World Environment Day 2026: Real estate adapts to climate change

World Environment Day 2026: Real estate adapts to climate change

J. Jeffrin Jeba Paulin

With rising sea levels and intensifying urban heat across cities, climate change is no longer just a subject of discussion — it’s time for meaningful action and long-term planning. Concerns around heat islands, waterlogging and development in environmentally vulnerable areas are increasingly shaping real estate investment decisions. Climate risk is also beginning to influence property prices, valuations and buyer preferences across the market.

In 2026, homebuyers are looking beyond location and amenities, taking into account green mandates, sustainable building practices and climate resilience before investing in property.

Ahead of World Environment Day on June 5, industry experts share their insights.

Industrial

“Industrial facilities are more susceptible to stress from climate change: intense heat reducing the efficiency of machines, extreme weather that interferes with supply chains, and water shortages that disrupt the ability to keep production continuous, among other issues. Relocating plants away from the coasts and investing in passive cooling, on-site renewable energy storage, and climate-resilient water systems may become necessary. These issues that used to be occasional problems are now becoming long-term, persistent problems. The goals have shifted to climate change resilient design, more energy-efficient systems, integrated renewable energy systems, better water resource management, and design principles for long-term viability.”Shashank GuptaDirector, RPS Group

Real estate

“Climate change is rewriting the rules of real estate, like not in a distant future, but right now. Rising sea levels, extreme heat, and flooding are no longer just distant threats, they are real valuation factors. We’re watching a seismic shift: properties without resilience features are starting to feel like stranded assets. Buyers now ask about flood zones, cooling costs, and even grid independence before they care too much about square footage. Green certification isn’t a luxury — it’s more of a risk metric. The industry has to retrofit what exists, and also build anew with nature, not against it. Real estate’s future will depend on adapting faster than climate changes, period.”Gunjan GoelDirector, Goel Ganga Development

Retail

“Retail property is hyper-sensitive to climate shocks. One flood or a heatwave can shut stores down for weeks, and it does more than just pause revenue, it also grinds brand trust. We’re reworking shopping centres with permeable pavements, shaded parking areas, and those backup microgrids that quietly keep running. The location game is also flipping, kind of, moving away from low-lying zones and toward climate-stable corridors where stuff doesn’t get wrecked as easily. Retail real estate really has to treat climate resilience as a core leasing clause, where landlords and tenants split the retrofit costs. Otherwise, the alternative is stranded strip malls, empty and stubborn. Shoppers will, in practice, walk with their feet to places that stay cool, stay dry, and stay open. Resilience is the new curb appeal, basically.”Raghunandan SarafFounder and CEO, Saraf Furniture

Infrastructure

“Infrastructure is the skeleton of real estate: roads, sewers, power lines, transit. Climate change fractures that skeleton, heat buckles rails, storms overload drainage and rising seas just inundate tunnels. Real estate can’t really work without resilient infrastructure. The infrastructure planning should slide away from historical weather and move forward toward climate models. This means raised substations, porous pavement and decentralised energy storage, to be done early. Every real estate rupee saved by green building can get wiped out by one failed bridge. Hence, infrastructure and real estate have to co-invest in adaptation.”Hardik ShahDirector, Shyam Group-Dholera SIR

Institutional

“Institutional owners, pension funds , universities, REITs — they hold these huge portfolios that are exposed to both climate physical risks and the transition kind. Like, we are running stress tests on assets against 2050 climate scenarios, and we also divest from higher-risk zip codes. Institutional real estate has to move toward mandatory climate-related financial disclosures, TCFD-aligned, and also lock in science-based targets for retrofit work. Fiduciary duty right now means shielding beneficiaries from stranded assets. This translates into funding green bonds for resilience upgrades, pushing for resilient infrastructure through lobbying and also sharing climate data across portfolios. Institutions don’t simply “own” buildings; they carry the obligation to adapt them. If we keep waiting, that looks like a breach of trust.”Keshav ManglaGM-Business Development, Forteasia Realty

