SCORCHEDSHUTTERSTOCK

Extreme Heat and Real Estate in Asia PacificSCORCHED: EXTREME HEAT AND REAL ESTATE IN ASIA PACIFIC
In 2013, Australia added deep purple, a new colour used forthe first time anywhere in the world, to its weather maps toshow record temperatures over 54°C1; in 2018, Japan declareda disaster when about 30,000 were admitted to hospitals
during a heat wave.2 That same year, South Korea recorded its
hottest temperature in over 110 years,3 and Hong Kong SAR
experienced a 15-consecutive-day heat wave, during which
indoor temperatures in buildings without air conditioning were
10°C hotter than outdoors.4
Soaring temperatures and dangerous heat waves are theuncomfortable reality in communities across the Asia Pacificregion. Extreme heat has the potential to cause devastating
public health consequences, infrastructure deterioration, andeven long-term impacts on local economies. The built
environment is both affected by higher temperatures and cancontribute to them through the absorption of heat and theemission of waste heat.
ULI’s 2019 review Scorched: Extreme Heat and Real Estate
outlines how real estate and land use practitioners can mitigate
the effects of extreme heat on people and infrastructure withthoughtful design and consideration of temperature-relatedrisks. Through ‘extreme heat resilience’, developers canrealize the business benefits of early resilience leadershipand contribute to the long-term success and liveability ofcommunities. Implementing heat-mitigation features that
reduce temperatures day-to-day also increases resilienceby helping prevent infrastructure failures and safeguarding
lives during extreme and co-occurring events.

INCREASING TEMPERATURES,
INCREASING IMPACTS
If climate change continues at the ‘business as usual’ rate,
the impacts of extreme heat – especially on economies andhealth – are projected to be the most severe in Asia Pacificcountries and especially in Southeast Asia. Extreme heat is
likely to measurably reduce country-level gross domestic
product (GDP), potentially by as little as 0.02 per cent in wealthy,
developed economies such as Singapore but as much as 10.7
per cent of GDP in countries with larger agricultural markets
such as the Philippines.5 Heat stress during Australia’s unusuallywarm 2013–2014 year, for example, cost the country an estimated
A$7 billion (US$6.2 billion) from lost productivity and heat illness.6
GDP losses could affect cities’ ability to raise capital (throughtaxes, for example) and the availability of capital for developers(as investors move to markets where heat impacts to theirreal estate investments are less severe or better mitigated bydevelopers and cities).
In the near term, the number, duration, and intensity of extreme
heat events in Asia Pacific are projected to increase significantly.
The World Health Organization estimates an additional 1,500 heatwave–related deaths in Asia Pacific’s high-income countries
by 2030; in Japan, for example, heat wave–related fatalities(2,000 per year as of 2018) could increase 170 per cent.7
By mid-century, average temperatures across Asia Pacific are
projected to increase 2°C with as much as 6°C of change insome areas.8

NOVA GROUP

Real estate sector investment in extreme heat management
could be especially meaningful in Asia Pacific markets whereclimates are historically hot and changing rapidly; megacities
amplify urban heat dynamics; and a significant number ofpeople are vulnerable to heat-related impacts.

SOLUTIONS FOR BUILDINGS
Significant opportunity exists to design and build to alleviate urban
heat island effects and safeguard human health. Developments
can prevent the absorption of heat with light-coloured surfaces andmaterials, provide direct cooling with increased shade from built
and natural shade canopies, and better cope with extremes through‘heat-aware’ building envelopes and HVAC choices that stabilize
indoor temperatures even during power outages. Installing cool(light-coloured) or green (vegetation-covered) roofs is almost
always an effective way to insulate the building (reducing energy use
and preventing heat gain) while potentially adding amenity space.
For a detailed list of extreme heat resilience strategies, visit
uli.org/extremeheat.

2

URBAN LAND INSTITUTE

Green roofs and walls, like the one above at NEX Tower in Manila, can help reduce
local temperatures and act as attractive amenities.

