Business Insights | The Century Paradox: Why the Built Environment Is Mortgaging Its Future

By Corrado Forcellati, Head of Singapore Consulting and Paia FROM CBRE, Singapore and Southeast Asia

Long-Term Capital Meets Short-Sighted Climate Reality

Long-term capital is speaking clearly. When a global technology giant issued a 100-year bond to fund its AI ambitions, it sent an unambiguous signal: the most sophisticated capital in the world is thinking in decades, if not centuries. Yet in the built environment — an industry whose assets are designed to endure for generations — planning is still dominated by short-term horizons.

Singapore’s Budget 2026, delivered by Prime Minister Lawrence Wong on 12 February 2026, has turned that contradiction into something more concrete: it is no longer just a strategic blind spot but a financial liability that is impossible to ignore.

Budget 2026: The Policy Reckoning Has Arrived

Budget 2026 is not a nudge. It is a structural repricing of carbon risk across the economy.

Singapore was the first country in Southeast Asia to introduce a carbon tax in 2019. That tax now sits at S$45/tCO₂e — the highest carbon tax rate in all of Asia — and is legislated to reach S$50–80/tCO₂e by 2030.¹ For the built environment, this transforms every procurement decision, every energy contract, and every unretrofitted building into a compounding financial exposure.

Budget 2026 also strengthened the mechanisms for action. The Energy Efficiency Grant (EEG) has been extended to 31 March 2027, co-funding energy-efficient equipment across construction, data centres, manufacturing, maritime, and retail. The Enterprise Financing Scheme – Green (EFS-Green) runs to March 2031, enabling businesses to finance decarbonisation investments at scale.² Advisory views are explicit: businesses should treat these instruments as vehicles to "build resilience and competitive advantage" — not just compliance checklists.³

The message is unmistakable: the era of optionality is over. Carbon performance now shapes value.

The Problem: We Are Building Tomorrow's Stranded Assets Today

The built environment generates 42% of annual global GHG emissions — 27% from building operations, and a further 15% locked into the fabric of buildings themselves through embodied carbon in materials and construction.⁴ Despite growing awareness, he industry's response remains dangerously incremental relative to the scale and pace of the climate crisis.

The consequence is predictable: assets built without climate foresight are becoming financially impaired ahead of schedule. CBRE Research has identified the "brown discount" dynamic clearly — when an asset's carbon performance falls above the decarbonisation pathway, it becomes theoretically stranded and prone to a decline in value.⁵

Major lenders are already repricing this risk. ING Bank announced in late 2024 that it will no longer extend new debt to real estate companies without a credible decarbonisation plan, a signal that financing conditions across the industry are tightening around climate performance.⁶

The data on action is equally compelling. CBRE's partnership with Redaptive demonstrated that lighting, along with heating, ventilation, and air conditioning  (HVAC) upgrades across commercial portfolios can generate savings of US$55 million over 10 years while reducing energy consumption by hundreds of millions of kWh — with no upfront capital required through innovative loan structures.⁷ Our research further shows that energy-efficient office buildings achieved rental value growth of 2.3% in H1 2024, outpacing the 1.6% recorded for inefficient assets.⁸

This is the century paradox: an industry that builds assets for a hundred years, refusing to plan for the climate reality of the next hundred years. The question is not whether to act. It is why so many are still waiting?

The Singapore Market Is Already Pricing This In

This is not theoretical risk. It is being priced into Singapore's real estate market right now. Budget 2026 did not create the shift; it amplified a direction the market had already set.

Our Singapore Figures Q4 2025 report shows that office rents rose 2.9% in 2025 — far outpacing the 0.4% increase of the prior year — driven by a tight vacancy environment and a powerful flight to quality.⁹ Core CBD (Grade A) vacancy closed in on 5% by year-end, with no major new supply scheduled until 2028. The buildings capturing that rental growth are overwhelmingly those with superior ESG credentials.

Beyond individual assets, Singapore’s push is towards a resilient urban ecosystem — where green mobility, heat‑mitigating public realm and diversified energy make buildings more attractive to tenants and talent over time.

