The Value of Sustainable Property Management in Real Estate: Evidence From Hong Kong

Jianfu Shen, Kwok Yuen Fan, Eddie C. M. Hui and Sik Man Ho

Journal of Real Estate Research, 2024, vol. 46, issue 3, 389-419

Abstract: This study investigates whether sustainability in property management is valued by property buyers. Using a sample of 312,474 property transactions in Hong Kong from 2007 to 2021 and based on a hedonic pricing model, we find that the environmental, social, and governance (ESG) performance of property management companies is positively associated with housing prices, and that housing prices drop if property management companies experience ESG-related risk incidents. The results are robust when the sample is restricted to repeat-sales transactions and when using a location-based matching approach and an instrumental variable approach. Further analysis shows that housing prices increase with the social and governance performance of property management companies but not with their environmental performance. The negative effect of ESG incidents on housing prices increases if the incidents are reported by high-reach media. Homebuyers and nonlocal buyers are more willing to pay a premium for sustainability in property management than are real estate speculators and local buyers. Additional evidence suggests that ESG practices play a more significant role in affecting property value through lower risk or a higher rental income growth rate than through higher gross rents. Overall, this study provides evidence of the value of sustainable property management in real estate.

Date: 2024
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://hdl.handle.net/10.1080/08965803.2024.2346413 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:rjerxx:v:46:y:2024:i:3:p:389-419

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/rjer20

DOI: 10.1080/08965803.2024.2346413

Access Statistics for this article

Journal of Real Estate Research is currently edited by William Hardin and Michael Seiler

More articles in Journal of Real Estate Research from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().