Incorporating GBFIs into Commercial Property Valuation

The widespread international acceptance of green buildings has led to rapid awareness of green building features and initiatives (GBFIs) in the South African property and construction industry, however among valuers it seems the awareness is still in its infancy. It is essential to be able to establish the effects of these GBFIs on the market value of commercial property.Three research methods were implemented in order to gather data; semi-structured interviews were conducted with valuers of varying degrees of experience in Cape Town, on-line surveys were completed by a sample of South African valuers, and a valuation simulation was conducted to determine the quantitative impact of GBFIs.The findings present evidence that even though South African valuers have limited knowledge of green buildings, they recognise the importance of incorporating the GBFIs in the valuation process. Energy efficiency was highlighted as the most important GBFI to take into account in South Africa, due to the volatility associated with increasing energy costs. The inclusion of GBFIs in valuations in practice was seen to be hindered by the lack of sufficient transactional data in the market. Furthermore, valuers experienced difficulty in quantifying and justifying the impact of GBFIs on the value of commercial green property.