As a passionate believer in the power of environmental, social and governance (ESG) to drive value in real estate, I’ve been encouraged by the accelerated integration of sustainability into mainstream investment strategies in the past few years.
We’re becoming quite good at making buildings more energy efficient, and doing it more often. I hope we broaden this to focus on social impact more – the ‘S’ in ESG. By helping to tackle entrenched social problems, buildings can achieve their higher purpose and make enduring, authentic connections between our tenants and the community. This can only be good for landlords and investors.
It’s clear that certain headwinds will restrain economic activity and threaten further property value growth. However, given the weight of capital still out there and a stark shortage of new supply, I expect to see a somewhat schizophrenic market; some assets will suffer, while others will be in surprisingly high demand. The properties that outperform will be the most forward-looking buildings that have adapted to the paradigm shift in occupational trends.
Resolution: To ride my bike to work as often as possible – I recently got an electric Brompton and love it. It’s also a great way to experience the issues our tenants and their staff face as they try to make healthier lifestyle choices.
Basil Demeroutis, managing partner at FORE
2019 forecasts: what lies ahead
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2019 forecast: Basil Demeroutis (FORE)