Abstract

Sustainability represents an innovative component of profitability for real estate finance, and among other instruments, real estate funds include a “green” component represented by certified buildings.

In particular, the adopted selection criteria refer to the two European most widespread certifications: LEED and BREEAM.

The objective is to demonstrate the degree of correlation between the adoption of implemented sustainable policies and financial performance. For this purpose Fama-French Five Factor Model has been applied.

This work is oriented in validating the hypothesis, which states that sustainable and environmentally friendly components positively affect the performances of investment portfolios, focusing on the European property management industry. Therefore, this paper has the ambitious aim of filling  the gap in current literature on REITs mainly focused on the US market.

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