EUROPE - More than 40 European real estate fund managers and investment companies are providing data on their sustainable performance to a new pan-European research platform.
Sustainable Investment in Real Estate (s-i-r-e) is conducting an empirical study on the financial performance of sustainable office and retail properties in Europe in a bid to identify the existence of "green alpha".
The study is being led by the EURO Institute of Real Estate Management and is aiming to identify the economic, environmental and social characteristics that drive investment outperformance.
Participants in the project include fund managers and investment companies from 10 different countries, such as Hermes Real Estate in the UK to SPF Beheer in the Netherlands, AXA Real Estate in France and Deutsche Bank Group in Germany.
The project is directed by the department of building and environment at Danube University Krems, Austria in co-direction with the school of planning and surveying at Kingston University in London.
Jürg Bernet, visiting professor at Danube University Krems and head of the s-i-r-e research platform, said: "Many real estate investment companies have recently set up their sustainable investment policies, but responsible investment decisions still lack hard facts on a rational link between sustainability and financial performance.
"The mission of s-i-r-e is advancing credible knowledge on sustainable investment in real estate by pan-European networking with the professional leaders from the worlds of both business and science."
The project has been awarded grants from the Royal Institution of Chartered Surveyors (RICS) Education Trust and the Austrian Chamber of Commerce, Federation of Real Estate Professionals.
Sarah Sayce, co-head of the project at Kingston University, added: "The research question is: Will the current data provide first evidence for a 'green alpha' of commercial real estate in Europe?
Tatiana Bosteels, head of responsible property investment at Hermes Real Estate, said that work that specifically addressed the link between more sustainable assets and value was essential for the real estate fund management industry to move forward in the area of sustainability.
"The more innovative initiatives that we have been involved in in the last year and a half have all been related to this big question," she said.
Bosteels says real estate fund managers are coming under increasing pressure from institutional investors to show they are integrating sustainability considerations into their investment strategies, and projects like s-i-r-e will help both investors and managers in this regard.