PROJECTED LABOUR CAPACITY REDUCTIONS IN SOUTHEAST ASIA BY 2045 FROM HEAT STRESS
Lost Labour
Capacity %9% Taiwan

0.0–1.0%

12% Vietnam

1.1–5.0%

Myanmar 5%

5.1–10%10% Laos

10.1–15.0%

Thailand 12%

15.1–20.0%

16% Cambodia

20.1+%

16% Philippines

Malaysia 24%

0

250

500

1,000
km

Singapore 25%
Indonesia 21%
High temperatures decrease productivity for both indoor and outdoor workers, with estimated productivity losses caused by heat stress as high as 45 per cent by 2045
across Southeast Asia. (ULI, adapted from Verisk Maplecroft)

URBANISATION AND EXTREME HEATEXTREME HEAT POLICY

In addition to rising temperatures from climate change,
many communities are likely to experience higher-temperaturedays; longer, more frequent heat waves; and intensified
impacts in cities where ‘urban heat islands’ form because of
the heat-absorbing properties of urban surfaces. Individual
buildings are affected by external high temperatures, whichcause material wear and tear, increase cooling costs, andthreaten grid stability contributing to blackouts.

Regulation that addresses extreme heat and the built
environment varies from country to country. Urban greening(for flood control and urban heat island mitigation) is acommon best practice. Bangkok, for example, set a goal ofestablishing 50 new city parks,11 and Tokyo provides subsidies
for the greening of rooftops.12

The size and density of cities influence
urban temperatures, which is especiallysignificant in Asia Pacific, which has
more than 13 megacities.
The size and density of cities greatly influence urban heatisland formation, a significant factor in Asia Pacific where urban
development has occurred at unprecedented rates and which
has more than 13 megacities.9 Cities that are large (in land areaand population) and densely developed usually have moresignificant heat islands than smaller, more sprawling, and lessdense cities.10 However, higher-density cities also offer important
opportunities for sustainable and energy-efficient living thatcan be combined with extreme heat resilient best practices tomitigate the urban heat island effect.

Melbourne implemented the world’s first target to reduce
citywide average temperature – a goal of 4°C reduction by
2030.13 The city is increasing tree planting and encouraging
green roof installation to achieve its goal. To provide a cooling
network of open spaces, Melbourne also amended its
Planning Scheme with recommendations that developers
make land contributions as part of new construction, withhigher percentage contributions in rapidly growing areas.14
Energy conservation is another focus, and entities such asSingapore, Japan, South Korea, Taiwan, Hong Kong SAR, andChina have expanded efficiency programs from the industrial
to the building sector.15 Reducing energy cooling needs canhelp eliminate the waste heat that contributes to higher urban
temperatures. Reduced energy consumption also lessens
electricity demand and pressure on the grid during times of highheat stress, helping prevent blackouts. Following the 2011
tsunami and Fukushima nuclear accident, Japan implemented
a setsuden power-saving campaign and mandated that big
power users reduce peak consumption. Many countries havedomestic green building rating schemes, although some assess
design only and do not verify performance.16
SCORCHED: EXTREME HEAT AND REAL ESTATE IN ASIA PACIFIC

3

SHUTTERSTOCKKEY TAKEAWAYS: EXTREME HEAT AND DEVELOPMENTCONSIDERATIONS IN ASIA PACIFIC
Extreme heat is an increasingly common planningconsideration in many global real estate markets.
Some leading developers, designers, and policymakers
in Asia Pacific countries are already considering
temperature-related risks in their work, and for others,
extreme heat is a newer focus.

Urban trees, such as in Xi’an, China, provide essential environmental services byminimizing the urban heat island effect, reducing air pollution, and managing
stormwater.

DANING 1 CHONGBANG

For the development team of Life Hub @ Daning, a large-scale, retail-anchored mixed-use project in Shanghai, creating a comfortable environment was part of
attracting users to the site. Trees, green building facades, and shading structures such as umbrellas reduce ambient temperatures, especially in pedestrian areas,
and the orientation and massing of the buildings create a ‘wind tunnel’ through the main plaza for added cooling.

The urban heat island effect is substantial
in many Asia Pacific cities
A 2015 review of temperatures collected in 100 cities
across Asia and Australia documented that the urban heatisland effect is raising local temperatures as much as 11°C as
compared with surrounding more rural areas.17

Extreme heat is a public health risk,
particularly for low-income and elderly
communities
Extreme heat causes the greatest damage in populations withother vulnerabilities, such as preexisting health conditions orlack of available coping strategies. People with low incomesare at high risk from extreme heat because they typically live
in neighborhoods that, lacking green space, are hotter thanthe city average. People with low incomes also often live in
substandard housing (including informal settlements) thatlacks weatherproofing and climate control.
Outdoor workers (such as agricultural or construction labourers)
are routinely exposed to extreme heat, given the nature of
their work. Hot temperatures are also associated with higher
incidence of certain diseases (especially when heat waves
occur during flooding or heavy rainfall); a rise in vector-borne
diseases such as dengue;18 and droughts, threatening foodsupply and livelihoods in some rural areas.

