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Article

Green Premium in the Tokyo Office Rent Market

1
Xymax Real Estate Institute and Center for Spatial Information Science, The University of Tokyo, Chiba 277-8568, Japan
2
Wisconsin School of Business, University of Wisconsin-Madison, Madison, WI 53706, USA
3
Center for Spatial Information Science, The University of Tokyo, Chiba 277-8568, Japan
*
Author to whom correspondence should be addressed.
Academic Editor: Pierfrancesco De Paola
Sustainability 2021, 13(21), 12227; https://doi.org/10.3390/su132112227
Received: 31 August 2021 / Revised: 25 October 2021 / Accepted: 2 November 2021 / Published: 5 November 2021
(This article belongs to the Special Issue Sustainable Property Markets)
More than 10 years have passed since studies on green buildings gained attention in the academic and industrial literature. Many studies report the economic value of green buildings, mainly in the U.S. and European markets. An empirical clarification of the dynamics of green premiums has significant implications for future urban sustainability. This study constructed a dataset of Tokyo office rents from 2009 to 2019. We estimated the green office rental premium using a hedonic approach. Our results show that, on average, an office property with a green label gains a premium of approximately 6.5% on contract rents. The Tokyo office market is heterogeneous, and endogeneity is an issue when identifying the green premium. We addressed the endogeneity issue with propensity score clustering. As a result of our estimation, the premium was approximately +5.4% for medium-sized old buildings and +2.6% for large-sized new buildings. View Full-Text
Keywords: green building; green label; hedonic approach; propensity score matching; clustering green building; green label; hedonic approach; propensity score matching; clustering
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MDPI and ACS Style

Onishi, J.; Deng, Y.; Shimizu, C. Green Premium in the Tokyo Office Rent Market. Sustainability 2021, 13, 12227. https://doi.org/10.3390/su132112227

AMA Style

Onishi J, Deng Y, Shimizu C. Green Premium in the Tokyo Office Rent Market. Sustainability. 2021; 13(21):12227. https://doi.org/10.3390/su132112227

Chicago/Turabian Style

Onishi, Junichiro, Yongheng Deng, and Chihiro Shimizu. 2021. "Green Premium in the Tokyo Office Rent Market" Sustainability 13, no. 21: 12227. https://doi.org/10.3390/su132112227

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