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Article
Publication date: 5 September 2018

Tu Thanh Le and Georgia Warren-Myers

The importance of sustainability in the property industry is well recognised, and many studies have proved the existence of sustainability premiums in real estate markets. Valuers…

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Abstract

Purpose

The importance of sustainability in the property industry is well recognised, and many studies have proved the existence of sustainability premiums in real estate markets. Valuers play the most pivotal role in reflecting the market, however despite the efforts of both academic and professional bodies to improve valuer knowledge and perceptions of sustainability there remains significant limitation of consideration of sustainability in valuation within the profession. The purpose of this paper is to investigate valuation practice through examining institutional grade commercial valuers’ approaches and consideration of sustainability in valuation.

Design/methodology/approach

This research used a case study approach and interviewed institutional grade commercial valuers in Melbourne, Australia, exploring their consideration of sustainability in their valuation reports for commercial properties. A semi-structured interview technique was utilised with responses using qualitative content analysis that investigated the processes used, knowledge and incorporation of sustainability in valuation practice.

Findings

The study has found substantial limitations in the incorporation of sustainability in property valuation in Melbourne’s real estate market, comprising valuers’ limited knowledge, reluctance to consider sustainability in the valuation process, poor verification or investigation of sustainability considerations, client instructions did not direct valuers to consider sustainability, lack of data and limited tools for detailed analysis.

Research limitations/implications

Although a small sample, the data redundancy found in this research suggests a level of consensus on certain aspects of practice within the sector in Melbourne. This corroborates similar findings from a large-scale study of valuers and property professionals in Europe and the UK (Michl et al. 2016).

Practical implications

There is urgent need for more education and direction in the consideration and incorporation of sustainability in valuation for valuers. Enhancing the enforcement of guidelines from professional bodies is also crucial in order to deepen the analysis of sustainability in property valuation.

Originality/value

The research has provided an in-depth perspective of valuation practice in the commercial sector, that identifies and expands on the barriers in regard to limited incorporation of sustainability in property valuation reports, physical reporting, comparative analysis and depth of discussion. Further, it highlights the limited consideration of guidance notes in regard to sustainability from professional bodies.

Details

Property Management, vol. 37 no. 1
Type: Research Article
ISSN: 0263-7472

Keywords

Article
Publication date: 25 February 2021

Georgia Warren-Myers and Lucy Cradduck

The purpose of this research is to investigate Australian property valuers' identification and consideration of physical risks to properties in valuation practice. The research…

Abstract

Purpose

The purpose of this research is to investigate Australian property valuers' identification and consideration of physical risks to properties in valuation practice. The research further explores valuers' considerations of climate change-related risks.

Design/methodology/approach

The research approach comprised an online survey of Australian valuers who were members of the Australian Property Institute. The online survey included structured and unstructured questions to explore types and extent of risk investigations in valuation practice.

Findings

The analysis reflects that while valuers easily identified and engaged with physical risks, there is a lack of understanding of, and engagement with, climate change risks. This supports the need for better information sources and guidance to inform valuers of climate change risks per se, as well as the development of specific mechanisms for consideration of such risks to be included in valuation processes, practices and reports.

Research limitations/implications

The research is limited by the small sample size achieved due to the timing of the survey deployment, which occurred during the first wave of COVID-19 lockdowns in Australia. Thus, the findings are not necessarily representative of the Australian valuation profession, but they do provide indications of current approaches to risk identification in practice and the need for more guidance in relation to climate change risks.

Practical implications

This research identifies that more support, guidance, information and tools, as well as awareness-raising, are required to enable valuers to accurately identify all risks affecting a property.

Originality/value

The research provides a snapshot of current understandings of physical risk identification in valuation practice. As investors and other organisations integrate and build up their analysis of climate risks to their portfolios and organisations, this research indicates that valuers also need to be aware of changing market assessment of physical and climate risks associated with property for consideration in valuation.

