Emerging Trends: Canada Flexibility and ESG are here to stay. PROSPECTS FOR COMMERCIAL/MULTIFAMILY SUBSECTORS THE INDUSTRY is keeping a close eye on three key trends reshaping Canadian real estate: the impact of a changing work world; finding the right approach to ESG; and costs and competition. Although the ultimate impact of change in the work world on real estate is as yet unknown, this ULI/PwC study and other independent surveys around the world reinforce what interviewees say: " Flex is here to stay. " On the institutional side, ESG matters are becoming a key criterion for investment decisions; however, on the private side, a need to justify upfront costs remains. There is a fairly strong feeling among many interviewees that ESG performance will be a business imperative for Canadian real estate companies, but there is a significant divide between private and institutional players. Rising prices for land and critical supplies are among the factors creating price pressures. Added to the challenge is increasing competition for deals and development opportunities. One interviewee expressed concern about maintaining prudence. The ongoing rise of Canada's real estate market has helped spark what one interviewee called an " insatiable appetite " by investors for assets. This was reflected in PwC's survey this summer, in which the percentage of respondents saying that equity capital for investing was oversupplied rose to 62 percent from 22 percent last year. 66 URBAN LAND WINTER 2022