Real Estate – Property Markets and Sustainable Behaviour

Citation

van de Wetering, J. (2013), "Real Estate – Property Markets and Sustainable Behaviour", Journal of Property Investment & Finance, Vol. 31 No. 4, pp. 394-396. https://doi.org/10.1108/JPIF-04-2013-0025

This book makes a contribution to existing literature by assessing attitudes and behaviour in a property market context, while simultaneously examining how sustainability issues may relate to investors and occupiers. The text is aimed at real estate students and real estate professionals and contains insights and recommendations for both. The book is structured as follows:

Section I – Introduction and concepts

• 1.

  Introduction

• 2.

  Background and orientation

• 3.

  Culture, markets and institutions

Section II – Background to real estate and financial markets

• 4.

  Real estate market mechanisms

• 5.

  Methods of ownership in the property market

• 6.

  Sustainability

• 7.

  Property investment decisions

• 8.

  Decision making and sustainability

• 9.

  Responsible property investment

Section III – Sustainable real estate and business tools

• 10.

  Real estate and shear zones

• 11.

  Portrait of place

• 12.

  Sustainability balanced scorecard that aligns real estate with business

• 13.

  Introduction to the big conversation

Section IV – Sustainability leadership and reflection

• 14.

  Sustainable leadership

• 15.

  Sustainability skills

The book consists of four sections, which address various types of behavioural, real estate related and sustainability related issues. Chapters 2 and 3 in Section I break decision making down into such subjects as values, knowledge, different levels of thinking and culture. The chapters also discuss the relevance of such theories to sustainability, buildings and property markets. Chapters 4 and 5 in Section II contain an introduction to the characteristics of property, the regulatory framework within which property markets operate and various types of property ownership. These chapters also introduce some key real estate related sustainability issues. Later chapters in Sections II and III explore the various concepts which have been introduced in earlier chapters in more detail and illustrate them with the following case studies: Chapter 6: Sustainable development (Central St Giles in London); Chapter 9: Sustainable attitudes and actions (RREEF); Chapter 10: Entering into formal dialogue (Brockwood Park Estate); Chapter 11: Identifying regional sustainable solutions to growth and well‐being (Central Lincolnshire); Chapter 12: Use of eco‐efficiency balanced scorecard in practice (AAT); Chapter 13: Results of The Big Conversation. These case studies set precedents and provide examples of the implementation of sustainability in projects and organisations. Finally, in Chapters 14 and 15 in Section IV, the authors provide readers with some insights on sustainability leadership and a set of skills which are required for sustainability literacy.

The book bases its approach to sustainability strongly on the requirements of the Triple Bottom Line (TBL) approach, a sustainability model which is generally applied in the business sector. The TBL approach can be criticised for its equal weighting of the three dimensions of environment, society and economy, as it could be argued that since the economy is a subset of society, which is in itself a subset of the environment, these dimensions are not equal and should not be treated as such. The TBL model therefore fails to acknowledge the potential importance and urgency of the ecological constraints which have brought sustainability to the forefront to begin with, diverting the focus away to a more ambiguous traditional “business as usual” sustainability approach with comparatively minor ecological and social concessions.

The short‐ and long‐term consequences of sustainability issues on property markets are addressed but might have benefitted from a more detailed discussion. For instance, some of the provisions in the Energy Act 2011, which is discussed in Chapter 6, may have significant implications for property markets and the authors' views on this would have been interesting. Although useful voluntary initiatives such as the IPD Environment Code and the ISPI index are discussed, the book might have benefited from a more explicit focus on environmental assessment tools such as the mandatory Energy Performance Certificate (EPC) and Display Energy Certificate (DEC) energy labels and the voluntary BREEAM ecolabel, which are the most commonly accepted benchmarks for defining sustainability in the UK real estate market. Moreover, the inclusion of a more globally oriented outlook on environmental assessment tools could have provided the book with additional international relevance.

It is worth mentioning in this context that eco‐labels serve as benchmarks which provide a clear definition of sustainability that can enable market participants to compare sustainability and express their preferences for sustainable buildings. A growing body of literature in the USA, Asia and Europe suggests that there is a positive impact on prices of these ecolabels. Papers by for instance Fuerst and McAllister (2011) and Aroul and Hansz (2012) have built a rationale for the existence of these premiums. Although some of this rationale is constructed in the book, the insights offered in such studies and the empirical evidence they provide could have provided the authors of this book with additional motivations to explain the behaviour of real estate market actors when it comes to sustainability. The book does attempt to assess financial impacts to some extent by describing the Sustainable Property Appraisal Project in Chapter 7. While this particular initiative can be useful for identifying financial benefits, it relies heavily on the validity of its own assumptions for the outcome of its calculations, which may constrain the relevance of the evidence that emerges from it.

Overall, the book benefits from a series of useful insights into property markets and sustainability and how these two relate to each other. The book succeeds in presenting an overview of sustainability as it is currently being implemented in several areas of the real estate industry. The case studies in particular contain many useful examples which may serve to enlighten scholars and practitioners. The book may be especially useful as a reference point to those who wish to know more about the motivations behind property market behaviour and related sustainability thinking.