The Wellness Real Estate Development Process Explained
By Horwath HTL Thailand
Tuesday, 5th November 2019

As people are becoming increasingly aware of the impact of lifestyle and environmental factors on their wellbeing, they seek health- and wellness-enhancing solutions that can be implemented into their daily lives.

As a matter of fact, the large majority of physical places where we live, work and play do not always support the implementation of such solutions, and often limit the achievement of health and wellness goals.

Hence, real estate has a key role to play in providing the foundation that enables individuals and communities to live healthier and longer lives. Given this reality, the real estate industry has slowly but progressively transformed itself, especially since the beginning of the 21st century, in order to align with the expectations of today’s residents and to combat the many health epidemics that are adversely affecting populations globally.

Wellness real estate was born as a result of this evolution, and today represents one of the key industries that together form the global wellness economy. The distinct environment that wellness real estate creates is significantly different than what is achieved with traditional real estate, a difference that stems from the particularities of the wellness real estate development process.

This paper aims to provide an overview of wellness real estate, including the industry size, components such as wellness lifestyle real estate and wellness communities, trends and benefits, to define the particularities of the development process, and explain why a specific approach is required. The concepts discussed throughout this paper are also illustrated with a case study of the Glen Ivy Hot Springs Resort wellness real estate development in California, United States.

Overview Of The Wellness Real Estate Market

Industry Definition And Key Characteristics

According to the Global Wellness Institute (“GWI”), wellness real estate is defined as “the construction of residential and commercial/institutional (i.e. office, hospitality, mixed-use/multi-family, medical, leisure, etc.) properties that incorporate intentional wellness elements in their design, materials, and buildings as well as their amenities, services and/or programming.”

Although the wellness real estate movement is recent, it has been developed and inspired from numerous other movements that have shaped the building and living space since the 1900s.

Among these movements were the planned communities in the early 1900s (e.g. golf and retirement communities), the food movements of the 1970s (e.g. urban farms, farmto-table, farmers’ markets), the design movements of the 1980s (e.g. Vastu, Feng Shui, multi-generational design, biophilic design) and the green and sustainable building movement of the 1990s (e.g. LEED, regenerative buildings, eco-villages). All of these movements have contributed to the creation and growth of the wellness real estate industry in the 21st century.

Industry Size And Growth Outlook

As of 2017, the global wellness real estate industry was worth USD 134.3 billion (total construction costs), and has grown at a CAGR of 6.4% between 2015 and 2017. Given the rising awareness of the direct influence that living and working environments have on our wellbeing, the industry has been witnessing significant growth, with an increasing pipeline of projects and sales, despite the fact that the purchase of wellness real estate comes with sales premiums over traditional real estate.

Comparing regions, North America represents the biggest wellness real estate market, valued at USD 54.8 billion in 2017, ahead of Asia Pacific (USD 46.8 billion) and Europe (USD 31.7 billion). The United States represents the largest wellness real estate market globally, valued at USD 52.5 billion – more than twice the value of the second biggest market, China (USD 19.9 billion).

There are currently more than 740 wellness real estate projects globally that are either already built or in development, and the pipeline is continuously growing. The wellness real estate industry is projected to grow by 6.0% annually, reaching USD 180.0 billion by 2022.

Industry Components

The wellness real estate industry consists of various components, each with their own key definitions and characteristics. For the purpose of this paper, we will be focusing on wellness lifestyle real estate and wellness communities, and how they are anchored through wellness hospitality developments.

Read the full report here

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