Cool design strategies, combined with public health andeffective emergency responses, can offset heat-related
mortality to a significant degree. In response to market
demands for cooler environments, one emerging strategy is
to incorporate air conditioning, a life-saving technology inmany cases, into new construction or building renovations(although adding air conditioning also has negative costand environmental implications).

Leading developers and designers
are considering extreme heat when
implementing best practices insustainability and energy efficiency
Extreme heat resilience strategies that contribute to energy
conservation (such as orientation to minimize solar heatgain and cool roof installations) often produce cost savings,
become preferred tenant locations, and help developers
achieve international and country-specific certifications.
The CapitaGreen office tower in Singapore, for example,
draws in cool air through an artful rooftop ‘cool void crown’,
reducing annual energy bills by 10 per cent and helping thebuilding earn Platinum-level certification under Singapore’s
Green Mark program. CapitaGreen has been 99 per centleased since it opened in 2014 and is earning a 10 per centrental premium.19

SCORCHED: EXTREME HEAT AND REAL ESTATE IN ASIA PACIFIC

5

Managing extreme heat is a criticalcomponent of placemaking andproduct quality

Extreme heat is one of the key
issues, especially in Asia Pacific.

User experience and comfort is a recurring theme, especiallyfor walkable, transit-oriented, and retail environments. Outdoor
spaces designed to provide cooler environments may haveenhanced foot traffic, sales, and brand visibility while properties
with ‘cool design’ features may experience similar benefits
when available as a productive environment during normal
hot-weather months and during extreme heat events.

CALVIN KWAN
General Manager of Corporate Development and Strategy, Link REITDESIGN INNOVATION
Developers and designers are increasingly implementing green
building innovations and testing emerging heat mitigation
technologies in Asia Pacific. At Singapore’s 101-hectare Gardens
by the Bay, futuristic solar-powered “supertrees” are an
attraction and a cooling strategy.
Designed by Grant Associates with architect Wilkinson Eyre
Architects and engineers Atelier One and Atelier Ten, eachsupertree is 25 to 50 metres tall. Two trees are connectedby a 128-metre aerial walkway.20 The trees provide shade topedestrians enjoying the walkways and gardens underneath,and the plants that grow vertically on each tree trunk provide
natural cooling and heat dissipation through evapotranspiration(the process by which plants evaporate water). The trees also
act as heat exhausts, venting residual hot air from the nearby
Energy Centre away from street level.21

6

URBAN LAND INSTITUTE

Local conditions – especially humidity level, which is a significant
human health factor – determine which mitigation andadaptation strategies will be effective and appropriate. The
frequently implemented strategies of evaporative cooling(water fountains and misting fans, for example) and vegetation(plants dissipate heat by evaporating water) can sometimes
increase humidity locally and are most effective in dry environments.
Developers with properties in humid locations can assess
the efficacy of evaporative strategies and focus on installing
non-vegetative shading, optimizing ventilation and HVAC,
reducing waste heat, and choosing building materials that absorb
less heat.

SHUTTERSTOCK

Link REIT, which operates more than 50 markets in Hong Kong
SAR, has implemented a Fresh Market Strategy, renovating many
existing buildings by removing internal walls between vendors
to improve air circulation and adding air conditioning. ‘Simply
adding air conditioning has made a big impact in terms of how
many people come to and shop longer in the markets,’ says
Calvin Kwan, general manager of corporate development andstrategy. ‘The Fresh Market Strategy is a really good businesscase for dealing with heat and turning a negative issue (heat)
into a strong business opportunity. However, with more people
coming in to avoid the heat, we have to think about more air
conditioning efficiency.’

Extreme heat mitigation requires
balancing temperature reduction
with humidity management

Inventive ‘supertrees’ attract visitors and are a cooling strategy, shading underlying
recreation spaces and venting waste heat from a nearby building away from pedestrians.

