Hongkong Land, Marsh tout climate-resilient property returns
SingTao · 1 SOURCESabout 3 hours ago2 MIN
Summary
Hongkong Land and Marsh have jointly published an investment report on climate-resilience measures, using the large mixed-use West Bund Central project in Shanghai as a case study. The report says the project’s resilience design can reduce expected losses from heavy-rain flooding by 88% and from storm surge by 84% under current climate conditions. It also projects that, with existing protections in place, the project’s expected losses from those two hazards in 2050 would remain below today’s level for a comparable asset without such measures. The study frames resilience spending as a commercial decision tied to leasing, asset quality and insurance availability, not only a sustainability exercise
Key Points
- The report, titled “Building Enduring Value: Quantifying the Investment Return of Real Estate Climate Resilience”, models average annual loss from storm surge, pluvial flooding and strong winds
- It uses a high-emissions scenario to compare current and 2050 climate risks, and tests the effect of protections that go beyond minimum building-code requirements
- Without existing resilience upgrades, expected 2050 storm-surge losses would more than double, while expected strong-wind losses would rise to more than three times current levels
- With the measures installed, expected storm-surge losses fall 84% now and in 2050; heavy-rain flood losses drop 88% now and 79% in 2050
- West Bund Central was engineered against projected 2050 climate conditions, with drainage capacity 23% above relevant standards and a sponge-city system exceeding 2,000 cubic metres
Why It Matters
For Hong Kong readers, the report links climate adaptation directly to rentability, tenant due diligence and the risk of assets becoming obsolete, issues that matter in a competitive office market. It also points to insurance access as a practical constraint, with Marsh saying the key question is not only premium cost but whether sufficient cover remains available as climate risks intensify