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The study aims to examine how the vicious circle of blame for sustainable buildings can be turned into virtuous loops of adaptation when considering sustainable buildings and what are the drivers for tenants and investors regarding sustainable buildings and gaining insights of investors’ and tenants’ corporate responsibility (CR) actions.

The paper consists of a literature review and two surveys. The literature review concentrates on exploring investors’ and tenants’ CR and sustainability drivers. Empirical evidence was gathered via two specific surveys. The first survey targeted investors, and the second survey targeted tenants to determine the focus areas of sustainability.

The findings of this study indicate that the vicious circle of blame can be turned into one of cooperation with respect to sustainable buildings if the mutual drivers for improving sustainability are linked with investor–tenant collaboration. Based on the survey, the tenants claim that productivity, corporate culture and image are the primary drivers for sustainable buildings, whereas the investors claim that corporate culture and image, tenant demand and marketability are the primary drivers. Both parties mentioned the same sustainability drivers: corporate culture and image and lower operating costs. However, it was found that investors are not communicating their CR actions to public or promoting image and productivity benefits of green buildings to potential tenants.

The limitation of this study is the sampling of Nordic countries, as there are indications of different situation in other markets such as the USA.

Improving sustainability in the real estate industry is linked to investor–tenant collaboration. In addition to common drivers, both investors and tenants have their own list of benefits and drivers for sustainable buildings. These drivers are linked to each other. Making progress with respect to sustainability in the built environment depends on people in the industry being aware of the importance of and possibilities offered by sustainable buildings, as well as being able and willing to act on this knowledge. Only through partnership can the full potential of the built environment be realised and help deliver an economically, environmentally and socially sustainable future.

The purpose of this paper is to investigate the role of distinct types of heating technology and their price impact in German residential real estate markets, considering a wide range of other housing market determinants. The authors aim to test and to verify specifically, whether the obsolescence of heating technology leads to a significant price discount and whether higher technological standards (and environmental friendliness) come with a price premium on the market.

The authors create housing market models for rental and sales segments by constructing generalized additive models with explicit multi-layered spatial components. To elaborate a profound and contemporary answer using these models, the authors perform large-sample regression analyses based on more than 400,000 observations covering German residential properties in 2015.

First and foremost, the heating system indeed shows significant explanatory importance for measuring housing rents and purchasing price. Second, the authors find that it makes a difference whether clean “green” technologies are implemented or whether “brown” systems with obsolete technology or fossil energy sources is on hand. Ultimately, the authors conclude that while low energy consumption indeed comes with a price premium, this needs to be interpreted together with the property’s heating type, as housing markets seem to outweigh the “green premium” by “brown discounts” if low energy consumption figures are powered by a certain type of heating technology system.

Aside of a possible omitted variable bias, the main research limitation is constituted by the integration of asking prices in the analysis, as actual transaction prices are not systematically transparent on national level in Germany. Limitations are discussed at the end of the paper.

This work supports investors who face the challenge of making environmental- and energy-related decisions as well as appraisers who deliver financial fundamentals for such. Third, the paper supports both asset managers as well as investment strategists in argumentation pro-environmental investments beyond all ecological necessity.

This paper contributes to the current discussion on climate change and the eclectic role of real estate in this context. The authors deliver evidence on pricing effects as a measure of socioeconomic acceptance of progressive heating technology and environmental friendliness as an imperative of twenty-first century societies.

This is the first study on “green premiums” or “brown discounts” that includes heating technology as a potential and distinct driver of value and rents. It is a contemporary contribution and delivers original information on the quantitative impact of contemporary and anachronistic technology in heating to researchers as well as investors and appraisers.

This paper aims to decompose the value effects of green retrofits on commercial real estate. The paper disentangles various sources of value capture mechanisms that can be attained through green retrofit actions and profiles the extent to which green retrofit solutions can be effectively capitalised using transaction evidence from the Munich housing market. The insights offered can help real estate owners and investors during their ex ante analysis of future energetic retrofit investments.

The authors offer their reader both a conceptual framework and the results from an empirical analysis to identify the value effects of retrofits and the associating gains in energy efficiency. The conceptual framework theorises the different value components that a deep retrofit has to offer. The regression analysis includes a multivariate analysis of 8,928 dwellings in the Munich residential real estate market.

