Responsible Property Investing

Community Planning, Planning, Real Estate Development

What is it?

Responsible Property Investing (RPI) is property investment or management strategies that maximizes the positive and minimizes the negative social and environmental effects of property investing, consistent with fiduciary responsibilities.

10 elements of RPI that help buildings perform better:

Energy conservation
Environmental protection
Voluntary certifications
Public transport oriented developments
Urban revitalization and adaptability
Health and safety
Worker well-being
Corporate citizenship
Social equity and community development
Local citizenship

Why RPI mattered?

  • Community Development

With a focus on improving public health, education, housing, employment, and crime prevention will greatly improve property values, reduce vacancy rates, lower maintenance expenses, increase rental rates and reduce insurance rates.

  • Design Quality

Poor design can lead to accelerated functional obsolescence and the rapid depreciation of even new buildings. Design excellence, on the other hand, can increase rents and lower vacancy rates, often by more than the cost of additional design work and finer materials.

  • Energy Conservation in Existing Buildings

Energy conservation lowers operating costs which in turn can increase net operating incomes. Certain measures may also improve tenant comfort and satisfaction, leading to better tenant retention.

  • Fair Labor Practices

By giving lower-skilled employees adequate salaries, benefits, and right to organize in a healthy, safe, and secure work environment, labor standards will raise, and therefor lead to better tenant retention, fewer vacancies, and even rent premiums.

  • Good corporate governance

Energy conservation lowers operating costs which in turn can increase net operating incomes. Certain measures may also improve tenant comfort and satisfaction, leading to better tenant retention.

  • Green Buildings

The benefits of green buildings include reduced running costs, reduced health and safety risks, lower absenteeism and increased productivity, improved image for the producer and occupier, easier letting, higher rents, better retention and comparable or reduced cost of construction.

  • Green Power Purchasing and Production

Green power may be a cost-effective strategy for complying with carbon regulations and may reduce the risk of future energy price hikes and regulations.

  • Historic and Cultural Preservation

Historic properties are associated with amenity values. Such benefits must be considered alongside functionality issues, but at the very least façades can be retained even as new functional standards are achieved.

  • Parks, Plazas, Atriums and Natural Areas

Nearby open spaces can increase property values, especially for residential, retail and office properties.

  • Safety and Risk Management

Safety hazards can constitute a significant liability for property owners and developers.

  • Recycling and Solid Waste Management

Litter, odors, noise and other problems from improper waste handling can cause complaints, reduce tenant retention and lower rents and property values. Recycling programs can lower disposal fees and increase operating incomes.

  • Transportation Demand Management and Transit Oriented Development

Transportation Demand Management and Transit Oriented Development lower the risk of depreciation caused by the possibility that traffic congestion and higher fuel costs might erode access to locations exclusively dependent on automobiles. Properties with good linkages to public transportation can appreciate in value in response to public investments in transit networks, increased transit use stimulated by higher fuel prices and heightened interest in urban living among retirees and young adults.

  • Tree Planting and Preservation

Trees can serve as amenities that increase rents in commercial properties, value in residential properties and sales in retail centers. They can also reduce operating expenses by lower heating and cooling costs.

  • Urban Regeneration

Owning properties in cities and regeneration areas can improve the risk-adjusted returns and diversification of property portfolios.

  • Water Conservation

Water conservation can reduce operating expenses and improve net operating income.

*Blog abstracted from UNEP report “Responsible Property Investing-What the leaders are doing.” For more information, please refer to original report.
*To know more about RPI, please see http://www.responsibleproperty.net/

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