The added value of environmental certification in the Dutch office market

Purpose 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.Design/methodology/approach A hedonic price model was used to assess the impact of BREEAM...

Full description

Saved in:
Bibliographic Details
Published in:Journal of European real estate research 2024-05, Vol.17 (1), p.70-86
Main Authors: van Overbeek, Rens, Ishaak, Farley, Geurts, Ellen, Remøy, Hilde
Format: Article
Language:English
Subjects:
Annual reports
Built environment
Certification
Climate change
Commercial real estate
Commercial space
Councils
Developers
Environmental performance
Green buildings
Office space
Real estate sales
Social responsibility
Sustainability
Sustainable development
Taxonomy
Citations: Items that this one cites
Online Access:Get full text
Tags: Add Tag
No Tags, Be the first to tag this record!
Description
Summary:Purpose 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.Design/methodology/approach 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.Findings 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.Originality/value 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.
ISSN:1753-9269
1753-9277
DOI:10.1108/JERER-04-2023-0010