Industry associations are reaching out to each other but it is still a very fragmented world out there. The Urban Land Institute draws together the industry's many stakeholders from architect to investor. Sustainability is a key mission: responsible land use will become an imperative for investors, and partnerships will be key to getting the word out, as ULI's EMEA head Bill Kistler explains to Martin Hurst

The difficulty in measuring sustainable real estate makes it a challenging concept to present to investors. "One problem with sustainability as a term is that there are very different definitions in North America and Europe, says the Urban Land Institute's (ULI) EMEA head, Bill Kistler. "In general the US considers sustainability as environmental - about more energy efficient buildings. In Europe it includes economic and social sustainability and is therefore more difficult to measure.

"We are trying to define what the industry will accept as a broad set of measurable standards that will say that one building is more sustainable than another, and therefore in 10 years will be worth more. At a recent gathering organised by the British Property Federation at MIPIM the concern was raised that if the property industry isn't proactive in creating a standard the EU will do it for us and we may not like the result. A key conclusion of the meeting was that the property industry will be seen more favourably in the eyes of our ultimate customer, the public, if we are seen as leading on this issue."

So how long will it be before we have a standard? "With focus, a lot of money and consensus we're looking at a minimum of two years to create a standard, though more probably three," Kistler estimates.

Attitudes to sustainable building have undergone swift change in a short time. ULI had a meeting with industry leaders in New York City two years ago when it asked whether tenants would be willing to pay a premium for a sustainable building. "The answer was categorically no," says Kistler. "Now they may not be willing to pay a lot more but they will insist, certainly in the case of a new building, that it is built to current standards of sustainability or better, and that if it is an old building that it is enhanced in some way so that it is more energy efficient."

Inevitably, some countries have been more effective in progressing this issue than others. But there is hope for all. "Globalisation is ultimately a good thing," says Kistler.

"Some years ago I worked at IBM in Europe where my American colleagues marvelled at the fact that it was considered cruel to place employees in offices with no outside awareness. Today a global player like IBM or Morgan Stanley will go to Shanghai with occupancy standards that say it will not occupy an office that does not meet the company's global sustainability requirements. The development community will have to respond if it wants Morgan Stanley or IBM as a tenant."

By the same token those companies more insulated from these forces have not progressed. "Are local US companies that aren't trading internationally demanding outside awareness for their employees in Chicago? Not yet," Kistler notes.

Some of the world's rapidly emerging economies are often seen as having little regard for sustainability issues. But things seem to be changing. "Recently I was in Dubai which on the surface seems to be one of the most unsustainable places you can imagine," says Kistler. "There is no economic imperative for them to be sustainable - if they can build it taller and shinier they will. They have oil for the next 200 years so they don't have the same energy imperative that we do. ULI ran a conference on sustainability there and brought in speakers from around the world. It was packed and moreover there was a real interest from people doing business locally. Abu Dhabi has really seized on the issue and is building entire communities which are zero carbon. A year ago they would have looked at you as though you were from Mars. In India, meanwhile, people are thinking about it, although there are other worries further up the agenda such as infrastructure and water."

Does regulation have a role to play? "Regulation can be a good because it means predictability," says Kistler. "If, for example, there is only so much building of a given type within a given area, this can protect long-term value. In many less regulated markets investors do not have this reassurance.

"As foreigner in the UK, I'm amazed at the ability to regulate town centre retail. It would be far easier to take a greenfield site and build a shopping centre which people would drive to. City centres in the US and other countries have suffered by allowing vitality that retail activity creates to move out. In addition, the leveraging of existing city centre infrastructure is more efficient and sustainable, which is in everyone's interest. It's harder for the retail developer and it's a longer term, more complicated bet for the investor than the greenfield option, but I think in the end everyone wins."

Climate change issues are sexy and are the most high profile of all the sustainability issues; some suggest the broader planning issues are sometimes marginalised. "The issues to do with planning are more complex, which makes them harder to measure," Kistler explains. "This brings us back to the point about standards. From an investor perspective, when oil is $150 a barrel the cost of being inefficient in terms of your location decision will become a very important criterion in determining whether a project is sustainable development."

Pressure on land is a key factor in the sustainability debate. "It's a fundamental issue.  I'm often distressed when I visit places and see what I consider to be the waste of the ultimate, non-renewable resource. In the US, rights to property are strongly ingrained in the idea that everyone has their own house with backyard and there are 50 feet between that and the next house. It is part of the ‘American dream'.

"By contrast, the Dutch city of Utrecht is a dense, perfectly livable, walkable, bikable town centre that 50, or even only 20, years, from now when oil runs out will be far more sustainable than a Phoenix or LA. Even relatively small US cities have huge footprints that have consumed surrounding farmland and open space with a land use pattern that ultimately is not very sustainable.

