The Changing Nature of Real Estate Investment and Delivery
6 February 2020
We know we need to green our cities to adapt to the impacts of climate change – but who is going to pay for it?
Cities worldwide are turning to nature-based solutions in the face of serious impacts from climate change and biodiversity loss. Policy makers, planners, developers and designers are adopting a green infrastructure approach, integrating plants soil and water into the urban fabric, to provide multiple ecosystem services and benefits – cooling the city, filtering air and water pollution, reducing surface flooding and improving health and wellbeing.
London has been at the forefront of green infrastructure policy and practice, with a game-changing green roof policy since 2008. The new London Plan’s Urban Greening Factor will also encourage greener new developments through the planning process.
But faster and more comprehensive delivery is needed to address the climate emergency and other environmental challenges. The real estate sector needs to be a driving force too.
Leading on from The Real Estate Debate chaired by Prof Andrew Edkins at EUGIC 2019, this event aimed to address in more detail some key issues:
- What financial instruments and mechanisms exist or are needed to support green infrastructure investment?
- How can insurers, investors, developers and real estate owners/managers participate
- What barriers and challenges exist? What solutions need to be shared?
- How can we finance green infrastructure for a climate-adapted, healthy and resilient city?
More than a hundred professionals from across the real estate sector – asset managers, investors, insurers, developers, as well as housing and regeneration policy makers and decision-takers – attended the event.
Thought leaders from real estate development, finance, insurance, policy and design and asset management explored the challenges of financing the delivery of green infrastructure through two sessions.
Shirley Rodrigues, Deputy Mayor of London for Environment and Energy, opened the event, setting the London context, in terms of the very real value of nature and green infrastructure to Londoners and visitors, as well as how the Mayor’s office and the GLA have been working to embed green infrastructure and nature-based solutions approaches in policy and encourage its delivery across the capital.
Prof Andrew Edkins Director of BREI, chaired the first session, exploring the environmental challenges faced by cities, the drivers for real estate investment, and how green infrastructure will be essential for a resilient future.
Peter Massini, Green Infrastructure Lead at the GLA, set out the scenarios London will be facing within the next twenty years, including more severe and frequent weather events, heatwaves and storms, and greater risk to the public’s health as well as to economic activity.
Roger Madelin, Head of the Canada Water Development at British Land, set out how important green infrastructure is to successful developments and liveable cities.
Prof Yolande Barnes, Head of International Research for Savills for many years, now Chair of BREI, proposed that we can’t afford not to work with nature – in fact, that green infrastructure means business.
The discussion that followed explored some of the main barriers to uptake and delivery, especially how policies like the Urban Greening Factor are emerging to address new build – but what to do about retrofitting green infrastructure to existing real estate?
Session 2, chaired by Christine Murray, Editor in Chief of The Developer magazine, unpacked these issues in more detail, with short 5-minute provocations from real estate investment, development and green infrastructure leaders.
Edward Vaughan Dixon, Head of ESG at Aviva Investors Real Assets stated the need to look at tools and mechanisms within the climate risk and insurance sector that could help unlock investment in green infrastructure.
Chantal Henderson, Director of Commercial Finance for the Grosvenor Estate, gave her perspective on the risks and opportunities of urban greening, especially how financial reporting within the next two years will require asset valuation to include how resilient an asset is to climate risk – a potentially huge game-changer.
Félicie Krikler, Director of Assael Architecture, showed how landscape-led masterplanning can provide key to good development design, delivery and value. Architects and landscape architects have a crucial role to play in showing clients that a better-quality scheme is achievable.
Chris Langdon, Investment and Development Director at ENGIE UK, discussed how ENGIE is exploring the opportunities and challenges of climate-adapted regeneration programmes, with examples of restorative landscape approaches to improve higher-quality living and working environments.
Finally, Dusty Gedge, President of the European Federation of Green Roof Associations, Director of Livingroofs.org and international consultant on climate adaptation through nature-based solutions gave his perspective on 30 years of changing the landscape of London’s real estate, through policies like the London Green Roof policy, providing 1.5M square metres of new green roofs in the ten years since he co-wrote it with Gary Grant.
There followed some excellent discussions on the challenges going forward such as how to spread the knowledge and awareness needed to inform new development as well retrofitting existing real estate.
The event finished with an informal drinks reception, continuing discussions and connecting with potential new partnerships being discussed to take the work forward.
A full report of this event and films of the presentations and interviews with speakers and some of the attendees will be released soon.