UK commercial real estate valuation practice: does it now build in sustainability considerations?

Abstract

PurposeThis paper investigates the extent to which commercial property valuers in the UK refer to Royal Institution of Chartered Surveyors (RICS) professional standards and guidance on the inclusion of sustainability in valuation reports. Data collection, analysis and reporting related to sustainability attributes is examined, as well as the perceived importance of these attributes to clients and any value impacts that are associated with them.Design/methodology/approachAn online survey of UK commercial property valuers was conducted from July to September 2019. The survey included both structured and open-ended questions.FindingsReference to RICS standards and guidance on sustainability has improved since earlier research. However, progress on data collection is still limited. At the time of the survey, UK valuers indicated that sustainability attributes were of more importance to owner-occupiers than investors and lenders. UK valuers also indicated that, out of a range of sustainability attributes, only certification was influencing market value (MV) and investment value (IV) to any great extent.Research limitations/implicationsThe online survey had 53 responses and this limited the ability to draw definitive conclusions. Hence, whilst the results may be indicative of the perceptions of some valuers of the significance of sustainability-related matters in the UK, the sample is not large enough to be considered representative of the opinions of property valuers per se in the UK.Practical implicationsExplicit reflection of sustainability in market or investment values is still limited in the UK valuation practice, but there are challenges faced by valuers that need further investigation, including difficulties in pricing sustainability attributes.Originality/valueThis is the first empirical investigation of the perception of sustainability by valuers in the UK commercial property market since the 2012 survey reported by Michl et al. (2016).

Antecedents of Real Estate Investment Intention among Filipino Millennials and Gen Z: An Extended Theory of Planned Behavior

“…Chmielewska et al [148] analyzed the investment transactions of residential real estate in five cities in Poland pre-and mid-pandemic and revealed a new preference among investors, which is to purchase properties located away from city centers and possibly anchor developments with the desire for larger space and better views. A study by Hossain et al [149] found that in some property valuers in the United Kingdom, sustainability in commercial real estate is more important for unit owners or occupants than for investors-this could not be said, however, of the entire population of property valuers in the United Kingdom. Contrary to these studies, post-pandemic investors in the Philippines significantly consider traditional notions in their property valuation (β = 0.691; p < 0.001) for their intention to invest in real estate.…”