Benjamin Tay is a corporate real estate Partner with Rajah & Tann in Singapore. Over the last 12 years, he has been involved in some of the largest and most significant commercial and industrial real estate transactions in the country.
In this interview with Asia Law Portal, Tay provides an overview of corporate real estate practice in Singapore, what opportunities currently exist in the market, and how he sees legal practice changing in the future.
You’re a lawyer based in Singapore, specialising in corporate real estate. Could you describe your practice and what are some of the misconceptions that people may have of your practice?
- Yes, a corporate real estate (CRE) lawyer represents parties, particularly corporate entities, dealing with direct and indirect interests in real property.
Predominantly, the scope of work involves the sale, purchase and leasing of real properties and dealings with other indirect interests in real property.
These indirect interests may include –
- an asset manager’s right to the profits of an investment entity;
- a beneficiary’s rights against a parent guarantor for its guarantee of an obligation under a lease; and
- other forms of hybrid derivatives of income.
Many third parties derive their income from services rendered in connection with the real estate. Some of these arrangements may be complex, and we represent the relevant parties’ interests as well.
2. The chief misconception that people have of real estate work is that it is procedural in nature, and susceptible to commoditisation.
There is some truth in this. One may expect the process to be mechanical if the terms of the contract are prescribed at law, for example, pursuant to the Housing Developers Rules.
If the asset is easily substituted (e.g. a unit in a multi-tenanted property), one may expect the contracts governing the asset to be fairly standard.
However, if one considers the characteristic of real estate as an asset class, the contrary should be true because it is generally difficult to substitute one specific real estate for another.
A building is usually unique, while the specific needs of the end-user of the property are different. Access to network cables and access to ports are important considerations, but their importance matters differently to end-users. It is important to consider the context of the transaction and not treat it as a matter of process.
For example, in the industrial property space, the terms and conditions that a self-storage provider would be prepared to accept for a lease are different from terms and conditions a data centre operator would accept.
What are some of the highlights of your career and how did you made it happen?
I had the opportunity to be exposed to significant transactions in the law firms I have worked at. I find some of these matters interesting. Here are three of them –
- I was a member of the team that advised M+W Singapore Pte Ltd in the real estate aspect of its successful enforcement/mortgage against Jurong Data Centre Development Pte. Ltd. in relation to a data centre under a debenture/building agreement.
This matter made case law in Singapore. For me, it highlights the importance of understanding the intricacies of real property interests.
2. I was a key member of the team that advised Facebook in the acquisition of its first Singapore data centre site from Jurong Town Corporation (JTC).
I had the opportunity to work with brilliant people from Facebook, their US counsels, and Jurong Town Corporation (JTC). The quality of their output, the thoroughness, and the commitment to the task are admirable.
3. Finally, this year, I had the opportunity to be involved in advising on a matter relating to a community care facility for Covid-19 patients. While the details are secret, it is heartening to see the whole-of-Government/whole-of-society approach in combating Covid-19 operating. The speed by which agencies can collaborate and get things done is encouraging.
What would be your advice to lawyers aspiring to practice corporate real estate law?
My view is that you should treat it like any other job. One should focus on picking up skills that can add value to your employer and clients. The same skills one picks up are fairly marketable and sought after in entities with a sizable real estate portfolio.
What is interesting about this job is you get to help people solve issues, albeit in a narrow area. You also get to work in an environment generally filled with reasonably smart people, sprinkled with some intensely talented individuals.
As real estate is an integral part of how people operate in societies, you would also get a chance to observe how Singapore has been developing.
You have been in practice for about 13 years now. Could you describe how your role evolved over the years?
Society has changed a lot since 2007. Do you remember where the technology companies were in 2007? However, compared to how the internet era has transformed entire businesses and industries, the change in Singapore real estate practice has been at a glacier pace.
But because our clients’ businesses have changed, we have to adapt. Data centres and co-living/co-working spaces are now part of the landscape.
As the economy continues to grow, the demand for legal services and the total supply of legal services have expanded fairly quickly through both the increased use of technology and the increased number of junior lawyers joining the practice each year.
As a whole, there are some efforts to systemise processes and adopt technology in law firms. There is also a trend of Singapore law firms expanding their practice in the region. So, you are expected to adopt technology and communicate across regions and culture.
Public authorities are also adopting technology to facilitate real estate transactions as well. However, the changes are incremental, and understandably so. Suppose anyone from the relevant agency picks up on this: I do hope we could receive public search results in respect of real estate via an API (in an XML or JSON format) instead of in a pdf file. This is so we do not have to transcribe the replies to the clients and can automate due diligence a lot more.
What is the current corporate real estate climate in Singapore?
Due to the Covid-19 pandemic, there appears to be a damper on corporate real estate transactions in Singapore, particularly in the office sector. While there has been a pickup recently, there is uncertainty as to how remote working will shape office demand.
Most of our deals in 2020 involved industrial properties, particularly in the logistics and data centres sectors. There has also been some interest in business parks.
At present, there are also some opportunities for distressed assets, as well as emerging uses of real properties, e.g. as high technology food farms, research innovation centres, floating solar farms, which are quite interesting.
What are the challenges ahead and how you are preparing yourself for the future?
Personally, I think technology will fundamentally change legal practice. In real estate practice, for areas which are already commoditised, those areas are even more susceptible to automation and technology bypassing the need for law firms to process the transactions.
However, while these are challenges, I do not consider technology a threat. The adoption of technology has made the human element and the application of human intellect and creativity more important. Also, I don’t think adoption of technology should be seen as a way to eliminate jobs and reduce costs but rather, as a way to help the organisation grow and perform better in the marketplace together with the existing enhanced-skilled, and even better paid, workforce.
Fortunately, we all have some time to adapt. Personally, I try to learn about technology by reading books and attending online courses. I also keep current with the increased use of software to deliver legal solutions. I try to pick up skills in areas which are less susceptible to competition from software.
From that perspective, I hope to be part of an organisation which adopt technology and evolve to meet the challenges and operates in an industry which has strong growth prospects in the next 5 to 10 years.
