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4/15/26, 10:39 AM Real Estate Investment: Pricing Environmental Risk Over Market Volatility
The new investor reality: pricing environmental risk before market volatility
by Amer Khansaheb • April 14, 2026 • 4 min read

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Editor’s Note:

This article is part of Entralon Hub’s Leadership View series, where senior real estate leaders
examine the structural forces shaping the next phase of residential investment and market
behaviour.

In this feature, Eng. Amer Khansaheb, CEO & Board Member of Union Properties, explores
why the next benchmark for urban success is shifting away from density and toward resilience, as
cities face rising infrastructure strain, resource pressure, and long-term delivery risk.

For decades, Real Estate investment decisions were shaped primarily by market risk. Interest rate
cycles, liquidity conditions, absorption rates, and macroeconomic indicators defined how assets
were valued and traded. Environmental considerations, while relevant for compliance or
operational efficiency, rarely influenced core valuation assumptions.

That hierarchy is now changing. A new generation of investors increasingly recognises that
environmental risk is not cyclical, but structural, and that it shapes asset performance far beyond
traditional market fluctuations.

Effects of Environmental Risks on Real Estate

Research shows that Real Estate, which is one of the most widely held asset classes globally, is
fundamentally exposed to climate risk. Buildings represent up to USD 111 trillion in value across
OECD economies, nearly twice the total GDP of these countries, and are highly sensitive to
environmental factors such as floods, heatwaves, and fires, as well as transition pressures
including regulation and rising energy costs.

OECD data also shows that climate‑related hazards already generate annual losses of USD 230
billion to USD 430 billion, a figure that continues to rise. These losses do not occur in isolation, as
they flow through insurance markets, valuation models, lending practices, and portfolio risk
assessments.

Moreover, the World Economic Forum’s 2025 Global Risks Report places environmental risks,
from extreme weather to biodiversity loss and ecosystem collapse, at the top of the decade‑long
global risk spectrum. This supports the findings of international experts who now consider climate-
related instability to be a fundamental structural risk that shapes financial, social, and economic
outcomes over decades. The biggest change in this process, however, is not in the numbers but
rather in the mindset.

https://hub.entralon.com/amer-khansaheb-article2/ 1/2