Home Greenhouse Sustainable real estate, a “real opportunity” for investors

Sustainable real estate, a “real opportunity” for investors


Investing in sustainable buildings could offer a real solution to reducing emissions in one of the most polluting sectors in the world, said Taronga Ventures, an investment company focused on sustainable innovation and technology.

Buildings currently account for 39% of global greenhouse gas emissions, according to UN data. Almost a third (28%) of the global total is the result of the operation of buildings – called operational emissions, while 11% comes from building materials and construction.

“This is a largely unknown fact,” Avi Naidu, co-founder and managing director of Taronga Ventures, told CNBC’s “Squawk Box Asia” on Friday.

“A lot of people think it’s transportation, it’s methane, it’s food that’s a big driver, but it’s actually the built environment,” said Naidu, whose company invests in. innovation in real estate and construction.

Dispel misconceptions

This lack of awareness, however, presents a “huge opportunity” for investors, Naidu said, noting that the technology and appetite for sustainable building solutions are already here.

“There is a misconception in the markets and in particular on the part of the owners [that] it will cost more. Absolutely, as the technology is first introduced, it sits higher on the cost curve, [but] as it’s more and more adopted, we see it moving further down the cost curve, ”he said.

The exterior of the Parkroyal Hotel in Singapore.

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“We are also starting to see consumers and investors paying a premium for products and assets that are ESG-aligned and much more sustainable,” he continued.

Environmental, social and governance investments – or ESG – have become increasingly popular in recent years, mainly in the wake of the Covid-19 pandemic.

“So a lot of the cost is increasingly being mitigated by the ability to command higher rents, higher asset values, and that’s really how landlords should think about it,” he said. he declares.

Decarbonize the economy

Decarbonizing the economy could be a market opportunity worth up to $ 30 trillion over the next two decades, according to Goldman Sachs.

For its part, Taronga Ventures is investing in green building solutions “along the entire value chain,” Naidu said. This includes the design, construction and operation, but also the reallocation and final destruction of buildings.

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As we build a new stock, “we have the opportunity to think about different materials, different types of concrete, different methodologies that make the process safer, smarter and obviously, from a carbon perspective, more efficient”, did he declare.

Naidu’s comments precede the 26th United Nations Conference of the Parties on Climate Change, known as COP26, in Glasgow in November, where world leaders will discuss efforts to tackle the climate crisis.