With all the strategies lined up for the upcoming prime season of real estate, businesses are now preparing themselves for several recent trends of 2025. Sustainable architecture is no longer a choice; it is a necessity. ESG considerations have become a key profit driver across industries, and real estate is no exception.
“If we do the right things, we’ll make money damn near automatic,” said Nike Executive Rob Strasser in 1977.
Nearly five decades later, that statement is ringing truer than ever in today’s evolving market.
ESG: A Financial Imperative
A responsible investment transition in real estate coupled with stricter ESG regulations reshapes big data and estate decision-making processes. Knight Frank’s 2025 survey found that 63% of investors are implementing ESG initiatives to enhance returns, while CBRE notes an increasing trend where customers are willing to pay premiums for sustainable properties.
Obsolescence and depreciation of non-compliant properties are soaring due to unabated inflation, interest rates, and geopolitical instability. Given these factors, sustainable real estate is no longer a competitive edge but a survival strategy.
PropTech: Digital Innovation With Sustainable Impact
PropTech, a technology specially designed for the real estate industry, has continued to disrupt market norms and conventions. Between 2025 and 2032, PropTech is anticipated to grow at a rate of 11.9% and exceed the value of $88 billion.
Smart homes, shared spaces, and real estate fintech are three major application areas of PropTech. This technology assists businesses in curating sustainable solutions that are also cost-effective. Some of the critical technologies include:
Big Data: used for analyzing market trends and precise evaluation of properties.
Artificial Intelligence (AI): Enhances customer experience with virtual contracts, tours, and investment predictions.
Internet of Things (IoT): This technology facilitates the integration of smart devices for monitoring energy usage and optimizing building performance.
Emerging PropTech trends also point toward increased digitization. Asset tokenization allows properties to be traded like stocks via blockchain.
Meanwhile, cryptocurrency transactions, particularly in high-end real estate, are expected to expand, bringing ESG and digital finance closer together.
Sustainable Infrastructure: From Certification to Construction
Sustainable infrastructure remains the most sought-after trend. It is now essential for market competitiveness. Buildings certified under systems like BREEAM and LEED are attracting more tenants and commanding higher premiums.
As energy efficiency regulations become more stringent, many developers opt for renewable energy sources such as solar panels and wind energy, supported by reputable companies like REC Group, Q Cells, and Siemens Gamesa. Recycled construction materials and sourcing them from sustainability-focused providers like Holcim and Veolia can also reduce cost and environmental impacts.
Collaborations between real estate and tech firms are rising, particularly those using excess server heat to cut energy bills. Though retrofitting costs remain high, investors adopting green features early are seeing increased demand, property values, and tax benefits.
A useful tool here is the Green IRR (Internal Rate of Return), which helps investors assess the profitability of sustainable upgrades.
Resilience and Climate Adaptation on the Rise
Climate adaptation is taking center stage. As insurance companies raise the bar on resilience, more cities, especially in Europe, invest in properties that can withstand floods, storms, and heat waves.
Even regions less prone to extreme weather are focusing on resilience. The main reason is financing. Access to green bonds and sustainability-linked loans increasingly depends on integrating climate adaptation into developments. Resilient properties hold stronger positions in the market over time.
Social-Focused Real Estate: Adapting to Hybrid Work
Hybrid work models are reshaping the demand for office space. Surveys indicate that companies prioritize flexible social workspaces to attract and retain top talent.
As larger firms move away from central hubs, suburban offices are gaining appeal due to affordability and ease of sustainability upgrades.
Meanwhile, demand is intensifying for well-located, efficient commercial space.
A notable trend today is the repurposing of commercial spaces for mixed-use. Developers are diversifying portfolios to keep pace with shifting demand as the boundaries between residential and commercial real estate blur.
ESG: The New Benchmark for Profitability
In 2025, real estate businesses must make ESG the core of their operations. As markets shift, “doing the right thing” is no longer just ethical; it’s the only viable strategy for long-term growth.
Sustainable real estate, backed by data, technology, and climate-ready infrastructure, drives returns. As regulations tighten and consumer expectations evolve, the future belongs to those who act now.
