Responsible Property Investment Research Articles

Applying Linear Hedonic Price Model to Measure Impact of Responsible Property Investment Factors on Thai Condominium Projects

Applying Linear Hedonic Price Model to Measure Impact of Responsible Property Investment Factors on Thai Condominium Projects

Reflecting the Sustainability Dimensions on the Residential Real Estate Prices

The paper analyzes the reaction of residential property prices to sustainability attributes and the extent to which they capitalize the effects of sustainability on real estate markets in EU-28 countries in the period 2000–2018. Given that the sustainable real estate market is mainly driven by demand, the sustainability attributes included in the study reflect both buyers’ expectations and their investment potential in sustainable residential properties, and developers’ efforts to become more “sustainable” through responsible property investment. In order to correspond to the current meaning of sustainable development, the variables capture the four dimensions that give content to the concept of the quadruple bottom line: economic, social, environmental and institutional. Using panel data and the two-stage least squares (2SLS) method, the research reveals a pronounced sensitivity of residential property prices to all sustainability dimensions in countries considered leaders in implementing the Sustainable Development Goals (SDGs), characterized by a strong institutional environment, and efficient and transparent real estate markets. In countries less committed to SGD implementation, weak governance and higher corruption negatively affect the transparency of real estate markets, and the dynamics of the price of residential transactions are determined only by the economic and social dimensions of sustainability.

Special Ethical and Compliance Issues Regarding Property Valuation Reports: Applicability of Valuations in Responsible Property Investment

This paper presents some ethical and compliance aspects of valuations and demonstrates the importance of real estate appraisals in responsible property investment. The basis is fieldwork (interviews with senior Hungarian experts supported by questionnaires) focusing dominantly on the Hungarian practice and experience, combined with a review of the literature. This paper focuses on the operative side of investments: defining a detailed investment process, highlighting the unique features of ethical, responsible investments and then selecting the steps where an independent valuation is necessary and highlighting which aspects of ethical property investment should be supported by appraisals. The aims of this paper are 1) presenting the necessity of valuations, 2) giving examples when the independence of valuations is questionable.The conclusion is straightforward: independent appraisals are essential in all major milestones, but the independence aspect is critical. There are two practical ways to support this: 1) full implementation of professional standards (in developed property markets) and 2) centralized and common frameworks, rules and some “nudges” established by financial administration (in semi-developed markets like in Hungary).

Socially Responsible Property Investment in Cities – Between Economic Reasoning and Social Obligations

AbstractThis article focuses on socially responsible property investment (SRPI), which is an investment estimated not only to bring financial gain but also social and environmental benefits. The theoretical part of the paper draws on existing literature on responsible investment. The empirical part discussed in this article is based on original research conducted by the author. Starting with a global and regional overview, the query was narrowed down to a national level (Poland) with a case study of the capital - Warsaw. The overarching research problem was described as follows: How are SRPI principles manifested and implemented by investors in the commercial real estate market? Additionally, investigation was supported by numerous questions regarding the interest in SRPI and an understanding of its principles and benefits among investors. Research goals were pursued based on primary and secondary data sources regarding existing and planned SRPI projects within the commercial real estate industry. Results indicate that there is a disparity between declared support for SRPI and market practice. At the conceptual level, there is an understanding of responsible investment principles and will to conduct such projects. However, commercial property practice proves a different reality with primary focus on green buildings, while the social factor is missing.

The Background and Development of Responsible Property Investment

The Background and Development of Responsible Property Investment

Socially responsible property investment in urban regeneration/ Priorities and behaviours of institutional investors in practice

Socially responsible property investment in urban regeneration/ Priorities and behaviours of institutional investors in practice

Responsible Property Investing in Canada: Factoring Both Environmental and Social Impacts in the Canadian Real Estate Market

Institutional investors and corporations increasingly recognize that extra-financial determinants of business performance can both create value and uncover significant risks within a business or investment portfolio. For companies that invest in, develop, own, or operate commercial real estate assets, this awareness of extra-financial impacts has led to a significant interest in what has been called “responsible property investment (RPI)”. Within the field of RPI, green real estate – real estate investment and management that seeks to reduce the environmental impacts of building construction and operations – has begun to receive attention. This attention has been extended over the past decade to community property development projects, where both social and environmental considerations related not only to the building, but also the project site and surrounding community are integrated into management and investment decisions. Some examples of these projects include affordable and workforce housing, urban revitalization and brownfield redevelopment. More social-focussed issues such as labour and workplace considerations are also key components of responsible property investing, yet to date labour issues have received little attention in the RPI literature and workplace considerations are reflected indirectly through environmental considerations in the green building literature. This paper explores responsible real estate investment in Canada by taking an integrated approach in examining both environmental and social factors and their potential impact on such investments. A series of semi-structured interviews are conducted with key stakeholders in Canada to gain insight into how using environmental and social factors may influence long-term risk and financial returns in real estate investment in Canada with particular emphasis on institutional investors engaged in these practices. Data is used to analyse the impact that ESG considerations have on financial performance of these assets. Jantzi-Sustainalytics ESG ratings are used along with the stock price changes of fourteen real estate companies and REITs to interrogate this question.

