Value of Commercial Real Estate investments: Sustainability perspective in Sweden and France

Abstract: During the recent decades the notion of sustainability has been introduced to almost all businesses and business areas. Sustainability in real estate and particularity in construction has been discussed by many researchers and journalists. Nowadays, not only many countries have adopted the sustainable construction techniques and started using green building materials but also it has started to be important to have sustainable property management, sustainable real estate valuation techniques as well as on the investment side, there has been a major trend to sustainable real estate investments. Many real estate companies are interested in investments into "green" properties both in France and in Sweden. The main objective of this thesis was to investigate the main force that drives these investments, whether they are driven by personal consciousness of investors, by the overall market trend or by the premium that they may receive from the sustainable investment. The purpose was to better understand the reasons behind the green real estate investments as well as to investigate the difference in value of certified sustainable real estate and its impact on the investment decisions. For the following thesis the qualitative research was used the most since its purpose is to get a better understanding of the motivation of companies to invest into sustainable real estate. However, quantitative data was as well applied in from of investigation about amount of investment transactions in different real estate sectors, repartition of types of investors, number of sustainable buildings with different certifications, etc. The research showed that real estate investors both in Sweden and France are most interested in the purchase of green buildings due to their ability to produce higher income and durability of buildings itself. The main premium that they are expecting from such investments is in better marketability of the building and thus shorter vacancy periods. Both qualitative and quantitative data have confirmed this conclusion.