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This study examines the relationship between environmental building certification Building Research Establishment Environmental Assessment Method (BREEAM-NL) and office rents in the Dutch office market.

A hedonic price model was used to assess the impact of BREEAM certification on office rents. The study is based on 4,355 rent transactions in the period 2015 to mid-2022, in which 331 transactions took place in certified office buildings and 4,024 transactions in non-certified office buildings.

The results provide empirical evidence on quantitative economic benefits of BREEAM-certified offices in the Netherlands. After controlling for all important office rent determinants, the results show a rental premium for certified office buildings of 10.3% on average. The green premiums highly differ across submarkets and vary between 5.1 and 12.6% in the five largest Dutch cities. Additionally, the results show significant positive correlation between BREEAM-NL label score and rents, whereby better performing buildings generally command higher rents.

The study contributes to the current literature on green building economics by providing, as one of the first, empirical evidence on the existence of financial benefits for BREEAM-certified office buildings in the Dutch office market.

The current literature has not investigated the perceived value of energy efficiency by households, regardless of financial benefits. Furthermore, there is a severe lack of research that investigates the effectiveness of the current format of EPC-labels. Therefore, the purpose of this paper is twofold: to study how households value energy efficiency in the housing market, regardless of price effects.

This study uses multiple hedonic regression models to analyse 706,778 Flemish properties for sale or rent between 2019 and 2023. The data is provided by Immoweb – the largest online real estate platform in Belgium. Given that the selling market is driven by different mechanisms than the rental market, the data set was divided in sold (522,164 listings) and rented properties (184,614 listings).

The ambiguous results of the A-label in the selling market indicate that the “class evaluation effect” found in related markets which use labels (e.g. household appliances) is also present in the housing market. However, the results of the other (lower) labels clearly show that owners do value energy improvements within labels, and this effect becomes stronger as the EPC-label becomes better. The rental market shows the opposite results. Energy improvements are only valued if they translate into a financial benefit. Taking these findings into account, the second part of this research shows that rescaling the EPC-label creates an incentive for improvements within labels.

This paper provides novel insights by studying the perceived value of energy efficiency in the absence of financial benefits and critically studying the effectiveness of the EPC-labels in their current shape. By investigating both the sales and rental market, the authors are able to make a comparison which creates valuable insights for academia, governments and real estate professionals.

As the awareness of environmental preservation and of sustainable development have become increasingly pronounced among various stakeholders, such as governments and communities, many businesses, in response, commence to introduce environmental-friendly measures and/or implement an environmental management system (EMS) in their daily operations. Even a service-oriented industry such as property management is no exception. To showcase their commitment to this cause, property management companies tend to obtain different environmental certifications. This study aims to investigate the effect of green property management, through environmental certifications, on property price.

The hedonic price model is used to determine the impacts of different environmental certifications on prices of selected residential properties in Hong Kong. Three districts from different parts of Hong Kong, including 16 private residential developments, are covered in this study.

The results show that ISO 14001 certification itself is not statistically significant in explaining property price. It is only when a property management company has obtained other local environmental management awards/certificates that varying levels of (positive) property price premiums are found. Nonetheless, the authors also find that controlling for other housing attributes, obtaining as many environmental certifications as possible does not necessarily result in the highest property price premium.

Nonetheless, the data sample has its limitations, such as its relatively small size and the unavailability of housing attribute(s) such as orientations.

For the implications, the value of environmental management awards/certificates, from the perspective of the end-users of property management services, is based on the scopes of these environmental certifications; the promotional effort on the part of organizations behind these awards/certificates; the disclosure of information about the EMS itself and the assessment criteria; and the public’s perceptions as to the companies’ rationale behind such certifications.

The study has provided some insights regarding the effect of various management standard certifications in property management, from the perspective of the end-users of the service (i.e. homeowners and potential homebuyers). This serves as a reference for developers, property managers, buyers and users alike.

Reviews recent New Zealand legal cases involving CBD office building leasing incentives, the efficacy of confidentiality agreements and current practical valuation problems arising when analysing office rentals. Takes a controversial stand in postulating that customary methods of decapitalizing incentives in use by the valuation profession lead to errors in calculating effective rentals. Suggests a new break‐even method to analyse lease incentives. Presents a “user‐friendly” step‐by‐step spread‐sheet goal‐seeking model to undertake the complex calculations required. The model shows graphically the explicit rental forecasts required and the resulting effective analysis alongside the results of applying customary methods. Aims to bring some balance to this area of current valuation controversy and to provide a powerful new tool to analyse accurately incentive‐induced office, retail or industrial rentals.

