Real estate redefined: exploring the hybrid future of real estate

Hybrid assets

Real estate redefined: exploring the hybrid future of real estate

Hybrid assets

Disruption, rapid digitalisation and ESG factors create a wave of exciting real estate opportunities. However, with this change comes the risk of rapid asset obsolescence, deepening the divide between the smartest and greenest properties, thriving sub-sectors and those left behind.

of European building stock is energy inefficient Source: European Commission

Only 1%

of EU building stock is renovated yearly Source: European Commission

of pension funds have seen 21%-30% depreciation due to brown discounting Source: Deepki

of UK office take-up has been of Grade A quality in 2023 Source: Savills

Stranded assets, stripped of value, must adapt to secure long-term performance and extend their lifespan. Retrofitting properties to meet new industry standards and user expectations or repurposing them to cater to growing demand in thriving sectors breathes new life into these properties. A hybrid asset transforms to remain relevant.

But embracing hybridity is no easy task. Real estate developers, investors and owners face disjointed planning legislation, refinancing challenges and fierce competition for tenants in an increasingly crowded market. It demands an innovative approach to planning and financing.