The Green Building Premium: Does It Exist?

Recent years have seen considerable discussion and debate in Asia Pacific around the existence of a so-called “green building premium”, which involves occupiers paying higher rents for green certified office space and investors shelling out more capital to purchase such assets.

While the precise magnitude of this premium remains difficult to quantify, and its extent varies across different markets, CBRE data suggest that a small number of occupiers would be willing to pay slightly higher rents for space in a green building, while a sizable number of investors would be willing to pay a marginal premium to purchase a green building.

Other evidence points to a trend for a “brown discount” for properties with relatively weaker environmental performance, resulting in lower rents and prices for “less green” buildings.

This Viewpoint provides a snapshot of the status of green building adoption in Asia Pacific; explains what’s driving occupiers’ and investors’ preference for green buildings; and discusses the existence, and extent of, a rental and capital value premium for a green buildings.