Built environment technology investor, Taronga Venture’s Managing Partner, Avi Naidu, shares with Asian Property Review about how technology is key in creating a more sustainable and valuable built environment.
The real estate sector is still responsible for 39% of total carbon emissions globally (UNEP). What can be done by property developers in Asia to make built spaces greener, cleaner and more efficient?
An increasing number of Asian developers are building more energy-efficient buildings, however, progress remains slow. What developers can do is to set targets, adopt standards and measure progress. A sizeable portion of a developer’s carbon footprint lies outside of their business operations and direct control, thus they need to actively engage their supply chains and stakeholders to mitigate their company’s climate impact and add value to the communities that they operate in.
They also need to look at the lifecycle of their assets and value chain as a whole; from conception and design to the materials in the build, operations, and infrastructure, and challenge each stage of the process.
Due to rapid urbanisation in Asia, there has been a significant impact in the development phase in particular, opening up opportunities for technology to make construction processes more efficient, cheaper, safer and more transparent.
Avi Naidu, Managing Partner of Taronga Venture
For example, carbon emissions can be influenced at the construction phase of the asset lifecycle. CarbonCure, an investment Taronga Ventures has made alongside Microsoft’s Climate Innovation Fund and Amazon’s Climate Pledge Fund, is a technology that allows existing carbon waste to be sequestered into concrete, making the product stronger, thereby reducing the amount of cement used and carbon emitted.
There is a big push from leading owners and operators to become carbon neutral, with net zero targets publicly declared from now until 2050. In recent years, we have seen a growing interest in having clean technology solutions for the built environment, and more longer-term initiatives introduced into portfolios. Global capital providers are beginning to recognise that a greener building is generally a more valuable building, and that by implementing these technologies, their portfolios can become more sustainable and on their way to carbon neutrality.
[ihc-hide-content ihc_mb_type=”show” ihc_mb_who=”1,2,3,4,5,9″ ihc_mb_template=”1″] How has Covid-19 changed the industry; has it accelerated the demand for greener, cleaner spaces?
Covid-19 has accelerated the demand for greener, cleaner spaces as the installation of green building technologies in shopping centres, offices and warehouses have shown that these can help limit the spread of the Covid-19 virus and stand them in good stead against future disease outbreaks.
When commercial real estate services firm, CBRE, surveyed 264 tenants in Asia-Pacific on their industry’s response to the Covid-19 crisis, nearly half of the tenants surveyed believed that the industry’s response to the Covid-19 crisis would lead to a stronger preference for buildings with wellness and environmental features.
As businesses recover from COVID-19, we have seen that across the entire real estate sector, internal barriers of resistance have eroded, and greater use of innovation and technology has become the only way of returning to some level of normality.
There is a demand for ‘healthier’ buildings across commercial, retail and residential, and new innovations such as air filters, hands-free sensors and cleaning technologies have provided a safeguard for tenants and employees. An example of this innovation is Singapore-based SmartClean, an emerging technology company in our RealTechX Singapore innovation program. SmartClean uses smart sensors to quantify and monitor cleanliness and hygiene within a building, providing real-time visibility into cleanliness levels.
The industry has also seen a greater level of focus on emerging technology companies that deliver innovative solutions to improve energy utilisation and sustainability outcomes. The adoption of this technology has become a differentiator – making corporates more attractive to institutional capital and portfolios more attractive to tenants. There is now a clear pressure to incorporate sustainable technology and innovations that improve long term resilience within real estate portfolios to gain market advantage. What are the emerging technologies and innovations that have proven useful and are adopted by developers in Asia?
Increasing the use of renewable energy, smart building management systems that optimise operations and practical technologies like water-saving taps, energy-saving lights and district cooling, are some of the innovations being used by developers to cut their buildings’ operational emissions. Within tropical cities, the aim of developers has been to keep the heat down and, at the same time, adapt structures to their natural surroundings, which has inspired the use of innovative technologies, such as the hanging gardens of Singapore’s ParkRoyal Hotel and the angled shading of Malaysia’s Suruhanjaya Tenaga Diamond Building.
Examples of emerging technologies from Taronga Ventures’ portfolio include:
OpenSpace (Asia/global): Using 3600 cameras combined with advanced artificial intelligence (AI) and machine learning technologies to capture a complete visual record of a construction sites, share it via the cloud, and track progress remotely, enabling greater collaboration and risk mitigation between project stakeholders, whilst creating an extensive digital record.
enVerid (SG): Traditional commercial HVAC designs rely on massive volumes of outside air to maintain acceptable indoor air quality, resulting in oversized HVAC equipment and often a 30-50% waste in HVAC energy consumption. To eliminate this waste, enVerid’s HLR technology cleans a building’s indoor air at a molecular level, enabling the building to use far less outside air while improving indoor air quality.
Dash Living (HK, JP, SG, AU): Next generation co-living residential solution in Hong Kong, Singapore, Tokyo, and Sydney. Dash Living’s mission is to create a global accommodation community through sharing economies, tech, and unique tenant experiences, empowering discerning urban professionals to live and thrive in the most expensive cities in the world.
Citadines Balestier SG
“Singapore’s pioneering Green Mark standard is now more widely used in Asian countries than the US Green Building Council’s LEED standard.What are the direct cost savings in utilising new tech and innovations?”
The utilisation of new tech and innovations has translated into cost savings through reduced operations costs, facilities management costs, future maintenance costs and transactions costs. Technological innovations have also vastly reduced the capital outlay required to invest in energy projects. A year-long study by Squire Mech Pte Ltd (jointly with RSP Architects Planners & Engineers (Pte) Ltd, Building System & Diagnostics Pte Ltd and Arcadis Singapore Pte Ltd), found that owners of Singapore’s Green Mark buildings reap greater energy and water savings throughout its lifecycle, and these savings outweigh the early investment cost. For years, developers have been talking about sustainability and Environmental, Social and Governance (ESG). What is the progress made so far and how can it be further improved?
There’s been wide implementation of various sustainability frameworks for the built environment, including GRESB, WELL, LEED and Green Mark to name a few, which has pushed more real estate asset owners, investors and stakeholders to recognise their industry obligations in understanding and actively managing ESG and climate-related risks as a routine component of their business-thinking, practices and management processes. Investors are also increasingly recognising that ESG information is crucial to understanding the mission, strategy and management quality of real estate companies. Thus, aside from only preventing climate-related losses, real estate professionals are shifting their focus onto generating real value through a more responsible approach. Technology has a key role to play in creating a more sustainable, and simultaneously valuable, built environment. Which country in Asia can be held up as a good example of its real estate industry having largely adopted most of the ESG’s recommendations?
Singapore is modelling best practices for the Asian built environment, with the World Economic Forum classifying the city as one of the 10 Asian cities “most prepared for the future”. The city is working hard at both a government and enterprise level to tackle climate change, with the government implementing the use of regulations in its response to the urgent threat of global warming. Singapore’s pioneering Green Mark standard is now more widely used in Asian countries than the US Green Building Council’s LEED standard, and Singapore aims to have 80% of its building stock achieve Green Mark standards by 2030.