Valuing Sustainable Buildings. Green Assets, the Role of Professional Valuers, and Assembling an Evidence Base
Mark Creamer and
The Valuation Journal, 2011, vol. 6, issue 2, 46-59
Investors and occupiers increasingly recognize that commercial benefits can flow from many of the measures taken to enhance buildings' sustainability. In particular, there is some evidence that sustainable buildings are more marketable and require less energy than other comparable peers. The valuation profession must now address whether and, if so, how to reflect the commercial benefits in appraisal reports. At CBRE, we do not explicitly incorporate sustainability factors into our methodology and are unlikely to do it until it is clear there is a material influence on market values. Our expectation is that, for the foreseeable future, a building's sustainability rating will not lead to automatic percentage changes in values. However, we do foresee more nuanced developments over time. For example, we expect the quantum of any impact from sustainability on value to vary depending on factors such as the building's age, use and location, the identity of the parties involved, the state of the market and the nature of the measures that have been implemented. To assemble an evidence base, we have recently introduced a Sustainability Checklist, and this will be forming an integral part of our valuation inspections. Public awareness and political momentum around the responsible use of the planet's scarce resources has risen rapidly in recent years. This short paper explores the implications of these trends for the valuation profession.
JEL-codes: Q01 Q51 R31 (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:vaj:journl:v:6:y:2011:i:2:p:46-59
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