Asia Real Estate Takes Aim at Net Zero: MTD TV Asia Sustainable Real Estate Forum 2021

Some 80 percent of real estate professionals in Asia Pacific now say that sustainability is important to their organisation’s business, according to the results of a survey released today at Mingtiandi’s Asia Sustainable Real Estate forum 2021 on MTD TV.

That broad commitment to reducing the environmental impact of real estate businesses in the region was among the key findings of a survey conducted by Mingtiandi in June and summarised in the “Sustainability in Asian Real Estate” report released today on the program.

The one hour show, which was sponsored by Yardi, also featured top executives from Manulife Investment Management and Brookfield Asset Management sharing how their companies having incorporated sustainability into their real estate investment strategies.

Geography Matters

With the vast majority of respondents in the survey ranking sustainability as either a top-level concern or at least important to their businesses, 13 percent ranked the issue as only somewhat important and just four percent of respondents said that sustainability was not important to their companies, according to responses to the June poll.

The survey received 136 responses from Mingtiandi readers globally, with Hong Kong-based respondents placing the highest value on sustainability, as 87 percent of those from the SAR said that the issue was either a top-level concern or was important to their organisations.

Singapore ranked just behind Hong Kong with 84 percent of respondents indicating that sustainability was at least important at their companies and 82 percent of mainland China participants gave the same response.

However, in developing markets such as India or Southeast Asia apart from Singapore, only 43 percent of respondents could say that sustainability was at least important to their firms.

Getting to Net-Zero

To learn more about how some of the world’s largest investors are already integrating sustainability into their businesses, Mingtiandi founder Michael Cole welcomed Christoph Schumacher, global head of real assets for private markets at Manulife Investment Management and Stuart Mercier, managing director and head of Asia for Brookfield Asset Management to join the program.

Both Manulife IM and Brookfield are part of the UN-backed Net-Zero Asset Owner Alliance, a group of 46 major fund managers and insurers which have all pledged to transition their portfolios to net-zero greenhouse gas emissions by 2050.

“We have mandated that all of our future real estate investments will be LEED Gold or better,” Mercier told Mingtiandi, referring to the US Green Building Council’s standards for sustainable properties. He added that Brookfield, which has $625 billion in assets under management globally, has committed that all of their assets will be carbon neutral by 2050.

Meeting Tenant Demand

For Schumacher, who joined Toronto-based Manulife to head their real assets division in May, the commitment to net-zero is not only about the environment but also about keeping in step with changing tenant requirements.

“In real estate, initially the move toward sustainability was really driven by our tenant demand and that led to our commitment to achieving the third party building certifications,” Schumacher said. “For many years we have been participants in LEED, CASBEE, BREEM and other certifications,” he added with regard to the sustainable building standards popular in the US, Japan, UK and other jurisdictions.

Globally, Schumacher said that 80 percent of the company’s real estate investments are in sustainability-certified assets, and in Canada such properties make up almost 100 percent of its portfolio. He did note that the proportion of green buildings in its Asia portfolio was slightly lower, at just 61 percent, with the company aiming to bring that level of sustainability more into line with its worldwide average.

Long Term Sustainability

With the COVID-19 pandemic having reconfigured investor expectations globally, Brookfield’s Mercier sees sustainability concerns gaining in importance with the public.

“This is going to be one of the major legacies of 2020 and 2021, that ESG has finally entered the broad lexicon, of not just the investment community but the population around the world,” he said, noting that integrating sustainability into properties will become key to ensuring the long-term value of real estate as public expectations evolve.

The aftermath of the coronavirus experience is also informing priorities for Manulife, with Schumacher pointing to a growing commitment to ensuring wellness for the occupiers of the company’s assets as we head towards 2022.

Data Centres Up Next

Following the sustainability forum, Mingtiandi is preparing for the second edition of its data centre event series, which will be held on MTD TV starting in just two weeks.

In the first session of the Mingtiandi APAC Data Centre Forum 2021, MTD TV will welcome Princeton Digital Group founder Rangu Salgame for a spotlight interview on 31 August which will touch upon the Warburg Pincus-backed company’s plans following its announcement of a $1 billion hyperscale project in Japan.

The series will continue on 7 September with a panel discussion of core data centre strategies in Asia Pacific featuring speakers from Princeton Digital, Nuveen, JLL and law firm Greenberg Traurig.

On 14 September there will be panel dedicated to exploring the potential for sustainable data centres, and then a final session on 23 September will focus on the development of north Asia data centre networks in Hong Kong, mainland China, Japan and Korea, as well as other parts of the region.