Certification adds value – and pays off at sale time
Certification schemes for sustainable building bring transparency to property quality
There are various schemes and certificates that provide proof of sustainability and can add value to properties. New legal requirements, greater economic viability and enhanced marketability increasingly make it a necessity rather than a choice to design and operate buildings in a sustainable way. Recognised certification is now a clear benchmark for tenants, buyers and for investors’ risk management.
A range of international and national certificates have been developed under the umbrella of the World Green Building Council in order to measure the sustainability of real estate. Due to growing demand for energy-efficient buildings from international investors, investment funds, life insurance companies and pension funds, as well as private investors, such certification is attracting more and more attention. Detailed certificates are a valuable indication of building quality that investors can easily interpret and use as a guide to returns over the entire lifecycle.
According to a study by CoStar published in March 2008, buildings with LEED certification achieve on average
- 4.1% higher occupancy rates
- USD 122 higher rental income per sq m
- USD 1,840 higher sales prices per sq m
than buildings of comparable quality without LEED status. CoStar is the biggest commercial real estate information company in the United States. A total of 355 LEED certified buildings were analysed for the study.
These figures put discussions about the higher costs associated with sustainable construction into perspective and demonstrate the considerable potential of international certification schemes for investors. In Europe too, certified properties are typically easier to let and sell. Coveted awards reduce letting risk and boost returns.