Maximising social value in the real estate sector
The real estate sector is emphasising circularity by reducing the use of raw materials, renewable energy for construction purposes, and prolonging the life of an asset.
Real estate is a globally recognised sector that comprises housing, retail, hospitality, and commercial as its sub-sectors. The sector is not only the highest employment generator after agriculture but also one of the key contributors to the country’s GDP.
Did you know that the real estate sector in India is expected to reach a market size of $1 trillion by 2030 and contribute 13 percent to the country’s GDP by 2025? Given its massive growth, it also adds and maximises social value, bringing sustainability and a people-centric mindset to its core.
Real estate and its social value
Social value implies bringing a change and adding value to people’s lives – as long as such ideas serve both purpose and profit. They also enhance the prestige and socio-economic status of people.
Additionally, sustainability provides businesses with a fresh perspective on how to discover, rethink, and reimagine ways to eliminate wasteful and inefficient methods of production and consumption.
The real estate sector is emphasising circularity by reducing the use of raw materials, renewable energy for construction purposes, and prolonging the life of an asset. Besides, Corporate Social Responsibility (CSR) is also providing an interface between the corporates and society to ensure sustainable development.
Creating social value with affordable housing
Affordable housing promotes a community's prosperity, raises their level of living, and has a direct impact on their quality of life. Here’s how:
In a developing nation like India which is densely populated, affordable housing is not only an aspiration but a necessity.
To achieve the same, the Indian government is supporting the concept by lowering the GST on housing to 1 percent, making it more accessible to the poorest members of society. It is also important for the real estate enterprises in India to provide income-friendly housing options to all.
Affordable housing not only provides individuals with a place to live, but also improves their quality of life by promoting better health, financial stability, adequate employment, security, diversity, and meaningful connections. It has a profound impact on the residents, especially as the projects are designed based on advanced urban planning.
Well-designed affordable housing projects transform society. They substantially impact the surrounding communities, particularly those residing in urban environments.
These projects are focused on uplifting residents, encouraging social connections, reducing overcrowding, increasing adjacent property values, attracting businesses and jobs, and reducing crime rates.
Focus on environmental, social and governance (ESG) issues
The stringent laws in the Indian market ensure that the companies comply with ESG agreements. Not many know that India’s construction industry contributes to 22 percent of the total emissions while being the largest consumer of natural resources.
To fight climate change, India must reduce its greenhouse gas emissions through sustainable practices in design, construction and operations.
India is not even close to building its targeted urban infrastructure for 2030 and therefore, offers a great opportunity to the real estate to mitigate carbon emissions and positively impact nearly 250 interdependent industries including cement, steel, timber, etc.
Being closely related to infrastructure, real estate construction must introduce eco-friendly means to help environment sustainability and aid returns for stakeholders.
Organised infrastructure, especially when it comes to planning and development of smart cities through green travel, waste management, water supply, and optimisation of energy consumption, goes a long way in ensuring social value.
Rehabilitation of public spaces, waste management, social care centres, water conservation, and clean energy, among others. The real estate companies must embrace solar power to generate energy, support ecological restoration around their properties, and even assist in river clean-ups.
Who drives social value?
Asset and property managers bring about positive social, economic and environmental results generated by an asset regardless of what it is. They also ensure that occupiers’ social value activities match with stakeholders’ needs.
Be it an office, an industrial park, or a retail centre, asset managers know how to create positive outcomes. Their environment-centric initiatives are tuned to have a long-lasting impact not just on a local area but also on society as a whole.
For example, there is more social value in gathering your building supplies from a local maker than an international chain. Therefore, having an engaged, considered, and collaborative property management team empowers an asset holder to do more.
The occupier of an asset has the opportunity to generate positive value via the size of their workforce and what that brings when it comes to resource, time, expertise, ideas and passion. It should be understood that working with investors, developers and asset managers helps asset holders in delivering more value for the communities where they work.
The reasons why social value is important are many. It aids community relations, opens recruitment options, allows retention, provides a license to operate and boosts publicity. It also leads to occupier and visitor gratification, apart from encouraging footfall.
Additionally, commercial real estate establishments often get requests to share information on social value. Therefore, they must have proof of their contribution towards social value.
Many factors drive this interest such as investor anticipations for disclosure and transparency to recognise the wider impact of businesses, and to learn and mitigate risk.
There are endless possibilities through the lifecycle of a building to create social value. These wide-ranging opportunities include local hiring, local procurement spends, access to space, use of the facilities and resources within a property, among others.
With such a range of possibilities, it is critical that stakeholder needs are addressed to build relationships with local communities and firms in proximity to the establishment. This would allow property managers to prioritise and generate positive social outcomes.
Edited by Kanishk Singh
(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of YourStory.)