The occupier data is even more direct. CBRE's 2026 Asia Pacific Investor Intentions Survey found that over 60% of occupiers will either pay a premium for sustainable building features, or conversely seek a discount, or even outright reject, buildings that lack them.¹⁰ Green building adoption across Asia Pacific reached 51% as of mid-2024, with Singapore and Australia leading the region — and in Singapore, authorities already mandate green certification for all new buildings, raising the bar from certification to demonstrable performance.¹¹

On the investment side, 58% of Asia Pacific investors have made retrofitting existing buildings their top ESG priority for 2026.¹⁰ Over 51% are willing to pay a premium for ESG-certified assets, with that proportion improving every year from 2023 to 2026.¹⁰ As CBRE's viewpoint on “The Green Building Premium” notes, green offices also achieve higher occupancy rates than non-green buildings — bringing compounding benefits to asset owners that go well beyond rental rate alone.¹¹

Meanwhile, Singapore's construction pipeline is surging. The Building and Construction Authority (BCA) projects S$47–53 billion in construction contracts to be awarded in 2026, following S$50.5 billion in 2025, with transformational projects including Changi Airport Terminal 5 and Marina Bay Sands expansion driving the cycle.¹² Every dollar of that pipeline carries an embodied carbon decision — and increasingly, a carbon tax consequence.

Real estate is already in a different pricing regime. Budget 2026 simply made it explicit.

This shift also reinforces a broader truth: a ‘smart’ future depends on a ‘sustainable’ foundation. Budget‑driven commitments to solar deployment, greener transport and a more diverse energy mix are not just environmental measures — they support economic stability, job creation, and a liveable city for the next century. Delivering on this vision will require accelerated re‑ and upskilling, alongside deeper mobilisation of private capital to complement public ambition.

Where Leadership Must Now Shift

The built environment's exposure is already quantified. Singapore's buildings account for approximately 11 MtCO₂e of carbon emissions based on the latest verified national data.¹³ Under an escalating carbon price regime, that is not a static number. It is a growing liability.

For developers and asset owners, the strategic imperatives are clear:

• Decarbonise operations by targeting measurable reductions in energy intensity (kWh/sqm/year) and increasing renewable energy sourcing.
• Reduce embodied carbon in new developments and major renovations. The World Green Building Council calls for at least 40% less embodied carbon in all new buildings by 2030, rising to net-zero embodied carbon by 2050.¹⁴
• Future-proof assets through climate risk assessments, resilient design, and certification — protecting against accelerating physical risks including flooding, heat stress, and extreme weather.
• Meet occupier expectations with credibility

Leaders will need to pair this with accelerated re- and upskilling, and crowd in private capital alongside schemes such as EEG and EFS-Green to deliver at portfolio scale. With 57% of occupiers — and 86% of large firms — holding public net‑zero pledges, performance is increasingly a leasing determinant.¹⁵

• Use financing intelligently to accelerate action

Budget 2026 makes the calculus explicit: the price of procrastination rises via carbon‑price exposure, while the premium of preparedness grows through access to green tech, grants and performance‑based finance that unlock retrofits without prohibitive upfront capex. EEG, EFS‑Green and emerging performance‑based financing models allow retrofits at scale without prohibitive capital barriers.^{2 7}

This is not about racing ahead of policy. It is about aligning with the market evidence already in play.

Singapore Consulting's Fit-for-Purpose Perspective

Here is what we know: the developers and asset owners who are ahead of this curve are not just managing risk. They are winning business, attracting capital, locking in tenants who won't lease anything without a green certificate, and accessing financing that is increasingly unavailable to non-compliant peers.

At Singapore Consulting, we do not help clients survive the transition. We help you lead it — through four practices that together cover every dimension of the built environment's climate challenge.

We support this transition through four interconnected capabilities:

Paia FROM CBRE — Climate analytics and stress testing

We bring the strategic and analytical rigour to make climate risk visible and investable. CBRE's Climate Risk and Real Estate Resilience viewpoint estimates that average annual losses from climate extreme events in Asia Pacific already stand at around US$780 billion, potentially rising to US$1.2–1.5 trillion in moderate to worst-case scenarios.¹⁶

As Corrado Forcellati, Head of Singapore Consulting and Paia FROM CBRE, states: "Analysing climate data and conducting stress tests are more important than ever to safeguard real estate against severe climate events. ¹⁶ We translate that analysis into the investment decisions, asset strategies, and portfolio positioning that protect and grow long-term value.

Real Estate Insights & Advisory — Market aligned portfolio strategy

We turn market data into strategic advantage. With GRESB now scoring embodied carbon for the first time in 2026⁴, the window for early-mover advantage in green asset positioning is open — but narrowing. We help clients identify which assets in their portfolio are most exposed to the brown discount, which are best positioned to capture the green premium, and where the highest-value intervention opportunities lie.

