Abstract
Abstract A major topic in discussions about environmental protection is the concept of sustainable development utilizing the economic criteria enhanced by environmental, social and ethical aspects. The concept inspired a new approach to construction and paved the way for the idea of sustainable buildings. Sustainable buildings are expected to offer economic benefits to their owners and tenants that should be reflected in property values. The authors test a hypothesis that the real estate market in Poland still fails to incorporate sustainability in property valuation. The article seeks evidence in support of this hypothesis, as well as attempting to find out why the market does not pay a premium for sustainability. To accomplish the purpose of the research, a systematic literature review, an analysis of the pilot studies available in Poland and a preliminary assessment of the ability of valuation methods to reflect sustainability in property valuations are performed. The focus of the research is on the office property market, one of the fastest growing and most modern segments of the real estate market. The conclusion drawn from the research is that, of all respondents surveyed by international studies, Polish developers, property owners, tenants and valuers know the least about sustainable building and that the evidence of the benefits of sustainable building is still unavailable in the Polish real estate market. Such benefits are rather hypothesized to exist and considered theoretically rather than empirically confirmed. It is possible that the reasons for these findings are the short period of research and problems with distinguishing sustainable buildings from conventional ones, which make it difficult for valuers to reflect the benefits of sustainability in valuations. Nevertheless, a new approach to property valuation encompassing environmental, ethical and moral aspects seems necessary. This would encourage sustainable building and green investment strategies. Sustainable valuation would also be an opportunity for the development of the valuation profession.
Highlights
Market participants are increasingly aware of the importance of environmental quality and of the scarcity of natural resources
The rising consumption of fossil fuels3 necessitates a rapid reorientation of our attitudes. From the above it follows that the real estate decisions should be made with concern for economic criteria as well as for the social, environmental and ethical aspects. This attitude leads to sustainable building, the development of which depends on the market participants’ awareness of sustainability issues and their readiness to embrace the concept of sustainable development, and on the benefits that property owners and tenants can have from sustainable building, which should be reflected in valuations
Developers, property owners, tenants and valuers operating in the Polish real estate market have a limited awareness of the benefits of sustainable buildings and the market itself does not provide solid evidence that such benefits really exist
Summary
Market participants are increasingly aware of the importance of environmental quality and of the scarcity of natural resources. The rising consumption of fossil fuels necessitates a rapid reorientation of our attitudes From the above it follows that the real estate decisions should be made with concern for economic criteria as well as for the social, environmental and ethical aspects. This attitude leads to sustainable building, the development of which depends on the market participants’ awareness of sustainability issues and their readiness to embrace the concept of sustainable development, and on the benefits that property owners and tenants can have from sustainable building, which should be reflected in valuations. In the Accord, the community undertook to advance the understanding, education and practices of valuation according to the principles of sustainable development (ARMITAGE 2009, p. 10)
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