Climate Crisis Changing Real Estate Location Strategy — What Gyeongbuk Companies Should Know

The climate crisis is changing the game of real estate investment. According to CBRE analysis, climate risk prediction modeling has emerged as a core tool for investment decision-making, with a clear trend of capital moving toward assets with high climate resilience. In the US alone, over 300,000 coastal homes are projected to face regular flooding risks by 2045.

Korea is no exception. The government announced the 4th National Climate Crisis Adaptation Plan and began supporting flood prevention facilities for disaster-vulnerable housing like semi-basements. Starting in 2026, the AI flood forecasting system will be expanded, and a system predicting road ice formation 12 hours in advance will also be introduced.

In industrial real estate, climate risk equals business risk. If factories stop due to flood damage, not only production disruption but also insurance premium surges and customer trust decline can occur in a chain reaction. Cases of global insurance companies refusing to underwrite insurance in high climate risk areas are also increasing.

Gyeongbuk's climate risk profile is relatively favorable. Coastal flooding risk is lower than Ulsan and Busan, and it's off typhoon paths. However, landslides in mountainous areas and river flooding in parts of Yeongcheon and Gyeongju require attention. There was flooding damage during Typhoon Hinnamno in Pohang in 2022.

Methods to reflect climate risk when selecting factory sites are as follows. First, check flood trace maps and disaster risk zone designations in the Land Use Regulation Information Service. Second, analyze extreme weather event frequencies in the region using the Korea Meteorological Administration's Climate Information Portal. Third, check natural disaster insurance conditions for the site with insurance companies in advance.

Selecting sites with high climate resilience can provide long-term insurance premium savings, business continuity assurance, and favorable scores in ESG evaluations. This is an investment, not a cost.