BREEAM, LEED, HQE – London office developers have multiple sustainability ratings to choose from. What they offer in common, says a new study from index provider MSCI, is a big boost to value.
MSCI found offices with a sustainability rating command a 25% premium when sold compared to those without, a premium that became “substantive” in 2019 and has grown since.
The company analysed sale prices of completed deals, modelling to take into account building age and size as well as its submarket location.
“The gap has accelerated through the past two quarters to stand at more than 25%, as buyers put even greater emphasis on buildings that meet their and their occupiers’ requirements,” said Tom Leahy, MSCI’s head of EMEA real assets research. “In fact, many of the world’s biggest property owners have ambitious carbon-reduction targets and intend for their portfolios to become net-carbon-neutral in the medium term.”
In other countries there is an even greater green premium that has been evident for longer – in Paris the figure stands at 35%, with the premium emerging in 2016. “A premium at this level shows a considerable bifurcation in the market — and one that may continue, given the ongoing emphasis on decarbonization of property portfolios,” said Leahy.
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