Is Hong Kong’s real estate industry climate ready?
Climate change risks in Hong Kong are becoming more apparent, what used to be 1-in-500-year flood events are now more frequent occurrences. Our current infrastructure falls short against the looming magnitude and frequency of extreme events.
To gauge the impact, we assessed climate risks of over 80 commercial properties across 10 major real estate developers in Hong Kong under the high-emissions scenario (RCP 8.5). Assuming no adaptation measures are taken, here are the trends we uncovered:
Climate-Related Hazards: Properties face medium-high risks from typhoons, floods, extreme heat, and landslides.
Intensifying threats: By 2050, expect 5.8% higher maximum wind speeds and 8.6% deeper floods.
Heatwave impact: Extreme heat values to rise from 35 to 39.5°C by 2030, straining energy consumption in buildings, particularly older less efficient ones.
Escalating losses: Climate Value-at-Risk (expected losses) is predicted to increase by 40% by 2030, and by staggering 78% by 2050.
Each property has a unique hazard and risk profile that depends on its geographical location (e.g., distance from shoreline) and local topography/elevation. Buildings across Hong Kong are exposed to different levels of rainfall-induced flood risk - a main driver of the differences in the Climate Value-at-Risk at the building level.
Across the sample of commercial properties analysed, buildings with exposure to rainfall floods of the highest severity are located in the Central area (in darkest red; intensity indicates severity of projected rainfall flood hazard under RCP 8.5 2030):
Assuming no adaptation measures, we find that properties in our sample are exposed to high rainfall flood inundation depths.
12 properties in our sample, primarily in the Central area, are exposed to maximum depths greater than 1.5 metres. An in-depth study of existing flood protection and resilience measures, alongside any potential improvements to drainage and flood prevention infrastructure, would be key in these areas.
With Intensel’s granular and forward-looking risk assessment platform, real estate owners can begin to comprehensively assess these risks, and to identify adaptation options and strategies at the building-level today.
Reach out to our team today to learn how: