Last Updated: August 9, 2026
It is quite possible you have noticed the recent heatwaves and rising temperatures, wherever in the world you live or have recently visited.
Add us as a preferred source to see more super-prime intelligence in Google.
Scorching conditions have slowed industry, strained infrastructure and left their mark on both public health and the environment.
For investors and property owners, the consequences, and the work required to mitigate them, can no longer be avoided.
Physical resilience, future cooling costs, water management, insurance availability and the supply of buildings equipped for more extreme conditions should now sit near the top of any property checklist.
The first priority is understanding how well your existing assets are protected. The second is identifying where adaptation can preserve value and produce the best opportunities.
Stretching last week’s restaurant metaphor through another course, if you can’t stand the heat, get out of the building.
Macro Impact & Financial Disruption
Seoul recently reached 40°C for the first time in eight years, while more than 1,200 cities recorded their highest-ever temperatures last year, and the UK recorded its driest July since 1868, with almost half of England experiencing drought conditions.
Grid capacity, cooling demand and ventilation are all affected by extreme heat. The second-order effects of how this impacts human behaviour is already showing up in the data.
According to research from the London School of Economics (LSE), in the UK, the June heatwave resulted in:
- Over £1 billion: Cost to the economy as worker output fell.
- 24 million: Lost working hours during the heatwave.
- 1.25 million people: Did not work at all during the worst week.
The UK is a prime example of a country poorly adapted to higher temperatures: properties designed to retain heat, little or no air conditioning and a transport system that was never built to withstand these conditions.
As infrastructure limits are tested, cities and asset owners are forced to adapt at the local and building level.
Real Estate Adapts
The capital is one of many cities globally that is beginning to adapt and at the prime end of markets, rethink its approach to city living.
Electricity and water networks are strained, working hours are reduced and public infrastructure is pushed towards its limits.
In one of London’s most valuable postcodes in Mayfair, the effects of a more volatile climate have already been felt. Grosvenor Square was hit by flooding in 2021, contributing to six times the usual number of insurance claims across the Grosvenor estate. Now London has experienced a record seven days above 35°C in a single year.
Grosvenor’s £25 million redevelopment of Grosvenor Square adapts for both sides of the problem:
- 1% to 50%: Increase in planted area across the square.
- 70,000 plants & 44 new trees: Added to provide natural shade.
- 1.4 million litres: Volume of rainwater retained via two new wetlands and improved drainage.
Across the UAE, Abu Dhabi’s Al Bahr Towers use a responsive outer skin of triangular panels that open and close as the sun moves, reducing solar gain by as much as 50% without simply relying on more air conditioning.
Tokyo shows how these measures can move into the regulatory baseline. Since April 2025, major housing suppliers have been required to meet renewable-energy installation targets across new homes, with rooftop solar becoming standard where location and design allow.
Where these physical adaptations reduce grid dependence, they also unlock direct commercial returns.
The Commercial Opportunity
Value can also be created inside the building. As energy supply becomes more volatile against an uncertain geopolitical backdrop, property is beginning to move beyond simply consuming power.
Smart technology, on-site generation and battery storage allow buildings to create, store and actively manage energy.
JLL’s report into value creation through energy-smart, low-carbon buildings puts numbers on that opportunity:
- 25% to 50% revenue increase: Unlocked by shifting buildings from passive power consumers into active energy resources.
- 1.5 billion sq ft: Volume of potentially investable stock identified across 30 global markets.
- 70% of obsolete stock: Located in areas with strong sustainability value-add potential.
Harnessing the power of the sun gives property owners opportunities beyond lowering their own energy bills.
On-site generation and storage can produce revenue through EV charging, energy services and the sale of surplus power during periods of peak grid demand – not to mention the potential for higher rents and stronger financing and insurance terms.
With so much ageing building stock, now is as good a time as any to act. JLL estimates that annual retrofit rates across commercial real estate must increase from 2.4% to 13.2% for the sector to align with net-zero goals by 2050.
That does not necessarily mean obsolete stock will be cheap – or that every discounted asset represents an opportunity. Attention must remain firmly fixed on the cost of adaptation against the potential rental or resale uplift, alongside finance and insurance availability, planning requirements and the resilience of the surrounding infrastructure.
But value-add strategies should now target assets where physical adaptation, lower operating costs and new energy revenues can materially change performance.
The best opportunity won’t necessarily be investing in the greenest building available, but an asset at the right discount with an infrastructure capable of supporting its transformation, ensuring its futureproof status.
