Any opinions, findings, conclusions or recommendations expressed in this material are those of the authors and do not necessarily reflect the views of UK Essays.
Introduction and background
Within the process of property investment decision-making, increasing attention to the relationship between sustainability and business growth. The terms ‘sustainability’ refers to the relationship between environment protection and the economic development related with the industry society (Ratcliffe et al, 2009). As well as, property industry is considering of the business development with responsibility of social and environment. Furthermore, the increasing demands for property assts and investment opportunities that comply with the principle of sustainable development. This concept also discussed by McNamara (2005) the environmental friendly building will become more desirable property asset in future years even if it is not reflected in their current value. Therefore, sustainability development is taking in to account of the real estate company business context.
If you need assistance with writing your essay, our professional essay writing service is here to help!Find out more
Interestingly, Prudential Property Investment Manager Limited (PRUPIM) is the global real estate management company with over £15billion of assets in more than 800 properties. In 2007, the company introduced ‘Sustainable Development: A Framework for Decision Making’ which targeted to minimise the business risk and maximise the market opportunities (Moore, 2007). Leads to the main proposal of the report as following;
- To analyse PRUIM Sustainability Development Framework in the UK real estate market focusing upon business park development.
- To critically review the Sustainability Development Framework in relation to the portfolio management of PRUPIM.
- To critically evaluate the Sustainability Development Framework in terms of, environmental scale of development and impact on the investment portfolio.
- To provide recommendations on improving PRUPIM portfolio in order to competitive advantage in UK real estate market.
In particular, area of study in the business park portfolio at The Green Park in Reading and The Oxford Science Park in Oxford by using the interview with two (2) expertises in real estate investment and the academic published literatures.
The chapter 1 of this report provides the published literatures review which concerned to sustainability development. The report focuses on the principle of triple bottom line to emphasise the correlation of economical, environmental and social within the sustainability development of real estate portfolio. Furthermore, the author adopted the sustainability development criteria (Sayce et al, 2004) to align the assessment of sustainable development framework of PRUPIM.
Furthermore, the author provides business analysis of PRUPIM sustainability development framework by using PESTLE analysis. As well as, to identify the critical success factors of the sustainability framework by using Key Performance Index. In addition, the evaluation of PRUPIM sustainability framework in term of environmental, social and economic context this will be mention on Chapter 2.
The chapter 3 of the report provides recommendation in order to short to intermediate term and long term to implementation the sustainability development framework for PRUPIM in further project investment.
Sustainability and Real Estate Portfolio
Emerging of ‘Sustainability’ to ‘Sustainable Development’
Sustainability has become crucial environmental discussions. When an environmental issueis debated in the media, there is frequently a quotation from a scientist or an environmental activist saying that the trend in question is “unsustainable”. The idea of sustainability becomes crucial nowadays. Regarding to, it is much more powerful rhetorically than an idea like being “environmental friendly” (Dresner, 2002).Concept of sustainability was likely formed by the World Council of Churched in 1974 in the report of Ecumenical Study Conference on Science and Technology for Human Development (World Council of Churched, 1974). The environmentalist proposed for response to developing world objection to concerning to the environment when human being in many parts of the world suffers from lack of food and unemployment. Therefore, the concept of sustainable development was put forward by the International Union for Conservation of Nature and Natural Resources in 1980 (International of Union for Conservation of Nature and Natural Resources, 1980).
Furthermore, sustainability issue within the real estate industry has been examined by a number of authors. Pivo and McNamara (2005) defined sustainability and the concept of responsibility property investment (RPI) as to maximize the positive effects and minimize the negative effects of property ownership, management and development on the social order and the natural environment in a way that is consistent with investor satisfactions and reliable responsibilities.
Francesco and Levy (2008) also examined this definition within the others literature, the term “sustainability” might be viewed as providing a framework for adopting investment principle which provide correlation to the economic, social and the natural environments that effectively utilise resources for the current and future generations. As a consequence, sustainability considers the three main elements of economic accomplishment, social development and environmental friendly. With respect of, the social environment, the emphasis is on changing the behaviour of real estate market participants to become more aware of day-today sustainable living.
As a result, sustainability is significantly important for over thirty years the concept has been developed by the scientists, the environmentalists and the social activists. At the initial stage of the discussion in sustainability concept was generated to the awareness of the quality of life for human being, which related to the social welfare and standardise of living of the future generation. Moreover, sustainability in real estate business has been developed under the circumstance of economic growth, environment protection and social wealth consideration to maximising benefits and minimising negative impact to the building owners, developers, and occupiers in term of society responsibility and environmental friendly.
Moving forward to the term of ‘sustainability development’ according to, Dresner (2002), has been discussed sustainability and sustainable development finally came to prominences in 1987, when the United Nations’ World Commission on Environment and Development published the Brundtland report which identified the way to square the circle of competing demands for environmental protection and economical development through out the new scheme of ‘sustainable development’.
