A new report investigating the extent that real estate markets are pricing in risk from the physical impacts of climate change has been published. In line with increasing investor and regulator requests for forward-looking analyses of assets and portfolios, the authors sought to better understand the variables that can feed into financial modeling and investment decision-making. The results are published jointly with UNEP FI and its partners from the Henley Business School at the University of Reading (U.K.) and the Brookfield Center of Real Estate and Infrastructure at the Schulich School of Business, York University (Canada).
The researchers reviewed published literature for empirical findings on value and price changes and shifts in market behavior linked to recent extreme weather events and sea level rise. They also investigated the channels through which values and prices are influenced, e.g., property cash flow, capitalization rates, and financing. Conclusions from the