Search

The Australian real estate sector has changed rapidly over the last decade. Most notably, the sector has actively embraced the notion of sustainability as it is represented by the increasing number of 'green buildings' across the nation's major metropolitan areas. Nevertheless, the characteristics of green and non-green buildings and their differences have not been fully studied. In addressing this, this research aimed to investigate if green buildings pose much superior building quality than their non-green counterpart. To this, 20 years of transaction data indicating building quality, the level of greenness, and sales prices were collected. These data were analysed using descriptive statistical techniques such as the Mann-Whitney U test and the Spearman rank-order correlation test. The results show that green and non-green building shave several different characteristics which make them distinguished from each other. Specifically, it is found that green buildings generally have superior building quality than their non-green counterpart. This raises a concern that older, shorter,and smaller buildings are relatively behind the trend of the 'green transformation' compared to the good quality buildings.This will inform policymakers more targeted strategies for making the sector greener than the present. usc Refereed/Peer-reviewed

In Australia, it is not surprising to see tenants pay premium prices for the higher level of greenness of their office buildings. This is reflected by the ever-increasing number of environmentally friendly and energy efficient green buildings nationwide especially across the major Commercial Building Districts (CBDs). Nevertheless, the impact of tenants’ office leasing behaviours on rents have not been fully explored. To address this knowledge gap, a survey of tenants who have leased the Sydney CBD-located office buildings was undertaken. The collected data were analysed using Partial Least Square - Structural Equation Modelling (PLS-SEM) techniques to identify the relationships amongst various tenants’ leasing motivators, the level of greenness of their office buildings, and rents. The results show that tenants’ leasing decisions about the level of greenness of their office buildings do not significantly contribute to office rents. Instead, the conventional attribute of building quality (e.g. floor plate size and building amenities) significantly and positively influences office rents. It is also found that building quality, along with the building’s sustainability aspect (e.g. indoor environmental quality and CO2 emissions), is an important motivator for sustainability-focused organisations. However, the overall greenness level of office buildings is being considered as an important aspect for people-focused organisations rather than for sustainability-focused organisations. The results inform regulators and practitioners better-targeted strategies could be developed by understanding various tenants’ leasing motivators and their influences on the greenness level of office buildings and rents.The original version of this article supplied to AIP Publishing contained an error in the author’s name. The name originally appeared as Benson T. H. Kim, but the correct name is Benson T. H. Lim. An updated version of this article, with the author’s name corrected, was published on 7 August 2019.

Environmentally friendly and energy efficient green buildings have gained their popularity across many countries including Australia. Despite their increasing popularity and rental premium, it is not known why tenants are more inclined to lease green over non-green office buildings in Australia. In addressing this gap, this study aims to explore tenants’ motivations to leasing green office buildings. To this, this study first analysed over 2,000 tenants occupying over 100 green buildings in Sydney CBD.This allowed this study to identify which tenants are morelikely lease green buildings than the others. The results show that tenants from; (i) the Finance and Insurance services sector, (ii) the Professional, Scientific and Technical services sector, and (iii) Real estate services sector account for over 50% of the entire tenant sample. Then, a judgemental purposive sampling method was adopted, and nine interviews were conducted with the key leasing decision-makers from the top three sectors. The interview findings reveal that the traditional aspects of location and costs are still the key motivational factors for green building tenants. However, many interviewees acknowledge that leasing a green office space could help improving their corporate image. This thus led to many tenants’ beliefs that green spaces contain both symbolic value and tangible value,and that higher rents for green buildings are rather acceptable considering what they can offer. The results of the study suggest that understanding the demand of various types of tenants is essential to shed the light on the expensive rental price of green buildings in Australia. Refereed/Peer-reviewed

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

Typical determinants of office building rental prices include location, height, age, and other tangible features of a building - and this is no exception to green buildings. Although evidence shown that green office buildings command rental premium than comparable non-green office buildings, literature could not fully explain causes of the higher rental prices. In addressing this gap, the aim of this research is to identify possible rental price attributes of green office buildings. More specifically, this study attempts to (1) analyse collective influence of various rental price attributes of green buildings, (2) review methods applied to probe the rental price attributes. The study was conducted by systematic review and meta-analysis on related literature. The result shows that literature identified rental attributes of green buildings using regression analysis, and these attributes are mostly indifferent to those of non-green buildings. Limited attention was given to attributes that are specific to green buildings. More specifically, green office building' symbolic aspect was not considered when analysing its rental premium. The result will be utilised in subsequent stage of the research project to probe the significance of its impacts. Refereed/Peer-reviewed

The greenness of office buildings is becoming a more important issue as it contributes to the sustainability of the building sector. Moreover, by leasing greener offices, tenants can be benefitted by the improved indoor environmental quality and better corporate branding attributed to its positive image. These benefits, however, often come with relatively expensive prices that tenants need to pay. Nevertheless, the sources of the price premium have not been fully explored especially from the aspect of tenants’ leasing behaviours. To address this, a questionnaire survey was conducted. Then, exploratory and confirmatory factor analysis were performed to identify the underlying dimensions of tenants’ leasing behaviours and to ensure their reliability and validity. The results show that tenants’ office leasing behaviours must be explained by several dimensions. Also, it is found that the obtained results have a sufficient reliability and validity. These allow proceeding to the next stage of the research to explain if and to what extent the greenness level of tenants’ offices and the rents they pay are influenced by various motivational variables based on the established analytical model.

Sustainability has increasingly attracted interests in the Australian real estate sector as evident by the increasing number of green buildings across its major cities. Despite the lucrative price tag, evidence has also indicated that tenants have shown a strong preference towards purchasing and leasing more energy efficient green buildings. These incremental trends are fuelled by several attributes - from tenants' willingness to portray their identity as a "socially responsible corporate" to regulatory pressures from the government. The aim of this study is to examine the effect of Australian building energy efficiency regulation on the supply of green building stocks. More specifically, we analysed the influence of Commercial Building Disclosure programme established by the Building Energy Efficiency Disclosure Act 2010. Past 5-year statistics of certified office buildings were collated from the National Australian Built Environment Rating System (NABERS) and analysed. The overall findings show that the Australian green building markets are at its mature stage, as the number ofgreen buildings across Sydney, Melbourne, and Brisbane Central Business Districts (CBD) has recorded a negative growth rate. On the other hand, our findings show that there is a positive growth trend in the NABERS 5 stars and above certified buildings. The picture emerges from this is that tenants are now moving towards the "more than the average" green buildings. Overall, green buildings located within the CBD were larger, produced more CO2, and consumed more energy than green buildings located outside of the CBD. Our findings help informing regulators and practitioners about the effective implementation and influence of sustainability regulations on the real estate market. Refereed/Peer-reviewed

For successful outcome of real estate development projects, it is important to understand the potential tenants as they drive the demand for properties. The aim of this study is to investigate tenant characteristics of the Australian green office building sector. The specific objectives are to; (1) compare and contrast the increment trend of green buildings within the green office building sector; (2) identify the tenancy profile of green buildings; (3) ascertain the possible industry concentrations within the current green building sector; and (4) explore the relationship between green building occupants’ characteristics and their tenancy. Descriptive statistics shows that Finance, Insurance and Real Estate (FIRE) industries along with government owned companies are the major tenants of green office buildings in the NSW State of Australia. In particular, real estate companies occupy more than half of the NSW based green office buildings whilst one third of them are the tenants of the 6-star rated buildings – the highest rated building in the current form of Australian Green Star accreditation scheme.