Across the years, Singapore has undergone an economic transformation, becoming the thriving metropolis in Southeast Asia it is today. Even while it has grown at a rapid pace, the Republic has emerged as a leading light in urban planning. At the same time, its property, building and construction firms are showcasing their international ambitions, with forays into the region and beyond. Here, we look at how Singapore’s building and construction sector is bringing its expertise to the world.
Meeting Asia’s Demand for Infrastructure
In spite of recent economic turbulence, Asia still remains an important growth engine for the world. With rising incomes and growing urbanisation, emerging economies in Asia will have a strong demand for urban and infrastructure development to meet the needs of its people and economy. Speaking at the Asia-Singapore Infrastructure Roundtable in April 2015, then Senior Minister of State for National Development Lee Yi Shyan noted the tremendous investment in infrastructure required by the major economies of the region.
Between 2010 and 2020, it is estimated that the twin Asian superpowers of China and India will need US$4.3 trillion and US$2.1 trillion respectively for infrastructure investment. Meanwhile, the same estimates put Southeast Asia’s infrastructure investment needs in the region of US$1 trillion. For Singapore’s infrastructure, building and construction companies, this represents tremendous business potential waiting to be tapped. In fact, many Singapore firms have found strong growth prospects in the export of construction, architectural, and interior design and fit-out services.
Singapore’s Unique Urban Planning and Development Expertise
In the 50 years since its independence, Singapore has transformed dramatically from a simple trading port to the shining metropolis that it is today. In the course of this journey, its city planners and builders have built up deep expertise across many areas. They include the building and construction of sectors from energy, public utilities, waste management to transport and connectivity, as well as coping with the constraints of limited physical space.
In particular, Singapore has made sustainability a hallmark of its urban development. In the latest Green City Index report published by Siemens, Singapore was the only city in Asia to rank above average overall, and show consistently strong results across all assessment categories, especially for its policies to maintain and improve the urban environment. In 2013, Singapore also won the award for Intelligent City Infrastructure, given out by Siemens and the C40 Cities Climate Leadership Group to ten cities for excellence in urban sustainability.
With all of this, it is no wonder that Singapore’s brand of urban planning and development know-how is well regarded amongst its Asian neighbours. Many of its major property and development corporations have built on this esteem to expand overseas. This include industry heavyweights such as Capitaland, Mapletree, Keppel Corporation and Sembcorp, with projects spanning the spectrum such as residential, retail, offices, industrial, infrastructure and integrated developments in countries such as China and India, as well as numerous Southeast Asian economies.
Capturing Opportunities in Asia and Beyond
Having a relatively small domestic economy has always meant that Singapore companies need to expand overseas to capture further growth and scale their business operations. This has applied to the building and construction sector, with the Singapore government actively encouraging local companies to venture forth. In the case of the Building and Construction Authority (BCA) – Singapore’s lead agency for the built environment – it has even made the promotion of the sector’s niche expertise overseas one of the elements of its five strategic thrusts.
As early as 2003, the BCA formed its International Development Group (IDG) to actively promote and support Singapore’s construction, construction-related, and property and real estate companies to venture overseas. It does this in a number of ways such as providing economic and construction information for potential overseas markets, up to even project opportunities. The IDG also facilitates the formation of consortia or strategic alliances for projects, as well as networking with government officials and industry players.
Leading the Way to Overseas Markets
There are further avenues of support for firms looking to expand overseas. International Enterprise (IE) Singapore, the government agency for the external economy, has a range of assistance schemes, such as the enhanced International Finance Scheme, which helps companies secure capital financing for their international projects. There is also the Market Readiness Assistance (MRA) scheme for companies looking to get help to find the right overseas business partners to start discussions. IE Singapore also offers support under the Global Company Partnership (GCP), helping firms build up its capabilities, develop its manpower, and defray the costs of setting up in new markets.
One notable example of the government leading the way in securing development projects in recent times is the appointment of a Singapore consortium – comprising Surbana and Jurong International – as appointed master planners in India for the new Andhra Pradesh capital city of Amaravati and the surrounding region. The appointment was announced in January 2015, with the final master plan delivered in July of the same year. In his statement accompanying the delivery of the final plan, Minister for Trade and Industry S Iswaran expressed hope of continuing the partnership into implementation and development. He also noted that the collaboration has also opened up more business and investment opportunities in Andhra Pradesh and India for Singapore companies.
Building Strength and Scale for Bigger Projects
Of late, Singapore’s building and construction sector has also witnessed a major consolidation, with JTC Corporation and Singapore investment company Temasek Holdings sealing an agreement in 2014 to merge four of their subsidiaries - JTC's Ascendas and Jurong International Holdings (JIH) as well as Temasek's Surbana and Singbridge. The single platform – with an aggregate value of around S$5 billion – will have two units, with Ascendas and Singbridge merging to become the asset investment and holding arm, and Surbana and JIH combining to become the technical unit offering construction and engineering services.
The resulting platform will be one of the largest integrated urban development player in the region, positioning the involved companies to tap the investment opportunities rising from Asia's rapid urbanisation. The mergers were completed in 2015, with the resulting infrastructure consultancy Surbana Jurong expressing its ambition to build Singapore-like cities around the globe by exporting packages of infrastructure, including industrial parks and residential dwellings.
Surbana Jurong has since outlined its growth strategy through mergers and acquisitions. In June 2015, it acquired Singapore-based multi-disciplinary engineering firm KTP Consultants and China-based multi-disciplinary design institute Sinosun Architects & Engineers to gain new capabilities and increase its market reach in China from nine to 16 cities.
In November 2015, Surbana Jurong announced further equity investments that will entrench its presence in Africa and ramp up its building-design capabilities. This came through a 20 per cent stake in CITICC (Africa) Holding Ltd, a US$300 million investment platform launched to develop affordable housing in sub-Saharan Africa, as well as a 8.4 per cent stake in San Francisco-based building-design software company FLUX Factory for US$9.25 million.
Powering Forwards and Upwards
All in all, Singapore’s strong infrastructure, building and construction expertise, allied with strong government support and direction, will stand in good stead as it moves to capitalise on the opportunities, arising from rapid urbanisation in the region. From China to India and the whole of Southeast Asia, the commercial potential is tremendous for those with the capability and ambition to ride on it.