The aim of this report is to articulate the business case for implementing circular economy principles in building projects. The report explores the possibility that new, circular real estate business models can deliver better returns on a reduced resource footprint. Projects in diverse sectors and markets can benefit from these models.

The report lays out five new circular business models for real estate, each of which offers better returns than business-as-usual:
 

• Flexible Spaces;
• Adaptable Assets;
• Relocatable Buildings;
• Residual Value;
• and Performance Procurement.

The first model, Flexible Spaces, builds on the trend of co-working spaces to unlock the potential of underutilised space in buildings while balancing the risks normally associated with short tenure space. A model based on Adaptable Assets considers the value of creating buildings that are resilient to both changing market conditions and social expectations by being able to adapt to alternative uses. A business model based on Relocatable Buildings moving across several sites in Amsterdam could create an internal rate of return of up to 26 % over 11 years without accounting for land costs. The Residual Value model envisages the creation of tradable futures contracts related to the value of building materials at deconstruction. The Performance Procurement model involves paying for performance, not products – a key idea in product-as-a-service business models.

The report concludes with four calls to action:
 

• Investor and construction client communities must lead the adoption of circular principles on scalable, commercial-scale real estate projects.
• Real estate professionals must drive this conversation.
• Policy makers must be involved from the beginning of commercial-scale pilots.
• Evaluation tools that capture lost value must be developed.

The report presents practical solutions and novel business models that can address existing sources of lost/untapped value and realise the value of circular economy in real estate. To explore and identify these sources of lost/untapped value, roundtable discussions were held with real estate investors, clients and policy makers in five study cities: Aarhus, Amsterdam, Berlin, London and Milan. For each type of lost/untapped value, the report presents the types of new relationships that need to be established and the actions that are to be taken by each stakeholder to achieve progress (e.g. urban policymakers, construction clients, landlords, third party operators, etc.).

Furthermore, the report highlights how the proposed novel real estate business models can help real estate actors achieve net zero targets as well as improve the resource productivity of real estate.The aim of this report is to articulate the business case for implementing circular economy principles in building projects. The report explores the possibility that new, circular real estate business models can deliver better returns on a reduced resource footprint. Projects in diverse sectors and markets can benefit from these models.

The report lays out five new circular business models for real estate, each of which offers better returns than business-as-usual:
 

• Flexible Spaces;
• Adaptable Assets;
• Relocatable Buildings;
• Residual Value;
• and Performance Procurement.

The first model, Flexible Spaces, builds on the trend of co-working spaces to unlock the potential of underutilised space in buildings while balancing the risks normally associated with short tenure space. A model based on Adaptable Assets considers the value of creating buildings that are resilient to both changing market conditions and social expectations by being able to adapt to alternative uses. A business model based on Relocatable Buildings moving across several sites in Amsterdam could create an internal rate of return of up to 26 % over 11 years without accounting for land costs. The Residual Value model envisages the creation of tradable futures contracts related to the value of building materials at deconstruction. The Performance Procurement model involves paying for performance, not products – a key idea in product-as-a-service business models.

The report concludes with four calls to action:
 

• Investor and construction client communities must lead the adoption of circular principles on scalable, commercial-scale real estate projects.
• Real estate professionals must drive this conversation.
• Policy makers must be involved from the beginning of commercial-scale pilots.
• Evaluation tools that capture lost value must be developed.

The report presents practical solutions and novel business models that can address existing sources of lost/untapped value and realise the value of circular economy in real estate. To explore and identify these sources of lost/untapped value, roundtable discussions were held with real estate investors, clients and policy makers in five study cities: Aarhus, Amsterdam, Berlin, London and Milan. For each type of lost/untapped value, the report presents the types of new relationships that need to be established and the actions that are to be taken by each stakeholder to achieve progress (e.g. urban policymakers, construction clients, landlords, third party operators, etc.).

Furthermore, the report highlights how the proposed novel real estate business models can help real estate actors achieve net zero targets as well as improve the resource productivity of real estate.

The report considers the roles of actors in both real estate and construction value chains, making it a good source of inspiration and guidance that can support cities and regions in the development and implementation of their Circular Systemic Solutions that involve the built environment.