黑洞社区

The UK government could be said to be infatuated with China and India - barely a month goes by without a senior politician heading east to encourage UK firms to join them there, or entice local businesses to invest in the UK. Prime minister David Cameron, chancellor George Osborne, business secretary Vince Cable and London mayor Boris Johnson have all led trade missions to one or both of Asia鈥檚 economic giants in recent years, with many successes chalked up, including UK construction firms winning major commissions in the two countries, and Chinese investment ploughing back in the UK in nuclear projects, Manchester Airport City and several London real estate deals.

There鈥檚 little surprise these two Asian tigers top their target list. Business ties with the region鈥檚 two most populous nations are seen as essential in a globalising world. On page 30, law firm Pinsent Masons details projections that China will invest 拢105bn in UK infrastructure by 2025.

But there is much more to Asia than China and India. South-east Asia, long seen as a hedging bet by UK firms when weighed against the continent鈥檚 more prosperous northern economies, is now fast attracting attention in its own right. The region boasts three of the world鈥檚 top 10 most rapidly growing construction economies - Indonesia, Vietnam and the Philippines, each growing between 6-9% each year - according to Global Construction Perspectives and Oxford Economics. Three other construction economies in the region - Singapore, Malaysia and Thailand - are also growing strongly, at 3-5% a year. The region also has huge untapped potential. The 10 countries that make up the Association of South-east Asian Nations (ASEAN) have roughly the same economic output as the UK, yet 10 times the population, at 600 million people.

Throw in recent political unrest in Hong Kong, and economic slowdown in China, and South-east Asia starts to look like a more attractive prospect. 黑洞社区 joined architects and clients descending on Singapore last month for an architecture festival, to see up close what the buzz was about.

Starting in Singapore

Singapore is known as 鈥淎sia for beginners鈥� among ex-pats. A former British colonial outpost, it has a legal and planning framework still recognisable to Brits, and a well-educated, largely English-speaking population. It鈥檚 the natural starting point for many UK firms in the region and its location in the centre of South-east Asia also makes it an obvious base.

鈥淚t鈥檚 the place to be,鈥� says Clive Lewis, associate director at Arup Associates, speaking outside the recently opened state-of-the-art Singapore National Stadium he helped design. 鈥淵ou have access to so many places from here, within four hours鈥� flight you can reach something like two billion people.鈥�

Singapore has a thriving construction market in its own right, as it builds rapidly to service its growing population, which has almost doubled in the last two decades from 3 million in 1990 to 5.4 million people last year.

Infrastructure is top of its government鈥檚 agenda, with expansion of its metro, a new airport terminal, relocation of its port and a high-speed rail link to Malaysia in the pipeline. Meanwhile, it finds innovative ways to grow its housing and commercial space, including reclaiming further land from the sea, investigating options to build above roads and railways, or underground.

Some businesses that work out here suggest Singapore could even outstrip Hong Kong as Asia鈥檚 foremost financial services capital - a proposition that seems more credible after the protests on the streets of Hong Kong in recent months.

鈥淗ong Kong is stuck on the edge of China and we are seeing problems there [as a result of that] at the moment, whereas Singapore is independent and secure,鈥� says Turner & Townsend鈥檚 Asia managing director Duncan Stone, in his office overlooking central Singapore. T&T bases its Asian operations, which includes a sizeable China business, out of Singapore, rather than Hong Kong. Its skyline - with its glistening array of modern skyscrapers amid clumps of lush tropical trees - attests to its rapidly developing economy. The further you travel from Singapore, the less familiar things become, but there are bountiful opportunities to tempt firms out of their comfort zone [see boxes, below].