Business and marketing strategies in responsible property investment

PurposeThe purpose of this paper is to give an overview of business and marketing strategies pursued by responsible property developers, funds and investors in the USA and to draw conclusions for future activities in that sector from a transatlantic perspective.Design/methodology/approachPersonal interviews are conducted with 42 developers, fund providers and managers, institutional, nonprofit and major private investors representing more than US$60 billion of responsible property assets under management. The data are complemented by an analysis of promotional documents. A cluster analysis is performed to classify the strategies of the participating companies and institutions and to explore any commonalities and differences.FindingsBusiness and marketing strategies in responsible property investment (RPI) can be described and characterised within the three dimensions of location, building and people. RPI activities and investors in the USA usually transcend pure green building and aim to contribute significantly to smart growth, to sustainable urban development and revitalization.Research limitations/implicationsThe results in this study are not fully representative of the US RPI community, with the study focussing on the core network of developers, real estate funds and large investors. Furthermore, issues of corporate governance and financial performance are omitted from this study. Interviews are conducted in autumn 2008, i.e. at a time when the major financial crisis reached a global scale, potentially influencing participants' perspectives and subsequent responses.Practical implicationsThe findings may help RPI practitioners reflect on business and marketing strategies. European developers, real estate funds and investors can benefit in many respects from US experiences.Originality/valueThe research approach, applied to RPI focussing on business and marketing strategies for the first time, provides new insights for practitioners on both sides of the Atlantic. Above all, the findings may initiate further research to deepen the understanding of the RPI business.

Developing a socially responsible property investment index for UK property companies

Purpose – Socially responsible property investment (SRPI) has taken on increased significance in recent years, as property investors have given an increased priority to environmental, social and governance issues in their property investment decision making. The purpose of this paper is to establish SRPI performance indices for UK property companies and empirically benchmark their risk‐adjusted performance and portfolio diversification benefits over recent years.Design/methodology/approach – Using five socially responsible investment (SRI) performance eligibility criteria, the UK property companies contributing to these SRI measures are identified. These UK property companies are used to establish a number of SRPI market cap‐weighted performance indices over 2003‐2008. These SRPI performance indices are used to assess the risk‐adjusted performance and portfolio diversification benefits of UK SRPI property companies.Findings – This paper objectively identifies the UK property companies actively involved in...

