RICS Draft Guidance Note: Sustainability and ESG in commercial property valuation and strategic advice, 3rd edition

Sustainability and ESG in commercial property valuation and strategic advice 3rd ed

8 Comparables and evidence

The ability to distinguish the relative sustainable performance of comparables may be possible in some cases (such as energy efficiency and carbon emissions) but may be far less apparent in others. There may not be the evidence to empirically support differential values based on the full range of sustainability criteria and characteristics. There can also be extensive geographical and market variances.

Due to the period in which they were built, existing stock may not meet current sustainability standards. This might, for example, affect the weighting given to the analysis of comparable evidence. Depending on the instruction and valuation purpose, valuers may take a view, if necessary supported by additional investigations by a specialist, as to the likely ability to bring an asset up to modern standards at a cost that is economic, subject to constraints around competence included in section 10.2 of this guidance.

Valuers should also consider any special considerations that might apply in the case of a historic properties to which extra regulatory requirements or physical constraints might apply.

Valuers should consider the participants and stakeholders that influence a property's market. Appropriate macroeconomic indicators and other indirect evidence beyond transactions can be used to support a valuer's judgement accordingly.