With the health and wellbeing of both people and the planet more important than ever before, sustainability is now a central focus to real estate sectors all over the world. New greener buildings; the regeneration of existing buildings; and their associated social impact are forming part of key strategies for companies to meet short and long term goals.
Growth of Green Buildings
Since the early 1970s sustainable design has increasingly become an important consideration. As the number of green buildings has grown, it has become apparent that there are many associated opportunities for the real estate sector with concepts such as green roofs and building management systems becoming much more common over the last 15 years. Not only do these concepts provide commercial and residential tenants with better amenities, they have often also offered building owners significant financial benefits through the ability to charge higher rents for these added features. It is estimated that the cost of building a sustainable property is only 8% more expensive than a standard building but can yield 10% more rent in the right market. There is therefore a strong business case to invest in such a way.
The Future - Regeneration
Whilst the construction of green buildings is fundamental to enhancing global infrastructure, many argue that there are more opportunities readily available to developers in the refurbishment and upgrading of older buildings through innovative design. This is ultimately more energy efficient and sustainable, than constructing a green building from scratch. A prime example of this it the growing movement in New York to make the many 1950s buildings, which comprise a large part of the real estate market, more energy efficient. This has been done by drawing upon the German idea of the "passive house". This concept looks to enhance the core components of a building, such as its foundations, roof, windows, and doors, by increasing insulation and reducing rain ingress. In turn, this creates a thermos like effect helping to regulate a building's temperature and humidity level for longer period of time so making the operation of the building more environmentally friendly.
In addition, not only is the structure or regeneration of a building important, but so are the materials used inside. Fit out works are notoriously unsustainable producing a high carbon count. With both building owners and occupiers now well aware of, and required to meet, sustainability targets, opportunities are now being taken to address this whilst achieving the aesthetic result traditional desired by occupiers.
The Future - Strategy
As companies place a greater emphasis on incorporating sustainability into their branding and business strategies, in order to attract investment, consumers and to gain market advantage, they are becoming increasingly strategic in how they do this as the competition hots up.
Commitments to achieving net zero carbon emissions before governments set deadlines and partnering with other key industry bodies, such as the World Green Building Council and the Better Buildings Partnership, are two such options. The partnerships not only publicly promote the commitment, but also all companies, to show their employees that the offices and buildings they operate from benefit the surrounding community and are kind to the planet.
The Future - Well-Being
Consumers have played a key role in companies' shift towards operating more sustainably. Health and wellbeing is a growing consideration within society, now more than ever following the Covid-19 pandemic.
Real estate developers and investors are refocusing in order to bring the outside in, and vice versa, through the construction of terraces, vegetative occupied roofs and living walls. Although these concepts have commonly been seen in countries with warmer climates for many years, incorporating them in all parts of the world will help to create environments which benefit those within them.
Developers need to focus on designing buildings which promote both healthy living and remain sustainable. This is likely to be through the incorporation of smart building management systems which can deal with the old age conflict of open windows and day light against the management of air flow and temperature.
The Future - Social Considerations
As we all learn to look further out, social impact and systematic zoning through real estate development is also becoming a more prominent consideration. There are many towns and cities globally which have become neglected over time due to a lack of consideration in the past. By focusing on relocating certain types of infrastructure, such as transportation systems, and industries, and creating a more desirable place to live and work, it is thought that there will be an improvement in not only the local economies, but also in the health and well-being of individuals. As social impact becomes a much bigger and visible topic companies are spending more time thinking about the types of measures they can take in order to enhance their corporate social responsibility.
Conclusion
Although regulatory and public requirements have driven sustainable strategies in the past, it is clear that an authentic and genuine commitment to sustainability is becoming a more powerful consideration for individuals and companies alike. There is a real commitment in the real estate sector to becoming more sustainable. With technology advancing daily there is a wide range of opportunity for developers of both commercial and residential buildings to create spaces which will function in an efficient way helping to achieve net zero in the coming years. However, the above highlights that new isn’t always better. Upgrading existing buildings and dealing with fit outs are just as important in the race to becoming more sustainable.
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