A Framework for the Future of Real Estate

The Real Estate CEOs of the World Economic Forum have devised a vision for the future of real estate. Buildings will bring comfort in the future are prepared for the most extraordinary events, are beneficial to human and planetary health, and for all members of society, it is affordable and accessible. It’s true a vision in which the future real estate is livable, sustainable, resilient, and affordable are all words that come to mind when thinking of a city. To deliver on this vision, on this Future Framework. The Department of Real Estate was established to provide a path for people interested in real estate for the industry to change, utilizing the best practices successful business techniques and solutions. Park View City Lahore is providing best lifestyle to people for residential purposes. Park View City Lahore is offering 10 Marla House for Sale in Park View Multan Road Lahore at prime location with affordable price.

Four key pillars

Livability, sustainability, resilience, and affordability are the four pillars of the future vision for cities and buildings. It identifies important facilitators in order to plan a change path.

 Sustainability

Buildings account for roughly 40% of worldwide energy use. Emissions of greenhouse gases. In affluent countries, the current building stock will account for 80 percent of the built environment by 2030, while only a small percentage of buildings — roughly 1-2 percent – are renovated each year. Action must be hastened to attain net zero carbon goals, which include reducing carbon emissions throughout the asset life cycle (e.g., building creation, operation, and decommissioning). This will necessitate energy retrofits of older buildings, which are costly but might reduce or eliminate CO2 emissions by converting to renewables or decarbonized electricity and reducing or eliminating energy demand for heating by two-thirds or more. Buildings will also need to be renovated or repurposed rather than demolished.

Resilience

Futureproofing cities and buildings, as well as the people who live in them, is at the heart of developing resilience, since it mitigates the effects of unforeseen natural and man-made calamities such as climatic, financial, and health crises, while also protecting community cultural identity.

Throughout their entire life cycle, assets must be able to resist a variety of unforeseen shocks and be adaptable to changing consumer demand.

Affordability

It is critical for the overall health of society to ensure that both individuals and businesses have equal access to high-quality living and working spaces. Space and location costs might prevent people from paying other basic living expenses, jeopardizing their employment and fundamental human rights. Affordability must have both financial access and asset criteria that are appropriate:

Financial access” refers to having access to affordable rents, as well as fair down payment and mortgage rates, as well as appropriate running costs (e.g. tax, insurance, repairs).

– “Adequate asset standards”: adequate space and healthy conditions, as well as convenient locations with equitable access to fundamental services (e.g. education, public transportation, and healthcare).

Regulatory framework

Supporting flexible zoning and city growth plans, as well as harmonising existing, fragmented construction rules, can help progress. At every level – from city to city and country to country – standards must become more harmonised.

Regulation can also be used to force change, as in the case of net zero carbon targets; their mandatory nature can be a powerful tool that complements corporate social responsibility goals, or affordability, in which the regulation can incentivize and subsidise supply and/or demand to help close market gaps.

Framework development

The development of this Framework for the Future of Real Estate is based on a collection of views from industry professionals as well as best-in-class case studies submitted by members of the World Economic Forum Real Estate Industry community from around the world.

Affordability: Delivering reduced life cycle operational costs

The real estate market is very fragmented. In the past, a developer constructed a building, an investor purchased a building, and an occupier occupied a building, and their incentives were not aligned. Nowhere has this been more evident than in the office sector, where traditional office developers have sought to build at the lowest possible cost, without accounting for operational costs.

However, as demand for net zero carbon buildings grows among investors and occupiers motivated by environmental, social, and governance (ESG), developers will need to align their incentives with investors and occupiers while also considering life cycle costs. These structures may necessitate. They will require a somewhat larger initial investment, but will be more reasonable in the long run due to lower operational costs. Furthermore, these structures are more appealing to tenants. According to JLL research, more sustainable buildings attract higher rental values of 6-11 percent 43 and have shorter vacancy times.

Improving real estate transparency, particularly in relation to service charges, is also important for lowering overall costs. It’s impossible for renters and landlords to collaborate on cost-cutting measures like utilities when service rates are completely opaque.

Industrial and logistics

This expansion is accompanied by rising expectations for the efficiency of logistics facilities. Online sales are twice as variable as those from brick-and-mortar establishments, and e-commerce-related logistics are three times more labor demanding than traditional operations. 44 Consumers are increasingly seeking faster delivery times – often overnight – and are three times more likely to return things purchased online than in a physical store. 45 Furthermore, when compared to forward logistics, the reverse logistics supply chain necessitates up to 20% more space and labor capacity.

Sustainability

Given the multi-store nature of retail real estate footprints, having a thorough decarbonization strategy is essential. It’s also critical for tenants and landlords to collaborate closely to understand and improve building performance, as well as to design with net zero carbon goals in mind, such as strategically using low-carbon materials, employing circularity when changing displays, and addressing overall energy usage.

Housing

Housing is a basic service that all members of society should have access to in order to ensure their safety and well-being. Housing, on the other hand, is a major financial burden for a large portion of the world’s population and is generally unavailable.

The rise of real estate

Real estate, which accounts for 10% of global GDP, is a key investment asset class. The last ten years have seen unparalleled increases in value (+3% compound annual growth rate) 2 and investment volume (+14 percent compound annual growth rate). Three as a result of historically low interest rates, record “dry powder” (reserves), and increased securitization of real estate. Commercial real estate transaction volumes have been gradually increasing since 2009, according to JLL, and reached a new high in 2019, surpassing 2007 levels.

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