SYDNEY-BASED property and infrastructure group Lendlease will use technology extensively as its cornerstone in its development in Tun Razak Exchange (TRX) comprising residential, offices, retail and a hotel.
Known as The Exchange TRX, Lendlease Development Malaysia Sdn Bhd is currently building serviced apartments TRX Residences and a retail mall with a net lettable area of 1.33 million sq ft. A 10-acre park sits atop the mall.
Having to content with the Covid-19 virus for nearly a year, with the global economy relying on new vaccines as its silver bullet, Lendlease, as a global developer, is using technology and sustainable development techniques to “future-prove” its development in TRX and yet remain customer-centric.
Says Lendlease Development managing director Stuart Mendel after a virtual press conference: “At a macro level, we do believe that this pandemic will lead to changes in the property sector, particularly in the way properties are designed to be more resilient to these sorts of occurrences.” Difficult and challenging though the year has been, Lendlease is not going to waste this pandemic. The project is a 60:40 joint venture with TRX master developer TRX City Sdn Bhd, which will be holding the smaller portion. TRX City is a company owned by the Finance Ministry.
Lendlease has an extensive portfolio of properties in Singapore and around the world. According to its 2019 annual report, the 17-acre development located at TRX’s 70-acre site is the group’s largest integrated project in Asia. It has to prove its worth in salt as a global brand at a time when tech usage has leapfrogged years ahead because of the Covid-19 pandemic.
Lendlease’s strategy and commitment underscores the fact that property development and management can never be the same again.
Whether it is density, design and use of public areas, ease of access and security, these issues matter.
Mendel says the fact that many businesses are able to “operate reasonably effectively” working from home (WFH) has opened up new horizons with regards to office design and operation. New residential designs are being conceived to make WFH more effective and comfortable.
Mendel says WFH has been accelerated within months instead of evolving over the years, although WFH is currently possible over the short to medium term, and cannot be relied on as a long-term solution.
The adoption of more “touchless” interfaces and technology to facilitate WFH and to enable “data-centric” asset operational decisions will only become increasingly important, Mendel says.
He says many of these elements were already embedded in the design of the company’s developments and thinking well before the pandemic hit.
“The pandemic has strengthened our commitment to a customer-centric approach to development design. It has reinforced our belief that our products must be ‘future-ready’ places and buildings that can withstand the impact of time and environment,” he says.
Project development aside, on a sales and marketing level, Lendlease continues to receive interest from potential partners, residents and tenants, he says.
Lendlease and its clients’ belief in the vision of The Exchange TRX remains strong, which again underscores the importance of building resilient communities, Mendel says.
Looking at property development from a chartered surveyor perspective, Datuk Mani Usilappan who retired as Valuation and Property Services Department director-general, says the pandemic has created “a lot of uncertainties for all sectors, at all levels of humanity.” Be it rich, poor, blue or white-collared workers, the virus has levelled everything.
As the US muddles through its most rampant transmission yet, and European nations once again going through lockdowns, prospects for recovery may appear grim.
Although Asia-Pacific is faring better, new waves are sweeping the region and Malaysia.
Says Datuk Mani: “We need to come to terms with uncertainties and also to assess the risks that those uncertainties bring about.
“Risks: you know what they are. Uncertainties: you don’t know.
“So there is a need to make projections with regards to uncertainties. How bad can this pandemic get? How long will it be with us?” The uncertainties ahead and the need for change was highlighted in a report on Emerging Trends in Real Estate Asia Pacific 2021 by consultancy PwC and Urban Land Institute (ULI).
ULI is a non-profit research and education organisation with regional offices in Washington, D.C., Hong Kong and London. Its stated mission is “to provide leadership in the responsible use of land and in creating and sustaining thriving communities worldwide”.
According to the report, the pandemic has acted as “a catalyst to accelerate trends” that were already underway before the arrival of Covid-19.
Environmental, social and governance issues have become more important for buyers and owners at the top end of the market. There is “a growing awareness of health and environmental issues, as well as an increasing understanding that building efficiency, in particular, is an issue that can translate directly to corporate bottom lines,” the report says.
One of the most significant impact of Covid-19 from a real estate perspective has been to fast-track a number of pre-existing secular and cyclical trends in ways that are likely to prove not only transformative but also, in the end, productive, the report says.
The report, quoting a Hong Kong-based consultant, says Covid-19 has accelerated everything to “an unimaginable degree.” “Evolving in the normal way, we expected 10 to 20 years to get to the final answer – now we have to get there in a matter of months,” he says, referring to Hong Kong.
The report says real estate markets in most destinations have stalled. But the silver lining is that, investors’ anticipation of a cascade of defaults as recession takes hold have largely been disappointed. For 2020, at least, the communities in Asia-Pacific have managed to protect themselves more effectively than developed-market counterparts in healthcare and financial resources.
As for Malaysia per se, the situation may be slightly different because of the various industrial issues like excessive supply in virtually every property segment, affordability factor and the lack of clear direction for the property sector.