Circular Economy and Real Estate
The consumption patterns of urban centers shed light on the fact that the urban population is exhausting resources like never before. The phenomenon of ‘Green Urbanism’ has been echoing for very long in the policy circles; it calls out for the inclusion of environment-friendly and inclusive practices across urban areas to wither away the detrimental impacts of climate change. Inducing new urban thinking at this juncture of time is not impossible; since, technology is disrupting every aspect of the economy, advancements in construction and architecture are increasing efficiency, and renewable energy sources and waste management techniques have started to replace the preceding methods.
It is a well-known fact that the real estate sector is a conglomerate entity; it drives industries, makes ground for business opportunities, and also provides housing facilities. According to the forecasts of the United Nations (UN), material consumption will increase to 90bn tons by 2050. Moreover, the housing sector utilises 40pc of the total resources of planet earth. These statistics show that if the business as usual continues the resource scarcity on the planet will become grave. With so much connected to the real estate sector, the concept of ‘Circular Economy’ (CE) can be applied to the real estate sector for inducing new urban thinking.
Moreover, the carbon footprint of major urban centers of the world is increasing day by day. Cities across the globe contribute 70pc of the total CO2 emissions. Simultaneously, the waste generated by cities is also reaching an unprecedented level which apart from posing threat to onshore lives is also threatening marine life. It is pertinent to mention here that sustainable development is impossible without incorporating a circular economy.
Graana.com through this blog highlights the importance of a Circular Economy and how can the concept push the sector towards more efficiency without compromising the overall objectives.
What is a Circular Economy?
Circular Economy corresponds to increasing the lifespan of a product by harnessing innovative methods and reusing the stuff and products more than once. CE is not a linear process rather it is about inducing efficiency, durability, and increasing the life cycle of a product. The concept initially may sound close to recycling; although recycling is one of the aspects of circular economy, the phenomenon as a whole encompasses a wide range of applications. In other words, the circular economy is about incorporating those business model which replaces ‘end-of-life’ concept and again using the commodity either through recycling. The end objective is to utilise a commodity to optimum, reuse once the life span is over, and decrease the dependency on raw materials.
In real estate the concept of circular economy can correspond to lowering the use of raw materials during construction, increasing the adaptability of the buildings with time, and utilising the building spaces in an efficient manner. Moreover, the real estate sector is also introducing the concept of ‘relocatable buildings’ which is about relocating the buildings to other areas where they can serve the purpose instead of demolishing it.
Following are the different ways in which the circular economy is transforming the real estate sector across the world.
Flexible spaces is relatively a new concept in real estate that promotes the utilisation of unused or under-utilised spaces in the buildings. This concept can prove useful for the buildings that cater to the needs of offices and have under-utilised spaces which do not serve any purpose. A report published by British Council for offices stated that spaces in offices are under-utilised 50-60pc throughout the whole day.
Different practices around the world show that owners of the buildings avail online platforms for listing the under-utilised spaces to search for the tenants. The benefit of this practice is that it can generate additional revenue while saving the finances that could have been spent on constructing or renting another building which is one of the major objectives of CE. Simultaneously, the concept of co-working spaces is another extension of the concept of flexible spaces where people from different industries share the same workplace.
Most of the buildings are turned to rubble when they complete their life span. The demolition of the building results in the wastage of resources and the amount that had been spent on the construction. The concept of adaptable buildings is related to CE which is about developing the buildings that can meet the needs of interested buyers once a building has completed its life span. The concept pertains to readjusting the buildings to meet the requirements with time.
This technique involves making changes to the interior of the buildings while keeping the foundations, envelope, and skin of the building intact. The changes can be made to the floor plans by adding or moving the walls depending on the usage. Thus, buildings instead of being demolished can be reused for different purposes by only making amendments to the interior of the buildings.
Modular Buildings and Vacant Land
Another aspect of real estate that is in line with CE is developing modular buildings for increasing the value of vacant lands. The model is about constructing buildings off-site then transporting them to vacant spaces for earning dividends on the vacant lands. The advantage of modular buildings is that they are built using high-quality materials, and are designed such that a facility can be assembled and re-assembled. Such a model ensures land utilisation to optimum and introduces efficiency in real estate practices.
A landowner who does not have enough finances can be linked to the owner of a modular building thus utilising the assets in the most efficient manner. The dividends can be shared between both owners. The concept is still in the pipeline across the world but can serve a great purpose by enacting policies.
Reusing Construction and Demolition Waste
It is estimated that the Construction and Demolition Waste (CDW) contributes 30pc of the solid waste produced across the world. This fact highlights that once a building constructed using numerous finances becomes a part of ruble once its life span is over. Moreover, the cost of input that will be incurred on re-construction will not only put pressure on natural resources but also demand new finances in the form of input and labor costs. However, there are few components among CDW that can be reused and recycled thus becoming a part of the Circular Economy. Components of CDW that can be recycled include structural steel, wood components, and architectural salvage including wooden door frames.
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