Factors affecting green office building investment in Malaysia

Abstract

This paper examines the factors that affect green office building investment in Malaysia. The objective of this paper is to establish the attractiveness of returns expected by property investors in green office properties. As investment in green office buildings is a relatively new concept, local literature in this area is scarce and most findings are drawn from external publication. Results from empirical studies are used to categorize risk and return factors. Return on investment (ROI) factors such as capital appreciation, higher rental income and improved cost saving factors are expected to enhance future demand and supply of such properties in the country. Due to the fact that the underlying factors of demand and supply may change over time, investment in green office properties is exposed to the vagaries of the market. Thus, before taking the risk of investing in green office properties, there is a need for the investor to consider the pros and cons of this venture. To minimise the risks entailed in green office investment, the investor needs to understand the risks and returns involved. It is expected that investment in green office buildings will lead to a new dimension in the real estate industry of Malaysia. Investors are beginning to take a keen interest in green office buildings because of their potentially higher returns compared to non-green buildings.