The commercial real estate industry is failing to address the consequences of the extreme weather events that are a rising threat to property values, according to a ULI Europe report.
Despite a doubling of incidences of flooding, storms, typhoons, and drought since the 1980s, and direct losses to real estate and infrastructure now totaling $150 billion a year, losses are being “seriously underestimated” by property investors, with portfolio allocations “rarely taking account of climate change.”
“Extreme weather events are already impacting financial returns in the real estate industry and in the future will continue to do so on a far greater scale,” the report warns.
Intensive efforts are needed to ensure that assets and future allocations are future-proofed, says the report, a theme explored by a panel at ULI Europe’s real estate trends conference in London last week.
Matthijs Kok, professor of flood risk at Netherlands-based Delft University of Technology, said the “big challenge” for the real estate industry was that it needed to focus on the suitability of surrounding infrastructure to cope. “Often, the probability of an event happening is the focus in people’s minds. But what should be taken into account is that the infrastructure is often not up to date.
“We need to look for new, accurate tailor-made solutions. There is an increasing need to incorporate a higher stand of flood defense and resilience in new projects. New technology like air bricks that block water as well as open data can help us,” said Kok. “We need to use the media to show that many measures can be taken.”
Dame Judy Mayhew Jonas said that a quarter of all risings of the Thames Barrier, a flood defense that protects London from tidal surges, had happened since last Christmas. “That is a bone-chilling thought for us sitting here in London,” she said.
Tim Neal, global director for building solutions at built-asset design and consultancy Arcadis, presented some innovative projects underway in the Dutch city of Rotterdam, which he described as “a leader city in this space,” partly owing to its interdisciplinary approach.
Rotterdam’s Floating Pavilion is a pilot project designed via collaboration between local design team Deltasync and Public Domain Architects to address rising sea levels and climate change.
Three connected 40-foot-tall (12 m) hemispheres are anchored to the city’s old harbor, and made from anticorrosive plastic called ETFE, which is 100 times lighter than glass.
“The progressive design came out of a collaborative approach. Rotterdam is blending water management skills with urban planning skills, and investment needs to create growth of the city in the future,” said Neal.
Neal announced on stage that Arcadis had just won a $325 million grant for a concept developed in collaboration with Danish architecture firm Bjarke Ingels Group from Rebuild by Design, an interdisciplinary organization established in response to Superstorm Sandy.
Its bid included a design concept called the “Big U,” which is a series of protective measures stretching from West 57th Street south to the Battery and up around the island of Manhattan to 42nd Street in a U-shape. It includes the use of mechanized floodgates and deployable floodwalls. “These will be integrated into the urban fabric, preserving the livable city space,” he said.