Determining Sustainability Premium in Real Estate Valuation - A Preliminary Survey of perspectives from Estate Surveyors and Valuers in Lagos, Nigeria.
DOI:
https://doi.org/10.5281/Keywords:
Lagos, Sustainability features, Sustainability premium, ValuationAbstract
There is a growing global focus on sustainability and understanding how it impacts property value is important. This will promote informed investment decisions and foster more accurate property valuation. This study examines valuers’ assessment of suitable premium to be earmarked for sustainability features in residential and commercial properties in Lagos, Nigeria. It also identifies possible variations in premium between property types. The target population consists of 198 randomly selected real estate practitioners in Lagos, Nigeria. Data collection was conducted using both online and physical surveys, with 114 valid responses. The Estate Surveyors and Valuers (ESVs) were asked to assess percentage increments in property valuations due to the presence of sustainability features, categorized into six key components: energy efficiency (EE), water efficiency (WE), innovation and site planning (IS), economy and conservation of materials (E), waste management (W), and indoor air quality (IAQ). Features were rated on a scale of 0-10%, 11-20%, 21-30%, 31-40%, and 41-50%. The analysis employed descriptive statistics using percentages and results graphically presented. The findings indicate that water efficiency consistently commanded the highest premium (41-50%) for both residential (33%) and commercial properties (27.8%). The aggregate analysis shows an average premium of 31-40% on rent for sustainability features in both property types, drawing attention to the market's gradual yet positive orientation toward sustainability. Variations in premium between residential and commercial properties are attributed to utility preferences both in building design requirements, and user operations
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