A look into the future of the real estate market

Livit NEST Haus

© Wojciech Zawarski

Interview with Reto Largo, Empa, Managing Director of NEST

Mr Largo, for those who aren’t familiar with NEST, what exactly do you do there?

We are the innovation building of the Empa and Eawag research institutes. At NEST, we have created an environment that allows us to research ideas under real conditions that can’t be easily tested in the free market. When something doesn’t work, we simply do it again, which isn’t possible in a real building project, if only for reasons of cost and time. 

We have modular building sites where we build flats and offices, for example. Here, real properties can be used to demonstrate how to build better and more sustainably without any risk.

What will transform the real estate market the most in the coming years?

The framework conditions will certainly be different: legally, socially, depending on the EU and especially when it comes to building materials. We have to build in a way that’s suitable for our grandchildren, that is, in a way that doesn’t burden future generations with our actions.

We already have functioning technologies for sustainable energy production. All we need now are solutions to store surplus energy for later, for example, to be able to use solar energy generated in summer during the winter. The question is how to approach this from a societal and cost perspective. We certainly still have a lot of research and optimisation to do.

What will significantly change building planning and optimisation in the future is the use of artificial intelligence (AI) and digital data. AI can be used, for example, to analyse consumption patterns and automatically suggest the best settings for heating and building technology.

What will also increasingly become an issue is optimising the water cycle. Eawag is already separating wastewater streams at NEST and considers them as a resource – for example, for plant fertiliser made from urine.

And we can look forward to finding ways to deal with changes to spatial planning requirements. How can we accommodate another 1.8 million people in Switzerland in the coming decades, including mobility and infrastructure? I’m personally convinced that we need a social master plan on how and where to make this growth possible, which we don’t yet have.

In the HiLo (High Performance – Low Emissions) unit, new ways of building with lesser amounts of material are being researched. The building sector today is confronted with numerous challenges in terms of resource and energy consumption as well as population growth. The researchers at HiLo are meeting these challenges with applied innovations. One of the biggest innovations is a new type of concrete structure that requires 70% less concrete and 90% less steel. This unit has also researched the latest heating, shading and ventilation systems, building technology and the use of secondary materials in concrete and acoustic materials.

The HiLo unit reigns from the top platform of the NEST research and innovation building on the Empa campus in Dübendorf, Switzerland. Photo: Roman Keller

What approaches do you see for dealing with these changing demands?

Living with fewer square metres per person and using raw materials more sparingly. Today, we continue to operate as if materials were infinitely cheap and available. That’s no longer in keeping with the times, which is why we have to adapt our processes. 

We still have a lot of tasks ahead of us to be able to achieve net zero in building construction. Optimised technologies are needed in building and support structures. 

A sensible approach would certainly be to create overall solutions for neighbourhoods, including mobility use and surplus energy storage. The real estate sector needs to develop big-picture thinking and include decentralised energy districts, including mobility, in its planning. 

What’s very important to bear in mind is that there are no easy answers. In the building sector, we’re heavily dependent on financial framework conditions, and the starting position varies from project to project. 

What will cease to exist?

In a best-case scenario: 

  • Waste that is not recycled
  • Energy that is not renewable
  • Components that are thrown away
  • Personal vehicles, most of which are currently stationary

We need to create technologies to ensure a high quality of life in a sustainable way.

First three images: interior view of the UMAR unit (behind couch: view of wall made of recycled technical materials), © Zooey Braun, Stuttgart
Last image: in the Sprint unit, both a prefabricated parquet and a solid parquet were given a second life. The prefabricated parquet was cut out and reassembled in the unit. The solid parquet was sanded, oiled and then laid 1:1. Photo: Martin Zeller


Closed-loop construction is an efficient approach to conserving resources and meeting our CO2 targets. In two NEST units, Urban Mining & Recycling and Sprint, research is carried out into the reuse and recycling of materials and entire building components. The principle of ‘design for disassembly’ pursues the goal of being able to return the resources and modular parts used to the material cycle after deconstruction. This is already the case 96% of the time in NEST’s Urban Mining & Recycling flat. 

For the initial construction, various waste materials are used, such as old carpets, jeans, Tetra Pak cartons and furnishing elements like door handles. And the rooms are very aesthetically pleasing; they don’t look at all like waste. 

Who will benefit from these innovations? 

I’m convinced that all of us can and must benefit. In the building sector, we can develop additional services, export technologies and new business models. There will be many opportunities for job enrichment. It’s important to have a sense of purpose behind the work you do. There’s enough potential in the building sector for employees to make a valuable contribution. 

What’s important to keep in mind in order for us to take advantage of the opportunities at hand?

We need reasonable carbon pricing and uniform incentive systems. Our systems are currently optimised according to a linear approach and are not set up to be circular. As a society, we have to think in the long term and consider the entire life cycle in the real estate context. In addition to the many positive environmental effects of circular construction measures, greater flexibility also leads to benefits such as greater investment security. 

Furthermore, new cooperation models are needed for builders, investors and companies, with a reasonable distribution of risk and profit. Early planning pays off.  

We don’t know everything, but it’s important to get started, try things out and learn from mistakes. Start now, learn, and don’t hope for the perfect solution.

The DFAB House is the first house in the world that was not only planned digitally, but also largely built digitally – using robots and 3D printers. The building technologies used are a research component of ETH Zurich in collaboration with industrial partners. 

The operation of the DFAB House also makes use of state-of-the-art technology. This includes a smart, multi-level burglar alarm system, automated shading options, the latest generation of networked household appliances and smart energy consumption control.

On the ground floor of the DFAB House, 15 individual, digitally manufactured concrete posts line the façade. The double-curved mesh-mould wall supports the load of the Smart Slab ceiling. Photo: Roman Keller

If we woke up tomorrow in the year 2070, how would we be living and working?

What I see when I look into my crystal ball is that by 2070, we’ll be living in a world that will have been completely powered by renewable energy for 20 years. CO2 from the air will be bound in materials designed for this purpose; mobility and other areas will be based on sharing concepts; building materials will be rented and rooms will be smaller and multi-purpose. The overarching system will have changed.  

Looking back, what did you not expect?

Honestly, that things would move ahead so slowly. On the other hand, I am pleased that I keep meeting people who have the energy to act, to tackle issues and to implement ideas that have an impact.  

Do you have any tips for stakeholders in the real estate sector?

Visit us at NEST and see what works in our research environment. Discuss, act and optimise, and improve all over again the day after tomorrow. That’s the only way to move forward. 

Thank you for the interview!

Thank you too, and congratulations to Livit on its anniversary.

Reto Largo studied computer science at ETH Zurich and completed an Executive MBA programme at the University of St. Gallen. He has extensive experience in technology development and sales, has founded his own companies and has managed large organisations and major projects in national and international environments. Reto Largo has been Managing Director of the NEST research and innovation platform at Empa since June 2014.