Climate risk, real estate, and the bottom line

This report, compiled by Four Twenty Seven and real estate technology company GeoPhy, discusses the impacts of climate change on real estate investment trusts (REITs). REITs represent an increasingly important asset class that provides investors with a vehicle for gaining exposure to portfolios of real estate.

Key findings include:

• 35 percent of REITs properties globally are exposed to climate hazards. Of these, 17 percent of properties are exposed to inland flood risk, 6 percent to sea level rise and coastal floods, and 12 percent exposed to hurricanes or typhoons

• U.S. markets most exposed to sea level rise include New York, San Francisco, Miami, Fort Lauderdale, and Boston. The Top 3 REITs most exposed to sea level rise in the U.S. are Vornado Realty Trust, Equity Residential, and CapitaLand.

• Globally, REITs concentrated in Hong Kong and Singapore display the highest exposure to rising seas. Sun Hung Kai Properties, worth $56 billion, has over a quarter of its properties exposed to coastal flooding. 

• 37 Japanese REITs have their entire portfolio exposed to the highest risk for typhoon globally, representing $264.5 billion at risk in properties in Tokyo and other Japanese cities.