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Circular economy brings value for real estate businesses

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United Kingdom
Cowes, Isle of Wight

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The built environment sector faces a desperate need to become more sustainable. The environmental and ethical cases to adapt have never been more robust.

The research, led by Ellen McArthur Foundation and Arup, supports the view that circular economy practices can be built into existing real estate business models. It also highlights its benefit, whether creating new value from an asset, keeping an asset at its highest value, or eliminating waste.

The report presents five positive business cases for circular real estate business models. The models shown can benefit diverse sectors and markets and have the potential to improve the resource productivity of real estate while contributing to the decarbonisation of the industry.

The feasibility studies used data from real projects in commercial, residential, retail and mixed-use markets and five European cities. The five models are:

  • Flexible spaces; builds on the trend of co-working spaces to unlock the potential of underutilised space in buildings
  • Adaptable assets; considers the value of creating buildings able to adapt to alternative users
  • Relocatable buildings; designs out waste by incentivising prefabricated and modular construction techniques while ensuring materials are kept in use for as long as possible
  • Residual value; envisages the creation of tradable futures contracts related to the value of building materials at deconstruction.
  • Performance procurement; extends the product-as-a-service model to the building level.

Read the full report.