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Article
Publication date: 29 July 2014

Jussi Vimpari and Seppo Junnila

The purpose of this study is first to evaluate whether real options analysis (ROA) is suitable for valuing green building certificates, and second to calculate the real…

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Abstract

Purpose

The purpose of this study is first to evaluate whether real options analysis (ROA) is suitable for valuing green building certificates, and second to calculate the real option value of a green certificate in a typical office building setting. Green buildings are demonstrated as one of the most profitable climate mitigation actions. However, no consensus exists among industry professionals about how green buildings and specifically green building certificates should be valued.

Design/methodology/approach

The research design of the study involves a theoretical part and an empirical part. In the theoretical part, option characteristics of green building certificates are identified and a contemporary real option valuation method is proposed for application. In the empirical part, the application is demonstrated in an embedded multiple case study design. Two different building cases (with and without green certificate) with eight independent cash flow valuations by eight industry professionals are used as data set for eight valuation case studies and analyses. Additionally, cross-case analysis is executed for strengthening the analysis.

Findings

The paper finds that green certificates have several characteristics similar to real options and supports the idea of using ROA in valuing a green certificate. The paper also explains how option pricing theory and discounted cash flow (DCF) method deal with uncertainty and what shortcomings of DCF could be overcome by ROA. The results show that a mean real option value of 985,000 (or 8.8 per cent premium to the mean property value) was found for a Leadership in Energy and Environmental Design Platinum certificate in the Finnish property market. The main finding of the paper suggests that the contemporary real option valuation methods are appropriate to assess the monetary value and the uncertainty of a green building certificate.

Originality/value

This is the first study to argue that option-pricing theory can be used for valuing green building certificates. The identification of the option characteristics of green building certificates and demonstration of the ROA in an empirical case makes questions whether the current mainstream investment analysis approaches are the most suitable methods for valuing green building certificates.

Details

Journal of European Real Estate Research, vol. 7 no. 2
Type: Research Article
ISSN: 1753-9269

Keywords

Article
Publication date: 23 September 2022

Visar Hoxha and Veli Lecaj

The purpose of this paper is to highlight the regulatory barriers to achieving sustainable buildings in Kosovo. The present paper focuses on regulatory barriers viewed…

Abstract

Purpose

The purpose of this paper is to highlight the regulatory barriers to achieving sustainable buildings in Kosovo. The present paper focuses on regulatory barriers viewed from the perspective of construction industry experts in achieving sustainable buildings.

Design/methodology/approach

The present study uses a qualitative research method and semi-structured interviews as a research instrument. The present study interviews around 20 experts in construction and property management, property development, spatial planning and energy management.

Findings

The study finds that Kosovo building laws and regulations provide for the materials assessment criteria, but the materials assessment criteria are only for mechanic strength. The study further finds that the sustainability concept is not included and incorporated in Kosovo's urban planning laws and regulations. The study also finds that despite specific clauses mentioning energy performance certificates in the Law on Energy Performance of Buildings in Kosovo, energy performance certificates appears to be not enforced and the nature of the barrier is more organizational rather than regulatory. Finally, the study finds that Kosovo laws are silent as far as green labeling of building materials is concerned.

Practical implications

The implication of the present finding is that policymakers in Kosovo not only should include clear sustainable materials assessment criteria in the law, but also enforce those criteria through testing and inspection mechanisms included in the law and implemented in practice through funding and organizational support. Nonetheless, policymakers in Kosovo should contemplate amending the urban planning laws in Kosovo and include both the term of sustainability at the planning level and conformity guidelines for sustainable design that can be done at the administrative directive level. Further, the clauses in the law do not suffice if the clauses are not accompanied by specific systemic and organizational support in the issuance of energy performance certificates. Policymakers in Kosovo should be proactive in designing clauses that specify green labeling standards for materials; however, these labeling standards should not adversely affect the cost of construction and reduce the demand for real estate.

Originality/value

The study is the first qualitative study about the perception of construction professionals in Kosovo, regarding the regulatory barriers of sustainable buildings in Kosovo.

Details

Property Management, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0263-7472

Keywords

Article
Publication date: 2 March 2012

Jessica Karhu, Ari Laitala, Heidi Falkenbach and Anna‐Liisa Sarasoja

The purpose of this paper is to find out the green preferences of corporate occupiers in relation to their occupied offices. The study aims to focus on the preferences of…

1277

Abstract

Purpose

The purpose of this paper is to find out the green preferences of corporate occupiers in relation to their occupied offices. The study aims to focus on the preferences of the end‐users at the organisational level. It also aims to study the relative importance of these preferences against one another and to seek the differences between respondent groups.

Design/methodology/approach

The survey is a case study approach concentrating on the situation in the Helsinki Metropolitan Area (Finland) in the summer of 2009. The survey was conducted as an internet‐based questionnaire with e‐mail invitations. The importance of nine given green attributes of the office buildings were ranked on a five‐point Likert scale. A total of 90 responses were analysed.

