One World One Realty Summit: The future is green and carbon-neutral for real estate

The real estate sector can improve governance by capitalising on technology, said Deepak Parekh, Chairman of HDFC Ltd, at the recently-concluded One World One Realty Summit - Global PropTech Summit 2021.

The veteran banker pointed to how projects can be monitored on digital dashboards with data driving key decisions.

“Funding for projects based on construction milestones can be better monitored online,” he said at the two-day virtual summit that began on April 22 to mark International Earth Day.

Parekh outlined PropTech (or property technologies) by pointing to robotics, virtual and augmented reality, drones and 3D printing, which will have an increasing number of applications in the construction and real estate industry. “PropTech could play a big role in accelerating the government’s Smart City Mission, and help local level bodies in tasks like facilitating online approvals of buildings,” he said, adding that robust vendor supply chain management can bring in price efficiencies.

The construction and real estate industry, which contributes 9 percent to India’s GDP, is also a fertile ground for sustainable innovation to make urbanisation and housing efficient and eco-friendly. The One World One Realty Summit - Global PropTech Summit 2021 steered dialogues in that direction by bringing stakeholders together to share ideas for a carbon-neutral future. The summit featured pitches by startup founders who are harnessing technology to digitise real estate development.

Government on board with sustainable urban development

In his keynote address, Hardeep S Puri, Minister for State for Housing and Urban Affairs, cited the Global Housing Technology Challenge to explain the Centre’s commitment to sustainable development. “This is a programme that will harness global expertise for the use of new construction techniques and green technologies in constructing houses in less time than techniques with conventional technologies,” Puri said. Launched in January 2021, the projects will begin in six geo-climatic zones in the country, before their use goes mainstream.

Dr. Ashwath Narayan C. N., Deputy Chief Minister of Karnataka, said PropTech will enhance the urban ecosystem by finding the best technology to streamline the distribution of property plans and help city planners see where hidden needs exist. “The role of government is extremely important in technology adoption in urban planning, city development, and incubating the PropTech ecosystem,” Ashwath Narayan said. “Globally, city planners in places ranging from Germany to Singapore are already using ideas like virtual reality, geodata and big data analytics for city planning.”

The COVID-19 pandemic, which has hamstrung the real estate industry, serves lessons for long-term approaches for environmentally-sustainable construction, said Mahesh Ramanujam, CEO of US Green Building Council, which is known for LEED (Leadership in Energy and Environmental Design) — a widely adopted green building rating system.

“The foremost lesson is that design operations of buildings or communities can either help mitigate the threat of the virus, or manifest an environment where viruses or other public health hazards can easily spread,” Ramanujam said. “Public health data shows that buildings are safer to occupy when their mechanical systems — especially heating, ventilation and air conditioning systems — promote good ventilation, and have scrubbing, purification and enhanced exchange of air,” he added.

How green bonds are driving change

The One World One Realty Summit dialogues also shed light on how issues of green bonds are drawing the attention of investors globally, even in emerging markets. Jean-Marie Masse, Chief Investment Officer at International Finance Corporation, said the sectors, which are attracting a lot of green bond proceeds globally, are renewable energy, transport and green buildings. “Based on IFC research and forecast, we expect more green bonds being issued in the future to finance green buildings,” Masse added.

There was also a discussion on ‘ESG and Green Bonds’. Environmental, Social and Corporate Governance (ESG) are the three central factors in measuring the sustainability and societal impact of an investment in a business. Sandeep Bhattacharya, India Project Manager of the Climate Bonds Initiative, said the financial sector, bond markets and loan markets can be a huge catalyst.

Many financial institutions in Europe went into green mobilisation due to high affordability of capital for sustainable projects. “As they got the asset cheap, they could disburse the asset for cheap and (this) created a virtual cycle,” said Bhattacharya. “Now, we have mortgage banks which are 70 percent green that started with just 10 percent green assets.” The panelists included Jai Shroff, CEO of UPL, Rajesh Khushalani, Principal Investments & Asset Management, HDFC Capital, and Vinamra Srivastava, CEO (Business Parks), CapitaLand Group.

Cost differences behind real estate's low tech adoption

In another panel discussion on the impact of technology and sustainability on real estate, Sriram Kalyanaraman, General Manager of KBZ Bank, deep-dived into why real estate has lagged in adopting technology. “Cost differences and the upfront costs that builders and realtors have to bear are among the foremost reasons, but the perception is changing,” said Kalyanaraman. He estimates there are more than 400 buildings in Mumbai that are automated green buildings.

“Issues around climate change pose a great risk to business and therefore impact their activities,” said Anirban Ghosh, Chief Sustainability Officer of Mahindra Group, in a panel discussion that delved on how corporate initiatives are leveraging tech for sustainability. People from the finance industry like investors and lenders are therefore seeing why climate change and sustainability matter to them when they lend or invest money.

Shyam Karigiri, Managing Director of Moog India Technology Centre, who was also on the panel, said collaborative consortium initiatives were being launched to solve sustainability challenges in the aerospace and technology industries. Karigiri noted that aircraft manufacturers are doing a great job in bringing together Tier 1 and 2 suppliers, who are sharing tech and working on tech solutions to address sustainability problems.

The One World One Realty Summit was hosted by The INDIA Advantage Summit (TIA Summit) with Brigade Real Estate Accelerator Programme (REAP) and HDFC Capital as presenting sponsors.

Incidentally Brigade REAP launches their 10th Cohort for PropTech startups and takes another concrete step to strengthen the ecosystem.

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