NOVA GROUP

HEAT-AWARE ENERGY EFFICIENCYEnergy efficiency and heat-aware design at NEX Tower, a
38,000-square-metre premium office building in Manila,
are producing cost savings and preparing developer-owner
Nova Group for an expanding sustainable building market.
Completed in 2018, NEX Tower features an efficient curtain wallwith double-paned glass, the most efficient air conditioning
on the market, and LED lighting and automated lighting controls(minimizing waste heat). ‘We also studied sun shading devices
for the external facade,’ elaborates Ricardo Cuerva, managing
director at Nova Group, ‘but we found they weren’t necessary
because the building is in shade from the surrounding buildings
most of the time, limiting the solar heat gain.’
A shaded rooftop deck also prevents heat build-up on the top
floors. Green walls, two of the first in the Philippines, attract
significant tenant and media attention, help improve air quality,
and likely contribute to lower temperature ‘microclimates’
where installed in an outdoor meeting space and main lobby.
‘It was a holistic approach to sustainability,’ says Cuerva. NEX
Tower has earned LEED Platinum certification. Cuerva expects
that estimated 30 per cent lower electricity costs will be
attractive to tenant companies, especially as the market forsustainable building matures.

The cooling design elements at NEX Tower are part of a holistic sustainability strategy
to manage operations costs and attract tenant companies.

Extreme heat mitigation policies often
support other regulatory goals, including
Asia Pacific focus areas of city greening,
air quality improvement, and energy
conservation
Air quality improvement initiatives, such as Hong Kong’s 2013
Clean Air Plan to cut particulate matter, ultimately reduce
the urban heat island effect. 22 Higher temperatures create
ideal conditions for the formation of smog, which thenacts as a heat-trapping barrier. City polices related to urban
forestry, green roofs, and open-space conservation/creation
establish ‘cool park islands’ that do not absorb as much heatas urban surfaces.

Local climatic conditions determine
which mitigation and adaptation
strategies will be most effective.
Developers who monitor local policy changes are potentiallybetter positioned to take advantage of incentives and energy
efficiency requirements; Singapore offers longstanding tax
incentives for energy-efficient equipment and mechanicalsystems, for example,23 and requires that official functions beheld in Green Mark–certified hotels or convention centers.24

SCORCHED: EXTREME HEAT AND REAL ESTATE IN ASIA PACIFIC

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NOTES
1. Alexander Abad-Santos, “It’s So Hot in Australia That They Added New Colors
to the Weather Map,” The Atlantic, 8 January 2013, https://www.theatlantic.com/
international/archive/2013/01/its-so-hot-australia-they-added-new-colors-weathermap/319705/.

12. APEC Energy Working Group, “Cool Roofs in APEC Economies: Review ofExperience, Best Practices, and Potential Benefits” (report prepared by Building
System & Diagnostics PTE Ltd for APEC Secretariat, Singapore, December 2011),
https://www.coolrooftoolkit.org/wp-content/uploads/2012/05/APEC-Cool-Roofs.pdf

2. Presentation by Kizzy Charles-Guzman during ULI webinar, 7 August 2019.

13. Neil McMahon, “Can Melbourne Lower Its Temperature by 7 Degrees?”
CityLab, 2 February 2015, https://www.citylab.com/environment/2015/02/canmelbourne-lower-its-temperature-by-7-degrees/385050/.

3. Benjamin Haas, “South Korean Heatwave Causes Record Deaths,” The Guardian,
9 August 2018, https://www.theguardian.com/world/2018/aug/09/south-koreanheatwave-causes-record-deaths.
4. Christy Leung, “Hong Kong Heatwave Left City’s Poorest Reduced to Tears andFighting Off Depression as Temperatures Soared in Oven-Like Homes,” South China
Morning Post, 7 July 2018, https://www.scmp.com/news/hong-kong/community/
article/2154224/hong-kong-heatwave-left-citys-poorest-reduced-tears-and.
5. Verisk Maplecroft, “The Economics of South east Asia’s Rising Temperatures,”
16 November 2017, https://www.maplecroft.com/insights/analysis/economics-ofsouth-east-asias-rising-temperatures/.
6. Kerstin Zander, Elspeth Oppermann, and Stephen Garnett, “Extreme Heat
Poses a Billion-Dollar Threat to Australia’s Economy,” The Conversation, 4 May
2015, https://theconversation.com/extreme-heat-poses-a-billion-dollar-threat-toaustralias-economy-41153.
7. Chris Russell, “Heat Wave Deaths in Japan Could Jump 170 Percent by 2080,
Spike Far Higher in Other Countries: Study,” Japan Times, 1 August 2018, https://www.japantimes.co.jp/life/2018/08/01/environment/study-sees-dramatic-rise-heatwave-deaths-2080-mitigating-steps-not-taken/#.XVrKhuhKiUk.
8. Postdam Institute for Climate Impact Research and Climate Analytics, Turn
Down the Heat: Climate Extremes, Regional Impacts, and the Case for Resilience(Washington, DC: International Bank for Reconstruction and Development/World
Bank, 2013), http://documents.worldbank.org/curated/en/975911468163736818/
pdf/784240WP0Full00D0CONF0to0June19090L.pdf.

