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Green Buildings Why Investing in Green Buildings?



The Green Buildings Stock Should Outperform the Market


Green Buildings Do Offer Advantages to The Users and the Owners

The concept of sustainable real estate is gaining momentum in the European real estate market as occupiers, investors and authorities are becoming increasingly environmentally conscious. A building’s energy and environmental performance is becoming a very significant negotiation instrument at purchase, letting, sale or at rent review stage. Green Buildings show improved liquidity, improved lettability, better tenant retention and fewer voids. According to a study, Green Buildings offer higher returns compared to traditional buildings. The US green office stock offered on average a 2% higher rental income, a more stable rate of occupancy and recorded a 16% higher sale price.



The following soft arguments are considered to be reasons for the superior performance of Green Buildings compared to traditional buildings:

  • Green Buildings require lower capital expenditures than others to comply with the new (future) regulations

  • Green Buildings will require lower tenant expenditures: a review of 60 certified buildings in the US demonstrated that Green Buildings are on average 25%-30% more energy efficient

  • Green Buildings provide improved public and occupant health due to improved environment and indoor air quality and therefore offer a better working environment which improves the productivity of the tenants’ workforce

  • Green Buildings offer an improved future liquidity because of their better adaptation to the new Kyoto based EU legislation

  • Green Buildings strengthen the image of the tenants and show their social responsibility, which increases the demand for such buildings

  • Green Buildings reduce environmental impacts by, for example, reducing storm water runoff and the heat island effect

The traditional real estate investment criteria must however remain unchanged and the green certification is to be considered as a major plus to a good building.

Is it an Appropriate Timing?

Due to current market circumstances, the Fund is likely to realise an attractive return by amongst others acquiring investments with discounts as many vendors/developers are starting to need to rule out their risk by securing their exit in order to safeguard their business.

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