Abstract
The construction industry is the world’s largest consumer of energy and producer of greenhouse gases. For this reason, there is a broad debate on how to make the built environment more sustainable. Although the positive externalities of energy-efficient retrofitting and new construction are known, the economic effects that green building has on the real estate sector in Italy are less evident. The aim of this paper is to analyze the Italian real estate market to investigate if, and to what extent, demand appreciates the supply of green real estate assets. The research focused on the analysis of 55 development projects of office buildings (with and without environmental certification) located in Milan, at present the most dynamic and flourishing real estate market in Italy. Through these case studies the authors investigated the premium price that is generated in certified real estate development projects. The results highlight a premium price, especially for high levels of sustainability. Similarly, the rate of absorption of certified assets reflects a preference for green properties, which are absorbed by the real estate market in less than half of the time foreseen for real estate without an environmental certification.
Highlights
The construction sector is the world’s largest consumer of energy and a producer of greenhouse gases [1,2,3]
The rate of absorption of certified assets reflects a preference for green properties, which are absorbed by the real estate market in less than half of the time foreseen for real estate without an environmental certification
We focused our research in Milan, at present the most dynamic and flourishing Italian real estate market
Summary
The construction sector is the world’s largest consumer of energy and a producer of greenhouse gases [1,2,3]. The hypothesis is the following: this segment has always been a forerunner of future trends in the real estate industry because national and international players interact putting into evidence innovation trends in the industry How is it possible to define a building as “green”? The environmental certification protocols were created for this purpose, with the aim of defining criteria and methodology that evaluate their level of sustainability. Such certifications offer to consumers and investors a basis for comparison between alternatives investments or rents [9,10]. Environmental certifications aim to reduce the level of information asymmetry between the construction sector and buildings owners and users [12]. The fourth part interprets the results, while in the fifth part we present the conclusions
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