To appreciate the explosive urbanization taking place in Asia, consider this analogy: every 40 days, a city the size of Boston is built in Asia. Of the $24.7 trillion in real estate investment opportunities predicted by 2030 in emerging cities, $17.8 trillion (72%) will be in Asia. While this growth is exciting for the real estate industry, it brings with it the social and environmental issues that come with it.
To promote a sustainable and innovative approach to this growth, the management of the MIT Center for Real Estate (MIT CRE) recently created the Asia Real Estate Initiative (AREI), which aims to become a platform for leaders in the industry, entrepreneurs and the academic community. to find solutions to the practical concerns of real estate development in these countries.
“Behind the creation of this initiative is the understanding that Asia is a living laboratory for the study of future global urban development,” said Hashim Sarkis, dean of the MIT School of Architecture and Planning.
An investment in the cities of the future
One of AREI’s areas of focus is connecting sustainability and technology in real estate.
“We believe that the real estate sector should work in collaboration with the energy, science and technology sectors to solve climate challenges,” says Richard Lester, the Institute’s associate vice-president for business. international. “AREI will engage academics and industry leaders, non-governmental organizations and civic leaders globally and in Asia, to advance knowledge sharing and research.”
In its effort to understand how trends and new technologies will impact the future of real estate, AREI received initial support from a prominent MIT CRE alumnus who wishes to remain anonymous. The donation will support a cohort of researchers working on innovative technologies applicable to advancing real estate sustainability goals, with a particular focus on global and Asian markets. The call for applications is already underway, with AREI seeking to collaborate with scholars from economics, finance, urban planning, technology, engineering and other disciplines.
“Research on real estate sustainability and technology could transform this industry and help invent the global real estate of the future,” says Professor Siqi Zheng, MIT CRE Faculty Director and MIT CRE Faculty Chair. AREI. “The combination of real estate and technology often leads to innovative and differential real estate development strategies such as green, smart and healthy buildings.”
The initiative comes at a key time to make a significant impact and cement a leadership role in property development across Asia. MIT CRE is positioned to help industry increase efficiency and social responsibility, with nearly 40 years of pioneering research in the field. Zheng, a recognized scholar specializing in urban growth in rapidly urbanizing regions, is the past president of the Asia Real Estate Society and sits on the board of the American Real Estate and Urban Economics Association. His research has been supported by international institutions such as the World Bank, the Asian Development Bank and the Lincoln Institute of Land Policy.
“AREI researchers are now working on three interrelated themes: the future of real estate and the dynamics of living-working-playing; connecting sustainability and technology in real estate; and innovations in finance and real estate business,” says Zheng.
The first theme has already given rise to a book — “Toward Urban Economic Vibrancy: Patterns and Practices in Asia’s New Cities” — recently published by SA+P Press.
Engage thought leaders and global stakeholders
AREI also plans to collaborate with its counterparts in Asia to contribute research, education and dialogue with industry to address the challenges of creating sustainable cities across the continent and identify areas of innovation. Traditionally, real estate has been a very local business with a long value chain, according to Zhengzhen Tan, director of AREI. Most developers have focused their careers on a particular type of product in a particular regional market. AREI is working to change this dynamic.
“We want to create a cross-border dialogue in Asia and between Asian, North American and European leaders to exchange knowledge and practices,” says Tan. “The real estate industry’s learning costs are very high compared to other sectors. Collective learning will reduce the cost of failure and have a significant impact on these global issues.
The 2021 UN Climate Change Conference in Glasgow shed further light on the environmental commitments made by governments in Asia. With real estate accounting for 40% of global greenhouse gas emissions, the Asian real estate market is undergoing an urgent transformation to meet this commitment.
“One of the most pressing calls is to achieve net zero emissions for real estate development and operations,” Tan says. “Investors and property developers are making short- and long-term choices that lock in environmental footprints for the ‘decisive decade.’ We hope to inspire developers and investors to think differently and step out of their comfort zone.