The key learning objectives are mentioned as follows:▪ analyse the attractiveness of the bike rental market using Michael Porter’s five forces model;▪ apply the TWOS framework to analyse the strengths and weaknesses of Tazzo;▪ evaluate various competitive strategies of Tazzo; and▪ identify the unique value proposition for such a service in an emerging market such as India.

Tazzo was an Indian technology bike rental start-up based in Hyderabad. It was a pioneer in providing on-demand bike rental services. Tazzo was founded in 2016 by Priyam Saraswat and Shivangi Srivastava, both from IIT Guwahati, Priyank Suthar from IIT Roorkee and Vikrant Gosain from IMT Hyderabad. Within two years since its inception, Tazzo had scaled up from 5 bikes to a fleet size of 600 bikes with more than 1,000 daily rides. They were making around 24,000 rides monthly with an average ticket size of INR 250. The revenues crossed INR 10 crores with more than 20,000 active users. In 2016, the market was nascent and the concept was new. There was huge demand for such an on-demand bike rental services for self-commute in the metros. However, increasing awareness of a huge untapped market in the bike rental market had led to entry of a flurry of competitors. Notable among them were Vogo, Bounce and ONN Bikes. Facing such intense competition Priyam, co-founder and CEO of Tazzo, had the challenge to be able to sustain his company’s early momentum. How would he be able to retain Tazzo’s market leadership position? Would it be possible for Tazzo to keep up the pace of growth amid increased competition? Would the company be able to ward off the challenges from its competitors? Priyam was facing all these challenging questions and had to quickly address them to continue to lead in this competitive race.

This case can be used in Marketing Management course’s “Competition Analysis” module for both MBA and executive-level programs dealing with marketing. This case study helps students in dealing with issues pertaining to a given market sector where a firm is operating, the strategies that could be used by the competitors and application of competitive strategies which the firm can apply.

Teaching notes are available for educators only.

CSS 8: Marketing.

The paper aims to form system dynamics modeling in introduced in conjunction with econometric analysis and planned scenario analysis which will uniquely structure the process whereby the ex ante capital values of the prime retail real estate sector.

The integrated system dynamics model investigates the structural factors affecting a unique expectation‐centered capital value (CV) formation of the prime retail real estate sector, through system dynamics modeling, econometric analysis , and the analysis of planned scenarios. This model extends beyond the usual lags and time line aspect of the price discovery process. The retail real estate sector is investigated within the Singapore context, as this sector changes dynamically and non‐linearly in relation to rental, cost and general demand expectations and to exogenous shocks like the Severe Advanced Respiratory Syndrome (SARS) outbreak. These macroeconomic factors are introduced to investigate their impact on retail space CVs through sensitivity analysis, during the simulation period of 20 quarters from the zero reference quarter (2Q2002).

The paper finds that simulation runs of the expectations‐centered system dynamics model are based on three scenarios. Sensitivity analysis is conducted for each scenario. Optimistic scenarios' CVs are lower than those of the likely scenario, owing to developers forming excessively high expectations that cannot be met by the actual rental levels. Pessimistic scenarios' CVs are highest. Based on bounded logic and the conditions for all scenarios, there are huge differences in expectations resulting in a large disparity in the endogenous CVs. Low actual rents are primarily due to poor informational efficiency, as the prime retail real estate sector is not transparent enough, and that many transactions are privately closed. Expectations cannot be met as the market information is not disseminated extensively through the agents and players. The scenarios clearly highlight the problem of informational non‐availability in the sector. The main policy implication is a need for a more transparent system of sharing rental and pricing information for the retail real estate sector, which is meaningful for real estate developers, investors and urban planners to sustain the retail real estate sector's viability.

This paper takes system dynamics modeling to the next level of incorporating econometric analysis, to estimate the sensitivity of retail rent to cost and the change in retail rent, for effectively structuring the dynamic process whereby the ex ante CVs of the prime retail sector in Singapore are formed and assessed, through a unique and rigorous expectations‐centered system dynamics model of rents, cost, retail stock, general demand and exogenous factors.

The purpose of this paper is to determine the impact of anchor stores on the performance and results of shopping centres and on the prices practiced by other stores. It analyses the customer spill‐over effect of the anchor stores on the Sonae Sierra shopping centres. Incorporated in Portugal in 1989, Sonae Sierra is an international corporation specializing in shopping centres. It is co‐owned by Sonae (Portugal) and Grosvenor (UK) who each own 50 per cent.

