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Why managing water sustainably (and explicitly talking about it) drives profit in the real estate business

For many years, sustainable water management was not a top priority for real estate companies. Sustainable construction was considered expensive and nothing more than a way to comply with the regulations. Today, however, sustainability has become a key aspect in the sector and an opportunity to create added value. Sustainable buildings are more profitable, and not only for the obvious reasons.

 

Of course, sustainable buildings have lower gas, water and electricity bills than the old energy guzzlers, but there’s more… Two years ago, the multinational Unilever announced that the brands they label ‘sustainable living brands’ are growing twice as fast as other brands. As such, sustainability has become a selling point.

 

Green is more profitable, also in real estate

According to the CBRE, the largest commercial real estate company in the world, rental prices are, on average, 18 per cent higher in ‘green’ buildings. Moreover, green buildings attract tenants of a higher social profile and boast higher occupancy rates.

Higher rental income, less turnover and lower energy bills amply compensate for the higher investment and costs for maintenance of the systems. Moreover, sustainable companies are a lot more attractive to young employees.

Today, the focus in sustainable construction is mainly on electricity savings and efficient heating, this due to the relative cost of electricity and gas in comparison to water prices. That is great of course, but we need to step it up a notch.

 

Sustainable water management: the next strategic challenge

The next key strategic challenge for the real-estate sector? Sustainable water management! Belgium is one of the European countries with the greatest water scarcity, after Cyprus, Bulgaria and Malta. The reason for this water scarcity is the fact that Belgium is densely populated. Moreover, Belgian industry and agriculture require a lot of water for their activities.

The WWD report by the United Nations estimates that demand will increase by 55 percent worldwide, along with a 400 percent increase in demand for water in manufacturing from developed countries.

This has prompted the real estate sector to pay more attention to the way water is used in buildings with the aim of guaranteeing the residents a healthy lifestyle, now and in the future. Our drinking water is also becoming more expensive every year. In fact, in the last three years, water bills have increased by 18 per cent.

Needless to say, companies that have mastered responsible and sustainable water management are one step ahead. But the real winners are those who can also convey their message to the public. Smart companies measure the impact of their activities in terms of sustainability and communicate the results to clients and prospects in a targeted manner, or they involve their stakeholders in the process by raising awareness on their water usage. The end result? A bigger market share!

Written by

Jacob Bossaer

Founder & CEO