Is there a demand for green offices in Central and Eastern Europe? Gunther Maier, Michal Gluszak,...
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Transcript of Is there a demand for green offices in Central and Eastern Europe? Gunther Maier, Michal Gluszak,...
Is there a demand for green offices in Central and Eastern Europe?
Gunther Maier, Michal Gluszak, Andrej Adamuscin, Kateryna Kurylchyk
Content
Introduction The current project team Conceptual background Interviews Survey instrument First results
Introduction
Green Building movement in Central and Eastern Europe Green Building Councils in almost all CEE countries Various strategies, various certification schemes Internationally active developers and consultants got
involved
What is the value of green building certificates in the CEE market? Very few certified buildings Limited information on transactions Need to do a contingent valuation study
The Research Team
Currently: Cracow (Poland) and Vienna (Austria) Planned: Kiev (Ukraine) and Bratislava (Slovakia)
Michal Gluszak, Malgorzata Zieba, University of Economics, Cracow
Gunther Maier, Kateryna Kurylchyk, WU Vienna Sabine Sedlacek, Modul University, Vienna Andrej Adamuscin, TU Bratislava
Conceptual Background
Evidence for a positive effect of Green Building certificates on values and rents Eichholtz, Kok & Quigley (2010) (US; LEED and Energy
Star): effective rent premium + 7%, sales price premium +16%; the label by itself has a positive value above the implied energy savings.
Fuerst & McAllister (2011) (US; LEED and Energy Star): rent premium +5% (LEED) and 4% (Energy Star); sales price premium +25% (LEED), +26% (Energy Star)
Wiley, Benefield & Johnson (2010) (US; LEED and Energy Star): rent premium +7% to +17%; higher occupancy by 10% to 18%; selling premium per sqft $30 (Energy Star) to $130 (LEED).
Conceptual Background
Positive image of Green Buildings Addae-Dapaah, Hiang & Shi (2009) (Singapore, survey
of occupants): No effect of awareness and appreciation of green benefits beyond cost savings and higher building values. Benefits are very uncertain.
Hypotheses: Green building certificates have a significant positive
effect on rents and sales prices. In less developed markets (CEE) awareness will be low
Conceptual Background
Method of choice Hedonic price estimation with certificate as explanatory
variable
Problem: Too few green buildings yet in CEE markets; very
limited information on rents and transactions
Solution: Expert interviews Contingent valuation survey
Survey instrument
Survey of companies who have moved to new office space within the last 2 years
Goal: identify the WTP (implicit price) for green building certificate
Strategy: contingent valuation Compare current office space with a similar hypothetical
alternative – which one would you have chosen? Analysis by use of a conditional logit model
Survey
Generating the hypothetical alternatives Criteria are sorted in decreasing expected
attractiveness (new before old, city center before periphery)
For all criteria except price, operating costs and certificate: For the new alternative, we either stay at the criteria value (40%) or go one step up (30%) or down (30%). When out of bounds, it is set to the boundary value.
For certificates: When certificate: 50% same certificate, 50% no certificate; when “no certificate”: 40% no certificate, LEED, BREEAM and DGNB with 20% each
Survey
Generating the hypothetical alternatives Sum of characteristics gives a rough measure of
attractiveness Randomly generated price deviations by 0%, 5%, 10%,
15% or 20% up or down Result centered around zero and shifted by difference in
attractiveness Correction over the experiment:
When only the original option is chosen, the alternative option becomes cheaper
When only the alternative option is chosen, it becomes cheaper
First results - VIENNA
32 responses Respondent
fixed effects omitted
Few significant coefficients
High Pseudo R-square
Totcost always neg.sign.
