From Green Buildings to a Sustainable Real Estate Industry - Assessing five years of …GNI

PurposeThe purpose of this paper is to determine if there is an impact of sustainability on the market in terms of a green premium or a brown discount on the price of commercial and residential real estate. It also seeks to identify the incentives and barriers for sustainable developments perceived by real estate professionals.Design/methodology/approachThe paper investigates the impact of sustainability features on the valuation of buildings in the United Arab Emirates (UAE). The study uses a qualitative structured questionnaire to determine the views of certified real estate valuers and advisors on this subject.FindingsThe results suggest a green premium of at least 1% in the UAE, coming from both supply-side and demand-side, and in commercial and residential sectors. Key barriers for the recognition of green building value include availability of reliable market data, lack of relevant technical skills and apparent client disinterest. Initiatives that would encourage green buildings include financial incentives for key stakeholders, raising and enforcing building standards, and higher energy prices. This paper identifies policy measures that local authorities may consider in transforming to a more sustainable economy. It is expected that such changes would convey to the real estate industry and affiliated stakeholders the financial benefits to be gained from investing in green buildings.Research limitations/implicationsThe UAE is not a transparent environment in terms of building prices and rents, and it can be challenging even for experienced professionals to determine whether an observed higher value can truly be considered a green premium. The second issue is that the results may be affected by a “voluntary response bias”, whereby recipients who are interested in sustainability are more likely to have responded to the survey.Practical implicationsThis paper identifies policy measures that local authorities may consider in transforming to a more sustainable economy. It is expected that such changes would convey to the real estate industry and affiliated stakeholders the financial benefits to be gained from investing in green buildings.Originality/valueMost research exploring the value of green buildings originates from developed economies and its applicability to the Middle East is questionable due to its differing origins and unusual development path. This article offers new insights into an under-researched market.

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An exploration of ecolabels and operating financial metrics

International Journal of Housing Markets and Analysis ◽

10.1108/ijhma-08-2019-0088 ◽

2019 ◽

Vol 13 (5) ◽

pp. 869-886

Author(s):

Erin A. Hopkins ◽

Jennifer H. Van Mullekom

Keyword(s):

Real Estate ◽

Design Methodology ◽

Green Buildings ◽

Real Estate Industry ◽

Rental Sector ◽

Bottom Line ◽

Content Type ◽

Financial Variables ◽

Financial Metrics ◽

Financial Impacts

Purpose As the green economic bottom line is a strong motivating force when deciding to build, manage and/or operate green, this study aims to examine the financial impacts of green certifications on multifamily rental communities. Design/methodology/approach Using a multiple regression methodology, operating financial variables are examined. Findings Multifamily rental green buildings garner not only higher rental collections but also higher total expenses. When applying these higher rates to properties, the overall increase in rents outweighs the increases in total expenses. Originality/value While multiple studies have focused on the office sector, this study begins to fill the literature gap within the multifamily rental sector regarding the economic impacts of green-certified buildings. The outcomes of this study have positive implications for the multifamily real estate industry by providing developers, owners, managers and related parties with a better understanding of the financial impacts of multifamily rental green buildings; however, more research is needed.

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