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Greenness and financial performance of European REITs

Giacomo Morri (Department of Corporate Finance and Real Estate, SDA Bocconi School of Management, Milan, Italy)
Rachele Anconetani (Department of Corporate Finance and Real Estate, SDA Bocconi School of Management, Milan, Italy)
Luca Benfari (Bocconi University, Milan, Italy)

Journal of European Real Estate Research

ISSN: 1753-9269

Article publication date: 1 December 2020

Issue publication date: 4 June 2021




The purpose of this paper is to investigate the link between greenness and the operating performance in 50 listed European real estate investment trusts (REITs).


Using a sample of 50 listed European REITs, the analysis leverages on Ordinary least squares models to investigate the relationship between greenness and operating performance indicators. In particular, it examines three types of greenness indicators: the overall Green Real Estate Sustainability Benchmark (GRESB) rating, its two components (management and policy [MP] and implementation and measurement) and the seven aspect scores; return on equity (ROE) and return on assets (ROA) are the fundamental measures of REITs operating performance.


The results demonstrate a positive relationship between greenness indicators and operating performance in European REITs, but the impact on ROE and ROA differs depending on the GRESB variable analyzed. If the GRESB rating proved to be significant on ROE and ROA, none of its two components has an impact on ROA, and only the MP score has a positive relationship with ROE. Finally, of the seven aspect scores, only the stakeholder engagement is significant on the two dependent variables.


The commercial real estate sector has a significant role in tackling climate change issues. To incentivize the market to increase the investments in green buildings, it is essential to find a link between their sustainability characteristics and the improvements they deliver in terms of operating performance. Despite there being a substantial body of literature investigating this connection in the US REITs market, there is still limited knowledge on the relationship between green and operating indicators in the European REITs market.



Morri, G., Anconetani, R. and Benfari, L. (2021), "Greenness and financial performance of European REITs", Journal of European Real Estate Research, Vol. 14 No. 1, pp. 40-61.



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