The impact of green premium on the development of green-labelled offices in the U.K.

Oyedokun, T. B. , Dunse, N. and Jones, C. (2018) The impact of green premium on the development of green-labelled offices in the U.K. Journal of Sustainable Real Estate, 10, pp. 81-108.

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The perceived wisdom in many studies is that the establishment of a premium value is an essential prerequisite for the promotion of green buildings. This green premium is then a driver of the development of new green buildings, as well as an agent of the green transformation of the existing non-labeled properties. In this study, green premium is assessed as a potential driver of labeled office property development. Thirty-two commercial real estate professionals, working for organizations that are involved in the development, sale, letting or management of green offices, were interviewed across four cities in the United Kingdom: London, Manchester, Birmingham, and Edinburgh. The results reveal that after 15 years of an active development of green offices, the existence of a green rent premium remains elusive. Similarly, no evidence was found of a willingness to pay more to occupy greenlabeled offices. The results suggest that a green premium cannot be simply seen in terms of a headline rent but more widely by reference to future income streams. Consequently, we propose a ‘‘green letting premium’’ as the primary motivation for the development of green offices. Our study contributes significantly to how green premium is defined, understood, and valued globally.

Item Type:Articles
Glasgow Author(s) Enlighten ID:Oyedokun, Dr Tunbosun
Authors: Oyedokun, T. B., Dunse, N., and Jones, C.
College/School:College of Social Sciences > School of Social and Political Sciences > Urban Studies
Journal Name:Journal of Sustainable Real Estate
Publisher:American Real Estate Society
ISSN (Online):1949-8276
Copyright Holders:Copyright © 2018 The Authors
First Published:First published in Journal of Sustainable Real Estate 10: 81-108
Publisher Policy:Reproduced under a Creative Commons License
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