Findings

The results show that location achieved the highest importance, even though it was rated in terms of the environmental sense only. The energy efficiency of a building was ranked second. The indicative results suggest that industry sector and the position of the respondent effect the importance of the preferences.

Research limitations/implications

The Helsinki Metropolitan Area was the focus of the study, but it is believed that the results can be generalised to other office market areas in Finland.

Practical implications

The findings will benefit the management of occupying organisations, real estate investors and marketers who may now deepen their understanding of the preferences of corporate occupiers. The results may be useful to organisations promoting green buildings.

Originality/value

The mainstream sustainability research in the real estate sector has focused on green buildings in the area of new construction, and economical and technical approaches. This study concentrates on end‐users' considerations at the organisational level and green preferences in the existing office stock.

Book part
Publication date: 25 April 2022

Siti Zubaidah Binti Hashim, Nadira Binti Ahzahar, Intan Bayani Bin Zakaria and Norehan Norlida Mohd Noor

Green building is an outcome of a design that focuses on increasing the efficiency of resources use energy and national environment. A variety of assessment programmes

Abstract

Green building is an outcome of a design that focuses on increasing the efficiency of resources use energy and national environment. A variety of assessment programmes were developed, such as green building incentive (GBI) had been implemented in Malaysia as a strong indication for the key player in the construction industry to use the opportunity for their companies by embracing the idea of green building focussing on renewable energies, energy conservation, green building, waste management, and support service. However, the current situation reveals that the incentives were not effective enough to encourage the key players to apply the green building concept in their development. The purpose of this research is to produce a new parameter of GBIs for construction key players in Malaysia. The participants of this research were among the implementer and policy maker in helping to produce new parameter on green building incentives in Malaysia. The significant of this new parameter is to provide some guidance to the government in improving and strengthen the prior incentive, hence increase the participation of key building players in green building development in Malaysia. Apart from that, the green incentives are considered to be valuable tools in generating interest, in creating a motive for the adoption of green building practices over conventional practices and in eliminating knowledge gaps.

Details

Sustainability Management Strategies and Impact in Developing Countries
Type: Book
ISBN: 978-1-80262-450-2

Keywords

Article
Publication date: 15 February 2013

Wadu Mesthrige Jayantha and Wan Sze Man

It is known that people's expectation towards their living “green” is increasing. Green features are now regarded as one of the important considerations of buyers in…

2125

Abstract

Purpose

It is known that people's expectation towards their living “green” is increasing. Green features are now regarded as one of the important considerations of buyers in purchasing a property. This research paper aims to investigate the significance of the green features of residential buildings to property buyers.

Design/methodology/approach

HK‐BEAM certification and HK‐GBC Award are used as the measurement of green residential buildings. The study used a hedonic price model to determine whether there is a relationship between green features and residential property price and the influence of green features on the residential property price if there is such relationship.

Findings

The empirical results show that green features have a significant and positive relationship with residential property price. People are willing to pay more for green buildings recognized by HK‐BEAM and HK‐GBC. They are willing to pay a sale price premium ranging from 3.4 percent to 6.4 percent. Furthermore, a relatively larger premium is found in Hong Kong Island compared to the New Territories.

Research limitations/implications

The results imply that environmentally friendly green buildings both increase the value of a property and attract property buyers; and well‐recognized green building schemes add value to properties and hence increase the property price.

Originality/value

The study has contributed an indication of the amount a buyer would be willing to pay for quality green buildings as a reference for users, developers and investors. The study sheds light on the ability of the market to capitalize environmental considerations in investment decisions.

Details

Journal of Facilities Management, vol. 11 no. 1
Type: Research Article
ISSN: 1472-5967

Keywords

Book part
Publication date: 29 March 2021

Yeşim Tanrıvermiş and Harun Tanrıvermiş

This chapter aims to examine the linkages between urbanisation, real estate investments and sustainability in Turkey. To do so, theoretical and conceptual frameworks were…

Abstract

This chapter aims to examine the linkages between urbanisation, real estate investments and sustainability in Turkey. To do so, theoretical and conceptual frameworks were discussed based on literature review. Through mixed-methods research, primary data were collected via questionnaires from relevant 248 company executives while secondary data were collected from relevant institutions. Data on two case study green buildings were also collected through documents from building owners and project and construction managers. The results show that many urban development, transformation and real estate projects are executed without considering sustainability principles. Thus, nationally, mixed-use real estate and green building projects are limited even though a majority of the companies surveyed (85%) designed and executed projects based on a green structure approach. Generally, the costs of green buildings are higher compared to traditional buildings. There is the need for strategic spatial plans based on reliable cadastre systems, targeting national and regional development in using existing resources efficiently and paying attention to the importance of environmental quality. For the efficiency of real estate markets, advanced real estate market and financing systems and the integration of sustainability principles into decision-making process in planning, design, construction and operation phases of projects should be considered.

Details

Sustainable Real Estate in the Developing World
Type: Book
ISBN: 978-1-83867-838-8

Keywords

Article
Publication date: 21 October 2013

Malgorzata Zieba, Stanislaw Belniak and Michal Gluszak

– The purpose of this paper is to assess the demand and to estimate the willingness to pay for sustainable (certified) office space in Poland.