Workplace Strategies — Aligning performance with demand

We connect the physical environment to the talent and occupier demand that drives rental performance. CBRE's 2024 Americas Office Occupier Sentiment Survey found that 57% of all respondents and 86% of large companies have made public net zero pledges, with building features directly influencing their leasing decisions.¹⁵

We help occupiers and landlords align workplace design and building performance to meet these expectations — turning sustainability into a competitive tool for talent attraction and retention.

Strategic Asset Solutions — Retrofit planning and execution

We deliver the operational and financial roadmap that makes decarbonisation actionable. With retrofitting as the top ESG priority for 58% of Asia Pacific investors in 2026¹⁰, we build costed, credible retrofit plans that improve energy intensity, reduce carbon tax liability, and sharpen every asset's competitive positioning in a market where flight-to-quality is the dominant leasing and investment dynamic.

In Conclusion

The century paradox ends when the built environment begins planning on the same horizon it builds for. Budget 2026 has made that not only prudent, but necessary. Singapore Consulting is the partner that makes that possible — with the rigour, the data, and the commercial conviction that this moment demands.

The assets of tomorrow are being designed today. Make sure yours are built to last.

Sources and Citations

¹ Ministry of Sustainability and the Environment & National Climate Change Secretariat. (2026). Carbon tax – Singapore.
      https://www.nccs.gov.sg/singapores-climate-action/mitigation-efforts/carbontax/.
² Eco-Business. (2026, February). Singapore may slow carbon tax price increases if global climate action stalls further.
      https://www.eco-business.com/news/singapore-may-slow-carbon-tax-price-increases-if-global-climate-action-stalls-further-warns-pm/.
³ PwC Singapore. (2026, February). Singapore Budget 2026 analysis.
      https://www.pwc.com/sg/en/publications/singapore-budget.html.
⁴ GRESB. (2025). What is embodied carbon in the real estate sector and why does it matter?
      https://www.gresb.com/what-is-embodied-carbon-in-the-real-estate-sector-and-why-does-it-matter/.
⁵ CBRE Research. (n.d.). Transition‑related climate risk and its impact on commercial real estate.
      https://www.cbre.com.sg/insights/viewpoints/transition-related-climate-risk-and-its-impact-on-commercial-real-estate.
⁶ World Economic Forum. (2025). The strong economic case for decarbonization in real estate.
      https://www.weforum.org/stories/2025/03/real-estate-economic-case-decarbonization/.
⁷ CBRE & Sustainable Credit Partners. (2025). Takeaways from CBRE’s decarbonizing commercial real estate report.
      https://www.scpcre.com/post/takeaway-s-from-cbre-s-decarbonizing-commercial-real-estate-report-a-financing-opportunity-for-midd.
⁸ Energy Advice Hub & CBRE UK Research. (2024, September). Energy‑efficient buildings see stronger ROI in commercial real estate.
      https://energyadvicehub.org/energy-efficient-buildings-see-stronger-roi-in-commercial-real-estate-says-cbre-study/.
⁹ CBRE Singapore. (2025). Singapore figures Q4 2025.
      https://www.cbre.com.sg/insights/figures/singapore-figures-q4-2025.
¹⁰ CBRE Research. (2026, January). 2026 Asia Pacific investor intentions survey.
      https://www.cbre.com.sg/insights/reports/2026-asia-pacific-investor-intentions-survey.
¹¹ CBRE Research. (n.d.). The green building premium: Does it exist?
      https://www.cbre.com/insights/viewpoints/asia-pacific-viewpoint-the-green-building-premium-does-it-exist.
¹² Singapore Green Building Council. (2026, January). Robust construction demand expected in 2026.
      https://www.sgbc.sg/robust-construction-demand-expected-in-2026/.
¹³ Baker McKenzie. (n.d.). CO₂ and energy targets – Singapore.
      https://resourcehub.bakermckenzie.com/en/resources/global-sustainable-buildings/asia-pacific/singapore/topics/co2-and-energy-targets.
¹⁴ World Green Building Council. (2019/2025). Bringing embodied carbon upfront. (2019 edition, updated 2025).
      https://worldgbc.org/climate-action/embodied-carbon/.
¹⁵ Sustainability Magazine & CBRE. (2024, August). CBRE: Sustainability drives real estate decisions.
      hhttps://sustainabilitymag.com/articles/cbre-sustainability-drives-real-estate-decisions.
¹⁶ RE Talk Asia & CBRE. (2025, November). CBRE launches climate risk and real estate resilience viewpoint.
      https://www.retalkasia.com/news/2025/11/24/cbre-launch-climate-risk-and-real-estate-resilience-viewpoint/1763953379.