The summary of the Brundtland report in 1987 has been defined sustainable development as ‘meet the needs of the present without compromising the ability of future generations to meet theirs needs’ (Dresner, 2002).
Interestingly, Sayce et al., (2004) also have discussed the term of sustainable development became significantly important topic for many governments over the 20th century, following, the Rio de Janeiro declaration in 1992. In this summit, the represent of many countries across the world signed the agreement of principle of sustainable development and actions at international, national and local level. The global agenda is a set of eight main principles that governments should be certify;
- The fundamental of human rights to the environmental that is sufficient to people healthy and well-being;
- The preservation and proper use of the environment and built environment that profit to current and future generations;
- The encouragement of bio-diversity to ensure eco-system protection;
- The monitoring of environmental standards and publication of related information;
- The prior evaluation of environmental impacts from the development projects;
- The all individuals are informed of planned activities and given right to justice;
- The conservation is integrated to the planning and implementation of development activities;
- The co-ordination with other state towards mutual implementation.
Additionally, Sayce et al., (2004) has been examined the eight principles of sustainable development in scale of the continental and country level as the European Union and the United Kingdom. According to, the Agenda 21 from the Rio 1992 summit. The plan for completing the sustainability development in business as the sets of great challenges for everyone and in this mean time, a combination of governmental legislation, political pressure and increased awareness on the part of the public, places the onus on all professional people to conduct their business in such a way that it does not conflict with the ambition of UK government to promote sustainable development. Sustainable development affects to all those concerned with the creation and maintenance of the built environment. The essence of sustainable development requires that in all development activity, due account is taken of both the short and long term of the activity for all those affected. The professionals in this field have a unique opportunity and obligation, whether they are developers, planning advisers, architects, contractors, building surveyors, property agents or investors. One of the key decisions for buildings that have implications for sustainable development is whether to demolish or retain an existing building. Economically, the decision may seem relatively simple but if the principle of sustainable development as to adopted, the implications become more complex
the UK, Sustainable Development Strategy does not mean having less economic development: on the contrary, a healthy economy is better able to generate the resources to meet people’s needs and new investment and environmental improvement often go hand in hand…. What it requires is that decisions throughout society are taken with proper regard to their environmental impact.
More recently, sustainability development relevance to social responsibility in real estate investment in term of, Social Responsibility Property Investment: SRPI. The property investors have become to be attentive of more ethical and environmental protection in the business development (Rapson et al., 2007). The fundamental of developing built environment to sustainable development required well-documented and becoming to increasingly well-recognised along the property community (Pivo and McNamara, 2005; WWF and Insight Investment, 2005; Morley Fund Management Ltd, 2005). Particularly, the commercial sustainability development implications the developers shall be determine the term of development location, the re-use of land, environmental reservation and “green buildings design” either to, the practices, method and materials employed (Keeping and Shiers, 2004)
Our academic experts are ready and waiting to assist with any writing project you may have. From simple essay plans, through to full dissertations, you can guarantee we have a service perfectly matched to your needs.View our services
The progress forward to sustainability in real estate portfolio to date has mostly been downward to the work of architects and engineers on the development and construction part. On the other hand, there have BREEAM and the “Green Guide” series taken the responsibility to the production of new material of construction and the design as well as, the assessment criteria of sustainable development in property business (Rapson et al., 2007). According to McNamara (2005) cited in Rapson et al., (2007) has been discussed sustainability development have been developed from the circle of problem in the real estate and construction business between engineers or architect, developers, investors and occupiers. Sustainability development could be based on the development from technical knowledge, energy efficient factors and ethical in the business to the persuasion the developers and the investors to realize and interest in the business strategy.
In summary, sustainability has been established over three decade from the group of people those concern to environmentally protection and well-being in the community. From the globalization agreement moved forward to continental scale and government policy of sustainable development. The term sustainability and sustainable development have been examined by a number of authors. In contract, Sustainable development has been developed from conflict in the cycle of real estate and construction. Next section will be explained why sustainability development is significantly important in the UK.
Why sustainable development has taken placed in UK real estate and construction business?
As Sayce et al., 2004 has been discussed the reason why sustainable development taking into account of real estate and construction. According to, the property and construction industry is significantly important to the UK economy and realisations the buildings have been relevance to all activities take place. People in the UK spent over half of their lives inside buildings. The good quality of work place should be affected the performance of the workers in theirs building and leads into the business growth as the result of sustainable development.
Furthermore, construction industry is significantly important to indicate the wealth of the UK’s annual’s GDP. The report, ‘Construction in the UK economy: The Benefits of Investment’ (CBI, 2009) illustrated that sustainability development in construction and real estate industry is the best sector for stimulating employment. According to, every £1 spent on construction business could be generated in the UK GDP growth to £2.84, as the spending not only creates construction output worth £1, but also stimulates growth elsewhere in the economy worth £1.Consequently, the relationship between sustainable development in real estate and construction industry in the UK and the other parts of the economy, as well as, its crucial contribution to the numerous other social and economic contexts including the regional development and employment.
