Real estate is a globally recognized industry that includes housing, retail, hospitality, and trade as sub-sectors. The sector is not only the first job generator after agriculture, but also one of the main 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% to the country’s GDP by 2025? Given its massive growth, it also adds and maximizes social value, bringing sustainability and a people-centric mindset.
Real estate and its social value
Social value involves bringing change and adding value to people’s lives – as long as those ideas serve both purpose and profit. They also enhance the prestige and socio-economic status of people.
Additionally, sustainability offers businesses a new perspective on how to discover, rethink, and reinvent ways to eliminate wasteful and inefficient methods of production and consumption.
The real estate sector emphasizes circularity by reducing the use of raw materials, renewable energy for construction purposes and extending the life of an asset. Furthermore, Corporate Social Responsibility (CSR) also provides an interface between business and society to ensure sustainable development.
Creating social value with affordable housing
Affordable housing promotes the prosperity of a community, raises its standard of living and has a direct impact on its quality of life. Here’s how:
In a densely populated developing country like India, affordable housing is not just an aspiration but a necessity.
To achieve the same goal, the Indian government is supporting the concept by lowering the GST on housing to 1%, making it more accessible to poorer members of society. It is also important for real estate companies in India to provide income-appropriate housing options for everyone.
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 inhabitants, especially since the projects are designed on the basis of advanced urban planning.
Well-designed affordable housing projects transform society. They have a considerable impact on surrounding communities, especially those residing in urban areas.
These projects aim to uplift residents, encourage social connections, reduce overcrowding, increase adjacent property values, attract business and jobs, and reduce crime rates.
Focus on environmental, social and governance (ESG) issues
India’s strict market laws ensure companies adhere to ESG agreements. Few people know that the construction industry in India contributes 22% of total emissions while being the largest consumer of natural resources.
To combat climate change, India must reduce its greenhouse gas emissions through sustainable design, construction and operating practices.
India is not even on the verge of building its targeted urban infrastructure for 2030 and therefore presents a great opportunity for real estate to mitigate carbon emissions and positively impact almost 250 interrelated industries, including cement, steel, wood, etc.
Being closely related to infrastructure, real estate construction must introduce environmentally friendly ways to help environmental sustainability and stakeholder profitability.
Organized infrastructure, especially when it comes to planning and developing smart cities through green travel, waste management, water supply and optimization of energy consumption, greatly contributes to ensuring social value.
Rehabilitation of public spaces, waste management, social care centers, water conservation and clean energy, among others. Real estate companies need to embrace solar power to generate power, support ecological restoration around their properties, and even help clean up rivers.
Who drives social value?
Asset and property managers drive positive social, economic and environmental outcomes generated by any asset. They also ensure that the social value activities of the occupants correspond to the needs of the stakeholders.
Whether it’s an office, industrial park or shopping mall, asset managers know how to create positive results. Their environment-focused initiatives are designed to have a lasting impact not just on a local area, but on society as a whole.
For example, there is more social value in sourcing your building materials from a local manufacturer than an international chain. Therefore, having an engaged, thoughtful and collaborative property management team enables an asset owner to achieve more.
The occupant of an asset has the opportunity to generate positive value through the size of its workforce and what this brings in terms of resources, time, expertise, ideas and passion. It should be understood that working with investors, developers and asset managers helps asset owners deliver more value to the communities where they work.
There are many reasons why social value is important. It facilitates community relations, opens recruitment options, enables retention, provides license to operate and stimulates publicity. This also leads to gratification of occupants and visitors, in addition to encouraging attendance.
Additionally, commercial real estate establishments often receive requests to share social value information. Therefore, they must have proof of their contribution to social value.
Many factors drive this interest, such as investor expectations for disclosure and transparency to recognize the broader impact of companies, and to learn and mitigate risk.
There are endless possibilities throughout a building’s life cycle to create social value. These many possibilities include local hiring, local procurement expenses, access to space, use of facilities and resources within a property, among others.
With such a range of possibilities, it is essential that the needs of stakeholders are taken into account to build relationships with local communities and businesses near the establishment. This would allow property managers to prioritize and drive positive social outcomes.
(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of YourStory.)