[27062017] The Business Times - SP group poised to transform into power sectors Uberhttps://www.spgroup.com.sg/dam/jcr:b12630e7-c52e-4ab0-8bfb-63558991aac7S$1.20 A SINGAPORE PRESS HOLDINGS PUBLICATION | businesstimes.com.sg | fb.com/thebusinesstimes | @BusinessTimes | CO REGN NO 198402868E | MCI (P) 037/12/2016 Tuesday, June 27, 2017 STAVING OFF CYBERATTACKS Cost of data breach down 10% globally, says study TOP STORIES/ 2 BEYOND BITCOINS Cryptocurrencies: A BT Infographics insight TOP STORIES/ 2 LEE FAMILY DISPUTE Indranee Rajah sees 4 options for 38, Oxley Road TOP STORIES/ 6 TAKING ON THE BIG PLAYERS Local beauty brands take on the world SME/ 26 MARKETS Monday Change STI Closed – KL COMP Closed – NIKKEI 225 20,153.35 +20.68 HANG SENG 25,871.89 +201.84 SHENZHEN B 1,144.59 +12.48 DOW (11.45am EDT) 21,444.08 +49.32 ❚❚ DAILY DIGEST Royal Dutch Shell aims to be a leader in clean energy and sees an opportunity in using its global presence and established brand to scale up the new energies business quickly as and when. TOP STORIES / 4 Keppel Land China and Alpha Investment Partners have tied up with a co-investor to acquire an office and retail mixed-used development, SOHO Hongkou in Shanghai, China, for some US$525 million. COMPANIES & MARKETS / 8 Newly qualified New Zealand carpenters are commanding six-figure salaries and construction costs have risen by half in under three years, symptoms of an unprecedented building boom straining the nation’s much-envied economy. REAL ESTATE / 11 A hastily-assembled group of investors looks set to win the bid for Toshiba Corp’s prized memory chip business, but a lack of clear leadership or industry clout is raising questions about who will take tough decisions about strategy and investment. TECHNOLOGY / 16 Activist investor Daniel Loeb’s Third Point LLC on Sunday unveiled a stake of more than one per cent in Nestle SA and urged the world’s largest packaged foods maker to improve its margins, buy back stock and shed non-core businesses. GOVT & ECONOMY / 20 Takata Corp filed for bankruptcy protection in the biggest postwar Japanese corporate failure in the manufacturing industry, as the 84-year-old company buckled under liabilities from millions of recalled air bags that have been linked to more than a dozen deaths. TRANSPORT / 21 Disruption looms for property sector as technology investments mount US$6b in venture capital pumped into “proptech” since 2011; 2017 proptech financing expected to hit US$3b By Lee Meixian leemx@sph.com.sg @LeeMeixianBT By Andrea Soh sandrea@sph.com.sg @AndreaSohBT Singapore REAL ESTATE has been a spectator to technology disruption for years, but all that could be changing as the traditionally tech-laggard sector moves into the epicentre of a technology revolution. Some say it is a new generation of managers and executives, digital natives themselves, who are driving the change. Regardless, a new term has been coined to describe this phenomenon: “proptech” – the real estate version of “fintech”. This leveraging of technology to improve property services ranges from an increased use of big data to the introduction of a distributed database such as blockchain technology, to even inventions such as robot receptionists. At a recent proptech panel discussion hosted at the Tech in Asia Singapore conference, JLL Asia Pacific CEO Anthony Couse said: “The next five years is critical to anyone in the real estate sector, whether you are a service provider, or in the world of developing or investing in real estate.” Singapore Disruptproperty.com lists about 33 proptech companies in Singapore, ranging from property search engines, to asset management companies, crowdfunding websites, smart building firms, market research companies, augmented reality service providers and video analytics solution providers to track human traffic in retail malls. According to CB Insights, a venture capital database, the volume of proptech financing globally has been on a steady increase, rising 36 per cent year on year to US$2.7 billion in 2016, and projected to increase another 10 per cent in 2017 to US$3 billion. Of the approximately US$6 billion in venture capital that has been invested in proptech since 2011, about 70 per cent was in the last two years. Those in the industry see opportunities for more investment in the sector. In an interview with The Business Times, Robert Courteau, CEO of Altus Group, a software and data company for real estate, said: “What’s fascinating to me is how little has been spent on technology in this industry when I look at the spectrum of things that AS WAVE after wave of disruption buffets the power sector, grid operator SP Group is taking steps to turn itself into the industry’s “Uber”: In time to come, it sees itself providing a platform that matches the supply and demand of power, especially as power generation becomes a fragmented and distributed business. At the heart of this transformation is the desire to stay relevant to the Singapore consumer, particularly as the progressive liberalisation of Singapore’s electricity market will lead to a fully open market by mid-2018. SP Group – formerly known as Singapore Power Ltd – owns and operates electricity and gas transmission networks in Singapore and Australia. The