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ESG a prime concern for Hong Kong real estate, says Cushman

17th March 2022

This year will see Hong Kong’s major real estate players strongly focus on ESG compliance, Cushman & Wakefield claims. 

In its latest Hong Kong Market Direction report, C&W says real estate investment trusts and investment funds will lead the way, following last year’s consultations from the Securities & Futures Commission (SFC) on management and disclosure for climate-related risks, requiring fund managers to undertake climate risk consideration as part of their investment process. 

Under the SFC requirement, managers with more than HK$8 billion ($1 billion) of assets under management are expected to meet climate-related risk requirements as part of their investment strategy by August 20 this year. All other fund managers must meet the same requirements by November 20.

“We forecast that ESG objectives and greener real estate practices will be more influential than ever, especially as we have already witnessed government-backed SFC regulations to actively engage fund managers to implement climate risks. And, linked to the focus on ESG, multinational firms will be further incentivised to seek green and wellness-certified office buildings," said John Siu, managing director, Hong Kong, C&W.

The broker predicts ESG mandates from regulators and occupiers will drive greater development of newer and greener energy efficient buildings, particularly among the most established landlords and developers.

At the close of 2021 there were 58 Beam Plus Platinum certified commercial buildings or units in Hong Kong, compared with only 34 at the end of 2019, a jump of 71% in just two years . 

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