The Impact of Environmental Certificates on Office Prices in London

42 Pages Posted: 18 Nov 2021

Date Written: August 23, 2021


The pressure on market participants in the built environment is intensifying in light of the increasing global awareness of the need to decrease CO2. In this context, the economic viability for real estate investors represents an essential decision-making criterion for the realisation of green investments. Therefore, this study uses the Greater London market to investigate the impact of BREEAM certifications of commercial office buildings on sales and rental prices between 2010 and 2021. In addition, a differentiation is made according to individual BREEAM certification levels and their individual effects on rental and sales premiums are examined. The final focus of the study is to determine the variation in green premiums when controlling for super trophy features, i.e., buildings of a special scale. Based on 2,537 sales and 2,907 rental transactions obtained from the EG radius database, the impact is investigated using a hedonic regression model. The results indicate that green certificates have a positive marginal effect on sales and rental prices and vary depending on the model specification, between 8 - 26 and 8 - 37 percent, respectively. However, the premium of BREEAM certified buildings decreases when adjusting for hedonic characteristics, and it was found that the super trophy features negatively affect the premium.

Keywords: Green buildings, BREEAM certification, hedonic regression, commercial office buildings, Greater London area

Suggested Citation

Zehner, Julian, The Impact of Environmental Certificates on Office Prices in London (August 23, 2021). Available at SSRN: or

Julian Zehner (Contact Author)

University College London ( email )

Gower Street
London, WC1E 6BT
United Kingdom

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