Savills : Real estate in Berlin, Toronto, Paris and Madrid most resilient to climate change, says Savills

Although they may still be vulnerable to significant climate hazards, their geographic positions, combined with other factors including city authorities having a plan to mitigate risk and higher proportions of 'green' real estate, make them the most resilient overall of the cities Savills examined.

The international real estate advisor looked at a representative group 23 of the world's largest, wealthiest and most populous cities that are particularly important for global real estate investment. It then measured each city's climate risk and the resilience of its real estate to those risks. Berlin is the best performing city Savills examined: its geographic position means its risk of climate change-related events is low, while it has a strong real estate resilience score due to factors including having a low share of stock identified as being at likely risk from climate-related damage and one of the highest proportions of buildings 'green' certified. Savills, however, notes that even the cities that perform best for real estate resilience have significant work to do in improving the sustainability of their stock.

"While our index is selective, and shouldn't be used as a league table, it does highlight to investors, developers and occupiers some of the cities which are most at risk of climate-related events and whether real estate in those cities is likely to be resilient to that risk, comments Paul Tostevin, Director, Savills World Research. "While there may be little possibility of altering the former given that risk is largely location-dependent, more can be done to increase real estate resiliency by adopting innovative design and build practices and delivering mitigating infrastructure - building storm drains to reduce flooding, for example.

"In addition, our research highlights that even in cities which have 'good' real estate resilience, a lot of work is still required to reduce carbon emissions and upgrade assets to higher sustainability standards. New York and Berlin score best on this metric, having 1.8% and 1.5% respectively of 'green' real estate stock per capita, but this is still a low proportion both given the urgency of fighting climate change and the fact that investors are actively looking to acquire the most sustainable stock to reduce their exposure to possible stranded assets."

Green certified real estate stock per capita, one of the real estate resilience metrics from Savills Climate Resilient Cities Index:

City	Country	Green RE stock per capita
New York	United States	1.80%
Berlin	Germany	1.50%
Beijing	China	1.20%
Toronto	Canada	1.00%
Shanghai	China	1.00%
Los Angeles	United States	0.90%
Madrid	Spain	0.70%
Hong Kong (City)	Hong Kong	0.60%
Stockholm	Sweden	0.50%
Dubai-Sharjah-Ajman	United Arab Emirates	0.40%
Miami	United States	0.30%
Sydney	Australia	0.30%
São Paulo	Brazil	0.20%
Amsterdam	Netherlands	0.20%
Seoul	Seoul	0.20%
Singapore	Singapore	0.20%
London	United Kingdom	0.10%
Paris	France	0.10%
Tokyo	Japan	0.00%
Jakarta	Indonesia	0.00%
Delhi	India	0.00%
Cape Town	South Africa	0.00%
Cairo	Egypt	0.00%

Source: Savills Research

Robert Godfrey, Director in Strategic Investment Advisory, Savills, adds: "In a city where the climate stability risk is high and real estate resilience low, this could affect the attractiveness of its markets, as major institutional investors already consider climate risk as part of their ESG strategies. Investors may increasingly seek more resilient and green real estate in climate stable cities, but at the moment they will be competing over relatively few buildings that meet all those current and future needs."

Ends

Access all of Savills Impacts research here

Methodology: Climate Resilient Cities Index

Savills index compares 23 of the world's largest, wealthiest and most populous cities that are particularly important for global real estate investment. It measures each city's climate risk and the resilience of its real estate to those risks. There are two pillars to the index:

Climate risk -

This considers a city's current and future climate risk. Current risk measures changes in the last decade in rainfall and temperature, average elevation above sea level, and the availability of groundwater. It also assess the current risk of physical disasters that are exacerbated by climate change. The city's future risks assessed are predicted exposure to extreme heat, sea level rise, coastal flooding and freshwater availability by 2050.

Real estate resilience -

Real estate resilience looks at whether the city, and the country in which it is located, has assessed its climate risk and whether it has a plan in place to combat it, and assesses the extent to which the city's real estate is vulnerable to climate risk. It also measures the city's share of green certified building stock; important too given the role carbon plays in accelerating climate change more broadly.