“Green Buildings“ – just Environmentally Sound or also Economical and a Stable Investment?

Prof. Dr. Lützkendorf und Dr. David Lorenz MRCIS

The planning, building and systematic maintenance of “green” or “sustainable” buildings, i. e. buildings which are energy-efficient, sparing in their consumption of resources, environmentally sound, healthy to spend time in, cost-effective and meet high quality standards in terms of their technical infrastructure, functionality, archi-tectural design and integration into the urban environment, is seen by politicians, academics and large sections of the public as a substantial contribution towards sustainable development. Questions, however, arise in connection with the potential benchmarks for such buildings, the implications thereof for their current and future valuation, and the way in which and extent to which sustainability credentials impact ratings, risk analyses as well as lending decisions. Will “non-sustainability” become a new risk in the property business? Will “sustainable” buildings packaged in suit-able investment products become attractive for certain investor groups seeking sus-tainable investments for their socially responsible investment (SRI) portfolio? What makes a building “green” or “sustainable”? The following investigates these issues.