By Rabab Raydan, MSCA Doctoral Researcher at QuiVal
The impact of natural disasters on real estate value
Natural disasters pose a significant threat to real estate value, as they can cause extensive property damage, disrupt market stability, and reshape investor confidence in affected regions. The recorded frequency of natural disasters has risen sharply from 1900 to 2023, with a particularly steep increase observed from the mid-20th century onward. This trend, as shown in Fig. 1 and Fig. 2 below highlight the escalating impact of environmental hazards. The frequency of reported natural disasters has seen also a significant increase from 1970 to 2024, with floods, storms, and extreme temperatures being the most prevalent. Hence, natural disasters are becoming more critical and frequent each year. This growing impact of environmental hazards is detrimental on global communities and real estate markets.
Wildfires, heatwaves, hurricanes, floods and others have resulted in $313 billion in global economic losses in 2022 alone1 on the real estate sector and the projections are still on the rise. These figures are not merely statistics; they signify communities at risk, livelihoods in jeopardy. Despite scientific warnings about rising sea levels, waterfront properties in cities like New York for example remain highly sought after, reflecting a complex interplay between perceived risk and lifestyle aspirations. This paradox illustrates the inadequacy of traditional valuation models, which fail to account for cultural and social factors driving property demand.
Globally, climate change is reshaping property markets, from increasing insurance premiums for coastal properties to shifting demand toward climate-resilient urban areas. Climate action failure is the most severe global risk of the next decade 2. Starting to increasingly acknowledge climate risk as a key investment consideration can be a key driver in transforming the way the industry works.
Highlighting the urgent need to factor environmental risks into property valuations, it remains a global responsibility to ensure that the impact of climate change on asset performance is well understood.
QuiVal, a Horizon-Europe funded multi-national project
At the heart of the drive for transformation is QuiVal (Quantum Inspired Valuation of Circular Real Estate). QuiVal focuses on redefining real estate valuation by integrating environmental and societal values, particularly in the context of circular and CO₂-neutral real estate. This transdisciplinary research initiative is a project funded from the European Union’s Horizon Europe research and innovation programme and hosts 13 doctoral research projects across multiple universities in The Netherlands, Italy, Denmark, Estonia, Belgium, the UK, and Switzerland. It brings together eight universities and fourteen practice partners through a collaboration which aims to develop new valuation approaches that account for sustainability, circular economy principles, and digital advancements, and redefine how we assess the true value of the built environment.
This research challenges existing valuation norms and seeks to provide actionable recommendations for implementing new approaches, ensuring that the transition towards circular and climate-conscious real estate valuation is both practical and effective. Inspired by quantum theory, QuiVal embraces the complexity of real-world professional practice, working directly with valuers, investors, and industry experts to drive meaningful change in the built environment answering the urgent call for a novel approach to property valuation.
CABER’s role within QuiVal
CABER at UWE Bristol is one of the QuiVal project partners. Our doctoral candidate Rabab Raydan is exploring how valuation practices evolve and how structural changes both internal, such as frameworks and data, and external, such as governance and policy, shape professional standards and practices in the industry, under the working title ‘Towards a paradigm shift in real estate valuation’.
Capturing a property’s comprehensive value in a rapidly evolving world is a particularly crucial approach as the digital revolution is reshaping the real estate landscape. A paradigm shift is needed but this is not merely about numbers; it is about storytelling, capturing the full narrative of a property’s value in a world where climate resilience, digital integration, and social dynamics are intertwined. To bridge this gap, it is significantly important to offer frameworks that not only meet regulatory demands but also align with investor priorities and societal expectations. This serves as an answer to the growing emphasis on Environmental, Social, and Governance (ESG) criteria which demands more effort on creating a re-evaluation of how property values are defined.
Supervised by Professor Alice Moncaster and Grazyna Wiejak-Roy, Rabab is working for the next three years alongside the other 12 doctoral candidates as part of this multi-disciplinary, multi-partner consortium to ensure that this applied research can address industry and the real-world complexity. Her project also includes two three-month secondments, with one of the QuiVal industry partners, JLL in London, and with one of the academic partners, ETH in Zurich, Switzerland. In turn, UWE Bristol and CABER will host another of the doctoral candidates, Xinyi Jiang, from the University of Southern Denmark.
Imagine a future where property valuations drive sustainable urban growth, promote community well-being, and support climate-resilient cities. This vision is not only possible but necessary. QuiVal is paving the way for more than financial gain; it is about creating value that endures, ensuring that our built environment supports not just the present but the future of our planet. This is the narrative we are crafting, towards a paradigm shift 4.
References
- Value of climate risk: How real estate owners can adapt | JLL. Accessed March 11, 2025.
- Global Risks Report 2023: the biggest risks facing the world | World Economic Forum. Accessed February 17, 2025.
- Realizing the value of circular economy for real estate development. Accessed March 11, 2025.
- Homepage – Quival. Accessed March 11, 2025.
Acknowledgements
This project has received funding from the European Union’s Horizon Europe research and innovation programme under the Marie Sklodowska-Curie grant agreement No 101169048.
This work is supported by the Engineering and Physical Sciences Research Council, as listed by UKRI, Grant Ref: EP/Z534791/1.