Is Sustainability Certification in Real Estate Worth It? – Evidence from European Office Markets

This analysis of European office space over a five-year period (2016–mid-2021) shows that the stock made up of certified buildings is steadily rising.  In certified buildings, leasing velocity was generally higher, vacancy risk lower, and an average rent premium of 21% was observed.  As countries increasingly announce their pledges to achieve net-zero emissions, pressure is mounting on building owners to implement changes to meet the climate goal in the Paris Agreement.  Due to both increasingly stringent regulations and pressure from the financial institutions, investors, and occupiers, there is a real threat of significant value erosion on carbon-intensive assets.