This study’s framework disentangles the total retrofit value effect into three components: the capitalisation of energy savings, the exposure to the value discount because of stricter standards and the value uplift because of indirect benefits (health, employee satisfaction, marketing etc.). The regression results indicate that the value gains because of energy efficiency improvements are in the range of 2.4–7.4%, while the indirect benefits and reduced exposure to stricter standards amount to another 3%.

While numerous studies have investigated the upside value effects of energy efficiency in the real estate sector, there is scant academic research which has sought to evidence the value of green retrofit solutions and the extent to which this can be capitalised. Instrumentalising the various value effects of energetic retrofit that have been identified is not straightforward. At the same time, inadequate value capture of energetic retrofit effects could delay intervention timelines or aborting of proposed retrofit actions which should be of primary concern to policymakers and stakeholders tasked with the decarbonisation of real estate assets.

A number of studies have investigated the relationship between energy performance certificates (EPCs) and house prices. A majority of studies have tended to model energy performance pricing effects within a traditional hedonic conditional mean estimate model. There has been limited analysis that has accounted for the relationship between EPCs and the effects across the pricing distribution. Moreover, there has been limited research examining the “standard cost improvements EPC score”, or “potential score”. Therefore, this paper aims to quantify and measure the dynamic effects of EPCs on house prices across the price spectrum and account for standardised cost-effective retrofit improvements.

Existing EPC studies produce one coefficient for the entirety of the pricing distribution, culminating in a single marginal implicit price effect. The approach within this study applies a quantile regression approach to empirically estimate how quantiles of house prices respond differently to unitary changes in the proximal effects of EPCs and structural property characteristics across the conditional distribution of house prices. Using a data set of 1,476 achieved transaction prices, the quantile regression models apply both assessed EPC score and bands and further examine the potential EPC rating for improved energy performance based on an average energy cost improvement.

The findings show that EPCs are valued differently across the quantiles and that conditional quantiles are asymmetrical. Only property prices in the upper quantiles of the price distribution show significant capitalisation effects with energy performance, and only properties with higher EPC scores display positive significant effects at the higher end of the price distribution. There are also brown discount effects evident for lower-rated properties within F- and G-rated EPC properties at the higher end of the pricing distribution. Moreover, the potential energy efficiency rating (score) also shows increased effects with sales prices and appears to minimise any brown discount effects. The findings imply that energy performance is a complex feature that is not easily “averaged” for valuation effect purposes.

While numerous studies have investigated the pricing effects of EPCs, they have tended to provide a single estimate to determine the relationship with price. This paper extends the traditional analytical insights beyond the conditional mean estimate by examining the quantiles of the relationship between EPCs and house prices to enhance the understanding of this esoteric and complex issue. In addition, this research applies the assessed energy efficiency potential to establish whether effective cost improvements enhance the relationship with sales price and capitalisation effects.

About 27 per cent of the total UK carbon emissions are attributed to residential buildings; therefore, improvements to the energy efficiency of the stock offers great potential. There are three main ways to achieve this. First is a mandatory approach, minimum energy efficiency standards are set and applied to new and existing buildings. Option 2 is voluntary, using energy ratings that classify performance to stimulate awareness and action. Third, financial measures, incentives and taxes, are applied to “nudge” behaviours. Most westernised countries have adopted a combination of Options 2 and 3, with the belief that the market will incentivize efficient properties. The belief is voluntary measures will stimulate demand, leading to value premiums. This paper aims to seek a deeper understanding of the relationship between energy efficiency and the value of residential property in Europe and, by so doing, to determine whether stronger policies are required to realise decarbonisation.

This paper reviews the current academic literature and large-scale quantitative studies conducted in Europe, mostly using hedonic pricing analysis to seek a relationship between energy performance certificates (EPCs) and either capital or rental values. It compares these to the reported findings of three case study projects that take a variety of different research approaches, all of which have the ambition to understand market behaviours and stimulate occupier or/and owner demand for energy efficient buildings.

