What progress has occurred in terms of developing the culture of sustainability in which UK property investors, occupiers, and developers are both informed and accepting of the sustainability principles? Although the rise in concern for 'triple bottom line' sustainability is now embedded in many government and corporate policies, it is still not integrated into UK property investment practice. Whilst the last decade has seen progress towards 'green buildings', there has not yet been a 'sea change' in market behaviour. In developing this premise, it draws on the third of three surveys undertaken by the authors spanning a decade and tracking investor attitudes towards 'green' and sustainable buildings. Stakeholders' attitudes towards a potential range of fiscal measures that might incentivize market movement towards the adaptation of more sustainable behaviour. The business case for investment in sustainable property currently rests on risk reduction, not proven return advantage. There is support among respondents for a range of fiscal incentives. Although challenges to implementation undoubtedly exist, they are, in the authors' view, worthy of further research and investigation. There is potential to stimulate, via the fiscal system, measures to reward sustainable practices in property investment and management which can be facilitated through a more open dialogue with government bodies.Quels ont été les progrès en termes de développement de la culture de la durabilité pour lesquels les investisseurs immobiliers, les occupants et les promoteurs au Royaume-Uni qui, à la fois, sont informés et acceptent les principes de durabilité? Bien que la préoccupation croissante vis-à -vis de la durabilité 'triple résultat' soit maintenant ancrée dans la politique de nombreux gouvernements et entreprises, elle n'est pas encore intégrée en pratique dans les investissements immobiliers au Royaume-Uni. Bien que la dernière décennie ait été le témoin d'un progrès vers les bâ timents écologiques, on n'a pas constaté de mouvements brusques dans le comportement du marché. En développant ces prémices, l'article s'appuie sur la troisième des trois études entreprises par les auteurs au cours d'une dizaine d'années afin d'analyser l'attitude des investisseurs en matière de bâ timents écologiques et durables. Les parties prenantes se tournent vers une palette de mesures fiscales possibles qui pourraient induire des mouvements du marché vers l'adaptation d'un comportement plus durable. Le dossier d'analyse portant sur les investissements dans des biens durables repose actuellement sur la réduction des risques et non sur les avantages de retour prouvés. On constate un certain soutien parmi les personnes interrogées en faveur d'une gamme d'incitations fiscales. Bien que leur mise en oeuvre présente indéniablement des difficultés, elles méritent, selon les auteurs, d'autres recherches et enquêtes. Il existe un potentiel pour stimuler, via le système fiscal, des mesures visant à récompenser les pratiques durables dans les investissements immob...

Purpose The purpose of this paper is to report on the findings of a survey conducted by the Royal Institution of Chartered Surveyors (RICS) to discuss the extent to which qualified valuers have adapted their valuation practices in the light of guidance published by RICS in respect of sustainability and commercial property. The findings are placed within a wider debate between assessment of market value and investment value (worth). Design/methodology/approach The paper is a theoretical discussion incorporating the results from an empirical survey of valuation practitioners. Findings The paper reveals that guidance published by RICS in 2011 has achieved limited, but variable, impact in terms of impacting on valuation practice due to a combination of factors including lack of knowledge of the guidance, non-requirement of clients to request sustainability reporting within valuations, paucity of data. It found that where worth (investment value) is required, sustainability factors are more likely to impact the calculation than where an estimate of market value is prepared. The paper identifies theoretical problems and practical barriers hindering an integration of sustainability aspects into valuation practice. Research limitations/implications The empirical work was conducted prior to the embedding of guidance within the mandatory provisions of the “Red Book”; the study therefore reports on a direction of travel rather than the current position. The implications for research are the requirement to enhance data capture and to seek ways to break down the barriers to more comprehensive integration of such data so that worth and market values may begin to converge. Practical implications The paper has practical implications for both the education of valuers which is proposed through the RenoValue project discussed in the paper and for the RICS in monitoring progress towards more specific integration within valuers’ calculations. Further, the paper identifies that clients and lenders have a key role to play through the instructions given to valuers. Social implications There is now widespread recognition that properties which are not resource efficient and which are not equipped to flex to changing occupier needs may not currently be “future proofed” in investment value terms and are likely to see value erosion over time. Further, buildings have a key role in terms of climate change policy. Whilst new buildings can be mandated to meet improved efficiency standards, the ways in which buildings owners can be encouraged to upgrade will be important moving forward. One way is through a value chain response. Originality/value The survey is the most comprehensive investigation of valuer’s practice in relation to sustainability and the assessment of market value and worth undertaken. This provides a unique insight into the effectiveness of professional guidance and enables an informed discussion as to appropriate ways to enhance guidance moving forward.

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PurposeThis paper seeks to set out a series of criteria through which the sustainability of commercial property can be assessed. It is part of a wider research project that addresses sustainability as a set of investment risks and is seeking to specify these risks and incorporate them within commercial property investment appraisals.Design/methodology/approachThe paper draws on existing literature to establish a series of sustainability criteria and then uses focus groups and interviews with industry operators to establish the relevance and potential significance of each criteria to property investment worth.FindingsThe research is focused on the investment performance of commercial property. The findings in the paper are thus driven by a strong economic imperative and the criteria focus on factors within the control of the investor‐owner. The research also reflects the views of a small group of industry operators. However, it sets out a practical set of sustainability criteria, reviewed by industry experts, against which the performance of any commercial property can be assessed.Originality/valueThe paper provides a set of sustainability criteria that are relevant to the performance of property as an operational asset and an investment asset. This will enable market operators to begin to address sustainability within the commercial property stock from a market‐based perspective reflecting the economic imperative that drives the industry. The focus on the investment sector differentiates the work from studies that look at sustainability more broadly as a qualitative issue.

There is a growing international consensus that climate change represents one of the most important structural forces and risks that long-term investors need to proactively consider in building resilient portfolios. Many institutional real estate investors have significant exposure to cities and regions that are economically important, but increasingly susceptible to climate change impacts. In this paper the authors review and synthesize existing academic research on risk exposure to acute and chronic climate related events and forces and their impacts on property asset values and lending practices. Evidence to date is dominated by studies focused on residential property, although some recent research has begun to examine the commercial real estate sector in a more rigorous way. The authors draw inferences from the residential studies for how these findings might apply to commercial real estate and highlight the more recent studies focused on commercial property. Recent research is published within both real estate and broader economics and finance journals; these papers indicate that awareness of climate risks is starting to have a more sustained impact on pricing and on investor decisionmaking, although the channels though which impact occurs are generally opaque and warrant further research. Key Takeaways▪ Historically, property prices decline after climate events but tend to eventually recover.Recent evidence suggests that climate events in geographies that previously suffered little exposure to extreme weather can lead to a long-lasting decline in prices or liquidity.▪ There is some evidence from residential markets that levels of belief in climate change and confidence in government-led mitigation of impacts may result in differing levels of price impacts where risks lie primarily in the future, such as sea level rise. In this respect the nature of the marginal investor is important.▪ Commercial owners/investors in some geographies are placing a higher risk premium on all properties in metro areas affected by climate events, regardless of whether their individual properties have been directly affected.