LEED: certification increases a building’s value

Thursday, September 27, 2018

The market rewards buildings with LEED certification, recognising sustainability as a decisive factor that governs investment choices: consequently, the market appreciates the value of the real estate asset, showing an increase of between 7 and 11%, based on the quality of the certification.

The effect of the certification is not limited to the valuation of assets, but also impacts upon the timing of their commercialisation. The survey, carried out on the Milan market, highlights a significant improvement in timing in terms of getting spaces destined for tertiary use onto the market, if the building is certified.

The combined effect of the two aspects revealed by the survey – price increase and speedier placing of the property on the market – results in an increase in investment benefits: a sign, therefore, of some importance to investors for whom sustainability is not merely an ethical choice, but also an opportunity for greater economic and financial outcome.

This, in a nutshell, is the result of the research carried out by REbuild Italy, (a platform for Italian innovation and construction), together with CBRE, (world leader in real estate consultancy) and GBCI Europe, (a third body that handles sustainability management – LEED, i.e. Leadership in Energy and Environmental Design – throughout the world) on large scale buildings aimed at professional workers in the heart of the city of Milan and the Porta Nuova district.

“From our research, which will be presented in its entirety on the afternoon of 2nd October in Milan, during REbuild, there is clear evidence that the market distinguishes the specific quality of LEED certification, especially the gold and platinum versions, compared to buildings without certification, highlighting a preference in the demand for buildings that are set apart by their superior environmental standards,” confirms Ezio Micelli, Chairman of the REbuild Scientific Committee.
This confirms similar research carried out, especially in the United Kingdom by RICS, that highlights the Italian real estate market trend to give increasingly clear recognition of the role of sustainability in creating value.

According to Federica Saccani, Head of Building Consultancy & Sustainability for CBRE Italia: “This research shows how, in Milan too, LEED certification offers a real element to attract investors. The results now, for the first time, manage to quantify that, which up until now has only been a qualitative aspect, confirming that transactions involving certified buildings are faster and more productive.”

The sustainability certification programmes at building level have become an integral part of the commercial real estate sector and the capital market has started to take note. Both companies and investors are paying attention to the matter of sustainability and are considering environmental, social and governance factors, (ESG) as being the best practice to adopt.

Kay Killmann, Director of GBCI Europe, the European reference point for the Green Building Council, points out that: “This is the first report in Europe that analyses, in depth, the benefits of LEED certification. Certification that, over and above a series of significant tangible advantages, also brings numerous benefits that can reduce risks. As a matter of fact, LEED certified buildings not only save energy, water, materials and resources, generating less waste, but the organisations that occupy these spaces notice an increase in their direct benefits in terms of health and productivity and a reduction in staff turnover.”