Growing enthusiasm over environmental, social and governance (ESG) issues has prompted property developers to pivot towards a more sustainable model. At the same time, the Covid-19 pandemic has led to the adoption of the more flexible work-from-home arrangement, which in turn has fuelled demand among homebuyers for a greener living environment.

The focus on carbon emissions and energy consumption has sharpened, along with technology related to health and hygiene. “It becomes part of the [lifestyle], especially during the pandemic, when people are working from home,” explains Andrew Young, associate director at Sino Group.

Speaking at the recent Asian Financial Forum (AFF) in Hong Kong, Young says real estate is no longer merely an asset class but has evolved into a lifestyle symbol, for which customers are willing to pay a premium.

Similar to ride-hailing platform Uber, property developers will soon be a service provider to homebuyers who will be more proactive in communicating what they want, the characteristics of residential space they are looking for.

With more investors setting their sights on sustainability, property developers are becoming more conscious of the ESG aspects of their projects.

“The future of property is about wind, low carbon, and being healthy,” Elizabeth Kok, director and senior adviser of Swire Properties, tells the same AFF session. Stakeholders expect property developers to focus on their ESG performance in both new and existing projects, she adds.

As ESG is still a nascent development in the real estate sector, its social and economic impact on the industry is hard to gauge in the short run. “But we firmly believe that if we invest in and build sustainable buildings, we are essentially accumulating competitive advantage for our business,” Kok says.

Young adds: “Investors now look at listed companies and their ESG actions. Investment funds are asking the same questions. This will invariably put pressure on developers to act more responsibly.”