By 2050, the UN estimates that more than two-thirds of us will live in cities, compared to 55 per cent in 2018, with the population expected to increase from 7.7 billion to 9.7 billion in the same period. This represents an urban population of 5.3 billion, posing both a challenge and an opportunity for those investing in real estate in the future, as it will play a critical role in how it shapes our environments and how it tackles addressing a more demanding and socially conscious society in the process.
Currently, the real estate sector consumes approximately 40% of global energy each year, according to the World Economic Forum. But mindsets and legislation are shifting in a positive direction to counteract this impact. According to the McKinsey Global Energy Perspective 2019, despite substantial population expansion and economic growth, energy demand is forecast to plateau by 2035 as a result of a move by businesses and governments to innovate and implement sustainable energy practices. Property is a capital and resource-intensive asset with a long lifespan, but the integration of technology and sustainability best practices can improve a building’s efficiency, resilience and long-term value. We know it makes sense, but the question is; how do we achieve this in practice? How can we make a building sustainable from inception to delivery to operation?
The challenge here may seem daunting, but the steps that we as real estate investors can take to create sustainable assets and communities are simple. We need to prioritise a collaborative and clear approach between all partners of a project to produce authentically sustainable end results. We need to understand the full supply chain involved in delivering an asset to ensure a deeply considered approach to sustainability, as only dealing with what is in front of you can only ever address part of the solution. To ensure this, we take a partnership-centric approach at Cain International, where we work closely with our partners from the inception of a project to ensure that all relevant parties are fully aligned on objectives and responsibilities.
We need to identify what sustainability for an asset means in practice and across its whole lifecycle. While it is important to aspire towards BREEAM ratings and install the right technology and infrastructure to achieve this, we also need to think about how the building will be used by its occupants once completed. It is not enough to create the appropriate infrastructure, achieve a rating and consider your job done when constructing a new real estate space. We need to consider how design principles can be applied to ensure the building’s long-term appeal, with space that is configured to encourage sustainably-minded tenants and residents. We need to be thinking forward and design space that can be adjusted around occupants’ changing needs over time and promotes sustainable occupational practices.
A central value of ours at Cain International is to make long-term commitments to community which we believe is an integral part of a sustainable approach. Our Shoreditch development, The Stage, is built on the former site of one of Shakespeare’s earliest playhouses. To ensure the development adds more than just bricks and mortar to the neighbourhood, we have included a performance area, park and purpose-built visitor centre, creating a unique development that respects local history and enriches The Stage’s civic role in the area in the long term. This is what social value truly means; the benefit that is felt by people, be they residents, local businesses, wider communities and whole cities, from any type of interaction with a building through its lifecycle.
We should be under no illusion about the scale of the challenge that lies ahead but focusing on the basics through close collaboration and understanding a building’s role in its community is a first step we can all take.