Estimating the impact of sustainability criteria on Swiss residential real estate returns
||Markus Gaebel and Annika Feige
||Estimating the impact of sustainability criteria on Swiss residential real estate returns
||19th Annual European Real Estate Society Conference in Edinburgh, Scotland
||This paper investigates the impact of sustainability aspects on total returns and cap rates for residential real estate assets. We use a cross-section of data from institutional investors of approximately 200 Swiss multi-family properties, including sustainability ratings. Our multiple regression analysis indicates that not only traditional building characteristics but also sustainability aspects offer explanatory power. The results suggest that building age, health and comfort features as well as flexibility criteria have statistically significant impacts on valuation-based real estate returns in 2009. Also this study provides sustainability benchmarks for better informed real estate portfolio management decisions. Practical applications illustrate how the findings can be integrated into sustainability considerations of institutional real estate investors.
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