2012 – An Exciting Year
This year, the GPD Council was very successful in promoting and maintaining the GP surveyors' professional standards. In the GPD AGM held on 15 November 2012, Sr Edward Au and I delivered the Treasurer and Chairman Reports for 2012, viz,
Major Works Done by the Council during the Year
1. Land Supply Working Group
In response to the Northeast New Territories New Development Areas Planning and Engineering Study (the NENT NDAs Study) jointly commissioned by the Civil Engineering and Development Department (CEDD) and the Planning Department (PlanD), the HKIS GPD has set up a Land Supply Working Group (LSWG) to focus on the proposed NDAs and to respond to the government’s consultation by recommending ways to mobilize private sector resources to enhance land supply instead of simply relying on the government. The LSWG was convened by Sr CK Lau with members from different sectors, including Sr Charles Chan, Joseph Ho, Andrew Fung, Tony Wan, Edward Au, and Selene Chiu.
The LSWG has reviewed the Government Land Supply Program, the New Town Resumption Experience, the NENT NDA study, and the Land Resumption procedures. The NENT NDAs will not only offer chances to promote social and economic developments in Hong Kong and its vicinity due to their strategic locations, but will also addresses housing and employment demands that result from population growth after the provision of approximately 533 ha of developable land. The LSWG solicited views from its members and submitted its comments to the government for its consideration.
2. HKIS Press Conference on our views to Development of the North East New Territories
Subsequent to the submission of the GPD’s comments on and responses to the NENT NDAs, the GPD arranged a press conference on 22 October 2012 to publicize its views. The conference went off well, with elaboration made by CK Lau, Convenor of the Working Group on Land Supply, and Francis Ng.
3. Construction costs of the Land Premium and Negotiations during the Valuation
Liaison Meeting
A GPD Working Group on Valuation (members included Lawrence Poon, Charles Chan, Joseph Ho, and CK Lau) was set up and liaised with the relevant government department on a regular basis. The WG is in negotiating with RLB and REDA to work out a new mechanism to adopt construction costs in residual valuations for land premium assessments. There has been good progress on the issue and members will be kept informed of further developments in due course.
4. Lands Department/HKIS Liaison Meeting
Convened by Sr CK Lau, the GPD Council has held regular liaison meetings with the Lands Department. Numerous land administration issues, including inter alia lease conditions interpretation, DD&H approval, the definition of GFA, site coverage for exempted features/structures, etc., have been covered. The GPD representatives included Lawrence Poon, Tony Wan, Joseph Ho, and Selene Chiu. Talks on these topics are in progress.
5. HKIS/RICS (HK) Joint Guidance Notes for Surveyors acting as Experts in Commercial
Rent Reviews in Hong Kong
A Working Group on the Guidance Notes for Commercial Rent Reviews in Hong Kong (JGNs) (working group members are: CK Lau, David Faulkner, Paul Dwyer, and Simon Lynch) has reconsidered the said guidance note. The updated draft is being scrutinized by an appointed legal consultant. The first draft of the JGNs was prepared early this year and has taken into account the RICS Guidance Notes, current practices on the appointment of independent valuation experts by the HKIS, and suggestions/comments by the working group.
The JGNs are Joint RICS and HKIS Guidance Notes, not a Statement of Standard Practice. They are primarily designed to assist those who are appointed either by the President or directly by the parties concerned to act as Experts in rent review disputes. JGNs are also intended to assist the parties themselves and those acting on their behalf by making them aware of the procedures likely to be followed and the issues involved. The JGNs are not intended to provide guidance to those acting as arbitrators, in which other specific procedures will be relevant. A surveyor may also be called upon by the parties to determine matters in disputes, such as the assessment of service charges or a valuation in connection with an option to purchase. The JGNs are not intended to cover all such matters, but in general terms, the basic principles set out would apply.
When procedures for specific professional tasks are recommended in the JGNs, they are inteded to embody the ‘best practices’. That is, these procedures, in the opinion of the RICS and HKIS, will meet a high standard of professional competence. The person appointed must exercise his or her professional expertise and judgment to the best of his or her ability.
The JGNs are consistent with the standard practices and procedures adopted by the RICS and HKIS, which have been carefully considered and revised to deal with common problems that are encountered in the determination process and to facilitate individual decisions for the benefit of both the appointed expert and the parties to a rent review dispute.
The JGNs are based on Hong Kong’s laws and practices. When members are appointed to act as experts, they are vested with substantial authority. The law continues to evolve and members have a professional duty to keep their knowledge up-to-date. The JGNs are relevant to professional competence because each surveyor should be equipped with the latest knowledge and acquaint him or herself with the Notes within a reasonable amount of time.
Pending final scrutiny by the legal consultant, the JGNs should be finalized in the near future.