Details

Journal of Property Investment & Finance, vol. 40 no. 1
Type: Research Article
ISSN: 1463-578X

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Article
Publication date: 7 March 2023

Georgia Warren-Myers and Lucy Cradduck

This research investigated Australian property valuers' identification and consideration of physical climate change risks in valuation practice.

Abstract

Purpose

This research investigated Australian property valuers' identification and consideration of physical climate change risks in valuation practice.

Design/methodology/approach

Thirty Australian valuer members of the Australian Property Institute from a variety of specialisations were interviewed. The semi-structured interviews explored climate change risks and the extent of risk investigation and consideration in valuation practice. The analysis utilised the Moser and Luers (2008) climate risk preparedness framework as a lens to evaluate current valuation practice in Australia.

Findings

The analysis reflects that while physical risks are easily identified and engaged with by valuers, correspondingly, there is a lack of understanding of and engagement with, climate change risks. This supports the need for better information sources and guidance to inform valuers of climate change risks and the development of specific mechanisms for the consideration of such risks to be included in valuation processes, practices and reports.

Research limitations/implications

The research was limited by its sample size and qualitative approach. Therefore, the research is not a representative opinion of the Australian profession; however, the analysis provides the perspective of a range of valuers from across Australia with different valuation specialisations.

Practical implications

This research has established that valuers have the potential to be prepared to address climate change in their professional capacity, as described by Moser and Luers (2008). However, they are constrained by information communication, access and detail and subsequent market awareness of information on climate change risk exposure on properties. There is a need for further support, guidance, information and tools, as well as awareness-raising, to enable valuers to accurately identify and reflect all risks affecting a property in the process of valuation.

Originality/value

This research provides the first investigation into the consideration of climate change in valuation practice. Property stakeholders—owners, investors, financiers and occupiers—are escalating their climate change risk analysis and reporting for property portfolios and organisations. This research suggests that valuers also need to be aware of the changing dynamics of market reporting and decision-making related to climate change risks to ensure appropriate reflection in valuation practice.

Details

Journal of Property Investment & Finance, vol. 41 no. 4
Type: Research Article
ISSN: 1463-578X

Keywords

Article
Publication date: 10 March 2022

Georgia Warren-Myers

The research investigates valuers' understanding of the value of sustainability in property and its' consideration in valuation practice in Australia. This paper explores valuers'…

Abstract

Purpose

The research investigates valuers' understanding of the value of sustainability in property and its' consideration in valuation practice in Australia. This paper explores valuers' perceptions of the relationships between sustainability and market values, sustainability and valuation variables, and the value influence of industry sustainability certification schemes. Further, this paper tracks prevalence of certified buildings in Australian commercial markets and the evolution of valuers' knowledge of sustainability certifications used in Australia.

Design/methodology/approach

This paper reports on the next rendition of a longitudinal study examining valuers’ practice in Australia. This research explores the evolution of Australian valuers' perception and knowledge of sustainability in valuation practice. The survey data has been periodically collected from practising valuers from 2007 to 2021. The survey questions investigate valuers' knowledge development, understanding, reporting and consideration of the relationship between sustainability and market value.

Findings

The results have identified the evolution of the influence of normative research on valuers' perceptions of the relationship between sustainability and value; with a clearer understanding emerging over time of where the value relationships are identified in valuation variables. Greater alignment between empirical Australian studies and valuers' perceptions of the influence of sustainability ratings on value, demonstrate the value connection for higher rated buildings under NABERS (energy rating) and Green Star. Whilst only 41% of the study's participants are including sustainability in their valuation reports, they include a higher level of commentary on building descriptions and initiatives, building ratings, and reporting of owner and tenant objectives, than in previous studies. Knowledge development relating to sustainability certification tool, NABERS was identified. This is likely linked to the introduction of mandatory disclosure legislation. This has also led to increased awareness and valuers' knowledge of the differences between the two key rating tools used in Australia.