Warehouse

“Warehouses are like climate canaries. When temperatures keep climbing, cold storage gets squeezed; heavy rains chew up roofs and loading docks, and the whole logistics routine kind of wobbles. We’re boosting distribution centers, throwing on cool roofs, and leaning into predictive analytics for weather related closures. This sector has to standardise resilience audits. Solar powered warehouses, plus battery backup, are getting treated as non-negotiable by big retailers.”Siddharth MauryaFounder & Managing Director, Vibhvangal Anukulakara Private Limited

Investment

“Investment capital is also finally pricing climate risk into real estate. We’ve moved past ESG as window dressing, and into quantitative models that discount properties if they lack resilience. For World Environment Day, investors should ask ‘What’s the 1-in-100-year flood height? What’s the cooling degree day trend looking like? Where is the insurance cost trajectory headed?’ Portfolios that are overweight in climate-exposed regions are already underperforming, even if the presentation stays polished. What’s changing now is that we’re shifting toward assets with verified net-zero operations, natural disaster hardening, and adaptation capex budgets that actually get funded. The green premiums are real, and the brown discounts are growing. The message is simple: climate-aligned real estate isn’t some niche—it’s the only long-term investment strategy.”Vijay RaundalDirector of Teerth Realties

Commercial

“Commercial real estate is dealing with a two-part problem, too: operational carbon and tenant expectations, both at the same time. Offices and malls in fire-prone or flood-risk zones are seeing insurance spikes and then vacancy rises, sometimes pretty quickly. Tenants want energy-efficient HVAC, solar readiness, and water recycling. Climate disclosure rules are now tangling with leasing and financing decisions. We’re urging developers to prioritise net-zero retrofits; otherwise, even prime locations can become liabilities. The sector can lead by example, turning lobbies into climate action statements and leases into sustainability contracts. Adaptation isn’t optional anymore; it’s the new rent.”Akash PharandeManaging director, Pharande Spaces

Luxury housing

“The meaning of luxury housing has undergone a quiet transformation. For many years, luxury was evaluated through address, scale, finishes, views, and amenities. Those will continue to matter, but they are no longer enough. A home that cannot stay comfortable, resource-efficient, and liveable over time will struggle to remain truly luxurious. Bengaluru’s original luxury was never only built form. It was its climate, tree cover, lakes, shaded streets, gardens and a certain ease of everyday life. As the city becomes warmer, denser, and more stretched on water and infrastructure, future-ready luxury will be defined by how intelligently a home works with nature: orientation, shade, natural ventilation, daylight, water recharge, reuse systems and durable materials.”Pavan KumarFounder & CEO, White Lotus Group

Hospitality

“Hospitality design is no longer centred only on aesthetics or luxury, it is increasingly about resilience, adaptability and environmental intelligence. Across the sector, we are witnessing a strong shift towards climate-responsive architecture that integrates passive cooling, natural ventilation, water-sensitive landscaping, renewable energy systems and biophilic elements into the guest experience. Sustainability is now influencing core design thinking, from material selection and energy optimisation to local craftsmanship and thermal efficiency.”Vishal Vincent TonyManaging Director, Aratt Developers and Founder, Ayatana Hospitalities

Commercial

“The priorities of commercial real estate in India are being rapidly reshaped owing to climate change. Today, sustainability is no longer an option but a key business imperative driving design, construction, and operations. Occupiers and investors are increasingly preferring green, energy-efficient, and climate-resilient developments that align with long-term ESG goals. Features such as efficient water management, lower carbon footprint, and wellness-focused infrastructure are becoming critical differentiators. Going forward, sustainable commercial assets will command stronger demand, better value creation, and long-term resilience.”Mohit RamsinghaniPresident & Business Head at VTP Realty

Published – May 29, 2026 05:50 pm IST

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