In October 2022, CBRE, a global real estate services firm, released a report indicating that environmentally friendly construction techniques and operations are not only beneficial for the ecosystem but also 'commercially' advantageous.

The report revealed that, after controlling for various factors such as location and completion year in a comparison of nearly 20,000 US offices, environmentally certified buildings commanded rents that were approximately 4% higher than those without certification. This is known as the 'green premium'.

Furthermore, a report released by Jones Lang LaSalle (JLL) in June 2023 showed that properties with green certifications in London, England, were being traded at prices more than 20% higher.

JLL analyzed the prices of 592 offices in London over a five-year period starting in 2017. The results showed that buildings certified under the UK's green building certification scheme, BREEAM, had an average sale price that was 20.6% higher than those without certification. Rents were also 11.6% higher.

Morgan Stanley Capital International (MSCI), a global research firm, also estimated in its November 2022 report that the green premium for office buildings was around 25% in London, England, and approximately 35% in Paris, France.

According to JLL's Asia market analysis report released in November 2022, when compared with other variables, green buildings commanded rents up to 28% higher than non-green buildings.

In Seoul, buildings with green certifications also had rents that were 7-22% higher than those without certification. JLL stated in the report that "tenants are increasingly demanding that buildings be environmentally friendly, linking it to the sustainability agenda." As a result, green buildings in Asia enjoy higher occupancy rates and premium rents.

According to a follow-up survey by JLL, the proportion of green-certified offices in Seoul increased from 21% in 2019 to 45% in 2023.

Key Findings

• Green buildings command a higher premium in terms of rent and sale price.
• The demand for green buildings is increasing globally.
• Tenants are willing to pay more for sustainable buildings.
• Green building certifications contribute to higher occupancy rates.