Research limitations/implications

The research has several limitations: firstly, recruitment of valuers and the number of valuers' responses has varied over time; secondly, due to collection methods respondents have a greater likelihood of having an interest in and knowledge of sustainability creating potential for positive bias; thirdly, respondents may have responded to the survey in different years, but due to anonymity there has been no ability to track this. The results provide insights into the Australian valuation profession but may not be fully representative of the profession overall in Australia.

Practical implications

The broader agenda of net zero, climate change, mitigation and carbon requirements, whether driven by market forces or government legislation, are generating changes in property markets as investors' reconsider their positions and model the implications of carbon emissions on their bottom lines. Introductions of policy and legislation over time in the Australian context have led to changes in valuation practice and increasing consideration of energy efficiency and ratings in the valuation of assets. However, further guidance and research still is required in Australia to assist in the knowledge development of valuers, and their ability to consider the emerging effects of sustainability, net zero and other market driven objectives including legislation, and how these may affect or influence their evaluation of market evidence and thus property values.

Originality/value

The research has tracked valuers' understanding, knowledge, and consideration of sustainability and energy efficiency in valuation practice since 2007. In that time the research has found that, as the market has evolved and more rated buildings are built (or retrofitted), so too has valuers' knowledge and consideration in valuation practices evolved. Valuers are more engaged with industry rating tools such as NABERS. This suggests that the Australian mandatory disclosure policies have contributed to changes in the market, which are then interpreted by valuers and reflected in their perceptions and consideration of energy ratings in valuation practice.

Details

Journal of Property Investment & Finance, vol. 41 no. 4
Type: Research Article
ISSN: 1463-578X

Keywords

Article
Publication date: 9 February 2022

Lucy Cradduck and Georgia Warren-Myers

This research seeks to understand the potential impact to investors from government responses to climate change risk, as reflected in changes to planning processes made after…

Abstract

Purpose

This research seeks to understand the potential impact to investors from government responses to climate change risk, as reflected in changes to planning processes made after significant weather events.

Design/methodology/approach

The research examines the land planning responses within a select local government authority (“LGA”) area following four significant weather events, in order to identify any changes made, and the impact on future development proposals. The LGA selected is the Central Coast Council, which is a coastal LGA in the Australian State of New South Wales. The research engaged with the publicly accessible records available on the Central Coast Council, Australian Bureau of Meteorology and other websites; and extant literature.

Findings

The research reveals that some adjustments were made by the Central Coast Council, and or the State government, to relevant laws, policies and processes following these events. These changes, however, tended to focus on imposing additional requirements on future development applications, rather than on requiring changes to current structures, or prohibiting further development works.

Research limitations/implications

The research has three limitations: (1) land law in Australia varies, as each State and Territory, and LGA, has specific laws, policies and processes; (2) as laws and policies are subject to change, it was necessary to select points in time at which to engage with those laws and processes; and (3) COVID-19's impact on domestic Australian travel [the authors could not travel interstate] meant only documents available on the Internet were considered, however, not all documents relating to development; or changes to laws and processes were easily accessible online. As the research focussed on one case study area, this may limit the applicability of the results to other areas. However, as extreme events are international, the related issues are a concern in all areas.

Practical implications

This research confirms the results of other extant research, which observed that some risks cannot be properly mitigated, such that any development in an at-risk area remains at risk. It also identifies that more current, accurate and publicly accessible data are required to enable investors to more easily and accurately identify all risks affecting a property.

Originality/value

The research provides a snapshot of one LGA's response to the physical risks arising from climate change events. As investors and other organisations integrate and build up their analysis of climate risks to their portfolios and organisations, governments become more aware of the long-term effects of climate change and consistently with extant research; this research indicates that a greater awareness is required of current risks and action to manage the short-term effects and cost challenges, in addition to the long-term adaptation requirements.

