New research from Global Wellness Institute reveals sector grew 22% during pandemic year, while overall construction projects shrank -2.5%
New research on the wellness real estate market from the Global Wellness Institute was released at their inaugural Wellness Real Estate & Communities Symposium September 28. The report, “Wellness Real Estate: Looking Beyond COVID-19,” shows the global market for wellness real estate grew 22 percent on average annually from 2017 to 2020, expanding from $148 billion in 2017 to $225 billion in 2019 to $275 billion in 2020. Wellness residential projects skyrocketed in those three short years, from 740 in 2017 to over 2,300 today (built, partially built, or in development).
GWI defines wellness real estate as the construction of residential and commercial/institutional properties (including office, hospital, mixed-use/multifamily, medical, and leisure) that incorporate intentional wellness elements in their design, materials, and building, as well as their amenities, services and/or programming.
“Just three years ago, wellness real estate was a concept not well understood by consumers, builders, developers, or investors, but we predicted demand would soon hit like a tsunami. That moment has arrived,” said Ophelia Yeung, GWI senior research fellow. “The pandemic has driven the idea of ‘building for human health’ into the mainstream consumer consciousness, and the recent market growth far exceeded our predictions, as well as general economic growth trends.”
According to the report, the market surged in the two years before the pandemic (2017-2019): Wellness real estate grew 23% each year compared with 5.4% growth for construction overall (and this disconnect remained true for every global region). The new research also makes it clear the pandemic further fueled the shift in the real estate and construction industries toward wellness: from 2019-2020, wellness real estate continued to grow by over 22%, even as overall construction shrank by -2.5%.
“So many macro forces—our fast-aging world, our stress and loneliness crises, the rise of remote work, a consumer demanding more sustainable living—means the growth trajectory for wellness homes and building design will only rise,” said Katherine Johnston, GWI senior research fellow. “But COVID-19 forced us to see our homes and built environment in a radically new light, as the protectors and enablers of our very health and wellbeing. Wellness real estate is now quickly moving from elective to essential.”
Among the topics at the Wellness Real Estate & Communities Symposium were the defining cultural shifts influencing wellness real estate, the disruption of senior living, post-COVID mental health, and the need to create wellness options for the middle market. During the Panel: A Conversation on Trends in Wellness Real Estate & Communities, Beth McGroarty, VP, Research & Forecasting, Global Wellness Institute stated, “The tendency to sell your product to the top 1% is a ‘halo-basher’ that can stop momentum. Middle class versions and more models will be the most important thing going forward.”
The Symposium featured highlights of wellness real estate projects across the globe, including:
United States:
Global:
Rancho La Puerta Residences, Mexico
Clear Island, Australia
Tri Vananda, Thailand
Wellness Communities Italia
Val de Vie Estate, South Africa
AMAALA, Saudi Arabia Vincitore
Benessere, Dubai, UAE
Speakers at the Symposium drove home the incremental value realized in wellness real estate investments, and the change in perspective from the building industry. GWI research from 2017 shows a 10 to 25% price premium for wellness lifestyle real estate.
“The construction industry has begun to awaken to the fact that the number one indicator of health is your home, and that we need to focus not on what we have learned, but what we have to learn,” said Jonathan Flaherty, Global Head of Sustainability and Building Technology Innovation, Tishman Speyer on the panel, Investor Perceptions: How Health and Wellbeing Are Seen as a Value Driver in Real Estate, moderated by Joanna Frank, President & CEO, Center for Active Design.