Urbanization and Sustainability: Asia
Please take part in our online Poll, register your response and view the results.
Peter Hilderson, Jones Lang LaSalle, Asia Pacific, Energy & Sustainability Services.
Our Global Chairman of Energy & Sustainability Services, Dan Probst, recently spoke about the trends impacting real estate sustainability practices – improvements in transparency, consistency in standards, public-private partnerships and growth in solar. Across Asia Pacific, these industry trends are encountering a set of regional dynamics that are likely to increase the probability that Asia will soon become the world leader in environmentally sustainable business practices. The impact on the real estate sector is immense, and is encouraging property investors and occupiers to fundamentally change the way they approach the procurement of assets or the acquisition of space.
The region is in the middle of a building boom unprecedented in human history. This is driven by perhaps the single most seismic change under way, the rapid transition to urbanization. At present only 40% of Asia's population lives in cities, compared to over 70% in most Western countries. As the region develops and the population moves to the cities for jobs, demand for built space seems insatiable. In China and India alone, over a half billion people are expected to move from the countryside to cities by 2050. Such a rate of development, unless planned correctly, will lead to risks in the quality of that development and adverse impacts on the environment.
The migration of people to cities, and the growth of companies and industry that follow, will place a huge strain on the region's natural resources. The economic and social ramifications of this resource squeeze have thus far been mitigated by the leaps in ‘quality of life' stemming from rapid growth. However, after a decade of development, the equilibrium between improvement in ‘quality of life' from economic growth and deterioration in ‘quality of life' from unchecked development is shifting. Local communities are becoming increasingly vocal over the impact on the environment and their ‘quality of life'. This is leading property developers and corporates around the region to aggressively improve and market their green credentials to the point where building certifications will soon be the new ‘normal' for prime properties.
These threats of mass urbanization and resource constraints are leading Asia into progressive environmental policy. The pressure is forcing policy makers to view sustainability as a vehicle for growth rather than a hurdle, encouraging them to leverage proven economic models, such as caps with trading options, to integrate sustainability into the fundamental underpinnings of the region. The examples of these initiatives are many. Australia has introduced a carbon tax and property disclosure requirements; China's 12th Five-Year Plan is centered around clean tech industries and carbon trading; and Singapore is mandating green buildings - to name just a few.
As increasing resource constraints and recent legislative policies accelerate the shift to greener buildings, and the rate of urbanization multiplies adoption into an historic scale, we expect the next few years will demonstrate the region's emerging role as the leader in environmentally sustainable business practice in real estate. As a committed partner to this shift, Jones Lang LaSalle will continue to advise our clients and the community through channels like this publication on how they can align these trends with their own business strategies