The effect of LEED certification on Shanghai’s prime office rental value

Chi Man Hui, Eric Wing fai Chan, Ka hung Yu

Research output: Journal article publicationJournal articleAcademic researchpeer-review

11 Citations (Scopus)

Abstract

Purpose – This study aims to examine whether Leadership in Energy and Environmental Design (LEED) certification yields additional premiums for Shanghai’s office rental sector. Design/methodology/approach – The hedonic model is utilized to evaluate the impact of LEED, as well as of other factors, on the rental values of 59 Grade A office buildings in Shanghai, including 23 LEED-certified buildings and 36 non-LEED-certified buildings. Findings – It is found that rental values of buildings with LEED are about 12.8 per cent than those of buildings without the same certification. Other factors, for instance accessibility to facilities such as subway station and 4-star hotels, the availability of catering services in surrounding areas as well as the building’s location (i.e. inside the CBD) also are significantly positively correlated with office rents in the sample commercial buildings. Originality/value – Besides being one of the earlier contributions to the literature with regard to the study of the impact of green certifications in China’s office market, the findings in this study also provide some empirical evidence for stakeholders, such as developers, investors, property managers and market practitioners, to evaluate the introduction of green features (and/or green certifications such as LEED) as an investment decision.
Original languageEnglish
Pages (from-to)297-310
Number of pages14
JournalJournal of Facilities Management
Volume13
Issue number3
DOIs
Publication statusPublished - 6 Jul 2015

Keywords

  • Accessibility
  • Hedonic pricing model
  • LEED
  • Office
  • Rents
  • Shanghai

ASJC Scopus subject areas

  • Business and International Management
  • Strategy and Management
  • Management of Technology and Innovation

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