Adopting circular economy to the real estate

September 14, 2022

The scarcity of materials calls for reusing instead of recycling. The real estate industry needs to move away from Take, Make, Waste to the circular model of Eliminate, Circulate, Regenerate. Circular economy is an opportunity for a different type of business, yet there are many reasons why the market adopts slowly to the changes. How we can adopt circular economy to real estate, was the topic discussed at the Urban Land Institute (ULI) Poland PLACES + SPACES among international and local experts in circularity.

**Hans Hammink, architect at Cie architectural practice in Amsterdam**, and a special guest at the meeting took the floor with a presentation entitled ‘Lessons in Circularity’. And valuable lessons in circularity were exactly what he went on to deliver.

Opportunity for a different kind of business

Circularity, he stated definitively, is growing – at least in his experience. The fact that there are currently 140 definitions of the term ‘circularity’, however, is testament to its embryonic nature, he said, so he sticks to the principles espoused by the Ellen MacArthur Foundation: reduce energy use, reduce your CO2 footprint, do not use toxic materials and be aware that materials are scarce. The very scarcity of materials, Hans said, means that used materials are becoming increasingly valuable: “Circularity is definitely an opportunity for a different kind of business,” he stated confidently. When it comes to circularity, the way things are built is important, he said. For example, if you use glue, it’s hard to disassemble. If you use screws, it’s much easier. Recycling – he stated emphatically – should be the last resort. Far better to reuse materials rather than recycle them.

Another project Hans talked about was a **bicycle park scheme in Eindhoven** for 5000 bicycles – a scheme yet to be completed. And here the audience learnt another important lesson in circularity: a circular project can be a project built for a limited time period. Not all projects need to be built to last. This bicycle park needs only to be designed for 10 years of life.

Hans presented Circl Pavilion, the first fully-circular project he was engaged in back in 2017, a 3-floor, 80m-long pavilion – part of a larger commercial project – that Cie designed for a large bank, whose brief was to design it on circular principles. The goal was to make it energy neutral. The main structure was made from locally-sourced wood, but the scheme posed a fundamental problem: it was very hard to source used materials. Finding enough used wood for a 12,000-sqm floor proved very difficult, but they managed. Securing enough glass for internal partitions – almost mission impossible. When they heard about some in southern Holland, their hearts rose, but when they saw the glass, their spirits fell. The glass was dirty and the frames were rough and uneven. However, they turned out to be perfect in that they added character and personality to the scheme – and Hans learnt an invaluable lesson which he was keen to share with the audience: when dealing with circularity, it pays to be aesthetically flexible – and then you get unexpectedly brilliant results. Quoting fashion designer Paul Smith, he said: “You can find inspiration in anything. If you can’t, look again“.

Bartosz Marcol, Senior Sustainability Consultant at Arup based in Warsaw

First question: is the project actually needed?

Following Hans were Ivan Acosta, Senior Sustainability Consultant from Arup in Berlin, and his colleague Bartosz Marcol, Senior Sustainability Consultant based in Warsaw, who presented The Circular Buildings Toolkit, which has come from Arup’s partnership and collaboration with the Ellen MacArthur Foundation. The aim of the toolkit is to stimulate a systemic change away from the current linear model in real estate – from Take, Make, Waste to the circular model of Eliminate, Circulate, Regenerate.

The real estate industry needs to produce adaptive and regenerative designs that make sustainable use of natural resources. Every developer needs to first ask if the project is actually needed, and if it is, then it needs to be built for long-term value, efficiently and with the right materials.

Arup’s aim is to create tools to measure the carbon footprint of buildings so that every single project can be assessed. In order for it to be practicable in the real world, however, there has to be value beyond decarbonization – motivation for real estate companies to prioritise circular economy principles, stated Ivan. There are currently three principles, he claimed: fear – the risk of mitigation; growth – for the clients’ clients (the end user); and return on capital – there has to be financial benefit at the end of it.

The toolkit is a simple web-based platform accessible to anyone, structured under three main components and stages: Learn, Engage, Act. And – Ivan emphasised to the audience – companies can register their projects, to help build their database of projects.

From the left: Monika Dębska-Pastakia, Founding & Managing Partner, Padmo Group; Marcin Juszczyk, Member of the Management Board, CFO/CIO, Capital Park Group; Hans Hammink, Architect, Associate, Circularity Lead, de Architekten Cie. Amsterdam; Elżbieta Rotblum, Sustainability Expert, Skanska Property Poland; Ivan Acosta, Senior Sustainability Consultant, Arup.

The real estate community – circular economy slowcoach

Monika Dębska-Pastakia, CEO of Warsaw-based Padmo Group, launched the subsequent panel discussion with the question: why is the real estate market so slow at adopting circular economy principles and practices – especially as we don’t really have any choice because resources are depleting so fast? There are relatively few examples of buildings with circularity principles, she stated, citing a recent circularity report from January 2022, it transpires that the world is only moderately circular.

Elżbieta Rotblum, Sustainability Expert for Skanska Property Poland, explained that Poland is not at the stage of scouting and harvesting already-used materials, but is simply destroying materials because it’s cheaper to do that than dismantling and storing them. However, with the energy and price crises upon us, people are starting to stop and think about reusing materials.

Ivan Acosta posited that the reason why it’s taking so long is that it takes a system change for circular principles to be adopted, and that takes time. We actually had a circular system a long time ago, he said, and the linear system took a long time to bring in. Regulatory bodies, he stated, will need to lead the system change. In the meantime, real estate progressives need to get together to collaborate and share learning, he said.

Hans Hammink then knuckled down to the nuts and bolts. Cost is the key issue, he said, adding that the tax system on used materials needs to change. Labour is taxed far higher than raw materials, and this has to change, he stated.

Marcin Juszczyk, Member of the Management Board and CFO/CIO of Capital Park Group stated that in Poland it’s still the case that internal imperative is needed in order to implement circularity, as there is not yet any external drive. But this will change, he claimed, as banks and financers push developers to adopt circularity principles due to the ESG drive.

Clients, said Ivan, tend not to be interested until potential legislation starts getting discussed – but things are starting to move forward faster in that regard.

Hans concluded firmly: “We have no choice. We have to do it.” Unfortunately, he noted, most projects are still regular, not circular. “But gradually there are more, and we are trying to prepare for the future,” he stated. For his younger colleagues, he noted, there is no question at all – they only want to work on circular projects. This he finds this very hopeful. “My students are the same. The younger generation has already made a mind shift”.

“We want to be able design and build without waste, recycle materials, and limit resource usage. The question so far has been – how? Today we talked about material passports, urban mining, circular design models and saw some very interesting case studies. I hope they will serve as a great inspiration for our future projects” – summarized Soren Rodian Olsen, Chair of ULI Poland.

The programme closed with a striking short film by Capital Park Group about their Norblin Factory project – in which the discussion was held, arguably the prime example of a project with circular principles very much at its heart.

The discussions were continued at the Networking Mixer that followed.

As always with the ULI Places + Spaces series of events, a lot of fresh and new ideas were brought up and discussed, with a rapt audience soaking it up. Attention now turns to the next event on 20 October, also at KinoGram in Norlin Factory.