A New Investor Consensus

The Rising Demand for Healthy Buildings

Examining Investor Viewpoints on Health and Wellness

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The Center for Active Design is pleased to share a new report detailing the growth in demand for healthy buildings. A New Investor Consensus: The Rising Demand for Healthy Buildings summarizes a comprehensive health and wellness study of global real estate investment managers and stakeholders representing an aggregate US$5.75 trillion assets under management (AUM) and portfolio investments in real estate totaling approximately US$1.03 trillion. This report was created in partnership with the United Nations Environment Programme Finance Initiative (UNEP FI) and BentallGreenOak (BGO).

Findings draw from a quantitative survey as well as qualitative structured interviews designed to gauge investor sentiment on integrating human health into real estate investment decisions and gain insight into future directions for the sector. The report reveals that COVID-19 has elevated the importance of health in investment decision-making, with 89.5 percent of respondents signaling their intent to enhance their wellness-related asset management strategies in the coming year. The need for healthy buildings has been steadily rising over the last decade, with nearly 70 percent of respondents indicating that they were seeing increased demand prior to the pandemic.

The report highlights an increasing investor awareness of the importance of health and well-being to their environmental, social and governance (ESG) strategies and the link between building design and function, and personal and societal health and wellness. This has given rise to a more concerted focus on the “S,” or social component of ESG, which has traditionally lagged behind the more well-defined environmental and governance pillars. The findings of this report signal a paradigm shift for the industry that is leading to a fresh evaluation of the role that the built environment plays in the safety, health and wellness of its occupants.

AT-A-GLANCE: Key Findings from the study.

  • A spike in demand for healthy buildings. Against the backdrop of COVID-19, 100 percent of respondents in Asia, 90 percent of respondents in North America and 85 percent of respondents in Europe expressed that current demand for healthy buildings is moderate or strong. Collectively, nearly 87 percent of respondents experienced increased demand over the past 12 to 24 months.
  • Demand expected to keep growing. Ninety-two percent of respondents agree that demand for healthy buildings will grow in the next three years.
  • Office and residential tenants driving demand. Ninety-five percent of respondents identify tenants as the leading stakeholder group driving demand, with most of that strong or moderate demand coming from the office (87 percent) and residential sectors (61 percent), followed by retail (48 percent). This reinforces the conclusion that the pandemic has brought health and wellness to the fore in spaces where people primarily live and work.
  • Diverse drivers behind the investment strategies. While 89.5 percent of respondents plan to enhance their company’s health and wellness strategies in the coming year, the motivations for doing so are diverse – respondents cite COVID-19 response (100 percent), human health (86 percent), tenant satisfaction (71 percent), market differentiation (71 percent), enhancing reputation (57 percent) and compliance concerns (43 percent) as core reasons for investing in these strategies.
  • A chance to align on best practices. Nearly three-fourths of respondents (74 percent) agree that tracking data is a key priority for implementing healthy buildings into their ESG strategies. The availability of healthy building certification systems – which 61 percent of respondents report using in some form – can offer a pathway for the industry to more consistently accomplish this by establishing clear benchmarking and reporting standards.

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Report Citation:
Center for Active Design, UNEP FI Secretariat, & BentallGreenOak. (2021). A new investor consensus: The rising demand for healthy buildings. https://www.fitwel.org/new-investor-consensus/

 
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    A New Investor Consensus: The Rising Demand for Healthy Buildings