group, fully-owned by Temasek Holdings, made S$923.5 million in net profit last year, on revenue of S$3.9 billion. In an interview with The Business Times, group chief executive Wong Kim Yin said that while every industry is being disrupted, the power market is undergoing multiple dimensions of such changes. Besides digital transformations, the industry also has had to face rapid technological advances in renewables and battery storage. “For the longest time, you cannot store electricity, or rather you cannot store it cheaply or efficiently. But increasingly that is changing,” he said. “And the moment you can store power, it changes how power will be delivered or consumed.” On top of these, consumers are now demanding sustainability. In order to stay true to its mission of enhancing the quality of life for Singaporeans, the group therefore SP Group poised to transform into ‘power sector’s Uber’ CEO says the moment electricity can be stored, it changes how power will be delivered or consumed Growing investor interest 2013 to Q1 2017 ■ Disclosed funding (US$ million) Deals 114 $451 186 $1,159 250 $1,991 2013 2014 2015 2016 2017 has to start building capabilities that will allow for the types of life Singaporeans may want to lead in 30 years, said Mr Wong. To do so, the group has adopted a three-pronged strategy: to be exposed to the latest technologies and ideas in the industry; to test promising ideas, and to have the capability to handle proven technologies. Under the first prong, the group in January this year partnered seven other utilities around the world to launch a global accelerator programme. Called Free Electrons, the programme supports startups developing solutions in areas such as clean energy, energy efficiency and mobility, digitisation, and on-demand customer services. SP Group has also put money in funds, including the Europe-based Environmental Technologies Fund which invests in clean technologies and greentech sectors. “By getting involved in these, we get exposed to all the ideas that people have come up 277 $2,698 247 (Full year projection) $2,973 (Full year projection) 61 $733 Source: CB Insights are important to real estate – from funding, to joint-venture development, to partnerships, to construction planning, to cost monitoring, to leasing, to the crowdsourcing of data, to liquidity, to things like daily valuation . . . If you go across that spectrum, every one of those has an opportunity for improvement in real estate.” Increasingly, he noted that there are venture capital companies that are solely focused on funding proptech startups. “Three years ago, there was no such thing. Now you have venture capital firms whose focus is all on real estate, and I think we will see more of that.” One major theme of fintech that has migrated to proptech is the use of blockchain. There are two main uses of it in the property sector. The first allows for the decentralising of transactions and removing of middlemen such as brokers, land title offices, and conveyance law firms. with,” Mr Wong explained. “We also have the opportunity to work with the entrepreneurs and to invest into them if those are things relevant to us.” A technology of interest to SP Group is blockchain, a decentralised and distributed digital ledger used to record data across many computers. This will be useful in the future energy world – one that is expected to be more distributed in nature with consumers also having the means to Property information such as ownership details, addresses, maintenance and repair history, et cetera, is recorded on the immutable digital ledger, such that home buyers and sellers can enter into “smart contracts” – digital contracts that automate the offline functions presently handled by agents, lawyers and banks. This also makes transactions cheaper and quicker. But Mr Couse said that for this to fully work, it requires the buy-in of the government. The “holy grail” of transacting online is to find a solution that will allow an end-to-end transaction with no break in the process. “If we can crack that and convince governments to completely digitise titles and ownership, then we can have end-to-end transactions and that’s really the end of the agent. “But just like fintech hasn’t removed the traditional banker, this hasn’t really happened. It’s still early days in the property sector, but the manual aspect of real estate is really going to go with automation.” There are early attempts to implement this in Singapore. For instance, peer-to-peer real estate start-up Averspace has launched blockchain-enabled house rentals on its mobile app. Continued on Page 2 SP Group chief executive Wong Kim Yin: “For the longest time, you cannot store electricity, or rather you cannot store it cheaply or efficiently. But increasingly that is changing.” PHOTO: KELVIN CHNG generate power using renewables or batteries, said Mr Wong. “Blockchain could potentially be a solution that will enable that distributed transaction to be done between someone who owns a battery and someone who owns a solar panel or even demand management...” Continued on Page 4 ☛ Shell aims to ride branding, global clout in clean energy race, Page 4 ☛ Electric vehicles compel change in grid operators and oil firms, Pg 4