Abstract

Purpose

The purpose of this paper is to assess the demand and to estimate the willingness to pay for sustainable (certified) office space in Poland.

Design/methodology/approach

Due to limited data on sustainable property performance in Poland, the research is based on stated-preference data. The main research tool is conjoint experiment, run on a sample of office tenants in Krakow.

Findings

Highest utility for office tenants in Poland is linked to BREEAM certificate (highest willingness to pay for having BREEAM certified office space. Slightly lower propensity to pay was observed for LEED certificate. The lowest willingness to pay was estimated for DGNB certificate. One of possible explanations is connected to tenants awareness (BREEAM is the most common certificate in Poland).

Research limitations/implications

The research results suggest increasing demand for sustainable office space in Poland, reflected by willingness to pay for sustainable office space. The main limitations of the research are twofold: geographical limitation (only one city) and hypothetical nature of choices made by tenants in the quasi-experiment.

Practical implications

The results of the research can justify the engagement of investors in sustainable property development in Poland and foster the development of this respective sector.

Originality/value

The paper is unique as it explores the potential for sustainable property development in emerging economies, which is not a common area of scientific interest mainly due to data availability. Traditionally most research focusses on mature markets in North America, and Western Europe, and empirical evidence from less developed markets is scarce. Few papers (if any) use quasi-experimental setting to elicit implicit price of ecological certificates.

Details

Property Management, vol. 31 no. 5
Type: Research Article
ISSN: 0263-7472

Keywords

Article
Publication date: 17 May 2013

Anna Aaltonen, Eeva Määttänen, Riikka Kyrö and Anna‐Liisa Sarasoja

The aim of this study is to identify and understand the role of facility services in the environmental performance of existing office buildings.

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Abstract

Purpose

The aim of this study is to identify and understand the role of facility services in the environmental performance of existing office buildings.

Design/methodology/approach

The study observes how a facilities management (FM) service provider develops its service processes to meet environmental efficiency objectives. The environmental objectives are adopted from a commonly used green building rating system. The developed processes and services are then analysed and tested against a case facility.

Findings

The results indicate that FM service processes have both direct and indirect influence on the building environmental performance metrics. The results show that, by relatively light changes and modifications to the FM service processes, quite extensive environmental benefits can be achieved.

Research limitations/implications

The study is preliminary and the results are based on the single case study. Only one service provider was assessed. Moreover, the case study represents a situation where all FM services are provided by one service provider.

Practical implications

FM providers readily hold a great portion of the data required for green management. It can be argued that FM services play a central role in the environmental performance of an office building and FM organizations can significantly support client organizations in their efforts to minimize their total environmental impact.

Social implications

The majority of carbon dioxide emissions caused by buildings are created during the operating phase of existing buildings. In other words, the way a building is managed and maintained has a major impact on the environmental performance of the building.

Originality/value

The study contributes to the discussion on the role of FM in climate change.

Article
Publication date: 1 December 2020

Giacomo Morri, Rachele Anconetani and Luca Benfari

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).

Abstract

Purpose

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).

Design/methodology/approach

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.

Findings

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.

Originality/value

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.

Details

Journal of European Real Estate Research , vol. 14 no. 1
Type: Research Article
ISSN: 1753-9269

Keywords

Open Access
Article
Publication date: 14 January 2021

Quangdung Tran and Dechun Huang

This study focused on investigation of the critical challenges the general contractors are facing in executing green building (GB) projects in Vietnam.

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Abstract

Purpose

This study focused on investigation of the critical challenges the general contractors are facing in executing green building (GB) projects in Vietnam.

Design/methodology/approach

The study conducted a literature review and three in-depth interviews to define 31 potential challenges hindering success of GB projects. Data was collected from 163 respondents through the questionnaire survey and was analyzed by the mean ranking technique, EFA and PLS-SEM.

Findings

The result found general contractors in Vietnam are facing the four components of challenges, namely “Planning activities-related challenges”, “Organizational activities-related challenges”, “Onsite management and control activities-related challenges” and “Green supply chain-related challenges”; and all of them have statistically significant effects on success of GB projects in Vietnam. Furthermore, the most dominant component was related to the non-readiness of external GB supply chain.

Practical implications

The findings suggest for practical measures to enhance success of GB projects in Vietnam, including (1) completing the system of legal regulations and technical codes, standards, guidelines on GB, (2) providing incentive policies to promote the R&D activities on GB and (3) providing educational programs to improve the awareness and capacity on GB in domestic construction organizations, especially medium and small subcontractors.

Originality/value

This study seeks to gain a better understanding on critical challenges hindering success of green building projects under the view point of general contractors with reference to the context of Vietnam – a developing economy. This study is the first study to identify potential challenges and evaluate the impact of the key components of challenges on success of GB projects.

Details

Journal of Economics and Development, vol. 24 no. 1
Type: Research Article
ISSN: 1859-0020

Keywords

1 – 10 of over 4000