ESG and Real Estate: The New Market Reality
ESG (Environmental, Social, Governance) is a set of criteria that assess the environmental, social, and governance aspects of businesses and investments. In 2025, ESG continues to shape the real estate market, with developers and investors increasingly focusing on energy-efficient projects and their social impact.
- Capital Inflow: Over the past 5–7 years, sustainable (ESG) investment funds in real estate have multiplied. In 2019, the volume of such funds was around $2.6 billion, rising to approximately $34 billion by 2024. Further growth is expected in 2025.
- Regulatory Tightening: Many countries are introducing stricter energy efficiency and carbon footprint standards. For example, some European nations plan to prohibit the operation of non-energy-efficient buildings without modernization by 2030.
Thus, ESG factors are becoming a key requirement for long-term success in the real estate market.
The Sustainable City in Oman: Unlocking a New Future for Investors | Watch on YouTube – Discover how modern eco-projects integrate with nature while offering maximum comfort.
The Rise of Green Buildings’ Profitability and Additional Benefits
Eco-friendly properties are increasingly attractive to buyers and tenants due to the following advantages:
- Lower Utility Costs
Modern energy-efficient systems (solar panels, recuperators, quality insulation) help reduce energy consumption by 30–70%. - Certification and Value Growth
International certifications such as LEED, BREEAM, and WELL boost a property’s market value, making it easier to lease or sell at a premium price. - Tax Incentives and Subsidies
Several countries offer tax deductions, grants, or preferential loans for green projects. - High Demand from Tenants
Large corporations, following their ESG strategies, prefer energy-efficient office spaces and residential complexes.
NEOM: Saudi Arabia’s FUTURISTIC City Investment Opportunity EXPOSED | Watch on YouTube – Learn more about one of the world’s most ambitious eco-friendly urban projects.
2025 Trends: Expert Predictions
- Stronger Regulations
Investment funds, insurance companies, and banks require developers to disclose ESG reports. Non-compliance may lead to funding refusals. - Climate Adaptation
Sustainable solutions such as drainage systems, durable construction materials, and autonomous energy sources are being widely adopted. - Social Impact of Projects
Investors evaluate projects based on the presence of social infrastructure such as schools, medical centers, and public spaces. - Digital Monitoring
IoT and Big Data help measure and control energy consumption, enhancing property management efficiency.
Practical Tips for Investors
- Check Energy Efficiency: Look for certifications, insulation quality, and engineering systems.
- Partner with Green Banks: Some banks offer preferential loans for purchasing or modernizing eco-properties.
- Stay Updated on Regulations: Find out what tax benefits are available in your investment region.
- Diversify Your Portfolio: Invest in different types of sustainable real estate – residential, commercial, and hospitality.
- Consider Retrofitting: Sometimes, modernizing an existing property is more profitable than buying a new one.
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Contacts
Email: info@nevestate.com
Phone: +971 50 461 9022
For investment consultations on eco-friendly real estate, feel free to contact us!
