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This dissertation investigates the influence of sustainability features on the valuation
performance in three different sub-sectors of the real estate market (Offices, Residential, and
Commercial Retail) large scale projects in Paris. Using a multiple regression model, the study
assesses how 14 sustainability attributes—Solar Panels, Green Roof, Sustainable Materials,
Energy-Positive Design, Urban Agriculture, Natural Lighting Systems, Water Recycling
Systems, Low-Carbon Construction, BREEAM/LEED Certification, Waste Management
Systems, Energy-Efficient HVAC, Bicycle Parking & EV Stations, Public Transport Proximity,
Indoor Air Quality Management affect prices of properties falling under these asset categories.
A review of findings adds that sustainability points have the highest impact on office projects
properties (with an R-squared value of 48.4%), meaning sustainability points account for almost
half the variation in prices for office property. Office property values are then proven to be
positively and statistically significant, up to €61.76 million, for each one score increase in total
sustainability points (statistically strong at p-value 0.0006). With a confidence interval of
30.20–93.33, the tight confidence intervals support the precision of this estimate—sustainability
is a primary value driver in office sector returns, driven primarily by regulatory concerns and
tenant demand for energy-efficient spaces.
The model fits residential properties with an R-squared of 26.19, meaning there is a moderate
relationship between sustainability features and price. The value of the project increases on
average by €16.10 million per total sustainability point, with a p-value of 0.006 which is
significant at a level of 1%. While sustainability was included and found to be a statistically
significant predictor of home prices, its relatively low R-squared suggests other factors such as
location and the general market also matter a lot.
By comparison, commercial retail projects have a weaker 11.85% R-squared value against
changes in rents versus headline inflation. It is, however, not significantly related to the
sustainability points of properties (€40.44 million p-value = 0.137). Indeed, the wide confidence
intervals (-14.18 to 95.05) show how great the uncertainty is, a feature of retail property
valuation—where things such as foot traffic and location are still king, and sustainability features
alone are not consistently predictive of better price performance in contrast with office buildings
or housing.
Overall, this study offers evidence demonstrating that sustainability attributes have a positive
impact on property values and suggests that they are particularly influential in the office sector,
offering pronounced value uplifts. Sustainability also drives value for residential properties,
though a bit more distantly. Thus, it indicates that sustainability is not a big price driver in the
retail sector and points towards better methods to integrate green features into commercial retail
valuation models which require further research. The results and conclusion provide practical
recommendations to real estate developers, investors, and policymakers: renewable energy
investments are better in office properties, somewhat beneficial for residential, and quite small in
commercial retail.
