Green building strategy, investment and change in the South African real estate industry

Abstract

In the real estate industry the growth and growth opportunities for real estate funds are based on a macroeconomic level, but on a micro economic level the importance of new building investment, the quality of tenants and the length of lease contracts signed are the main determinants of real estate fund growth and return. This research attempts to understand the perception and investment of green buildings in South Africa and whether real estate funds are focusing on green building investment as a strategic objective, as well as investigating the importance of tenants within the strategic framework. Furthermore the research attempts to investigate what changes would be required from a regulatory and other factors in order for the South African real estate industry to become more focused on green building investment. The study found that the size of the real estate fund plays a significant role in whether or not real estate funds focus on green building investment as a strategic focus. The role and relationship with tenants furthermore adds to how important real estate fund view green building investment and finally the influence of regulation and the involvement of government, among other factors, plays a significant role in what the future will be holding for green building investment.