Exploring the region

For US architect KPF, the practice鈥檚 first projects were in China and Japan, but it has been growing rapidly into South-east Asia, particularly over the last three years, and now has projects in Thailand, Singapore, Malaysia and Indonesia. Director Forth Bagley says Thailand鈥檚 capital Bangkok and Indonesia鈥檚 capital Jakarta are 鈥渧ery busy鈥� for the practice. In Bangkok its projects include a head office for Thai brewer Singha, with accompanying theatre and hotel, while in Jakarta it is designing two high-rise office buildings. 鈥淎s an architect where is the potential to impact the most? You鈥檇 point to Jakarta, Bangkok, Kuala Lumpur, Ho Chi Minh City,鈥� Bagley enthuses. 鈥淚t鈥檚 going to be one of the most exciting regions over the next 10 years.鈥�

Zaha Hadid Architects is one UK architect which would like to follow KPF鈥檚 lead. With several projects already in China and Japan, the practice is keen to venture further, says associate Simon Yu. 鈥淲e鈥檇 like to branch out into Asia Pacific, including to Korea, Indonesia and Vietnam,鈥� Yu says, sat in the sprawling conference centre of Singapore鈥檚 mega hotel and mall complex, Marina Bay Sands. 鈥淲e鈥檙e certainly open to whatever鈥檚 out here.鈥�

TFP Farrells has worked in Singapore and also ventured into Cambodia, to develop the country鈥檚 tallest building for local bank Vattanac, shaped like a dragon. 鈥淪ymbolism and iconography are important in the region,鈥� says the practice鈥檚 Asia director Stefan Krummeck. 鈥淐ambodia is still in its infancy but it has the potential to develop.鈥�

The region is also creating its fair share of wealthy investors looking to invest in property overseas, with the UK top of their wish list. Last month Malaysian developers Sime Darby and SP Setia signed a 拢1.3bn deal for the next phases of the redevelopment of grand London icon Battersea Power Station, with the finance largely coming from Malaysian banks. 鈥淔or us a large part of the attraction of South-east Asia is to forge relationships with clients that are sizing up development opportunities back here in the UK,鈥� says RLB chief executive Lance Taylor. 鈥淚t is a fast-developing and very exciting region.鈥�

Winston Hauw, managing partner for RLB Singapore and its regional offices, which has 600 staff in South-east Asia, lists many challenges for UK firms operating in the region, including acquiring a good understanding of the local business culture and market; establishing a strong local network of clientele; adapting their UK business model to the emerging market environment; finding and employing suitably qualified and experienced staff; nurturing local leadership and succession planning.

Some firms caution that corruption is an issue in some South-east Asian countries, when working with the public sector in nations outside Singapore and Malaysia. 鈥淭here鈥檚 big potential in infrastructure as some countries in the region are far behind. But it鈥檚 a bridge too far for some,鈥� says T&T鈥檚 Stone.

鈥淲e鈥檇 put ourselves in that bracket. Clients want this and that and obviously you have to make sure you don鈥檛 contravene anti-bribery regulations in the UK.鈥� PPP projects managed by investors are seen as a safer route into infrastructure markets. All the firms spoken to recommended Brits should find a local partner to work with in each of the south-Asian markets. To manage risks, in some countries you can secure down payments before you start work, typically around 5-10% of the project fee.

Ironically, as the UK agonises over whether or not to leave the European Union (EU), one consultant in South-east Asia says the region lacks just such a body there. 鈥淭he ASEAN needs to be more like the EU,鈥� says Stone. 鈥淗ow these countries get together will be crucial to their success - for instance, in terms of harmonising market conditions and reducing trade tariffs.鈥� Although Chinese money is important in South-east Asia, Stone argues the Chinese don鈥檛 have the market wrapped up: 鈥淭he vast majority of nations in South-east Asia are democratic and lean away from China.鈥�

Karen Tham, regional director for South-east Asia for Aecom, which has offices in six countries in the region, says: 鈥淭here鈥檚 a need for more experienced people, particularly architects and engineers in the region.鈥�

Kevin Jose, global board director of Aedas, who is based in Singapore, agrees there are shortages in the region that UK firms can fill: 鈥淭here鈥檚 a shortage of engineers and of contractors,鈥� he says. 鈥淲e鈥檙e working with more international engineers to make up for the shortfall.鈥� As for the risks, he says: 鈥淎s long as you know what you鈥檙e doing, you鈥檒l be fine. You figure out how to manage the risks the best. It鈥檚 not without its risk and challenges, but it鈥檚 great fun.鈥