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Overall: We still believe that the interest rate tailwind of slower global growth will support REITs in Asia especially Australia, Singapore and even Hong Kong (see fall in HIBOR). CPI in our region outside of Japan has been trending very much in the right direction.
The global real estate sector faces mounting pressure to decarbonise, contributing nearly 40% of total emissions (1). With the 2050 net-zero target fast approaching, investors and asset managers must urgently align with evolving ESG standards or risk falling behind.
Europe: Regulatory Leadership and Standardisation
Europe leads the way in ESG integration with rigorous regulatory frameworks. The EU Taxonomy for Sustainable Activities (2) provides a clear classification system for environmentally sustainable investments, guiding capital allocation towards green real estate. Additionally, the Global Real Estate Sustainability Benchmark (GRESB) (3)—originally developed in Europe—has become a widely accepted ESG performance measurement tool, shaping investment decisions worldwide.
GRESB’s influence extends beyond Europe, particularly into the Asia-Pacific (APAC) region, where a joint study with ANREV found that higher GRESB scores correlate with stronger financial performance. This has encouraged investors and developers across APAC to integrate sustainability benchmarks into asset management, enhancing ESG disclosures and compliance.
United States: Market-Driven ESG Adoption
Unlike Europe’s regulatory-first approach, the US real estate sector is driven by market incentives and investor demand. The Inflation Reduction Act (2022) promotes building efficiency and renewable energy adoption, while major cities have introduced stringent local policies. New York City’s Local Law 97 (4) mandates a 40% reduction in building emissions by 2030, penalising non-compliance with significant financial consequences.
Beyond regulation, major institutional investors such as BlackRock and Brookfield have embedded ESG principles into real estate portfolio strategies. The increasing willingness of tenants to pay a premium for energy-efficient spaces further highlights the market-driven shift towards sustainability.
Asia: Diverse Strategies Across Developed and Emerging Markets
Asia’s real estate ESG trends vary by region. China is focusing on large-scale sustainable urban developments as part of its 2060 carbon-neutral goal. Japan and South Korea are leveraging smart-grid technology and AI-driven energy management to improve efficiency and emissions tracking.
In Southeast Asia, where economies are still developing, international financial support is playing a crucial role in accelerating sustainability efforts. Singapore, for instance, has seen rapid growth in green-certified buildings, with investors aligning assets to Task Force on Climate-related Financial Disclosures (TCFD) (5) and Science-Based Targets (SBTi) (6) recommendations to improve transparency and global compliance.
A Global Shift Towards Sustainable Real Estate
Despite regional differences, ESG integration in real estate is becoming a global imperative. Investors, developers, and asset managers must navigate evolving standards while ensuring properties remain competitive in an increasingly sustainability-driven market.
To remain ahead, real estate leaders must proactively:
As the real estate industry moves toward a net-zero future, those who embrace sustainability will protect long-term assett value and strengthen their market position. The shift from regional approaches to a globally integrated ESG strategy is already underway—now is the time for decisive action.
References:
Managing Director
Longevity Partners
Trump 2.0—The First 100 Days explores the early economic and commercial real estate implications of President Trump’s 2025 policy agenda. Building on our analyses of the First 100 Days from the last two administrations, this series of reports examines critical developments in trade policy, tax reforms, immigration and other policy priorities. To provide tailored insights, we’ve created focused analyses for the U.S. and Canada, as well as the APAC and EMEA regions, highlighting the economic and property sector outlook in each area. Each report dives into relevant regional trends across sectors, offering invaluable insights for occupiers and investors navigating today’s landscape.
Our analysis presents the most probable and possible scenarios based on current data, but conditions remain dynamic, with new developments still emerging. Both potential opportunities and challenges may arise as these policies take shape over time.
Download the Report Read MoreThe Philippines is emerging as a promising investment destination, driven by strong macroeconomic fundamentals, a dynamic consumer base, and expanding opportunities in REITs, hospitality, and renewable energy. Real estate diversification, sustainable development, and infrastructure upgrades are creating new growth avenues across both primary and secondary markets.
As global supply chains diversify, the country’s strategic location and young workforce further position it for long-term gains. Investors who navigate local dynamics carefully and prioritize sustainability and partnerships with experienced players stand to unlock substantial value.