6. Vetting Panel for Real Estate Valuers and Business Valuers for Public Disclosure Purposes
The GPD Council has resolved to conduct an annual review of the List of property valuers for undertaking valuations for incorporation or reference in listing particulars, circulars, and valuations in connection with takeovers and mergers (“the List”). A Panel for Real Estate Valuers and Business Valuers for Public Disclosure Purposes (the “vetting panel”) has been formed to vet the qualifications of professional surveyors. The first meeting of the panel was held early this year to go through its terms of reference, regulations, and associated business.
An annual return of relevant forms and declarations by members on the List shall be submitted to the HKIS. The declarations shall confirm if the relevant members fulfill the necessary requirements to be included on the List (including employment by a firm providing valuation services). The submission will come at the end of November each year and announcements on/updates to the List will be made by the end of January in the following year. Another update of the List will be made by the end of July of each year for new applications and/or applications for re-instatement onto the List. The vetting panel will commence operations once related issues have been settled.
7. New Assessment of Professional Competence (“APC”) Rules and Guide and New Arrangements
Members may recall that following the EGM on 18 July 2011, a new APC scheme (“the New Scheme) took effect on the same date. The New Scheme recognizes the importance of professional knowledge in some specific areas and, as such, probationers undergoing the APC will have to attain the required level in this respect. The GPD Education Committee convened by Louie Chan with Panel Members Edward Au, Joseph Ho, Thomas Chan, and Lawrence Pang had re-vamped the GPD APC Rules and Guide in accordance with the resolutions of the EGM.
There are two parts under the New Scheme. Part 1 is a combination of: (a) 12 months’ experience; (b) 20 hours’ pre qualification structure learning (“PQSL”) for cognate degree holders [40 hours’ PQSL for non-degree holders] within 12 months after a probationer takes Part 1 of the written assessment; and (c) written assessments on four papers. Probationers who have passed Part 1 may proceed to Part 2 if they have accumulated a minimum of 24 months’ structured training. Part 2 is a submission of a critical analysis follow by an oral assessment.
The GPD Education Panel has reviewed and fully revised the APC Rules and Guide for the General Practice Division. A new edition (“the 2012 Guide”) was subsequently approved by the Board of Education in June of this year. Under the 2012 Guide, APC Candidates who are in their first year of the APC Programme could proceed to the Part One Assessment in October 2012 (“the 2012 Part One Assessment”). On the other hand, candidates who are in their second year of the APC Programme could reference the previous APC Rules and Guide at the time they enrolled in the APC Programme in 2010 (which was also treated as the commencement of the diary and the APC Programme), as they obviously had no knowledge of the new APC Programme as at 18 July 2011. In this regard, the Education Committee of the GPD, as directed by the Board of Education, formulated the transitional arrangements in respect of the Part One APC Programme in 2012.
8. New APC and Revision Workshop
During the transition period, candidates who enrolled prior to 2011 were allowed to sit for the APC written examination, which was held on 4 October this year. In order to help candidates with their preparations for the APC written examination, the Education Committee of the GP Division and the Young Surveyors Group arranged seven APC Revision Workshops to cover the entire syllabus of Part 1 of the APC written examination.
9. New “Scale of Professional Charges for the General Practice Services in Hong Kong” is in operation
The current “Scale of Professional Charges for General Practice Services in Hong Kong” (“Scale of Charges”) was first published jointly by the HKIS and the RICS (HK Branch) in 1995. The HKIS reviewed and re-printed it again in 2005. With the help of a GPD WG, the Scale of Charges was updated and re-published at the end of 2011.
The new Scale of Charges is advisory in nature and is intended as guidance for Professional GP Surveyors. The document has served many useful purposes in the following areas of work:
- Compensation claims. Consultation has been made with the Lands Department from time to time.
- Certain types of valuation work.
- Courts/Tribunal – reference points for the determination of the reasonableness of “costs” for expert surveyors’ fees.
- Independent expert – reference points for the determination of reasonableness of experts’ fees by the President of the HKIS, the courts/tribunal, etc.
After the publication of the document, the HKIS launched a promotion of the Scale of Charges by sending a copy of it to all stakeholders. This new fee scale has been welcomed by ractitioners and related institutions, including the Urban Renewal Authority.
10. The Business and Property Standards Panel
Members may recall that a GPD Valuation Standard Panel was set up and convened by Sr Joseph Ho to conduct a comprehensive review of standards with a view to continuing the maintenance of the best professional standards when preparing valuation reports. At present, the HKIS has two mandatory valuation standards, namely “The HKIS Valuation Standards on Trade-related Business Assets and Business Enterprises” (2004) and “The HKIS Valuation Standards on Properties” (2005). There also exists a separate “Guidance Notes on Valuations of Properties for Mortgage Purpose” (2005). The Business and Property Valuation Standards Panel noted that there have been drastic changes in recent years to the capital market and financial reporting standards in Hong Kong. This has led to greater demand for valuation services on different types of property.
