Sustainable Real Estate Investing

Sustainability is the only viable path for the future and it is an important concept for the real estate industry, according to the white paper Sustainable Real Estate Investing found on the Avenue Living Asset Management Ltd. website.

“Individuals and institutions need to commit to the United Nations’ Sustainable Development Goals, as they are the actionable steps required to meet the needs of today without jeopardizing the needs of the future,” writes Grant Alexander Wilson, Ph.D., Faculty Member, Department of Management and Marketing, Edwards School of Business, University of Saskatchewan.

“Sectors, like real estate, have large roles to play, based on the number of areas they impact and the degree to which they impact these goals. New real estate initiatives must be approached with a sustainable development perspective. Furthermore, there is a tremendous opportunity to engage in sustainability initiatives with existing real estate properties. Ultimately, these initiatives should not be met with opposition, but instead with optimism due to their long-term and multi-dimensional performance benefits. In short, empirical evidence suggests real estate companies do well by doing good.

“Sustainable development in real estate is highly salient, as real estate directly impacts many of these goals (e.g. poverty, infrastructure, cities, energy, etc.). Moreover, real estate’s influence on certain areas is second to none (e.g. carbon emissions and raw materials). According to the International Energy Association (2021), it is estimated that real estate accounts for “one-third of global final energy consumption and 40 per cent of total direct and indirect carbon emissions.” According to Eichholtz et al. (2010), buildings are also responsible for 40 per cent of raw material consumption. With population growth estimates, these conditions are likely to increase. However, with its challenges, there are also opportunities.

“Among the many Rs of sustainability are reuse and repurpose. The continued use, renovations, and upgrades of existing rental stock for the future are of critical importance. Based on data from Canada, nearly 90 per cent of the 2,126,060 residential rental properties were built before the year 2000  . . . This data shows that existing rental properties serve as the industry’s foundation. Although new sustainably-build properties are important, conservation and sustainability initiatives for the existing residential stock are arguably more important.”

The full report can be found here.

(Content supplied by Avenue Living Asset Management Ltd)

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