Does Sustainability Affect Real Estate Market Values? Empirical Evidence from the Office Buildings Market in Milan (Italy)

Alessia Mangialardo, Ezio Micelli and Federica Saccani
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Alessia Mangialardo: Department of Architecture and Arts, IUAV University of Venice, 2206I-30123 Dorsoduro, Italy
Ezio Micelli: Department of Architecture and Arts, IUAV University of Venice, 2206I-30123 Dorsoduro, Italy
Federica Saccani: Building Consultancy & Sustainability, CBRE, Piazza degli Affari 2, 20123 Milan, Italy

Sustainability, 2018, vol. 11, issue 1, 1-14

Abstract: The construction industry is the world’s largest consumer of energy and producer of greenhouse gases. For this reason, there is a broad debate on how to make the built environment more sustainable. Although the positive externalities of energy-efficient retrofitting and new construction are known, the economic effects that green building has on the real estate sector in Italy are less evident. The aim of this paper is to analyze the Italian real estate market to investigate if, and to what extent, demand appreciates the supply of green real estate assets. The research focused on the analysis of 55 development projects of office buildings (with and without environmental certification) located in Milan, at present the most dynamic and flourishing real estate market in Italy. Through these case studies the authors investigated the premium price that is generated in certified real estate development projects. The results highlight a premium price, especially for high levels of sustainability. Similarly, the rate of absorption of certified assets reflects a preference for green properties, which are absorbed by the real estate market in less than half of the time foreseen for real estate without an environmental certification.

Keywords: green buildings; sustainability; construction industry; LEED certification; real estate innovation (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

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