Building Tomorrow: Three Success Stories
The Real Estate and Construction Industry's Role in Sustainable Development and Social Integration
By: Juan Carlos Garnica
How Can Modern Building Practices Boost Our Economy and Community?
In the tapestry of economic development, the real estate and construction industry emerges as a pivotal thread, weaving together the growth of a nation's GDP with the fabric of its societal well-being. Both publicly and privately funded, the industry's contribution to economic activity is undeniably significant, particularly in developing countries where the manufacturing sector is often nascent. Here, real estate and construction, alongside mining, become a primary conduit for wealth generation, leveraging local materials, labor, and machinery.
The critical need for infrastructure in these regions propels a high rate of investment in social projects, many of which are strategically directed towards remote and underprivileged areas. Initiatives such as the construction of local roads, hospitals, schools, and daycare centers are not just infrastructural developments; they are lifelines to communities grappling with challenges of accessibility and basic services. In executing these projects, real estate and construction companies inherently adopt a role beyond builders; they become integrators, employers, and educators, hiring locally and fostering a communal atmosphere that aligns with company objectives and local aspirations.
Hiring local labor is often one of the first steps in project implementation, triggering a cascade of secondary economic activities that spread throughout the project impact area. Each project becomes a hub of employment and economic opportunity, from small contractors and transporters to women providing food or doing direct construction work.
However, this integration of construction into local communities is not without its challenges. It confronts social realities marked by inequities such as domestic violence, alcoholism, child labor, and gender disparity—issues that are prevalent in settings burdened by poverty, illiteracy, and inadequate access to essential resources. The real estate and construction industry, therefore, finds itself in a unique position to address these social dilemmas, leveraging its projects as platforms for broader societal engagement and improvement.
Bridging Goals with Action: Three Success Stories
In the real estate and infrastructure sectors, the Sustainable Development Goals (SDGs) serve as a compass for impactful investments. These 17 goals chart a course for projects that not only yield financial returns but also contribute positively to society.
Here, we highlight three projects from our portfolio exemplifying how integrating the SDGs can generate value and meaningful change, underscoring the symbiotic relationship between sustainable development and business success.
Rural Road Development - Quebrada Honda
The Quebrada Honda initiative, with an allocated budget of US$ 14 million, stands as a testament to sustainable infrastructure development within the dense Amazon jungle. This comprehensive project entailed the construction of 36 kilometers of rural road, which were instrumental in enhancing connectivity for remote communities. Central to this venture was the strategic engagement of local labor, which not only provided immediate job opportunities but also sparked a surge in secondary economic activities, enriching the local economy. This deliberate focus on local employment and community involvement harmonized with SDG-8 (Decent Work and Economic Growth), aiming to promote sustained, inclusive, and sustainable economic growth. Furthermore, the integration of targeted health and education programs addressed SDG-3 (Good Health and Well-being) and SDG-5 (Gender Equality), fostering a holistic approach to community well-being and the empowerment of all community members.
For investors, this project offered more than just financial returns; it provided a blueprint for impactful investing that balances economic gains with social development. By leveraging local resources and aligning with SDGs, the investment not only achieved its expected return but also broadened the investors' experience in sustainable practices, enhancing their portfolio for future endeavors. This strategic approach to investment, focusing on sustainable and community-centric projects, positions investors to capitalize on similar opportunities, thereby amplifying their impact and return on investment in the burgeoning field of sustainable development.
Sustainable Medical School Campus - Piura, Perú
Our project located in South America focused on developing a sustainable medical school campus designed to accommodate 3,000 new students annually in a region where summer temperatures often exceed 37 degrees Celsius. Prioritizing environmental and social sustainability, the design preserved existing trees to provide natural shade and integrated green spaces for student relaxation and interaction. Innovative features like ventilated double roofs and lattice façade screens ensured solar protection and natural cooling, achieving significant energy savings, around $300,000 per year with a 6-year payback period.
The campus not only stands as a model for eco-friendly design, SDG-7, but also significantly impacts the local community by offering extensive educational opportunities in the medical field. The employment of local labor for construction, from small-scale contractors to local women, stimulated the local economy and supported community development, aligning with SDG-3 and SDG-5.
This initiative highlights the power of integrating sustainable practices with educational infrastructure, demonstrating that such projects can profoundly benefit both the environment and the community, preparing a new generation of medical professionals within a sustainable and health-promoting setting.
For investors, the project exceeded expectations, not only in financial returns but also in enhancing the institutional image. As a pioneering model of sustainable development, it has set a national benchmark, resonating with its target audience, GenZ, a demographic increasingly concerned with sustainability and equality. This alignment with contemporary societal values and quantifiable financial benefits reflected in improved cash flows and payback periods underscores the project's success in delivering meaningful impact and robust investment returns.
Social Housing - Eco-Friendly Initiative
Our third project embarked on a groundbreaking social housing development, constructing 100s homes specifically designed for low-income families. This initiative was not only a response to the urgent need for affordable housing but also a commitment to sustainability and energy efficiency. By incorporating energy-efficient designs and renewable energy sources, such as solar panels, we were able to reduce utility costs for residents by 30% to 50%, making a significant impact on their long-term living expenses.
The use of sustainable materials in construction further contributed to cost reductions, particularly in plastering, by approximately 30% while simultaneously reducing the carbon footprint of each home. This approach made the homes not only more affordable but also more environmentally friendly. The development was enhanced with community gardens and shared spaces, fostering a sense of community and well-being among residents.
From an investor's perspective, the project offered reduced maintenance costs and was selected for a government incentive grant, covering 15% of the total cost due to its orientation towards social housing. This financial model, combined with sustainable practices, aligns with SDG-11 (Sustainable Cities and Communities), SDG-7 (Affordable and Clean Energy), and SDG-13 (Climate Action), highlighting the project's contribution to sustainable urban development, energy conservation, and climate action efforts.
This social housing project exemplifies how sustainable development can be economically viable and socially impactful, offering investors a unique opportunity to contribute to global sustainability goals while achieving financial returns.