November 2, 2022
Is Sustainability a Fundamental Concern for Commercial Real Estate Players?
Global changes in the community, economy, and environment are resulting in disruptions across every sector, but it is arguably more important in the real estate niche. Climate change and the recent COVID-19 pandemic have exposed the industry to numerous vulnerabilities that demand collective actions toward sustainable building solutions. For years, the property market impacted the environment negatively in different areas, from the emission of harmful gases to intensive resource consumption. For example, the industry accounts for 39% of global annual greenhouse gas (GHG) emissions. This is why sustainability has become a major area of concern for the real estate industry. Keep reading for more, including the latest trends in sustainable real estate, the benefits of green properties, and the best actions for green buildings.
Important Trends on Sustainability in the Real Estate Sector
- Studies done by Dalton and Fuerst show that green certifications can raise the premium of a commercial building by about 7.6%.
- 63% of top investors agree that green strategies, such as energy saving features, can increase occupancy rates and increase tenancy retention.
- It will take approximately USD5.2 trillion in the next decade (2020-2030) to decarbonize the planet's built environment. This calls for urgent measures to at least reach 50% carbon emission reduction by 2030 and keep the goal of achieving net zero carbon by 2050 alive.
- New green buildings yield a 10.5% reduction in operating costs in the first year and 16.9% in the subsequent five years.
- Upgrading buildings to make them more sustainable helps to cut down operating costs by up to 11.5%
Why Adopt Sustainability in Commercial Real Estates?
The numbers and trends we have highlighted above paint a picture of an industry on the move. Players in the sector have discovered that although sustainability efforts might come with some costs at the beginning of the process, the benefits outweigh them by far in the long term. So, here are some of the reasons why you should not be left behind as everyone else works to transform his/her property into green real estate.
- Green buildings easily comply with local and international safety, health, and occupational laws and policies.
- Investors prefer real estates that are designed with sustainability in mind.
- Sustainable buildings are very effective in promoting better health and well-being of occupants.
- Advanced technologies used in green buildings can help to recycle the bulk of the material to keep the cost of operations low.
- It is crucial in helping real estate players join hands with other parties in addressing the problem of global warming.
- Helps to increase the productivity of the building occupants.
Areas of Focus for Commercial Real Estate Players
From the moment a building is designed and constructed, its environmental, social, and governance (ESG) impacts start being felt. It changes the natural landscape, uses a lot of materials, and can affect biological diversity depending on the location. Even when old, the building continues exerting its impacts via maintenance and management. So, here are some of the real estate strategies that players are focusing on to demonstrate sustainability concerns:
Reducing Water Use in the Buildings
Buildings use a lot of water during the construction phase and occupation stages. Because of its scarcity, players in real estate have focused on using the latest technologies to help keep water use and costs low. For example, they install low-flow showerheads that reduce the overall amount of water that people use in their bathrooms. Smart faucets that sense and only release water when waved have also become common, helping to reduce the risk of forgetting the taps running for hours or overnight.
Green building designs are also using recycled water for purposes such as landscaping and cleaning. This reduces the pressure exerted on the clean waterways. Even when they do not recycle all the water, it is treated to ensure it does not harm biodiversity.
Green Rooftops and Facades
All over Singapore, Asia, and across the globe, you have probably seen the rising number of buildings with green rooftops and facades. Real estate players appreciate that vegetation provides aesthetic appeal and further helps to draw some carbon dioxide from the atmosphere. Imagine if all the buildings on the planet had green rooftops. They would make the urban environment clean, attract insects such as bees, and promote better health.
Supporting Forest Restoration Projects
After the UN called member countries to save the planet by aiming to achieve zero carbon emissions by 2050, most players have adjusted their operations. In real estate, the efforts to remove as much carbon emissions from the atmosphere are being extended to off site areas. One of these is supporting forest restoration projects. Some companies are working with local administrations, international organisations, and research units that focus on restoring natural habitats.