Responsible property investment criteria developed using the Delphi Method

This paper helps define responsible property investing (RPI) by using the Delphi Method to prioritize criteria for the evaluation of property investments. An international panel from the real estate and social investing sectors evaluated 66 criteria in terms of materiality to investors and importance to the public interest. A moderate to strong level of consensus was achieved. Criteria were ranked in terms of their materiality for financial performance and their importance to the public interest. Top ranked criteria were energy efficiency and conservation, high level of public transport services, transit-oriented development, daylight and natural ventilation, and contributes to higher density, mixed-use walkable places. There were few to no significant differences among the panellists by industry, gender or nationality. Factor analysis uncovered ten dimensions underlying the criteria. Based on this analysis, the panel would emphasize the creation of less automobile-dependent and more energy-efficient cities where worker well-being and urban revitalization are priorities. Leadership in Energy and Environmental Design (LEED) green building rating tools were compared with the results and found to be much stronger on environmental criteria than social concerns. The results can guide RPI portfolio audits, database development, third-party assessments of property companies, strategic consulting, the development of corporate reporting standards, RPI certification procedures, updated green building assessment tools, and cost–benefit studies to help guide asset managers. Cet article aide à définir l'Investissement Immobilier Responsable (RPI) en utilisant la méthode Delphi pour classer par ordre de priorité des critères pour l'évaluation des investissements immobiliers. Un groupe international composé de représentants des secteurs de l'immobilier et de l'investissement social a évalué 66 critères en termes d'importance relative pour les performances financières et d'importance pour l'intérêt public. Un niveau de consensus moyen à fort s'est dégagé. Les critères ont été classés en termes d'importance pour les performances financières et d'importance pour l'intérêt public. Les critères prioritaires étaient l'efficacité énergétique et la conservation, un haut niveau de transports publics, des développements axés sur les transits, la lumière du jour et la ventilation naturelle ainsi que la contribution à des lieux piétonniers à forte densité et à usages mixtes. Il n'y avait peu ou pas de différences significatives entre les membres du groupe répartis par industrie, sexe ou nationalité. L'analyse des facteurs a mis à jour dix dimensions sous-jacentes des critères. Sur la base de cette analyse, le groupe insiste sur la création de villes dépendant moins de la voiture et plus efficaces en énergie où les priorités sont le bien-être des travailleurs et la revitalisation urbaine. Les outils de classement des bâtiments écologiques du système LEED (Leadership in Energy and Environmental Design) ont été comparés aux résultats et se sont révélés beaucoup plus utiles pour les critères environnementaux que pour les préoccupations sociales. Les résultats peuvent guider les audits de portefeuilles RPI, le développement de bases de données, l'évaluation d'entreprises immobilières par des tiers, la consultance stratégique, le développement de normes de reporting institutionnel, les procédures de certification RPI, les outils d'évaluation de bâtiments écologiques actualisés et des analyses coûts-avantages pour aider les gestionnaires d'actifs. Mots clès: responsabilité sociale de l'entreprise, comportement éthique, bâtiments écologiques, critères d'investissement, portefeuilles de biens, intérêt public, investissement immobilier responsable

Socially Responsible Property Investment: Quantifying the Relationship between Sustainability and Investment Property Worth

This paper explores the potential link between the sustainability of a property asset and its investment worth. The research is based on the premise that sustainability represents an additional and changing set of risks for property investors and as such needs to be examined systematically for those risks to be properly understood and mitigated. It seeks to make the bundle of issues referred to as ‘sustainability’ explicit within the appraisal process in order that their impact on property worth can be more effectively examined and assessed from a property investment perspective. A series of relationships between sustainability and the functional performance of a property are theorized. A set of parameters quantifying the impact of that functional performance on rental growth and depreciation are then developed. The main findings are that sustainability is pertinent to property investment and can be analysed in relation to potential impact on standard investment appraisal variables. The paper presents a model for doing this as a foundation from which further work can be developed. Two example appraisals are presented to demonstrate the approach developed.

Exploring responsible property investing: a survey of American executives

AbstractProperty is an important part of modern economies with significant social and environmental consequences. As a result, practitioners and scholars have begun focusing on the social responsibility and sustainability of property investors. This paper expands that work by examining Responsible Property Investing among investment organizations in the United States. Responsible Property Investing is defined as efforts that go beyond compliance with minimum legal requirements to better manage the environmental, social, and governance issues associated with property investing. A survey of senior American executives finds that most organizations are going beyond compliance, implementing management strategies and investing in properties that are consistent with Responsible Property Investment principles. Most executives also place their organization beyond compliance in a Responsible Property Investing stage model. Business concerns are the leading drivers and impediments. Among the various types of organizations studied, pension funds, foundations and endowments lag behind others in implementing Responsible Property Investing. Copyright © 2007 John Wiley & Sons, Ltd and ERP Environment.

Socially responsible property investment (SRPI)

PurposeSocially responsible investment (SRI) is now a well established part of equities investment. Questions are now being raised over property investment and whether similar attempts to be “socially responsible” should be incorporated into investment practice. This paper aims to examine the investment practices of large fund managers for both equities and property in order to identify products and activities which are contributing to the progress of SRPI.Design/methodology/approachAnalysis was conducted of equities SRI, and potential SRPI activities, for the top ten UK property fund management using publicly available company literature. This was analysed using simple matrices to understand common activities, industry application, and market‐leading innovations. Relationships between progress in SRI and SRPI, are also explored, along with the consideration of SRPI actions in the context of SRI concepts.FindingsMarket leaders were established in terms of their equities SRI products and services, though this did not necessarily equate to progress in the field of SRPI. Only one potentially SPRI product was identified. However this does not represent the overall consideration of sustainability issues in relation to property investment practices. Half of the companies studied were found to be taking actions which demonstrate attempts to consider the impacts associated with property investment.Originality/valueThis paper reflects a call from key SRPI thinkers to assess the current extent of SRPI practices, which will be a useful starting point for further analysis/debate of the most appropriate SRPI methods. It should therefore be of interest to both SRI and general property investors alike.