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Challenges Real estate

Read more about the different challenges below:

Reducing the climate impact of real estate
The real estate sector is responsible for almost 40% of the global energy and process-related emissions. The real estate sector is a traditionally conservative sector and currently lags behind when compared to the efforts of other sectors to mitigate climate change and move towards circular economy. In order to mitigate the effects of climate change and for the Paris Agreement to succeed, the contribution from the real estate sector is essential.

Reduce the shortage of affordable housing
In some metropolitan areas the supply of affordable housing is under pressure. After the financial crisis the real estate market took a long time to recover, which halter the construction of new housing. This is accompanied by low interest rates, which make real estate a lucrative investment option for investors. Shortage of affordable housing affects the livability of cities in two ways. First, high prices of housing leads to a more restricted living space. Second, this restricted living space leads a poor quality of life due to overcrowding, pollution or smog problems.

Waste and linear thinking in the sector
The real estate sector is a large consumer of materials. Rapid urbanization puts stress on the demand for such materials. In order to combat material scarcity a transition towards a circular economy is necessary. This requires a new approach and new business models. It will require a review of upstream and downstream impacts. Circular business models have the potential to deliver improved financial performance. However, investor and construction client communities must lead the adoption of circular principles within their projects.

Keeping existing properties up to date
Changes in demographics and society require existing buildings to be updated, both in terms of sustainability (already covered) but also user needs. The COVID-19 pandemic has accelerated the shift of employees working from home. The role of offices will change, as will the demands from tenants. As for retail, online retail is expected to accelerate even further, while the desire for physical retail buildings will remain in some form. Aging populations and groups with special needs require adaptations to existing structures.

Improve the health and well-being of residents
Smart buildings will become the norm within real estate. The high prices of real estate and rapid urbanization will put a great pressure on the livability of cities. The pandemic has further accelerated the transition of a focus towards occupants’ health and well-being. In the coming years the real estate sector will have to improve the standard of living and the quality of life of its inhabitants through the developments of smart buildings.