PwC's Asia Pacific Real Estate Tax Leader joins panel of judges for the Real Estate Asia Awards
According to Kwok Kay, what the real estate industry should learn from the COVID-19 crisis is to practice resilience and exercise good financial discipline
KK is PwC's Asia Pacific Real Estate Tax Leader and a member of PwC's Global Asset and Wealth Management Team. KK also leads a tax advisory group in Hong Kong / China, which specialises in real estate, infrastructure and construction.
Graduating from the Chinese University of Hong Kong with an MBA degree, KK has accumulated extensive experience in providing advice on real estate and infrastructure projects over the years. His real estate clients include global, regional and country-specific real estate and infrastructure funds, private equity funds, pension funds, insurance companies, sovereign wealth funds, REITs, publicly listed property groups, and other investors.
KK is a member of the Hong Kong Institute of Certified Public Accountants and is an ex-Chairman of the Executive Committee of its Taxation Faculty and an ex-member of its China Taxation Sub-committee. He has also represented the Institute in the Joint Liaison Committee of Taxation. Besides, he is a member of the Institute of Chartered Accountants in Australia and New Zealand and a fellow of the Association of Chartered Certified Accountants in the UK.
KK is one of this year's judges at the Real Estate Asia Awards. Recently he sat down with us to share his thoughts about the pandemic and the challenges and opportunities for the industry and property owners; the rise of proptech and Environmental, Social and Governance (ESG), and why Asia is in a good position to benefit from the post-pandemic recovery.
What do you think is the most important factor when judging real estate developments for the Real Estate Asia awards?
One is functionality-property is built to serve, and hence, functionality is one of the most important factors. Second is economics or financials—it is more likely for a project that provides a reasonable return on investment to incentivize people to invest. This would involve effective cost control and creativity to enhance value, including the use of technologies. The third one is aesthetics-more often than not, property is built to last. It must fit in well with the environment in harmony, and better still be a piece of art that would survive the test of time.
What can the real estate industry learn from the COVID-19 crisis? And for those who have been badly hit, what's your advice to owners who are recovering from the pandemic?
One thing that the real estate industry can learn from the crisis is being resilient and exercising good financial discipline. This may involve cost control measures, debt restructuring, re-balancing real estate portfolio, and many others to survive the pandemic, And also re-positioning the real estate portfolio to capture the opportunities that may arise post pandemic.
What are the challenges and opportunities for property developers during the pandemic? What about property owners?
Minimising the disturbance brought about by the pandemic to their development and sales programs; opportunity to build up their land bank and seek for quality assets that might not otherwise be available during normal times; re-deploying and/or re-positioning their assets to address the changing needs of business strategy (reinventing the purpose of the workplace; centralisation versus decentralisation; more flexible workplace design to allow different uses, etc.); workforce (work from home/work remotely, needs for social interaction) and customers (creating new experiences for customers); and the new requirements of government, regulators, shareholders, business partners and society (hygiene, social distancing, ESG, etcetera).
Which trends will define the real estate industry, especially in infrastructure in the years to come?
The pandemic and technologies have re-defined the demand for space and types of assets Offices, retail and hotels are among the most affected; whereas logistics, data centres and healthcare facilities are up and rising. Proptech and ESG have also been gaining importance and becoming key drivers of the real estate business, as a result of the growing awareness of building efficiency, health and environment issues during the pandemic.
What do you think is the future of real estate in Asia and the world?
Notwithstanding the shockwaves resulting from the pandemic, real estate should continue to be an important asset class for those who seek yield and preservation of value, particularly during a time when major governments around the globe are practicing expansionary monetary policy and fiscal policy. Asia, with its growing demographics and vast market, is in a good position to benefit from the post-pandemic recovery.