COVID and Climate Change Point in Similar Direction

Interview

The Budapest Business Journal speaks with Zsombor Barta, president of the Hungarian Green Business Council (HuGBC) and director of sustainability at Tomlin about the current challenges facing the industry.

Zsombor Barta

BBJ: How would you define sustainability in the coronavirus environment and what are the challenges that real estate faces?

Zsombor Barta: You can see two major opinions when it comes to sustainability and coronavirus. One says that sustainability is currently not in the focus anymore, as coronavirus and its mitigation measures and the connected negative financial effects dominate the markets. The other opinion says that the pandemic situation showcased how important sustainability is, and the situation and our future can be only tackled if this is taken even more seriously. My view is the same: I think the pandemic is not only a big challenge but also a chance to transform our societies and economies towards a more robust sustainable way. The real estate sector is also affected heavily. New ideas, alternative solutions and sustainable business solutions are the only way to mitigate the challenges and to future-proof the sector.

BBJ: How are BREEAM, LEED and WELL enhancing these elements in their accreditation systems?

ZsB: All of the internationally well-established green building certification schemes have incorporated holistic ideas of sustainability, therefore they are a great tool to follow. Further, all of these schemes already have a so-called Health and Wellbeing section included within their requirements. This has become highly important. All of the scheme operators quickly reacted to the pandemic and highlighted their health and safety requirements. As the WELL system is the one providing a framework especially for the interior environment, this scheme has probably become the most relevant requirement related to a healthy and safe internal environment.

BBJ: What will be the impact of the virus on the city and the working and living environment?

ZsB: The working environment is changing drastically; that has also had a huge effect on commercial real estate, especially offices and retail spaces. Working from home (WFH) is becoming a standard and not a privilege as it was before. Public transport is being seen as a transportation mode with higher risks for virus contamination, therefore commuting and transportation habits are also dramatically changing. Individual (alternative) transport options become more popular; cities must react to this and promote for example car or bike sharing systems, designate new and safe transport lines etc. Because of the above, more people will WFH, less are then commuting and online retail is having another boost, which, on the other hand, has a huge effect on traditional retail. All of this effects real estate heavily as well and developers and owners must react to it.

BBJ: How will it impact office, retail, industrial and hotel development?

ZsB: Nobody can say exactly how the commercial real estate sector will be impacted, but everybody agrees the impact will be huge. I think we will soon see totally new and innovative real estate concepts on the market, for example combining office developments with residential or transforming classical office spaces to spacious and safe meeting places. We will see what the future brings, but the pandemic will definitely change this sector.

BBJ: How does transportation need to be developed and improved?

ZsB: Public transportation systems are more risky than individual transportation. Therefore, the major focus should be on the further development and promotion of alternative individual transport options. Car, bike, motorbike, e-bike sharing systems are a good alternative, although often relatively expensive. Bikes are a cost effective and efficient transportation mode, which should definitely be supported more. Further, trains will probably become again more popular, as the excellent European network could also be also for longer distances with individual cabins or for overnight journeys.

BBJ: How will the situation impact the architectural and interior design of commercial property?

ZsB: This is also something which is currently under development, but what we can see is that health and safety features will definitely dominate near future developments. This has an effect on the building engineering systems (e.g. increased ventilation and filtration capacities), interior spaces (more individual spaces instead of small and overcrowded rooms) and more and new technologies (such as automatic doors, elevators, taps, etc. to avoid physical contact with the equipment).

BBJ: What are the current priorities of building owners with regard to office interiors and how will office practice change?

ZsB: Currently, the owners of commercial assets are trying to survey this pandemic situation without losing their tenants; therefore, they are often offering many benefits and discount options. In the future, more flexible solutions will be required and this also requires new products on the market. Smaller and more individual spaces are frequently requested by tenants on the one hand, but also bigger and more spacious areas for more people. This is a challenge which the sector has to address somehow.

BBJ: How will PM/FM systems need to be adapted?

ZsB: Increased health and safety standards and increased operation and maintenance procedures require a systematic FM/PM approach and new capacities are also needed to meet these new and increased expectations. Also, new measurements, tests and a control mechanism are expected to come, because a high level of transparency can increase confidence and trust, which is definitely needed to gain back normality.

BBJ: How can office development, management and investment be financially viable in the new environment?

ZsB: Only if they address the above mentioned issues and if they are willing to invest in new and alternative approaches. A transparent sustainability strategy could be one important step, but also investment in different new technologies is an important factor.

BBJ: How are office and retail tenant specifications changing?

ZsB: Tenants would like to increase flexibility. This relates to the lease contracts, leasing times and periods, to the leased and communal spaces as well.

BBJ: How are concerns with regard to coronavirus and climate change interconnected?

ZsB: The current global pandemic is directly connected to an unsustainable way of living and to unsustainable societies as well. The rapid global spread of the virus was only possible because the unsustainable circumstances were optimal for that. Climate change and the destruction of natural capital is an even bigger catastrophe for mankind than this current pandemic situation. The current situation is only a delicate foretaste for what will happen if we do not take climate change and environmental protection seriously and if we do not change our societies to a more sustainable way immediately.

There is no time to wait or to discuss when and how it should happen. Experts and scientists have developed several beneficial options and scenarios for several decades already for how we simply have to live. This definitely requires a change in our individual life habits, but if we understand the benefits and importance in order to do so, we can have a much healthier and more livable time here on mother earth. There is no option “B” as there is also no planet “B” and the alarming signs are already ringing; we have to understand and take the alarms seriously and change immediately. The good news is that there are several sustainable alternatives and nobody has to go back to the medieval ages. Currently, our societies and we as individuals spend a huge amount of money to support unsustainable solutions; we have just to switch and support real sustainable alternatives and to live with less. This will help a lot and our climate targets can be achieved much faster than with conventional systems.

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