After the review, the Panel proposed that a unified and concise set of valuation standards, which is mandatory in nature, should be prepared to cope with the changes. In addition, since the first editions of both standards came out, there have been significant developments in the International Valuation Standards (IVS) published by the International Valuation Standards Committee (IVSC), of which the HKIS is a Valuation Organization Member. As it is committed to achieving the objective of securing a set of common valuation standards that is acceptable worldwide, the HKIS would, wherever possible, adopt the standards set by the IVSC. A new edition will be issued by the end of 2012.
External Affairs
1. The 7th Cross Strait Land Conference (第七屆兩岸四地土地學術研討會)
The 7th Cross Strait Land Conference was held from 5 to 7 July 2012 in Macau. The GPD convened this event with representatives from Macau, Taiwan, and China. Sr Edward Au, Francis Ng, and Dr Lawrence Poon were nominated as the GPD representatives in the organizing committee.
A team of HKIS Delegates, including GPD representatives Sr Francis Ng, Lawrence Poon, Edward Au, Ringo Lam, Jason Chan, and KM Chau, along with HKIS President Serena Lau and Vice President Simon Kwok, attended the conference, which was attended by about 120 participants from China, Taiwan, and Macao.
As a keynote speaker, Sr Francis Ng presented a land administration paper, while Sr Edward Au, Simon Kwok, and Francis Ng acted as panelists in various conference sessions.
2. WAVO AGM and Council Meetings 2012
The World Association of Valuation Organizations (WAVO) held its Annual General Meeting on 28 & 29 May 2012 in Singapore and its Board Meeting on 1 October 2012 in Melbourne, Australia. WAVO is a body that brings together professional property valuation organizations that represent valuers and related property consultants employed in private practice, business and industry, the public sector, and education, as well as some specialized groups that interact frequently with the profession. WAVO’s mission is to develop and enhance the valuation and related professions and to ensure the provision of services of consistently high quality and uniformity in the public interest. WAVO carries out its mission by promoting the best practices, supporting robust and consistent standards, encouraging higher education, and facilitating lifelong learning among its Members.
Apart from vetting the finance report, membership list, and the business plan of WAVO 2012-15, the WAVO AGM also discussed Joint WAVO member courses and the WAVO Valuation Report Competition. WAVO intended to draw up a ‘Competency guide for valuers,” amendments to the WAVO constitution, and a WAVO list of valuation experts, as well as discuss International Valuation and Appraisal Week and the WAVO International Valuation Certificate (known as WIVCert). Mr Edward Au (Hon Treasurer of GPD) was appointed one of the four Vice-Presidents of WAVO.
Representatives of association members present at the Board Meeting held on Monday, 1 October 2012 at the Travelodge, Dockland of Melbourne, Australia, included Messer Richard Borges (AI (USA)), Edward Au (HKIS), Prof Lim (SISV), Keith Goodwin (AIC (Canada)), David Shum (AIC), Keith Lancastle (AIC), Dr Adrian Crivii (ANEVAR), Ian Campbell (PINZ), David Clark (PINZ), Tan Choi Heng (SISV), John Teo (SISV), and Gan Bee Ghee (SISV)(WAVO Secretary). The Meeting was chaired by Prof LIM. Mr Ricardo Garza, President of the Federacion De Colegios De Valuadores, Mexico, attended the Board Meeting as an observer. The Meeting reviewed the progress of the work that arose from the last WAVO Board Meeting (mentioned above) and discussed the future development of the organization.
3. 7th ASEAN VALUERS (AVA) Congress in Brunei Darussalam – 2 to 5 July 2012
Upon invitation by the President of the AVA, HKIS GPD Chairman Sr Francis Ng and the Hon Treasurer Edward Au, jointly with Vice President Simon Kwok attended the 7th AVA Congress in Brunei Darussalam from 2 to 5 July 2012.
During the AVA Congress, Sr Edward Au presented a Hong Kong Report.
4. GPD Delegation Visit to ROCREAA, Taiwan
To enhance liaison and cooperation with our counterparts in Taiwan, a delegation of eight HKIS Members visited the ROCREAA (Republic of China Real Estate Appraisers Association) [中華民國不動產估價師公會全國聯合會(ROCREAA)] and met with other stakeholders in Taiwan from 19 to 22 April 2012. The GPD delegates were Sr Francis Ng, Edward Au, KK Chiu, Joseph Ho, CK Lau, Lawrence Poon, and Elsa Ng. HKIS Vice President Simon Kwok also joined the event.