Promoting Better Health of the Business Occupants
An ageing building will feel just like new if you can give it a personal touch, especially in promoting the well-being of occupants. This can be an excellent idea because tenants or buyers will develop a greater attachment to the building. Players in real estate achieve this through a few strategies:
- Bringing fresh air inside the building through HVAC: Try as much as possible to clear away the harmful chemicals that can result in toxic emissions. There are modern innovations today such as CONTINEWM which purifies the air inside the facility and eliminates odours.
- Make sure the building incorporates natural lighting: This creates a sense of comfort and enjoyment for the building users. It is also an excellent energy saving strategy.
- Add acoustics into the building: Sound insulation can help people to concentrate and peacefully enjoy the green building.
Support for Local Communities
The concept of sustainability puts a lot of emphasis on the local communities. A project that disrupts the local communities, perhaps by displacing them or damaging their culture, cannot be considered sustainable. During the designing phase, contractors and property owners carefully factor in the local communities to minimise negative impacts. They also employ the following strategies to support the local communities and make the community feel part of the project:
- Working with local projects to support facilities such as schools and health facilities.
- Liaising with local community organisations or leadership to support empowerment initiatives.
- Improving the neighbouring infrastructure, such as roads and water lines for the local communities.
- Supporting crucial administrative operations, such as policing, local libraries, or scholarships for the local communities.
Using Energy Saving Technologies
Commercial real estate players can reduce their energy use by a significant margin by adopting the latest technologies and devices. Remember that energy saving not only helps to keep the cost of operations low but also comes in handy in reducing the respective building's carbon footprint. Here are some of the best options for cutting down energy use:
- Smart Energy Management Solutions
These technologies are used in buildings to help automate their energy management. The goal is to ensure that energy is only used in the right quantities when it is required. For example, smart lighting solutions use sensors to note when there are no people in the restrooms and automatically turn off the lights. This means no energy is wasted even when occupants because a user forgot to switch off the lamp.
Modern energy management systems are also used for energy saving in the HVAC system. If you have the finance manager working in his office over the weekend when all other employees are away, only his room will be air-conditioned instead of the entire office. The modern energy management system can also help in collecting data for action about energy use.
- Alternative Sources of Energy
You have probably seen buildings with solar panels installed on their rooftops both in the city and countryside. This is an excellent area of action, especially for real estate developers with sites in areas that have an abundance of sunshine. Using alternative energy sources, from solar to wind, implies that you can avoid a portion or entire power-related utility bills for a building.
As they shift to alternative sources of energy, real estate players are also increasingly relying on more efficient lighting fixtures. The most preferred option is LED lighting, which is 75% more energy efficient compared to traditional incandescent lamps. This is why most players are adding LED lighting both indoors and outdoors for higher energy-saving rates in all phases of building development.
- Using CONTINEWM to Reduce Energy Use
In most buildings, the bulk of energy-related costs goes to the HVAC system. Air-conditioning of office buildings alone accounts for up to 52% of their electricity consumption. However, they are now able to cut down the cost by installing CONTINEWM in the heat exchanger. This device works by clearing positive electrostatic charges that are created by the moving parts of the system. These positive charges create resistance that forces the HVAC to work harder and use more energy.
Using CONTINEWM, the airflow becomes smooth, and it is possible to cut down the energy use of the HVAC by up to 25% on average. Once installed, the system also helps to reduce bad odour, which is crucial in improving the air quality of the building or offices. Notably, CONTINEWM is worth more than its cost and is easy to install and maintain.
Commercial real estate players have demonstrated that they are focused on promoting sustainability and are willing to take every step to make the planet a better place. So, if you are new to the industry or have been looking for impressive ways to promote sustainability, the areas of action we have highlighted in this post offer an excellent starting point. Remember to also partner with other local and international organisations, such as Climate Fresk, to share, learn, and get support for your effort to make real estate and the planet more sustainable.