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Title: An exploration of building energy performance and financial value with demonstration on UK offices
Author: Parkinson, Aidan
ISNI:       0000 0004 5989 0706
Awarding Body: University of Cambridge
Current Institution: University of Cambridge
Date of Award: 2016
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This research explores the relationship between expectations of building energy performance and financial value. The context of the United Kingdom was selected as a leading case, being a significantly large economy to enact legislation that commits the government to delivering ambitious emission reductions to mitigate climate change impacts. Taking a constructivist-pragmatist approach, this research triangulates the contribution of building energy performance to financial value. The UK has recently introduced the Energy Performance Certificate (EPC) as a signal of building energy performance. An initial investigation set out to evaluate the validity of EPCs as signals of occupier satisfaction with office facilities; and to understand whether occupant attitudes towards environmental issues have affected commercial office rental values. This was achieved by surveying occupant satisfaction with their workplaces using a novel multi-item rating scale which gathered 204 responses. Responses to this satisfaction scale were matched with the corresponding EPC and rental value of occupiers’ workplaces. The satisfaction scale was found to be both a reliable and valid measure. The analysis found that EPC asset rating correlates significantly with occupant satisfaction with all facility attributes. Therefore, EPC ratings may be considered valid signals of overall facility satisfaction within the survey sample. Rental value was found to correlate significantly only with facility aesthetics. A further study explores the relationship between plausible future change to the UK energy system and climate, and the financial value of real estate. A scalable explorative scenarios approach is developed to calculate value at risk to UK property from energy performance. This involves a novel approach to testing UK energy system futures through an exploratory analysis of 2050 end-states and demonstration on a diverse selection of typological cases inspired by real life contemporary buildings. In doing so, the significance of systematic risks to building energy performance can be quantified. If adopted, appropriate corrections could be made to financial assessments of energy performance to consider an environment where the social cost of greenhouse gas emissions are internalised. There is disparity in that the theoretical causal relationships between financial value and energy performance are not reflected by market premiums for EPCs in UK office markets. This research addresses this through making internally consistent comparisons between financial evaluations of energy performance and asset ratings developed using the National Calculation Methodology (NCM), statutory practice for deriving EPCs in the UK. Based upon the evidence provided by six case studies, a relationship between NCM and financial evaluations of energy performance is unclear.
Supervisor: Not available Sponsor: Not available
Qualification Name: Thesis (Ph.D.) Qualification Level: Doctoral