Real Estate Market: A valuable asset

With 2017 global real estate values totalling US$228 trillion, the real estate market is a more valuable asset class than all stocks, shares and securitised debt combined.  The world now owns real estate assets worth 2.8 times its annual income.

Significantly, investment buildings consume around 40% of the world’s energy and contribute up to 30% of annual Greenhouse Gas emissions.  Also, in the developed world, people spend more than 80% of their time in buildings.    So, in terms of tackling the issues of climate change and public health, the real estate sector has a massive part to play.

It’s not just about addressing problems though, there is growing evidence in multiple geographies that a climate-friendly and sustainable real estate sector can both preserve and increase asset value.  An emerging correlation between green building characteristics and investment performance is being recognised in market, expert and academic research connecting “green real estate” positively with key investment fundamentals such as: increased client demand; lower operational costs; reduced rates of depreciation; and higher liquidity.

As a result, Environmental, Social and Governance (ESG) factors which were previously a niche interest among asset owners, asset managers, banks, brokers and investment consultants are now routinely analysed.  Sustainability due diligence is an increasingly important consideration for the real estate market and requires a powerful network of specialists in EHS&S practices. Inogen provides that. This Environmental Alliance has Associates that are working across the sector through the entire real estate cycle to support clients in key areas of sustainability, including contamination assessment and management, energy performance and efficiency, development advice around contaminated land, ground conditions, flood risk and biodiversity, through to resource efficiency, Smart City services and wellbeing initiatives.  The support to the real estate sector with its drive towards achieving global sustainability goals becomes an important issue and Inogen knows that.

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Contact the Author, Alex Ferguson: alex [dot] ferguson [at] deltasimons [dot] com (alex[dot]ferguson[at]deltasimons[dot]com)