IDEAS home Printed from https://ideas.repec.org/p/arz/wpaper/eres2017_92.html
   My bibliography  Save this paper

Is it worth to be Green? A Performance analysis on European Green REITs

Author

Listed:
  • Massimo Mariani
  • Pierluigi Maria Patruno
  • Paola Amoruso
  • Alessandra Caragnano

Abstract

Sustainability represents an innovative component of profitability for real estate finance, in line with the dynamics that characterize the today different sectors in the global landscape.Among other instruments, real estate funds which aim to ensure sustainability as an essential component of their investment strategy opt in diversifying their investment portfolios, including a "green" component represented by certified buildings.In instance, there has been a significant expansion of this segment within the US market, followed by a relatively recent development on the European framework.In light of these recent trends affecting the European market, the present research paper is intended to ascertain the impact of the "green" component on the financial performance of European REITs.In particular, the adopted selection criteria refer to the two European most widespread certifications: LEED and BREEAM, which provide standards for evaluating sustainable buildings from an environmental point of view. The objective is to demonstrate the degree of correlation between the adoption of implemented sustainable policies and financial performance (particularly, selected indicators have been: ROE, ROA, FFO and alpha).In addition, the widely validate state of the art Fama-French Five Factor Model has been applied for the estimation of funds performances, improving the meticulousness of the work as one of a kind.The rationale of this research arises from results of previous studies that investigated on green investment funds and comparable traditional funds performances, questioning whether pursuing green investment goals, would improve return performance (Eichholtz, Kok, and Yonder 2012).The work is oriented in validating the hypothesis, which states that sustainable and environmentally friendly components positively affect investment portfolios, focusing on the European property management industry.Therefore, this paper has the ambitious aim to fill the gap in current literature on REITs mainly focused on the US market.

Suggested Citation

  • Massimo Mariani & Pierluigi Maria Patruno & Paola Amoruso & Alessandra Caragnano, 2017. "Is it worth to be Green? A Performance analysis on European Green REITs," ERES eres2017_92, European Real Estate Society (ERES).
    • Handle: RePEc:arz:wpaper:eres2017_92
    as

    Download full text from publisher

    File URL: https://eres.architexturez.net/doc/oai-eres-id-eres2017-92
    Download Restriction: no
    File URL: https://eres.architexturez.net/system/files/92.pdf
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    European Reits; Financial Performance; Green Buildings; Green investments; Sustainable policies;
    All these keywords.

    JEL classification:

    • R3 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:arz:wpaper:eres2017_92. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Architexturez Imprints (email available below). General contact details of provider: https://edirc.repec.org/data/eressea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.