Cert_XXX mixed
any LEED BREEAM DGNB other multipleconst -2.37* -2.42* -1.97 -2.29 -1.99 -2.2totcost -0.13*** -0.13*** -0.14*** -0.13*** -0.13*** -0.13***cert_XXX 0.34 1.15* -1.81** 0.41 1.75 0.66loc_2 -0.19 -0.15 -0.16 -0.19 -0.13 -0.17loc_3 -1.38* -1.36* -1.48** -1.41* -1.43** -1.31*loc_4 -2.16** -2.26** -2.12** -2.14** -2.16** -2.1**loc_5 -2.12 -2.22* -1.72 -2 -2.03 -2.03transp_2 0.01 -0.05 -0.03 0.01 -0.06 0.03transp_3 -0.41 -0.62 -0.52 -0.41 -0.46 -0.38transp_4 1.31 1.11 1.07 1.32 1.41 1.23transp_5 -0.98 -1.06 -0.71 -0.84 -0.98 -0.93age -0.59* -0.56* -0.53 -0.6* -0.6* -0.57*type_2 -0.3 -0.35 -0.26 -0.29 -0.24 -0.3type_3 14.85 13.66 14.2 14.93 14.12 15.07type_4 12.79 11.33 11.88 12.9 12.12 13.05qual_2 -0.42 -0.48 -0.31 -0.4 -0.23 -0.46qual_3 -2.03*** -2.08*** -2.01*** -2.01*** -1.83** -2.07***qual_4 -20.96 -20.06 -20.39 -21.02 -20.09 -21.18 LogLike -113.58 -112.40 -110.14 -113.73 -112.61 -113.60Pseudo R2 0.46 0.46 0.48 0.46 0.46 0.46
First results - VIENNA
Value of green building certificate in % cost increase
Outlier BREEAM (negative significant) Others in a meaningful range (3-9%)
any LEED BREEAM DGNB other multiple
totcost -0.13*** -0.13*** -0.14*** -0.13*** -0.13*** -0.13***
cert_XXX 0.34 1.15* -1.81** 0.41 1.75 0.66
value 2,66 8,60 -13,28 3,12 13,80 5,16
First results Cracow
18 respomdents Respondent fixed
effects omitted
any LEED BREEAM DGNB other multiple
const -3,37 -0,47 -0,81 -0,98 -0,32 -0,43
totcost -0,21*** -0,22*** -0,19*** -0,2*** -0,2*** -0,2***
cert_XXX 2,72*** 0,89 1,67** 0,75 18,37 -0,28***
loc_2 0,75 0,5 0,55 0,46 0,44 0,48
loc_3 2,2 1,56 1,91 1,66 1,61 1,65
loc_4 -18,33 -16,64 -17,2 -16,41 -16,9 -16,19
loc_5 -16,2 -15,01 -15,15 -14,46 -15,52 -14,45
transp_2 -1,52* -0,91 -1,27 -1,14 -0,91 -1,04
transp_3 -4,42*** -3,89*** -3,56*** -3,89*** -3,71*** -3,77***
transp_4 38,92 36,2 34,61 35,46 36,64 35,03
age -0,35 -1,01 -1,04 -0,78 -0,97 -0,98
type_2 -1,7 -1,44 -1,1 -1,53* -1,6* -1,39
type_3 -4,42** -3,15* -2,21 -3,6** -3,2* -3,01*
type_4 -7,57*** -6,13*** -5,64*** -6,35*** -6,11*** -5,94***
qual_2 -0,74 -1,21 -1,14 -0,81 -0,91 -1,03
qual_3 -1,87* -1,72 -1,62 -1,38 -1,38 -1,49
qual_4 -1,5 -2,52 -2,09 -2,2 -2,23 -2,38
any LEED BREEAM DGNB other multiple
totcost -0,21 -0,22 -0,19 -0,2 -0,2 -0,2
cert_XXX 2,72 0,89 1,67 0,75 18,37 -0,28
Value 12,76 4,02 8,62 3,77 90,22 -1,34
Summary and conclusions
Still very limited information basis – needs to be expanded
Weak support for the thesis that there is demand for green office buildings in CEE (Vienna)
Green building certificate is worth 3-9% higher total cost
Problem BREEAM / multiple? Surprisingly similar results Next steps:
More observations for Vienna and Cracow Implement Kiev and Bratislava Expand to other cities?