14. City of Melbourne, Open Space Strategy: Planning for Future Growth, June
2012, https://www.melbourne.vic.gov.au/community/parks-open-spaces/pages/
open-space-strategy.aspx.
15. Wen Hong and Madelaine Steller Chiang, “Trends in Asia’s Building Energy
Efficiency Polices,” International Conference on Climate Change, 2017, http://
www.hkccf.org/download/iccc2007/31May/S5A/HONG%20Wen/Trends%20in%20
Asia’s%20Building%20Energy%20Efficiency%20Policies.pdf.
16. Tim Shen, “Sustainability: Green Building in Asia,” IPE Real Assets,
September/October 2016, https://realassets.ipe.com/investment-/sustainability/
sustainability-green-building-in-asia/realassets.ipe.com/investment-/sustainability/
sustainability-green-building-in-asia/10015284.fullarticle.
17. M. Santamouris, “Analyzing the Heat Island Magnitude and Characteristics
in One Hundred Asian and Australian Cities and Regions,” Science of the Total
Environment 512–513 (15 April 2015): 582–598, https://doi.org/10.1016/j.
scitotenv.2015.01.060.
18. Climate & Development Knowledge Network, The IPCC’s Fifth Assessment
Report: What’s in It for South Asia? (2014), https://cdkn.org/wp-content/
uploads/2014/04/CDKN-IPCC-Whats-in-it-for-South-Asia-AR5.pdf.
19. Mark Cooper, “Asia’s Financiers Are Buying into More Sustainable Building
Practices,” Urban Land, 21 June 2019, https://urbanland.uli.org/sustainability/
asias-financiers-are-buying-into-more-sustainable-building-practices/.

9. The World’s Cities in 2018: Data Booklet (United Nations, 2018), https://www.
un.org/en/events/citiesday/assets/pdf/the_worlds_cities_in_2018_data_booklet.pdf.

20. Grant Associates, Gardens by the Bay – Supertrees, http://grant-associates.
uk.com/projects/super-trees/.

10. Bin Zhou, Diego Rybski, and Jürgen P. Kropp, “The Role of City Size and
Urban Form in the Surface Urban Heat Island,” Nature Scientific Reports 7: 4791
(6 July 2017), https://www.nature.com/articles/s41598-017-04242-2.

21. Gardens by the Bay, Sustainability Efforts, https://www.gardensbythebay.com.
sg/en/the-gardens/sustainability-efforts.html.

11. Sigit Arifwidodo, Rizqi Abdulharis, and Tetsu Kubota, “Understanding Urban Heat
Island Effect and Its Implications to Climate Change Adaptation Strategies in Major
Southeast Asian Cities,” Final Technical Report CAF2016-RR12-CMY-Arifidodov(Kobe, Japan: Asia-Pacific Network for Global Change Research, 2018), https://www.
apn-gcr.org/resources/files/original/bca1fac6f3e698096c445f3133a23f70.pdf.

ULI Asia PacificRoom 3418, Jardine House
1 Connaught PlaceCentral Hong Kong

22. Ernst Kao, “Hong Kong Is Making ‘Significant Progress’ in Its Efforts to
Improve Air Quality,” Business Insider, 17 May 2017, https://www.businessinsider.
com/hong-kong-air-quality-2017-5.
23. APEC Energy Working Group, “Cool Roofs in APEC Economies.”
24. Tim Shen, “Sustainability: Green Building in Asia.”ULI Center for Sustainability andEconomic Performance2001 L Street, NW, Suite 200
Washington, DC 20036-4948

For more information about extreme heat and real estate as well as ULI’s related resilience resources, visit
uli.org/extremeheat or email resilience@uli.org.