"Is social value relevant to the real estate investment in existing stock?" - I am often asked by real estate investors and asset managers.
A simple answer is yes.
As discussed in our ULI report, investors can help address social issues through, for example, investing in underserved areas or sectors (e.g. affordable housing). Asset managers can work with tenants to support wellbeing, promote social cohesion and address inequality through property management and programme delivery.
Long-term investors see the benefit of their investment in social value creation as 'not-yet financial value'. Creating a vocational training space in a shopping centre or a community centre in an office building may not bring extra revenue straightaway. However, the benefit of stronger local economy or better social cohesion in local community will materialise over time. Those investors, who see such long-term benefit, are monitoring and managing social aspects of the asset performance in order to identify risks and opportunities for their investment portfolios. Spotting an early sign helps them make necessary interventions and optimise their asset performance, leading to stable and healthy returns.