The construction and real estate industry as a whole has to increase the attention into the broader environmental and social agenda. That this, presented by the concept of sustainable development regarding to the built environment affects to all human activities (Curwell and Cooper, 1998). Additionally, in 1999, the Kyoto Protocol is an agreement made under the United Nations Framework Convention on Climate Change. In 1999, targets were agreed worldwide on the reduction of greenhouse gas emissions; the target for the European Union was to reduce emissions to 8 per cent below 1990 levels by 2008-2012 (DTI, 2004).The UK has set itself the goal of reducing the gas emissions by 8-12 per cent by 2010 with respect of the global agreements, sustainability has been highlight on the UK government policy. Later on the same year in 1999, the United Nations Framework Convention on Climate Change has been published the strategy document ‘A better quality of life: Strategy for Sustainable Development for the United Kingdom’ (Tucker et al., 2009). The report is focused on social development in order to, recognize the needs of everyone, environmental protection, carefully use of natural resources and maintain the high level of economic growth and employment (DEFRA, 1999).
The department of the Environment, Transport and the Regions: DETR (2000) also introduced the regulations to monitoring real estate and construction sectors to achieve of more sustainable development. The main proposes for more profitable and competitive, delivery customers’ satisfaction and value added by provide the sustainability building, with respect to create maximization of shareholder wealth. As well as, enhancing and protecting environmental and natural resources. And minimizing the impact of energy consumption particularly, carbon-based and natural resources.
As a result, sustainable development has been contributed from three main contents in term of social, environmental and economic growth. The following section would be presented the significantly important of sustainability development in the equity of society, environment and economy principle.
The triple bottom line principle (TBL)
With the advent of sustainability development paradigm in real estate sector, corporations is become to move into economic conception of responsibility and influence the business strategy in response to environmental protection and changing society expectation (Robinson, 2000). Interestingly, Sayce et al., (2004, p.3) stated in building sustainability in balance of TBL principle as
‘The sustainable development context has three main aspects to be concern in term of Economic, Environmental and Social. The balance of these three elements is said to comply with the principle of the triple bottom line (TBL). Increasingly, corporate bodies are adopting TBL principle in developing their business activities. This is partly in response to legislative imperatives and partly due to an increasing realisation that compliance with and promotion of social and environmental well-being is good for business ‘.
In term of, economic factor refers to financial viability. These include issues of competitiveness advantage, employment, market development and long-term profitability. Economic sustainability is increasingly implicit of value added creation in broader rather than conventional financial accounting. Economical and financial aspects of sustainability development therefore, may be encompassing to decrease operations costs along the management system and emerging the new market through rigorous business integrity policies. As well as, increase productivity and high performance from a motivated workforce and workplace. And attract a new investor by offering opportunity in social responsible investment (ICC, 2002)
As Jamali (2006) has been investigated environmental issues in sustainability development is focused on the impact from business activities to natural system, ecology system, and natural resources for instance, land, air and water. The responsible in environmental engage to comply with government regulations. In generally, the sustainable development in environmentally context also concerned to initiative of recycling and energy efficient. And it has been involved a comprehensive approach to a company’s operations, products and that including the business product assessment, operations processes and services. Furthermore sustainability development in environmental point of view is focused on eliminating waste from the property during the under construction period until the project completion and hand-over to the customers; maximizing the efficiency and productivity of all assets and resources; and minimizing practice that might be negatively affect the natural resources for the future generations.
The social element is become to corporate sustainability in term of centralize on the impact of the organization on the social activities. Particularly in the real estate sectors, social responsibility expectation of diverse groups either, internal and external stakeholders. As well as interest groups comprising civil society are actually considered and skillfully balanced. The social bottom line incorporated topics for instance, public health, society issues, public controversies, education and training, social justice, workplace safety, working environmental, human rights, equal opportunity and labour rights (Jamali, 2006). Therefore, sustainability is crucial in the property company business strategy to being balance between economic growth and the responsibility of environmental and social performance over the long term. Notwithstanding the compelling principle of TBL, the economic performance in the property company is controversial issues of its reliability and sustainability growth and thus as fundamentally element of the corporate social responsibility (CSR). However, to become social responsibility is increasingly understood to both involvement the environmental stewardship and concern to social activities (Windsor, 2001).
Therefore, the challenge facing to the property company nowadays to becoming considered the principle of triple bottom line as a whole for generate and develop the business strategy in order to complying the sustainable development. Hence, the criteria assessment of sustainability development is essentially focus topics. The following section would be examined the sustainable development criteria from the published literature and leads to assessment the existing sustainable development framework of PRUPIM in chapter 2.
Cite This Work
To export a reference to this article please select a referencing style below:
Related ServicesView all
DMCA / Removal Request
If you are the original writer of this essay and no longer wish to have the essay published on the UK Essays website then please: