Tenants' decision to or not to lease green & non-green buildings: a conceptual framework

Understanding the key features driving tenants' decision to or not to lease green and non-green buildings is important for building owners and developers- especially in today's era of sustainable development. Although evidence shown that green buildings could fetch a rental price premium over non-green buildings, it is not known as to what drives tenants' leasing decision. In addressing this gap, the aim of this study is to develop a conceptual framework for explaining tenants' leasing decision for green and non-green buildings. More specifically, it attempts to (1) identify key building features of green and non-green buildings, and external influences that could affect tenants' decision; and (2) review relevant theories underpinning tenants' behaviours. The research was conducted by using literature survey on related publications, including, but not limited to, books, journal articles, and market and government research reports. The review shows that building features could be broadly classified into: instrumental (i.e. tangible) and symbolic (i.e. non-tangible) aspects and that these two aspects could collectively influence tenants' decision to lease and pay the price premium for green over non-green buildings. In particular, tenants' decision on leasing green buildings might not be only driven by mandatory regulations or sustainability features but also by expectations to fulfil different, possibly conflicting, values, and willingness to portray their identity. To probe this, this conceptual framework integrates four different theories; Expectation-value theory, Push-pull theory, Symbolic self-completion theory, and Theory of bounded rationality. This framework will be tested in subsequent stages of the research project. Refereed/Peer-reviewed