Turning Green to Gold
The impact of green certifications on rents, prices, and values.
- Dr Georgina Warren-Myers
Our latest data shows green-certified buildings command higher values and are more sought-after than assets that are not certified. In this report, produced in conjunction with the New Zealand Green Building Council (NZGBC), we delve into the trends and insights surrounding the performance of Green Star-certified assets in Aotearoa.
Green Star certification commands a premium of 3.7% to 7.5%, while buildings with both Green Star and a NABERS 5-star energy rating enjoy a 9.8% sale price premium and a 6.7% rental premium. These same properties also have the lowest vacancy rates, with occupancy as high as 98%-99% on average.
Green certifications attract tenants and investors seeking sustainable properties that are future-proofed against evolving regulation. As the market matures and regulations evolve, the value gap between certified and non-certified assets will grow. From an investor’s perspective, certified buildings benefit from higher rents, greater sale prices, and reduced vacancies, making them a smart purchase.
Sustainability in real estate is becoming a crucial aspect of driving returns for property owners and enhancing asset value.
This report delves into the economic benefits of green buildings and highlights the significance of certifications in boosting property values. With rising ESG demands, now is the time to invest in green-certified properties.
- Green Star 4-6 Star ratings: Assets that achieve the highest levels of Green Star certification command a 3.7% - 7.5% sales premium.
- Occupiers seeking certified space: Vacancy rates for green-certified properties are low, averaging between 1% and 2%, which means more consistent returns for landlords.
- Future-proofing commercial real estate: The rising importance of emissions reduction and ESG credentials as regulations are formalised in the coming years will reinforce the value differential between green-certified and uncertified assets.
Learn more about how embracing sustainability can enhance asset values and keep astute investors ahead in the evolving real estate market. Download our latest research below.