The large-scale academic study results generally show a positive relationship between observed market prices and EPCs, which are commonly taken as surrogates for efficiency; however, outcomes are variable. One large study found energy upgrades may increase value, but not to the point where costs outweigh the value gain. Other studies found high returns on investment in energy efficiency technologies. The case study projects, however, revealed a more nuanced set of arguments in terms of the relationship between energy efficiency and market behaviours. Whilst there is some evidence that energy efficiency is beginning to impact on value, it is small compared to other value drivers; other drivers, including health, well-being and private sector finance deals, may prove more powerful market drivers. Further, the empirical findings reported point towards the emergence of a “brown” discount being more likely to be the long-term trend than a green premium. It is concluded that the current levels of action are unlikely to deliver the levels of decarbonisation urgently needed.

This is a desktop study of other European studies that may have collected data on slightly different variables.

This study shows that more action is required to realise decarbonisation in new and existing residential property in the European states considered. The sector offers potential for substantial reductions, and other mandatory approaches need to be considered.

This is a timely review of the current outcomes of European programmes (EPCs) adopted in several countries to increase energy efficiency in the residential sector through a voluntary mechanism. The results show that more action is needed.

The 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.

The 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.

The 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.

The 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.

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.

Most 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.

This study examines the performance of both open‐ended and closed‐end mutual funds – as fixed income securities and vehicles for capital gains. A determination will be made of which categories one group was able to outperform the other and to recognize why a group performs better or worse over time.

In order to develop our understanding of valuation models and so extend this to encompass the important area of performance measurement and its interpretation, it is essential to have a framework which will enable such developments to take place. This paper presents a theoretical model based on a certainty equivalent approach which enables the market risk of individual properties and portfolios to be assessed on an expectations basis. The data requirements for using the model are not onerous and with simple extensions it can be adapted to cope with changes in risk that occur when variations in the lease structure are anticipated. Understanding the influence of systematic or market risk is essential if our understanding of valuation is to improve. Systematic risk is the single most important factor which determines the premium which should be allowed to compensate for risk. This aspect has been largely ignored in the property literature with the result that risk premium figures are frequently assumed to be constant across all sectors and properties. This paper derives a model which attempts to overcome some of these problems. Due to data limitations empirical tests of the model cannot be regarded as conclusive. However, those tests that have been carried out suggest that the model could be used for estimating the required rate of return of both sectors and individual properties. It also has considerable potential in estimating growth expectations for groups of properties and can thus be used in the decision‐making process. Much, however, remains to be done.

The UK government, in late 2019, announced new proposed targets for the energy efficiency legislation in the UK, MEES – Minimum Energy Efficiency Standards. The current suggestion is that all let properties, commercial or residential, need to be B rated by 2030. If this is implemented, it will have a significant impact upon the UK market property investment market.

This practice briefing is an overview of the 2018 legislation and comments on how market awareness has changed since its introduction and the potential impact upon prices of affected properties moving forward

This paper discusses how capital and rental values are beginning to be discounted in the market to allow for current and future liabilities under the MEES legislation. This has a significant impact on strategies for property investment.

This paper analyses the likelihood of (negative) capital and rental value changes under the proposed stricter energy efficiency guidelines.

This provides guidance on how valuations can be undertaken to reflect any impact of the likely changes to UK energy efficiency legislation.

The purpose of this paper is to examine the cross-sectoral collaboration between conservation and economic appraisal, and to process a financial analysis for private owners of a built heritage.

The methodology applied addresses the financial analysis of restoration through a discounted cash flow analysis, together with a life cycle costing. Costs and revenues are both analysed in this paper. Some energy-saving measures are applied to cut running costs and decrease the energy required by the building, using as reference the “Guidelines for improving energy efficiency in cultural heritage” drafted by MiBACT, which considers the respect of restoration principles. In order to increase revenues, part of the building is rented. The attractiveness of the investment opportunity is valued through the calculation of the net present value of cash flows, the payback period and the internal rate of return.

The paper offers a simple strategy for the planning of cost-revenues, preventively allowing verification if the conservation is economically feasible and if the owners can afford the operation. The strategic planning will give the owners the chance of maintaining the property of their building and achieve a proper restoration on it.

The novelty of the paper is the study of cooperation between conservation and economic valuation, but also the focus on a specific portion of twentieth-century heritage, the war-wounded houses, which represent a widespread patrimony, on which it is not clear how to operate yet.