"Eventually you are left with desert or mountain land unfit for agriculture. Within our lifetime that will be a major challenge because growing your food halfway around the world will not be possible in an energy-starved future.  Sadly, it will likely take this kind of major disruption to be the antidote to sprawl."

Each year ULI awards the $100,000 J. C. Nichols Prize to an individual for lifetime contribution to the built environment. Two years ago the award went to architect and planner Peter Calthorpe. "He is one of the early sustainability visionaries," Kistler says.

"He designed a massive state office building in Sacramento 25 years ago. Although it has every design and technology to minimise energy consumption, the feature that represented the most sustainable long-term commitment was that it had no space for parking. This would not be unusual in a city like London. In Sacramento only a government building could do this - it would be commercial death. It's now part of the planning code which aims to encourage people to use public transport or bicycles or live closer so they can walk to work. This kind of regulation doesn't get you re-elected until people are really suffering - when the price of oil reaches $150 a barrel for example." 

ULI has a diverse membership. About 30% of its members are real estate lenders or investors, including pension funds. Others are advisers or developers. Around 20% are policy makers - government and academicians and others. European membership has a slightly higher percentage drawn fr om the financial community.

Kistler describes ULI as an organisation that is "unique in that it brings together all stakeholders in the built environment. From students to CEOs in 92 countries."

Why are investors attracted to ULI? "Successful investors are concerned about the macro factors that shape opportunities or issues in their portfolios - infrastructure or demographics, for example. The issues which our Emerging Trends survey looks at (see p62) are focused on what fundamentals make one city potentially more attractive or ascending versus declining in the eyes of our members."

Given ULI's broad remit it is interesting to see how ULI interacts with the various industry groups. "Most of our members are also members of other professional organisations representing their sector or discipline," Kistler explains. "But ULI makes it possible for architects to exchange ideas with investors and developers. The challenges an architect faces will also need to be considered by an investor in property - the key trends in design, materials and technology. You may read about it superficially in an article but you can really drill down with the architect that you meet at the ULI meeting. ULI is about cross-pollination and integration. The industry is very fragmented - by sector, discipline, geography, and it needs to bring together those perspectives. That is our niche."

ULI has made efforts to strengthen ties and work with the various industry representative bodies. But there have been challenges. "Often as we grow in a market we are initially seen as a threat to the national industry organisations," says Kistler.

"That quickly fades as we strive to be a resource and partner for them whenever possible. We make a point of coming with a somewhat ‘un-American' humility, stressing that we are not in Europe to say how things should be done here. In many areas of the real estate business and land use, Europe is a laboratory of great ideas. The rest of the world has much learn from European cities."

The best strategy is to reach out and say this is what we do, this is what we bring to the table. "Nine times out of 10 both parties have found that the whole is greater than the sum of the parts."

Kistler says that where associations such as INREV, EPRA and the IPF are concerned, "if ULI is doing a programme where they clearly bring local or sector expertise and research which is deeper than ours then that is a natural partnership.

"When we have partnered with these organisations it gives ULI credibility with their members which brings members to our organisation and vice versa. In our global education programme we have half a dozen courses related to finance. IPF covers this area very well. So why reinvent that wheel? It's much better if we bring customers from outside the UK to their education programme. This is a natural synergy and the kind of thing we like to pursue with them.

"Some draw comparisons between ULI and the RICS - and there are some similarities. For example we do training - globally we offer over 60 practical programmes, what you need to know tomorrow. Investors often take development, planning and design classes to speak more intelligently with the people that are trying to enhance their portfolios or develop a new project. We are not trying to replace the university credentials or the chartered surveyor qualification which the RICS offers."

Some 20% of the ULI membership is from the public sector. These members see particular benefit in association with the ULI. "They feel a little more comfortable joining the discussion with an organisation like ULI because they know that tomorrow we're not going to be asking for legislation for a particular issue that benefits our members. They want to share their perspectives on transport, housing and other issues and better understand the priorities of  investors and developers."

One key benefit which Kistler sees in partnering with industry bodies is brand recognition. Until recently ULI has been a US-centric organisation where it is a dominant player with 35,000 members.

About three years ago ULI carried out a big strategic review. "We knew that if we wanted to deliver on our mission of sharing best practice globally we had to know what good ideas are being developed in Europe and vice versa," says Kistler. "So we decided we needed a more relevant - in other words global - presence."

At that time ULI had just over 1,000 members in Europe; now it has almost 3,000. Kistler says that the effect of this is that ULI's members in the US are much more aware of best practice in Europe where it is now present in 14 countries. "Our European members are meeting regularly, doing case studies and research. More of our books about global issues, such as affordable housing and sustainability, are using examples from Europe. That is something we want to accelerate. We have a significant presence in the Gulf based in Abu Dhabi. We are also in discussions in India to create a platform there - that is a place that has a real need for ideas and for resources from elsewhere in the world. ULI can play a valuable role as an enabler of this exchange."