This article was originally published in August 2019.
Why we need to encourage innovation and holistic solutions to the challenges facing real estate.
“Silo busters unite!” is becoming a slogan here at the Real Estate Institute. We contest that few, if any, of the major problems that face real estate in the 21st century can be tackled from a single standpoint; whether that be the perspective of a single location, use class, ideology or professional capacity. This applies nowhere more powerfully than to the problem of climate change and sustainability. 21st century solutions to this problem have to be global, multi-sector, inclusive and multi-disciplinary.
Much has been discussed about the bottom-line benefits of green infrastructure but planting trees, building rain gardens or using porous paving alone are not enough to create sustainable real estate. To be truly sustainable, green infrastructure must add value, enhance the occupier experience and be flexible enough to adapt and respond to changing social, economic and technological conditions.
To achieve this, green infrastructure and the industry response cannot be separated from the considerable disruption on other areas of real estate that we are seeing in the 21st century, characterised by fundamental changes in the nature of capitalism and money. The need for long-term income streams has completely changed investment criteria and aims.
In the latter half of the 20th century the nature of money changed. The post-war baby boomer generation in advanced economies were wealthier than previous generations and funded new investing institutions like pension funds and insurance companies. The name of the investment game in the 20th century was capital growth as these investors had to deploy large chunks of capital quickly in high-value assets.