Theoretical Linkage of Social and Environmental Factors to the Value of Green Commercial Office Building In Malaysia

Abstract

The construction of green building takes into account environmental, social and economic factors throughoutits life cycle. Although previous studies have shown that these factors influence the value of a property, the applicability of the findings from such studieswith regard to property valuation practice is still limited. This is due to lack of awareness on the effects of green aspects particularly among valuers. The same can be said in the case of Malaysia where there is lack of consideration on the potential impact of the underlying principle of sustainability in the market value of green commercial office buildings. As a result, these environmentally friendly buildings which take into account the factors mentioned earlier and that are implemented in their construction are not properly valued. Thus, the aim of this paper is to investigate earlier attempts made by valuers to recognize the need for reviewing the valuation practices in relation to the growing number of green buildingsby exploring the global literature within the past decade. The paper presents review of literature on the impact of green features on the value of commercial office buildingby looking at those which incorporated the Concentric Ring model. The findings of this paper indicate that there is a strong relationship among all green features that affects the value of a property. However, due to lack of awareness of green building features among Malaysian valuation practitioners, the impact of green initiatives on property valuation has not been perceived clearly in the market. Hence, the highlighted green factors and their attributesin this paper could be used as a guidance to justify the consideration of green building features in valuing the green commercial office building in the future.