Europe property report underscores growing interest in real estate wellness factors
When JP Morgan Europe released its Europe Property Report this month, there was a new category in their trends coverage – Real Estate and Well-Being. That’s good news for the International WELL Building Institute (IWBI) and its WELL Building Standard (WELL), which is an evidence-based system for measuring, certifying and monitoring the performance of building features that impact health and well-being.
“I was fortunate enough to speak at this conference this year,” IWBI Founder Paul Scialla said, “and I was extremely encouraged by the financial community’s significant interest in health and wellness as a value driver for quality real estate. The report underscores what we’ve known all along – that investing in building sustainability can lower operational costs, but that when you couple that with investing in the aspects of a building that can enhance your employees’ health and well-being, you gain productivity and other key benefits that show up in a more engaged workforce and your bottom line.”
The Global Wellness Institute notes that the global wellness economy amounted to $3.7 trillion in 2015, and that the market for wellness in real estate is gaining traction. The market for residential, hospitality, and mixed-used real estate that incorporates wellness elements into its design, construction, amenities and services was one of the fastest-growing wellness sectors from 2013-15, growing 19 percent to $118.6 billion.
The JPM report specifically called out IWBI’s WELL Building Standard, which focuses on helping building owners and operators incorporate design and operational features that have health and wellness impacts into both new and existing buildings. These features typically build on sustainability concepts introduced by the prevailing green building rating standards — LEED, Green Star, BREEAM and the Living Building Challenge – and take them to the next level.
“One of the most exciting aspects of WELL is that it has given the market a tool to create a common language around health and well-being aspects of the built environment,” IWBI Chairman and CEO Rick Fedrizzi said. “That in turn is helping us frame research that validates for both investors and tenants the performance impacts of using WELL. If we want people to be healthier, we have to make it easy for them to be healthy, and if we rethink the role of the built environment in the public health agenda, we’re adding value to real estate assets and valuing people’s health at the same time. That’s huge.”
The JPM report noted findings from the World Green Building Council, which highlighted six design and construction elements that impact health and well-being in buildings:
- Indoor air quality. Research suggests that better air quality can result in an 8-11 percent productivity increase.
- Thermal comfort. A modest degree of personal control over thermal comfort can return single-digit improvements in productivity.
- Daylight and lighting. Being close to daylight results in more optimal sleep. Productivity of focused work increased by 15 percent for workers close to a window. The report cites a study by neuroscientists, which suggests that office workers with windows received 173 percent more white light exposure during work hours, and slept an average of 46 minutes more per night.
- Biophilla. Being close to nature, improves productivity and the feeling of wellbeing.
- Noise. Exposure to noise lowers productivity. Performance can drop up to 66 percent when exposed to distracting noise.
- Active design. Having access to an on-site gym, bicycle storage and access to green space lowers the number of sick days for those who actively use these facilities.
“Now the benefits are quantifiable: lower absenteeism, lower staff turnover, higher revenue per employee; reduced medical costs, fewer medical complaints; fewer physical complaints,” Fedrizzi said. “If operating costs are about 90 percent salaries and benefits for most companies, a 10 percent variance in staff costs can have a significant impact on a company’s overall financial performance. The certification process as defined by WELL gives companies a roadmap to achieve a healthier, more engaged work force through improvement in their buildings. It’s not a small thing.”
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