Details

Journal of Property Investment & Finance, vol. 40 no. 4
Type: Research Article
ISSN: 1463-578X

Keywords

Content available
Article
Publication date: 4 March 2022

Georgia Warren-Myers

The research investigates valuers' understanding of the value of sustainability in property and its consideration in valuation practice. The paper explores the extant research…

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Abstract

Purpose

The research investigates valuers' understanding of the value of sustainability in property and its consideration in valuation practice. The paper explores the extant research that has examined valuers' perceptions of the relationships between sustainability and market values, sustainability measurement, value relationships and the standards and guidelines released industry bodies.

Design/methodology/approach

This paper, part 1 of 2, reports the current state of play of valuation research in the consideration of sustainability in valuation practice and the role of industry bodies in the guidance regarding sustainability consideration in valuation. The second paper provides the next rendition of a longitudinal study examining valuation practice in Australia.

Findings

The paper provides an overview of the evolution of the consideration of sustainability in property over the past two decades. Providing insights of how the property sector, its markets and valuation professionals have responded to answering the questions of: what is the value of sustainability? Whilst earlier publications both industry and academic publications alike focussed on the normative aspects of how sustainability should affect value, more recent research starts to ascertain the implications of sustainability on property values. Despite industry bodies providing information, education, guidelines and standards, it would seem that valuers in their practice are still grappling with the challenges of understanding the rapidly evolving area of sustainability, environmental, social and governance and climate risks in valuations.

Research limitations/implications

The paper does not present as an authority on all research that has been conducted to date, it provides an overview of the evolving nature of both academic research and industry consideration of sustainability, particularly in a valuation context. This provides the background for Part 2.

Practical implications

The broader agenda of net zero, climate change, mitigation and carbon requirements, whether driven by market forces or government legislation, are generating substantial changes in property markets, as investors reconsider their positions and model the implications of carbon emissions on their bottom lines. Government policies appear to have a considerable influence over market behaviours, which filters through to stakeholder decision-making. However, despite government policies, clear market signalling and industry body guidance on valuing sustainability, the content and depth of sustainability consideration in valuation are still limited.

Originality/value

The paper provides an overview of the last decade of research into the value of sustainability and the evolving nature of information and guidance for valuers to identify, evaluate and consider sustainability in valuation.

Details

Journal of Property Investment & Finance, vol. 40 no. 4
Type: Research Article
ISSN: 1463-578X

Keywords

Article
Publication date: 5 September 2016

Georgia Warren-Myers

The relationship between sustainability and value in property has been a major area of investigation over the past decade. However, in spite of the extant literature and research…

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Abstract

Purpose

The relationship between sustainability and value in property has been a major area of investigation over the past decade. However, in spite of the extant literature and research, the connections made by valuers in practice of the value relationship are still unresolved. The purpose of this paper is to investigate, in the Australian context, valuers’ perception of the relationship between sustainability and value; and their experience and knowledge of sustainability in valuation practice.

Design/methodology/approach

The research investigates valuers’ perception and knowledge of sustainability and its inclusion in valuation practice in Australia. The approach uses a longitudinal survey of valuers from 2007 to 2015 tracking valuers’ knowledge, understanding, inclusion of sustainability reporting and the perceptions of the relationship between sustainability and market value.

Findings

This paper presents findings from a longitudinal survey that has been conducted in Australia since 2007, identifying changes between 2007, the height of the property market and sustainability engagement prior to the global financial crisis, and the subsequent years to 2015. The growth of sustainability in the property market is significant, however, valuers’ knowledge and reporting on sustainability is not demonstrating the same level of development. As a result, this is inhibiting valuers reporting on sustainability and has implications for practice and treatment of market values.

Practical implications

This research highlights the need to examine how to assist valuers to more rapidly develop knowledge and experience to reflect the implications of change in practice. Current approaches being developed in the UK and Europe, like the introduction of RenoValue professional development programs and guidance documents, to assist valuers to develop their knowledge needs to be implemented in the Australian environment as current approaches are inadequate, and steps need to be taken in order to assist their development of knowledge and experience as the market demonstrates growth and acceptance of sustainability. This research identifies the need to re-examine how professional development is undertaken and knowledge developed by those practicing in the profession in Australia.

