Sustainability and Innovation in the 11 Real Estate Meeting at IESE Business School

The XI Real Estate Meeting at IESE Madrid provided a comprehensive analysis of the entire real estate process, addressing the challenges and opportunities within a rapidly evolving economic and technological landscape. This year’s discussions emphasized resilience and innovation as essential pillars for the future of the sector, integrating sustainability, technological advancement, and investment strategies to redefine urban development. The conference underscored the necessity of adapting to global economic shifts, regulatory changes, and evolving consumer demands, fostering a real estate industry that is both agile and forward-thinking.

From Land Development to Sustainable Urban Planning

One of the key themes explored was the role of sustainable urban planning in addressing housing needs. A notable example is Valdecarros, Madrid’s largest urban development project, which will provide 150,000 new homes over the next decade. This initiative highlights the increasing importance of integrating green spaces, energy efficiency, and modern urban infrastructure into large-scale real estate projects. It also reflects a growing trend among cities worldwide to balance expansion with environmental responsibility.

Valdecarros demonstrates how sustainability can be embedded in the earliest stages of real estate development. The project prioritizes water management systems, energy-efficient design, and sustainable mobility solutions, such as extensive cycling infrastructure and public transportation networks. These elements contribute to reducing the environmental impact of urban expansion while fostering long-term resilience against climate-related challenges. Similar initiatives, such as the Nordhavn project in Copenhagen or the Hudson Yards development in New York, show how cities worldwide are embracing mixed-use, smart urban planning to optimize space and enhance sustainability. Additionally, Barcelona’s Superblocks initiative and Paris’ 15-minute city model are further examples of how urban design can be reshaped to prioritize accessibility, livability, and environmental stewardship.

Innovation in Construction: Industrialization, AI, and Energy Efficiency

The transition from land development to construction is increasingly shaped by industrialization and digital innovation. Juan Antonio Gómez-Pintado’s (moderated by myself) workshop highlighted the transformative potential of artificial intelligence (AI) and generative architecture in the design and construction phases. While industrialization may require significant upfront investment, they ultimately enhance efficiency by reducing design time, optimizing material usage, and improving structural performance. Both accelerate project completion enhancing the internal rate of return (IRR) of projects while minimize resource wastage.

Sustainable construction techniques were another focal point of the discussions. Dry construction methods, which reduce water consumption and construction waste, are gaining traction as a means to increase efficiency while lowering environmental impact. Additionally, the industry is embracing renewable energy integration, with solar and geothermal energy playing a critical role in reducing buildings’ carbon footprints.

The shift toward modular construction is playing a key role in transforming real estate development. Prefabricated building components allow for faster assembly, improved cost control, and a significant reduction in emissions related to traditional construction processes. Countries like Sweden and the Netherlands have embraced this trend, leading to increased affordability and sustainability in housing projects. Moreover, certifications such as BREEAM, LEED, and Passivhaus are becoming essential benchmarks for ensuring energy-efficient and environmentally responsible building practices. These certifications not only contribute to regulatory compliance but also enhance property valuation and investor interest.

Following construction, real estate enters the sales phase, where property developers manage transactions through APIs, facilitating seamless interactions between buyers and sellers. The post-sale stage diverges into two primary pathways: properties can be acquired by end-users for residential or commercial purposes, or by investors looking for asset appreciation and income generation.

Investment funds and institutional investors continue incorporating Environmental, Social, and Governance (ESG) criteria into their decision-making processes. These standards ensure that real estate projects align with sustainability goals and long-term value creation. Beyond financial returns, ESG-driven investments prioritize energy efficiency, responsible resource use, and social impact, positioning sustainable properties as highly attractive assets in the market. The long-term expectation is that sustainability-focused investments will remain central to the industry’s evolution, given regulatory trends and increasing consumer demand for energy-efficient properties.

Moreover, the real estate sector is witnessing a shift in asset utilization. Investors and property owners are exploring diverse strategies, including property rehabilitation and adaptive reuse, to maximize long-term value while reducing environmental impact. Whether through modernizing outdated structures or converting spaces for new uses, sustainability remains at the forefront of investment decisions. Notable examples include the transformation of former industrial sites into modern residential or commercial hubs, such as London’s Battersea Power Station redevelopment or Berlin’s Holzmarkt urban renewal project. Additionally, abandoned office buildings are being repurposed into co-living spaces and vertical farming centers, responding to changing lifestyle preferences and environmental needs.

The Real Estate Meeting codirected by Carles Vergara and myself underscored the necessity of resilience and innovation across the entire real estate cycle—from land acquisition and sustainable urban planning to industrialized construction and AI-driven design, culminating in ESG-focused investment strategies. The integration of energy-efficient technologies, digital transformation, and adaptive investment approaches is no longer just a market trend but a fundamental shift in the way cities are built and managed.

As sustainability takes center stage, energy certifications and environmental standards are redefining asset valuation and investment strategies. Regulations such as the EU Taxonomy and energy performance directives are not merely compliance requirements but signals of a deeper transformation in real estate. The sector is moving beyond short-term profitability, embracing a long-term vision where buildings are not only financially viable but also contributors to environmental and social well-being.

This shift is more than an economic necessity—it is an opportunity. The cities of the future will be shaped by those who understand that real estate is not just about space, but about creating ecosystems where people, businesses, and nature can thrive in harmony.