Green retail delivers top Q1 investment return

Wednesday, May 25, 2016

Properties with BOMA BEST or LEED ratings collectively outperformed their uncertified peers in the REALpac/IPD Canada property index during the first quarter of 2016. Recently released REALpac/IPD green index results show a total investment return of 8.5 per cent, versus an 8 per cent total return for the entire index of directly held real estate.

Assets analyzed as part of the green index are collectively worth about $67.6 billion, or almost half of overall index value, but account for only 22 per cent of individual properties. Retail is a pre-eminent contributor with 94 BOMA BEST certified properties representing 22.7 per cent of total index value — perhaps reflecting the weighting of super-regional malls.

BOMA BEST certified retail assets were top performers among all analyzed property types, registering a 10.1 per cent total return. Uniquely, capital growth at 5.3 per cent represented the greater portion of that total, while other property types reported higher income returns.

LEED certified properties also surpassed the green index average, delivering a total return of 9.1 per cent. Numerically, they make up a small fraction of just 20 properties or 0.8 per cent of the entire index, but represent about 2.4 per cent of its value.

Among the much greater mass of BOMA BEST certified green index participants, office and industrial properties both fell short of the average. The total return on office properties was 6.8 per cent, breaking down to 5.5 per cent income return and 1.2 per cent capital growth. Green industrial properties make the smallest dent at 83 properties equating to 1.2 per cent of the total index value and delivering a total return of 6.6 per cent.

Leave a Reply

Your email address will not be published. Required fields are marked *

In our efforts to deter spam comments, please type in the missing part of this simple calculation: *Time limit exceeded. Please complete the captcha once again.