correlation between rail transit service and property values, is there any potential for negative effects caused by the new transit infrastructure?

Examination of the effects of proximity to rail transit for two neighbourhoods in a Taiwanese city showed that proximity to rail showed a positive effect on property values on the west side, but a negative effect in the neighbourhood on the east side. In the neighbourhood on the west side, property values increased close to US$1,045 for every 100 metres.

The opposite held true for the east side. For every 100 metres closer to the MRT station, the property values dropped by US$965. This negative effect might be due to such factors as noise, perceptions of crime, traffic congestion and visual intrusion. In the case of the west side, the value of accessibility provided by the rail line more than compensated for these nuisance effects. On the east side, the value of accessibility was not enough to compensate for the nuisance effects.

Other studies found the rail transit shows positive correlation to property values to areas where the access provided by the transit service is valued.

In Miami, higher growth, higher priced neighbourhoods experienced greater positive effect than stagnant, lower priced neighbourhoods. In Atlanta, it appeared that the opposite was the case.

The higher income neighbourhoods did not appear to show value associated with being near rail while lower income neighbourhoods did show positive value with that association. While this might appear to be a contradiction, these facts highlight one of the primary reasons why rail transit imparts value to properties. This is the case for the high growth, higher valued districts in Miami and the lower income groups in suburban Atlanta. Positive property value impacts are primarily felt within limited zone around transit stations, generally a reasonable walking distance of up to one-quarter or one-half mile.

Enhancing pedestrian accessibility from the station to the surrounding area can increase the likelihood that properties will be within a reasonable walking distance of the station, hence experience a value benefit.

Improvements to station area accessibility can take the form of increasing the density of streets and pedestrian paths, improving safety, lighting, and other pedestrian amenities, and by providing additional station entrances and portals to allow direct access to the station from more locations.

Although the exact impact of nuisance variables such as noise and visual obstruction caused by terrestrial and elevated rail guide ways has not been extensively reviewed, several studies suggest that such nuisances do lessen the benefits that properties near the rail alignment and rail stations experience. Rail investment planning thus should seek to mitigate these types of effects through effective design and engineering. Rail transit investments have proven to create positive effects on property values. In fact, the effect of a new fixed guideway transit investment is two-fold. First, transit investments improve the convenience of accessing other parts of a region from station locations.

Second, rail transit accessibility enhances the attractiveness of property, increasing the likelihood that the property can be developed or redeveloped to a more valuable and more intense use.

Documentation of the impact of rail transit on property values primarily focuses on the first effect. Property value premiums due to increases in accessibility range between 3% and 40%.

Property value premiums due to increases in the ability to develop or redevelop property depend on the land use and amount of development allowed on the property.

Slight negative impacts of rail on property values are generally attributed to noise, visual intrusion, and the association of the rail right-of-way with industrial uses.

In the case of our 55km MRT project that will run from Sungai Buloh to Kajang, we expect that property values, for example undeveloped land in key hot spots such as on the north side of the line, would surge more than 100% especially near the four proposed interchange stations (Sg Buloh, KL sentral, Maluri and Kajang).

Rahim is executive chairman of Rahim & Co Group of Companies.

By The Star

It’s a small, small world

It is interesting to observe how things are becoming increasingly fluid and inter-connected these days as the whole world turns into a big global village.

With the easy connectivity provided by the Internet and 24-hour cable television that broadcast news as they are happening, it is as if people are living next door to each other even if they are actually thousands of miles apart.

With Skype, Facebook, Twitter and other social networking sites, the global village has grown even smaller and there is no stopping the massive integration and coming together of people from all walks of life and from different parts of the world in pursuit of some common goals and interests.

Travelling has also been made easier and more economical with the advent of low-cost carriers.

The rapid globalisation and borderless world we are living in today offers immense opportunities for more changes and advancements to be made in all fronts of the social, economic and political spheres.

The rapid pace at which people are moving and sharing information has certainly heralded greater awareness of things that are happening around us.

And with whistleblower website WikiLeaks, there is definitely a growing demand for greater accountability and transparency in the way governments, business corporations and communities operate. Irrespective of which side one comes from, we are after all one big global community. The people may be separated by physical distance and other differences, but they actually share many similar traits and aspirations - the need to thrive in a good and safe environment.

The rapid globalisation and coming together of people is increasingly evident in the real estate sector. This can be seen in the rising number of cross-border real estate transactions.

It is not unusual to find people owning multiple homes in different cities around the world as they form the growing population of global citizens. But the threat of inflation is spooking many governments in Asia and they are now on red alert to prevent asset bubbles from boiling over within their borders. Who can blame them when there is much liquidity in the system while the second round of quantitative easing in the US is believed to be driving liquidity to the various asset markets and pushing prices upwards. The speed in which this “hot money” flow into and out of countries has the potential to create another economic carnage of immense proportions if left unchecked. Much asset value will be washed out when these money retreat from our shores.

As it is, just at the press of a button, big sums of monies are crossing borders almost every second. While genuine investors should be welcome as they create jobs and contribute to the country's economic growth, those who only want to hype up the value of their assets for their own selfish gains should be reined in.

Locally, inflationary pressures and the inflow of foreign capital have started to drive Malaysia's property prices upwards and there is growing worry that many middle income earners will not be able to buy their own property, especially in the more upmarket and prime areas. They may have to resort to renting instead.

To address this problem, the opening up of Government-owned land for redevelopment should pay more emphasis to more affordably priced homes to enable the less well-to-do to own properties.

The planned township development on the massive Rubber Research Institute land in Sungei Buloh offers a golden opportunity to kick off a well thought out public housing scheme for eligible Klang Valley folks. It can then be used as a workable model for the other states to follow.

After all, the middle and lower income group still make up more than 80% of the local population.

Deputy news editor Angie Ng is convinced there will be more intermigration of people around the world as dictated by Mother Nature and climate changes.

By The Star (by Angie Ng)