Biophilic design, green certifications and materials, and on-site energy lead the way.
With the Asia Pacific region comprising 4.3 billion people and many of the world’s biggest cities, the sheer scale of the sustainability challenge there is daunting. However, asset owners are increasingly using more sustainable designs and technologies to boost the performance of their assets.
Given the fact that the Asia Pacific region is still heavily reliant on fossil fuels and nations such as China and India continue to expand their coal-fired electricity supply, there is more pressure to decarbonize elsewhere, which offers an opportunity for real estate, says Amie Shuttleworth, head of sustainable investing at Undivided Ventures, a Hong Kong–based property technology (proptech) investor.
“There is an opportunity to make a big impact in Asia, in the decarbonization of operational and new-build assets,” Shuttleworth says. “One of the reasons for that is, we don’t have the grid decarbonizing at the same trajectory as in Europe, so more needs to be done at the asset level.”
Certified Green
New buildings are now more likely than not to seek some sort of green certification. According to CBRE research, 63 percent of new buildings in the region are green certified, led by Australia and Singapore, where certification is compulsory. This means that ever more developers are factoring sustainability into design.
Architects and designers also have begun to look holistically at the urban environment, rather than just the asset in isolation. David Buffonge, cofounder and executive director at architectural design firm Lead8, says, “Asian cities tend to be dense and vertical. A lot of design work is now focused on bringing in nature and green space, creating public realm, and connecting vertical spaces.
“In Asia, we are beginning to see more new buildings adopt biophilic design and inclusive approaches that create places accessible to the public,” he continues. “Ironically, today’s design technology allows us to create more natural, open spaces with airflow and shade, which harks back to the way buildings were designed before mechanical cooling.”
One building that has adopted biophilic design is CapitaSpring in Singapore, developed by listed property group CapitaLand. This 969,000-square-foot (90,000 sq m) structure comprises 89,300 square feet (8,300 sq m) of green space at multiple levels, much of which is open to the public. The building also features landscaped “breathing space” between it and the surrounding buildings.
Designing for Efficiency
An important design consideration for both sustainability and the bottom line is efficiency. Wasted space is wasted money in dense cities with high land values, but it is also more sustainable to use space as efficiently as possible.
“Real estate isn’t efficient if it is only used half the time. Design that blurs the boundaries between work and leisure space and encourages 24/7 usage is a more efficient and sustainable use of limited space,” says Buffonge.
Mixed-use developments above transport nodes—a key feature of Asian cities—contribute to more efficient use of space; however, some cities are looking to advance this further. The 2019 master plan from Singapore’s Urban Redevelopment Authority envisages transforming the central business district into “a 24/7 mixed-use district so that the CBD [central business district] will not only be a place to work, but also a vibrant place to live and play in,” according to Buffonge.
Sustainability considerations also are influencing the orientation and design of buildings in the Asia Pacific region. One striking example is the Quayside office development in Kowloon, Hong Kong. Developer Link REIT opted to rotate the building 45 degrees from the road to maximize harbor views and increase airflow around the building. The building also features shading fins, which reduce the heat gain from sunlight as well as the need for mechanical cooling.
For property developers, the oft-cited mantra that “what can be measured can be managed” is at the heart of their sustainability work, meaning that data, design, and technology are intertwined. John Haffner, deputy director, sustainability, at real estate developer Hang Lung Properties, says, “Data analytics is critical to everything around sustainability. For the last few years, we have focused on installing more energy and water meters, so we have the data to enable us to benchmark and improve performance.
“We have also established a robust digital data collection system for Scope 1 and 2 emissions. And we are now collaborating with GIGA for the RESET certification for an office renovation. They can provide us with carbon, circularity, and health scores for the materials we use.”
Carbon Capture
“While artificial intelligence [AI] is hitting the headlines for its potential dangers, more basic forms are proving essential technology for asset owners,” Haffner says. Hang Lung is also piloting the use of AI for building optimization in its headquarters in Hong Kong to drive energy efficiency improvements; the company expects to cut electricity consumption from the building’s heating, ventilation, and air conditioning (HVAC) system by at least 10 percent.
