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31st of March 2021

Solutions for a better society - Experts on trends in Public sector

Adapteo is excited about a future where adaptable buildings play a large role in resilient and inclusive societies.

We have spoken to five leading voices within real estate and the public sector to identify key trends that will shape our industry. We have learnt that there will be many opportunities for adaptable buildings to create value in society.

The experts Adapteo talked to observed six key trends shaping how the public sector will manage its real estate to respond to the changing needs of society.

1. Old building stock in need of renovation

The public property renovation debt is enormous. 73 per cent1 of schools in the Nordic countries today are 40 years or older, and a significant proportion of these are in big need of renovation. The renovation debt is an obstacle to inclusive and quality education. It is already leading to a reconsideration of the public sector’s traditional role as property managers.

2. Urbanisation on the rise

Urbanisation affects not only large cities, but also rural areas where people increasingly move to urban centres. This creates changing demands for key social infrastructure such as education and elderly care.

– The urbanisation trend is strong. Urbanisation affects not only large cities, but also rural areas where people increasingly move to urban centres. Because of this trend, we now see larger elderly homes and schools in the town centres in order to streamline costs.

Annika Wallenskog, Chief Economist at the Swedish Association of Municipalities and Regions

3. Volatile demographic changes

Recent years have been extra volatile in terms of demographic trends. For instance, Sweden and Germany had a large immigration stream that peaked in 2015 which has now almost completely ceased. Millennials are also starting to have children, which increases demand for daycare centres and schools.

– These factors make it harder to produce accurate population forecasts. In addition, the elderly population will grow significantly. Sweden needs to build about 500 nursing homes by 2026, and in the pipeline today we only have about 150.

Annika Wallenskog

4. Strained public sector finances at local level while needs increase

The recent financial crises have hit the municipalities hard and, as a consequence, property maintenance and renovations have been neglected. Despite stronger finances in the past ten years, covid-19 worsens the prospects for public sector finances. The situation has caught up with many municipalities, and the renovation debt is so great that many are starting to look for new solutions.

– As maintenance is neglected, the potential need for rapid evacuation that requires adaptable buildings increases.

Hanna Hellquist, Deputy Municipal Director at the Norrtälje Municipality in Sweden

– The public sector is starting to see that as needs change over time, adaptable builders can rapidly learn from each project, continuously adapt and improve spaces for schools, daycare and elderly care.

Antti Peltokorpi, Assistant Professor of Operations Management in Construction at Aalto University School of Engineering in Finland

5. The rise of climate change on the agenda

Buildings stand for 38 per cent of all energy-related CO2 emissions globally2. The construction and real estate industry and its customers are looking increasingly at the entire environmental footprint of buildings, not just energy efficiency. Therefore, aspects around sustainable design, circularity and choice of materials will become more important. Legislation is also increasing.

– New legislation such as the EU Taxonomy, an increasing price for CO2 and the financial sector becoming aware of climate risks will drive interest in climate-positive buildings in the years ahead.

Jürgen Utz, Director of the DGNB Academy at the German Sustainable Building Council

6. The pandemic has driven demand for flexible solutions

Covid-19 has changed our lives in a number of aspects. It has also led to new ways of using buildings and real estate. We have seen many examples of flexible and adaptable spaces increasing resilience in society and helping keep people safe – from isolating the infected within elderly care to creating additional hospital wards. The impact may continue beyond covid-19.

– We may see a larger number of relocatable buildings in the future, which can be especially relevant in regions with sparsely populated areas like the Nordic countries. Beyond healthcare, covid-19 has also forced schools to go digital overnight. A mix of traditional classroom teaching and digital solutions open up for new opportunities to design adaptable spaces that best contribute to inclusive and quality education.

Annika Wallenskog

– Digitisation has accelerated during the pandemic. This is likely to have some positive impact, for example on how we design modern teaching and schools in the future.

Jürgen Utz

1 Backlog Renovation report, PWC Strategy&, 2018

2 UNEP, 2020

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