Originality/value

This longitudinal survey is the only research that has spanned a substantial period of time attempting to ascertain valuers’ perception of the relationship between sustainability and value; and attempts to track the knowledge development of valuers in the context of sustainability. The findings identify how the market is developing and adhering to a product model development theory, however, also identifies more fundamental issues and implications for valuation praxis, in the development of knowledge and ability of valuers to adapt to change and reflect these valuations.

Details

Journal of Property Investment & Finance, vol. 34 no. 6
Type: Research Article
ISSN: 1463-578X

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Article
Publication date: 22 June 2020

Georgia Warren-Myers, Anna Hurlimann and Judy Bush

The purpose of this paper is to understand the sources of climate change information used and trusted by key stakeholders in the Australian property industry, their information…

Abstract

Purpose

The purpose of this paper is to understand the sources of climate change information used and trusted by key stakeholders in the Australian property industry, their information needs and their capacity to translate that information into decision-making.

Design/methodology/approach

Qualitative research applying in-depth interviews with 24 key stakeholders from a diverse range of property/real estate companies in Australia.

Findings

This research identified a wide range of information types used by key stakeholders, ranging from reliance on unsophisticated mass media reporting to detailed analysis of scientific research. The capacity of stakeholders to translate this information for their organisation was polarised; 11 of the 24 interviewees indicated they had the capacity, while the other 13 indicated they did not, often owing to time horizons or lack of current interest within the organisation or from clients.

Research limitations/implications

This research was limited to 24 in-depth interviews and is not intended to be a representative sample. However, this limitation is offset by the fact that a diverse range of stakeholders were interviewed and an in-depth and rich understanding has been provided about their approach to climate change.

Practical implications

The results can inform the development of better communication channels for climate change for the property industry by supporting science-practice collaborations in the timely and effective dissemination of research. This is important to understand given the identified need to bridge the gap among research, policy and practice.

Social implications

Climate change poses significant challenges and risks for built environments. The property industry, as a key stakeholder, has great potential to influence current practices. The results reported here assist in addressing these challenges.

Originality/value

At present, limited research globally has been conducted about climate change actions in the property industry. This research responds to this gap.

Details

Journal of European Real Estate Research , vol. 13 no. 3
Type: Research Article
ISSN: 1753-9269

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Article
Publication date: 6 September 2018

Georgia Warren-Myers, Madeline Judge and Angela Paladino

Rating tools for the built environment were designed to engage consumers and enhance sustainability and resilience. However, the intended outcomes of these rating systems appear…

Abstract

Purpose

Rating tools for the built environment were designed to engage consumers and enhance sustainability and resilience. However, the intended outcomes of these rating systems appear to have limited implementation in the residential new housing market in Australia. The purpose of this paper is to investigate consumers’ motivations and experiences who have purchased houses that are situated in a sustainability-based certified development and will have been required to comply with mandatory dwelling certification.

Design/methodology/approach

The paper explores the awareness and perception of sustainability ratings and whether the motivations for purchasing in the sustainably certified development have heightened their awareness of sustainability and the resilience of new housing. This has been investigated through a pilot study of consumers who have purchased land in a certified estate and built a new home, through an online survey.

Findings

The findings reveal that the rating systems are at present not having the desired influence as first thought; that is, to inform consumers of the sustainability of a dwelling or property and to instigate trust of the environmental credentials of the property.

Research limitations/implications

This illuminating case study of participants who have purchased a sustainable rated development demonstrates that regardless of their concern for environmental issues, consumers have both low awareness and trust in the ratings. Despite this, consumers do seek value from these credentials to the overall property.

Originality/value

This study aims to illustrate the disconnect in engagement between developers, builders and new home buyers in relation to sustainability certification and implementation.

Details

International Journal of Building Pathology and Adaptation, vol. 36 no. 4
Type: Research Article
ISSN: 2398-4708

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Abstract

Details

Journal of Property Investment & Finance, vol. 40 no. 4
Type: Research Article
ISSN: 1463-578X

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