RICS at the World Sustainable Building 08 Conference Melbourne

People spend almost 90% of their life inside buildings. Consequently, healthy indoor environments contribute significantly to human health and well-being and offer a large potential for reducing "external’ costs to society through lowering allergies and asthma, days lost to sick leave and even Sick-Building Syndrome.

The contribution then of buildings and of the property and construction sector to sustainable development could be immense, but how do we put value on sustainability in property investment?

A recent report by RICS; Sustainable Property Investment & Management – Key Issues and Challenges, to be launched at the World SB08 Conference in Melbourne on Tuesday 23 September 2008 goes to the very heart of the matter.

The report states that one important condition for a further market penetration and mainstreaming of sustainable building is being able to make the business case that sustainable buildings actually yield higher economic value than their unsustainable counterparts.

Measures and tools are needed that allow for describing, assessing and communicating the financial out performance of sustainable buildings. One possible solution in this regard is the integration of sustainability issues within existing (traditional and advanced) property valuation methods and practices.

"Valuers are the vital cog in the process" says Stephen Ellis, Chair of RICS Oceania. "Without the correct tools and resources property owners can be exposed to pitfalls in the market place because they are valuing their properties incorrectly leaving themselves exposed to market variations which could have been foreseen by the valuer."

"This is apparent in how we go about valuing existing stock against new green buildings. The property owner with the non green building will be looking at some very hard decisions unless they have up to date and accurate data from the valuer."

Against this background, RICS has supported a scientific forum on "Valuing Sustainability" organised by Professor Dr. Thomas Lützkendorf of Karlsruhe University and Dr. David Lorenz MRICS of Lorenz Property Advisors which will address the following issues:

• How to bridge the gap between environmental, social, and economic aspects of property value
• How to empirically demonstrate the relationship between a building’s environmental and social performance and its market value? What are the conditions for further strengthening this link
• How to adapt existing property valuation methods and practices so as to reflect sustainability issues

The forum will have expert speakers from the EU, Australia, the United States as well as Mr Stephen Berry, a representative from the Australian Department of the Environment, Water, Heritage and the Arts.

David Lorenz MRICS Chairman of the RICS EU Advisory Group on Sustainable Property Investment & Management said that valuers:

"…need a sound knowledge-base to draw upon when estimating property values or giving advice to clients. Gathering this proof will not only help to move sustainable construction, investment and management quickly into the mainstream, it will also apply greater pressure on investors and investment managers to include sustainability considerations within their decision-making processes."