What is the value of green building features? An empirical analysis of green building development in Jakarta, Indonesia

Abstract

Purpose

This study aims to examine the influence of green feature adoption on building value within Jakarta, Indonesia’s market. It assesses the presence of green premiums or brown discounts through a supply-demand analysis, evaluates their impact on building values, and identifies factors influencing green features’ value reflection and development.

Design/methodology/approach

This study employs a qualitative approach to investigate the green feature reflection on building value in Jakarta, Indonesia. Data is gathered through questionnaires and semi-structured interviews with appraisers, the GBCI, and developers.

Findings

The study’s findings reveal a positive acceptance of green buildings in Jakarta’s market, with most appraisers recognising a higher perceived value in these sustainable structures. Factors contributing to this higher value perception encompass green building certifications, reduced operational costs, and increased appeal to potential tenants. Conversely, hindering factors include a lack of law enforcement and limited availability of market data.

Practical implications

The study highlights practical considerations for construction and real estate stakeholders on the factors influencing green building development. Supporting factors for green building development include sustainability training, compliance with green building standards, and incentives. Conversely, obstacles encompass enforcement challenges, stakeholder expertise deficits, and resistance to change.

Originality/value

This study is the first in Indonesia, magnifying its significance and potential impact. It pioneers exploring green building features’ influence on building value in Jakarta, presenting a unique contribution to the existing literature. This originality emphasises the imperative for sustainable development in the region and sets the stage for future research and policy initiatives.

Citation

Sidig, D.S., Ratri, C.W. and Wibowo, A. (2024), "What is the value of green building features? An empirical analysis of green building development in Jakarta, Indonesia", Journal of Property Investment & Finance, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/JPIF-10-2023-0089