According to Green Street Advisors, latest analysis shows that green buildings are not trading at a premium. I can’t help but find this hard to believe.
Not to misunderstand, I love data as much as the next surveyor. Without it we are floundering. Just ask any retail agent trying to determine rental affordability in a total void of trading figures. However, sometimes things just don’t seem to add up?
This week I visited two office buildings in Amsterdam delivered by EDGE – The EDGE and EDGE Olympic. At EDGE sustainability is to the fore, and here are two full and thriving buildings benefiting from a sustainable and healthy environment, with tenants knocking at the door to take more space.
Two things seem to me to be clear.
1 – a building with modern green credentials will be more tradable as the issue develops and legislation closes in.
2 – tenants want to be in a building that offers good sustainability criteria.
Surely those are two factors worth paying for?
Perhaps there is a lag in the data. Sustainability has sky rocketed in the national psyche even over the last 12 months, spear headed by Greta and an increasing voice from our next generation. Maybe this will now permeate the investment psyche.
Or it could be a lag in market sentiment – a reluctance to identify change and leave the comfort of business as usual. Our foodstore team tell me that omni-channel supermarkets – acknowledged as the future of the sector – show no evidence of attracting an investment premium. This too surprises me.
Every investor would love a crystal ball, but you don’t need one to identify the sustainability agenda – it is real and it is now. If I can really buy a sustainable office at parity against standard stock then sign me up.
Analysts at Green Street Advisors, a real estate research firm, say they have “struggled” to find compelling evidence of material sale or rental premium for environmentally friendly buildings