“Buildings in the future will have something close to real-time optimization,” he says.
There are important carbon savings to be realized in the fabric of buildings. “Materials are an important focus,” Shuttleworth says. “We don’t use that much steel compared to other regions, so reducing concreteis the priority, especially as new buildings can be quite overdesigned in this regard.”
New technology is helping developers design buildings that use less concrete than is typical in the region.
There also is ongoing research into concrete that can be produced with a smaller carbon footprint.For example, one of Undivided’s portfolio companies is Structure Pal, which uses AI to help design buildings using less concrete. It claims to be able to reduce the amount of concrete used in a development by 15 percent.
Meanwhile, Hang Lung has been collaborating with CLEANCO2, a proptech startup affiliated with China’s Zhejiang University. CLEANCO2 uses carbon dioxide capture, use, and storage (CCUS) technology to produce low-carbon concrete, bricks, and byproducts such as aggregate for building construction. Such products could be important in reducing embodied carbon from construction.
As well as using innovative materials, there is a much greater use of local and recycled materials, says Buffonge. “Not that long ago, developers would import marble from Italy as a way to differentiate, but now they are requesting to use recycled or upcycled materials.”
On-Site Power
Another focus for asset owners in the Asia Pacific region—especially important where it is hard to get electricity from renewable sources via the grid—is on-site power generation.
For example, ESR Group, one of the largest managers of Asia Pacific industrial space, recently released its 2030 ESG Roadmap, in which it pledged to build 1 gigawatt of solar photovoltaic (PV) capacity by 2030, a tenfold increase from the 100 megawatts installed at the end of 2022. Meanwhile, Hang Lung has installed on-site solar panels at eight properties that generate over 600 megawatt-hours of renewable energy annually.
Hang Lung also has a small ground energy system, which uses heat from the ground as a “free” source of energy, at its Westlake 66 project in Hangzhou, something still relatively unusual for the region. The potential for ground energy is something that Haffner believes is being neglected by real estate. “It is like a big battery in the ground,” he explains.
Rooftops need not necessarily be used to generate electricity but as a means to reduce its use.
“As well as integrating solar PV into designs, we see radiative cooling technologies which reduce the need for mechanical cooling,” Shuttleworth says. “Also, Asian data centers are being designed with as much passive cooling as possible, which means everything from intelligent management systems to cooling gel for server racks.”
Much of the work being done by Hang Lung and other asset owners is in its early stages and, like all asset owners, the company has to address legacy properties and designs. Some older buildings in Hong Kong still lack a building management system, for instance, and are being retrofitted to bring them up to scratch.
Embodied Carbon
The real estate industry in Asia also lags that in Europe in terms of dealing with embodied carbon.
“With regard to embodied carbon, no one knows what ‘good’ looks like in Asia, because we don’t have the data and benchmarking available in Europe. No one knows if something is a good building or retrofit, which is a real challenge for the industry,” Shuttleworth says.
There are two main challenges for Asian asset owners seeking to use proptech to improve sustainability. First, the region lacks the critical mass of proptech companies and venture capital investors that can be seen in Europe and the United States. However, this is changing with specialist venture capital firms such as Undivided, Taronga Ventures (an Australian sustainable proptech investor), and U.S. firm Fifth Wall, which opened an office in Singapore earlier this year.
The second major hurdle is that proptech solutions need to be effective at scale.
“That is the big challenge for real estate. We need collectively to find a way to accelerate the scaling of these technologies,” says Hang Lung’s Haffner. “We consider it very important to partner with innovators and universities on these technologies in the hope that they can be scaled up to work for the industry.”
Key developments for the region in the future will be the adoption of more passive design features and more intelligent automated management and the continued development of proptech capital markets. Meanwhile, everyone working in sustainability in Asian real estate declares that more industry collaboration is needed if it is to make real progress in sustainability, Haffner says.
MARK COOPER is a freelance journalist based in Hong Kong. He is editor and cofounder of Sustain, an online resource for real estate sustainability.