The data collection targeted 35 shopping centres in Portugal and Spain with 1,200,000 square feet (or more), for three consecutive years (2005‐2007). The anchor stores provide about 41 per cent of the total gross lettable area and on average pay only 18 per cent of the total rent collected by the developer. The ordinary least squares and Kruskal‐Wallis statistic (in order to avoid ANOVA assumption violations) are used to test the hypotheses.

The empirical analysis shows that a greater presence of anchors in a mall directly increases the sales, and consequently the rents of non‐anchor stores in a mall. The authors demonstrate that externalities are internalized by efficient allocation of space and incentives across stores, and also show that the anchor stores increased the malls' customer drawing power, measured as the number of people who visited the mall at a given time, although lately they have had less impact on the sales per person visiting the centres.

This study is limited in that it surveyed only Sonae Sierra shopping centres, hence the results can only be generalized using this model as a basis. Other limitations were an inability to gather data on customer purchasing power in the areas surrounding the Sonae Sierra shopping centres, and the need to safeguard the confidentiality of the information, which did not allow the use of more independent variables for the models.

It is demonstrated that the total sales of the shopping malls are directly influenced by the number of anchors, and that the area allocated to them is a strategic tool.

The paper uses unique data consisting of mall store contracts to study the complex economic issues that arise when stores co‐occupy a large shopping centre.

Aimed at senior corporate real estate decision makers and members of the corporate finance teams responsible for real estate portfolio strategy, this paper helps these professionals to identify opportunities for different types of lease finance. Readers will go through a brief history of the sale‐leaseback market and learn the factors which determine sale‐leaseback pricing. In addition, they will ascertain how recent changes in the debt markets impact their rental rates, as well as how changes in the equity markets have added a new supply of funds and lowered finance costs. Tenants will obtain a better understanding of the concerns, interests and motivations from a lessor’s perspective, as well as the factors they should consider when deciding whether to own or lease their real estate. This understanding of the lessor should enhance the corporate professional’s negotiating skills. Overall, the contents of this paper should help improve communication between the corporate finance team and the corporate real estate team as each understands better the other’s concerns and perspective on real estate.

The purpose of this paper is to explore how the availability of sustainable buildings may affect the decisions made by office occupiers in their building selection process.

The structure of the paper includes a review of both the sustainability literature and traditional location literature which serves to inform the study. A qualitative study comprising 13 in‐depth one‐to‐one interviews with decision makers of a variety of organisations who have chosen to locate in a “sustainable” building within the central business district in Auckland, New Zealand is undertaken.

The research suggests that selecting a building that is perceived to be sustainable by the market may not be the ultimate driving factor in the office location decision and that more emphasis is placed on micro location factors, attractiveness to staff, marketing and flexibility. The importance of each of these factors tends to be influenced by the size and type of organisation as well as the availability of suitable buildings in the market. The research reinforces the finding that organisations generally seek accommodation that can “add value” to their specific business.

The study provides a deeper understanding on the impact of the emergence of sustainable buildings in the decision‐making process of office tenants and how this may be affected by the size and type of the occupier organisation. These findings will be of practical application to property professionals involved in the development, sale and valuing of sustainable buildings.

This paper provides in‐depth insights into business location decisions from the perspective of a variety of tenants choosing to locate within a CBD.

The purpose of this paper is to analyze a successful sustainability program run by an owner that has invested $23 million, received rebates of $10 million, accrued over $9 million of savings and has won top scores in LEED and Energy Star. Other owners planning to invest in energy conservation and sustainability can apply the lessons learnt to overcome common barriers.

This case study is based on project information supplied by the owner and structured interviews with the operational team. The projects are analyzed based on drivers and payback characteristics. Finally, the case study puts Adobe Systems' results within the context of the industry by matching it to the challenges identified in other reports.

The results show that 40 percent of projects are initiated by operation management personnel. The projects with the biggest savings are supported by third-party incentives. Only 10 percent of projects are evaluated by simulation and account for 12 percent of annual savings. Energy Star plays a crucial role for benchmarking performance and should be run annually. LEED EB is valuable when expending conservation efforts beyond energy aspects to sustainability. Performance benchmarking is a crucial step to determine the potential and priority of energy improvements.

The findings are based on the three towers in San Jose, California.

Building owners can incorporate the methodologies applied to evaluate these successful projects into their buildings. Facility managers can leverage the findings to present the advantages of recertification and commissioning.

A detailed project analysis, from a leader in practice, shows the importance of the local building operations team in sustainability and energy conservation.