The HKIS delegates met with representatives of the ROCREAA and our counterparts from the Department of Land Administration, National Taipei University, the Land Administration Agent Guild of Taipei City, etc. The hosts extended a warm welcome to us. We introduced the HKIS’s set-up, professional training, work of practitioners, and related issues. We took the chance to discuss business valuation standards with Taiwan’s financial stakeholders. ROCREAA representatives elaborated on problems encountered when assessing current market land values, controls on property speculation, and the provision of housing for low/middle income groups.
GPD Delegates also met with representatives of the Securities and Futures Bureau to exchange views on the alignment of valuation practices with international standards, the valuation approach to intangible assets, and professional qualifications for carrying out business valuation. The delegation also visited the Taipei 101 Tower to learn about the leasing and management of the highest office tower in Taiwan. We were pleased to have the opportunity to discuss issues of mutual concern with members of ROCREAA Kaohsiung and the key stakeholders of land administration and property development. From the responses and various issues raised, I would say that the visit was very successful in building a closer relationship between the HKIS and the ROCREAA and other counterparts in Taiwan.
5. FIG Working Week 2012
This year, the HKIS sent a six-member delegation to FIG orking Week, which was held in Rome, Italy. The Delegation included Sr Simon Kwok (HKIS Vice President), Edward Au (GPD Hon Treasurer), Raymond Chan (P&D Chairman), Tzena Wong (QSD), Bessie Liu (YSG), and me. Sr Winnie Siu, LSD member, also joined the delegation.
6. The 26th PAN PACIFIC CONGRESS of REAL ESTATE APPRAISERS, VALUERS AND
COUNSELLORS – 1 to 4 October 2012 in Melbourne, Australia
Sr Edward Au represented the HKIS GPD at the 26th Pan Pacific Congress of Real Estate Appraisers, Valuers and Counsellors (PPC). It was held from 1 to 4 October 2012 in Melbourne, Australia. The PPC is held biennially around the Pacific Rim by member associations in turn. This year’s Congress focused on sustainable development, green buildings, and their effect on valuation. Other discussion topics included valuation for financial instruments, intangible assets, detrimental assets, and capital investments.
7. Visit of the Property Institute of New Zealand
On 22 October 2012, 23 members from the Property Institute of New Zealand (NZPI), led by Ian Campbell (Past President & Board Member) and David Clark (CEO), visited the HKIS. The delegation was greeted by HKIS President Sr Serena Lau, Hon Treasurer Sr Gary Yeung, Francis Ng, KK Chiu, Eugina Fok, and Edward Au. Everyone exchanged views on current intuitional affairs and the property situations in Hong Kong and New Zealand.
The NZPI delegates were briefed on the structure, history, and organization of the HKIS and the Hong Kong property market. They showed a keen interest in Hong Kong’s residential property market and property prices. The NZPI intended to expand its cooperation with overseas institutes and questions on a reciprocity arrangement with China were raised. On the other hand, the HKIS noted that the NZPI has launched online property professional teaching courses that may be of interest to HKIS members. We will ask for further information on this development and keep members informed on its progress.
CPD Events
Our CPD Event Conveners, Sr Jason Chan, KM Chau, and Simon Poon, have been actively organizing important events for our GPD members. In 2011-2012, the GPD organized over 16 CPD events and seminars. The CPD topics covered a wide range of issues including the Hong Kong property market, professional practices, and the world economic impact on property. All CPD events were enthusiastically attended by members.
Looking ahead
The coming year will be a busy one for the GPD. We will continue to serve our members and concentrate on the following issues:
- Publication of the new HKIS Valuation Standards
- Guidance Notes for Commercial Rent Reviews in Hong Kong
- Liaise with the government on Land Premium and Valuation parameters
- Liaise with the Lands Department on various land administration aspects
- Comments on new policy and initiatives
- Provision of professional inputs and views on NENT, land, and housing supply
- Trainings for graduates in connection with the APC
- Arranging CPD for members
- Keeping closer ties with and participating in events organized by related professional bodies
A Vote of Thanks
I wish to take this opportunity to thank GPD Council Members (and co-opted members) who made relentless efforts and gave support to the Council during various functions and activities over the past year. My special thanks go to all panel and committee members as well.
GPD Council Members at the HKIS 2012 Annual Dinner
The existing office of the GPD Council consists of the following members:
Hon Treasurer Report – by Edward Au
Over the past year (from November 2011 to October 2012), the GPD had a total income of $258,545.00, whereas the total expenses for the same period were $221,968.27. That resulted in a net income of $36,576.23 for fiscal year 2012. The GPD’s income mainly came from CPD and social events, while expenses were primarily from venue charges, overseas events, and meal expenses for Council activities. The unaudited “Accumulative Balance of GPD” was, as at 31 Oct 2012, $816,574.76 (compared to a balance of $779,998.03 as at the end of Oct 2011). Details of the breakdown of the GPD’s account are annexed hereof.
