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Is The Higher Value of Green Buildings Reflected In Current Valuation Practices?

Author

Listed:
  • Costin Ciora

    (The Bucharest University of Economic Studies)

  • Gunther Maier

    (Vienna University of Economics and Business (WU))

  • Ion Anghel

    (The Bucharest University of Economic Studies)

Abstract

Urban sprawl and economic development brought new ways of correlating the efficiency and performance, and green buildings are spreading at higher levels. In this normative study, we discuss specific issues in how valuation methods could be considered when assessing green buildings. The real estate market is one of the most dynamic sectors, and therefore the commercial market increased in size and spreading. As the economy is growing, more office building investment created the framework for companies to operate and to further develop the economy. Our objective is to present a step-by-step approach in understanding the need of specific correlation between valuation measures and actual financial performance of this type of buildings, relative to value, rent premium, occupancy premium or even increase in productivity. With limited number of green buildings even in major cities, the issue of incorporating the premium in the final value could be challenging for the appraiser, and thus, we raise questions that could lead to further research in this area. Our analysis suggests that appraisers should take into consideration the positive effects of green buildings in their valuations. This paper is a contribution to the emerging literature on the topic of green buildings, with the focus on valuation methods.

Suggested Citation

  • Costin Ciora & Gunther Maier & Ion Anghel, 2016. "Is The Higher Value of Green Buildings Reflected In Current Valuation Practices?," Journal of Accounting and Management Information Systems, Faculty of Accounting and Management Information Systems, The Bucharest University of Economic Studies, vol. 15(1), pages 58-71, March.
    • Handle: RePEc:ami:journl:v:15:y:2016:i:1:p:58-71
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    References listed on IDEAS

    as
    1. Ion ANGHEL & Alexandru Richard IONESCU, 2011. "Sustainability in Real Estate Analysis and Valuation," The Valuation Journal, The National Association of Authorized Romanian Valuers, vol. 6(2), pages 60-75.
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    Cited by:

    1. Ioannis Vardopoulos & Ioannis Vannas & George Xydis & Constantinos Vassiliades, 2023. "Homeowners’ Perceptions of Renewable Energy and Market Value of Sustainable Buildings," Energies, MDPI, vol. 16(10), pages 1-18, May.

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      More about this item

      Keywords

      green buildings; sustainable buildings; valuation; sustainability;
      All these keywords.

      JEL classification:

      • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects
      • R30 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - General

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