The Australian developer Lendlease has attempted to address these points at its Barangaroo South development in Sydney, now its headquarters. The interior space is notably employee friendly and designed to encourage "serendipitous ways of meeting", according to a study by University of Sydney psychologists. The project is committed to achieving carbon-neutral, water-positive and zero-waste status. It also anticipates future climate events in a land known for increasingly intense storms and bushfires, not only in its construction but also its relationship to other buildings, roads and utilities. It has looked at social stressors, too, for residents, visitors and workers, creating a climate change and community plan devoted to adaptation and resilience.
Swire Properties in 2018 launched a comprehensive study of climate-change risk for not only its property assets but also its business operations in Hong Kong, mainland China and at its $1billion Brickell City Centre mixed-use development in Miami. It sought to identify business opportunities as well as risks, modelling its own acute and chronic liabilities alongside localised climate data, for the short and long term.
Swire plans to use the results of this "deep physical risk analysis" to develop an action plan to mitigate risks and build resilience across its portfolios. It also has an enterprise risk management system for climate and water-related risks, and at the start of 2018, it issued its first "green bond", generating $500million to fund or refinance green initiatives.
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Assessors and property owners beware. Valuations are knocked down by a discount of 7% on properties that are already exposed to sea-level rise, compared to less-exposed properties, as shown by a study from the University of Colorado at Boulder and Penn State. No surprise, then, that investors are shying away from risky coastal areas, and even expressing concern about inland cities with climate risk. But the Bloomberg panel also notes infrastructure, land and buildings that plan for business and climate resilience benefit from increased market valuations.
These are not far-fetched, distant problems. Globally, 35% of the properties owned by real estate investment trusts (REITs) are already exposed to climate hazards, according to a report by real estate data aggregator Geophy and Four Twenty Seven, which provides climate-change risk analysis for financial markets. The funds run by developers in Japan, Hong Kong and Singapore are particularly vulnerable. Cheung Kong Property Holdings, Mitsui Fudosan and Sumitomo Realty & Development top the "who's who" with climate risk red flags on their properties. More than 25% of Sun Hung Kai Properties' $56billion portfolio is exposed to sea flooding.
Although these are big, global problems, solutions come first on a small scale.
The Hong Kong-based developer Sino Land is looking to uncover new ways of running an old-fashioned business at its Sino Inno Lab. The initiative sponsors 45 proptech companies, much of whose work is displayed in a 3,000 ft2 incubator in the gritty industrial neighbourhood of Kwun Tong, where there's a mock apartment, kitchen, bathroom and hotel room.
The lab has also welcomed 2,400 guests since it opened in October 2018, many of them trade groups but also competitors such as Sun Hung Kai, Henderson Land and the Shui On Group. All groups are welcome to give their backing to any of the companies.
Promising technologies also get a test contract to apply their work in a real-world Sino project. One of those candidates is a "smart film" that can render a window opaque, semilucent or deep grey, reducing solar gain and the need for air-conditioning. If the company, Film Players, can perfect a totally black filter, Sino will consider removing curtains from some of its hotels.
Daryl Ng, the scion of the Sino family and now deputy chairman, says developers have an obligation to run their portfolios as responsibly and sustainably as possible. "A building is a carbon footprint," Ng admits while giving a tour of the Inno Lab. "So what is a green building? It's one where you make the footprint smaller. And a green building is where you are helping the people in it live a healthier, better lifestyle."
And for Sino, smaller footprints start with small steps. This sultry summer in Hong Kong, a test project has applied Airlite paint to the exterior wall of a warehouse. The paint is designed not only to emit no harmful volatile organic compounds but also to absorb air pollution. Should its porous layers survive Hong Kong's extreme weather, Sino will apply it in car parks and to the exterior walls of existing buildings, as well as inside new apartments. While at the Tsim Sha Tsui Centre that serves as Sino's headquarters, lighting, elevators and air-conditioning and heating systems have been replaced with more modern energy efficient models. "These are easy steps," Ng says, that pay back in energy savings.