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CHINESE VERSION

HONG KONG (5 September 2022) – A report from the Urban Land Institute (ULI), finds that better collaboration between the public and private sectors, stronger government policies on climate change, as well as more consistent and robust risk assessments for assets are key to manage climate risks impacts on real estate value in the Greater Bay Area (GBA).

The report, Mitigating Climate Risk Impact to Real Estate Value in the Greater Bay Area, identifies the climate risks threatening the real estate sector in the region and examines the actions taken or planned by developers, equity and debt investors, insurance companies, non-governmental organisations and the government to account for and mitigate known climate risks. The report also details the consequences for inaction, including divestment from risk-prone areas, interruptions to business continuity, rising insurance rates and infrastructure maintenance costs.

David Faulkner, President of ULI Asia Pacific, said: “The Greater Bay Area is one of the most vulnerable urban regions to climate change. Guangzhou as one of the world’s most economically exposed cities to sea-level rise, together with Shenzhen, are among the 20 largest coastal cities anticipated to have the highest flood losses by 2050. It is pressing for the real estate industry to act now. Together, we need concrete steps to mitigate climate risks, prioritise sustainable buildings, and protect the value of assets in the GBA.”

The report calls on key industry stakeholders to establish a Climate Resilience Coalition to facilitate a coordinated approach to addressing climate risk. This coalition would involve local and regional business associations, developers, and engineering consultants in coordinating action in addition to articulating the benefits of climate risk mitigation for the real estate industry. Recognising that independent action will also be critical to addressing current and future risk posed by climate change, the report poses recommendations to key stakeholders in the GBA real estate market. For instance, developers can define targets on attaining green standard certification for projects and mitigating climate risks identified. Meanwhile, investors can preemptively identify and consider key climate risks in transactions across asset portfolios, and ensure compliance with forthcoming and existing climate change regulations.

Governments can be climate leaders by taking take active steps in assisting the real estate industry in driving climate risk mitigation initiatives. The report recommends that lawmakers take other steps in assisting the real estate industry in driving climate risk mitigation initiatives, specifically by thinking beyond emissions and pollution control, to consider adopting rules relating to reporting on and adapting to climate risk factors for the entire real estate project life cycle.  To gain easy access to reliable information about current and future climate conditions, the report highlights the importance of relevant and robust data to support key real estate players in their decision-making. This would include identifying methods of sharing information about locations and capacities of climate resilience-related interventions throughout the region, obtaining access to privately maintained data sources, and developing a system for data interoperability to allow for analysis and comparison of interventions across jurisdictions.

The Mitigating Climate Risk Impact to Real Estate Value report is based on interviews with investors, developers, insurers, government, and local non-government organisations.

The full report is available online at http://knowledge.uli.org/reports/research-reports/2022/mitigating-climate-risk-impact-to-real-estate-value-in-the-greater-bay-area.

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About the Urban Land Institute
The Urban Land Institute (ULI) is a non-profit education and research institute supported by its members. Its mission is to shape the future of the built environment for transformative impact in communities worldwide. Established in 1936, the Institute has more than 45,000 members worldwide representing all aspects of land use and development disciplines. For more information on ULI, please visit uli.org or follow us on Twitter, Facebook, LinkedIn and Instagram. ULI has more than 2,600 members in the Asia Pacific region. For more information on ULI Asia Pacific, visit asia.uli.org or follow us on Facebook, Instagram, LinkedIn and Twitter.