Indoor Air Quality and Property Productivity

Abstract

Environmental concerns have firmly put sustainable development on the research agenda of those who deal with the built environment. Many researchers have found that poor IAQ has negative impact on tenant-landlord relationships, workersí health and productivity, and building elements and systems. This implies that IAQ affects property productivity (i.e. rental/capital value of properties). While several people laud the virtues of sustainable development, most of them hesitate to commit themselves financially to sustainable development because of the uncertainty about the cost effectiveness of such developments. Therefore the paper is aimed at ascertaining the impact of IAQ on office rentals and the productivity of an industrial property in Singapore. The paper centres on office properties in the central business district of Singapore and an industrial property in a Science park in Singapore. The methodology includes the hedonic model, experiment (through measurement of IAQ levels) and two surveys (one each for the office and industrial properties respectively). The results of the hedonic model show a positive relationship, albeit statistically insignificant, between office rental value and IAQ. This is supported by the result of the survey. However, a cost benefit analysis reveals that investing in good IAQ is cost-effective and thus, increases the value of the properties in the sample.