Green Premium Accelerates as Investors Pay More for Certified Buildings

The phrase “green premium” used to sound like marketing. Today it is increasingly treated like pricing logic. Across major markets, buyers and tenants are rewarding buildings that can prove lower operating costs, better indoor comfort, stronger resilience to heat and flooding, and credible carbon reporting. Certified assets are not only leasing faster in many Grade A segments, they are also being underwritten with tighter exit assumptions because investors believe the future buyer pool will be wider and more liquid. That shift matters in Southeast Asia because the region is still building at scale, meaning developers and asset managers can capture the premium early by designing, certifying, and operating buildings that meet the new definition of “institutional quality.”

Asia-Pacific investors themselves are describing this premium directly. CBRE’s Asia Pacific Investor Intentions Survey notes that investors continue to place a higher green premium on ESG-certified assets and rank green acquisition and development as a top priority. CBRE The implication is simple. Capital is becoming more selective, and sustainability is moving from optional positioning to a factor that can influence pricing, leasing velocity, and financing terms.

The evidence is becoming harder to ignore

In mature markets, the relationship between certification and pricing has been measured for years. What is changing is that the evidence is now being used as an underwriting input by mainstream capital rather than as a specialist ESG add-on. In the US office market, CBRE has published analysis showing LEED-certified offices achieving an average annual rent premium relative to comparable non-LEED buildings, reinforcing that certification can translate into higher income rather than merely reputational value. CBRE On the transaction side, Cushman and Wakefield research referenced by the U.S. Green Building Council found LEED-certified Class A urban office sales generating a meaningful price per square foot premium over noncertified buildings.

At the global narrative level, the World Green Building Council has also compiled evidence indicating that premium certified buildings can achieve rental premiums in some markets, especially where demand is concentrated among corporates with sustainability targets and where green supply is limited. These are not perfect apples-to-apples comparisons across geographies, but together they show a consistent direction of travel. When buildings can prove performance and certification in a way investors trust, many markets show faster tenant absorption and stronger pricing.

The point is not that every certified building automatically becomes more valuable. The premium tends to appear most strongly when certification is paired with genuinely better building performance, strong location fundamentals, and high-quality management. A certificate without operational discipline often disappoints. But a high-performing certified building in a market experiencing a flight to quality can become the short-list choice, and short-list dynamics are where rent premiums and faster leasing are born.

Why certification now influences leasing speed

Leasing speed is often the first place the green premium shows up because occupiers make decisions on operational costs, employee experience, and brand risk in real time. As corporate sustainability reporting becomes more standardized, building choice becomes part of a company’s own disclosures. Tenants are increasingly asking for proof of energy performance, indoor environmental quality, and practical features such as metering, smart controls, and efficient cooling. RICS’ Sustainability Report 2025, based on insight from over 3,500 real estate and construction professionals, reflects how sustainability is shaping market practice and tenant expectations.

In Kuala Lumpur, this dynamic is visible in the way Grade A office stock has evolved. JLL reports that the proportion of green certified Grade A office stock in Kuala Lumpur rose significantly over five years, and points to multinational corporates as key drivers of the flight toward green space as they try to meet climate targets. JLL This matters because it shows demand-side pressure even in a market without universal mandates. When multinational tenants become anchor occupiers, their procurement standards spread through the market, influencing what local firms consider “premium space,” which in turn shapes leasing velocity.

Faster leasing also links to comfort and productivity, not just cost. In hot and humid climates, indoor environmental quality and cooling efficiency are central to user experience. Buildings that can keep temperatures stable, reduce humidity issues, and maintain fresh air rates without excessive energy use often outperform in tenant satisfaction and renewal behavior. In that context, certification becomes a proxy for higher baseline standards, especially when paired with building data that proves performance.

The sale-price premium is partly an exit-liquidity story

The pricing premium observed in some transaction datasets is not only about income today, it is about confidence in the future buyer pool. Investors are increasingly concerned that older buildings with weak energy performance may face higher capex, slower leasing, and value erosion as standards tighten. That risk is sometimes called “stranding,” meaning the asset becomes harder to lease, finance, or sell without heavy upgrades. RICS has highlighted concerns about progress in carbon measurement and the potential for market momentum to stall without stronger policy and skills, but the underlying message is still that sustainability performance is becoming an unavoidable part of asset risk management. 

This is why certified assets can trade with more confidence even when markets are uncertain. Buyers can underwrite a clearer pathway to compliance, tenant demand, and financing eligibility. Sellers can present a stronger narrative to investment committees. Lenders can justify better terms when energy performance and reporting reduce risk. Over time, this becomes a feedback loop: better assets attract better tenants and better financing, which supports stronger values, which encourages more capital to chase the category.

There is also a practical operating-cost element. GRESB has referenced research indicating that high performance buildings can have meaningfully reduced operating expenses compared with legacy stock, and links green performance with higher asset values, rental premiums, and occupancy rates. Lower operating costs widen net operating income margins, which can translate directly into value when cap rates are tight. Even in markets where tenants do not pay meaningfully higher headline rents, owners may still win through lower energy costs, reduced maintenance volatility, and better retention.

The Malaysia and regional angle: heat, humidity, and energy bills change the math

Malaysia and neighboring markets sit in a climate zone where cooling is not optional and energy costs are a major line item. That makes energy efficiency and smart building controls especially valuable. Buildings that reduce cooling load through better envelopes, shading, efficient chillers, and advanced controls can produce measurable savings. Where service charges and energy bills have been rising, the ability to keep operating costs stable becomes a competitive advantage.

The local certification ecosystem also matters. Malaysia has frameworks designed for tropical conditions, and this local fit influences whether certification translates into real performance. The Green Building Index explains that GBI is designed specifically for Malaysia’s hot and humid tropical climate and local infrastructure context, which is important because performance needs to match climate reality rather than imported assumptions. In practical terms, that supports confidence that a “green” label can align with occupant comfort and real energy outcomes, which is what occupiers and investors ultimately care about.

The market is also building the capability layer around certification. GreenRE’s updates show ongoing development of tools and a growing professional ecosystem, including accredited professionals and energy certification initiatives for existing buildings.This matters because the premium strengthens when certification is not just a one-time development milestone but part of an operational practice that continues through the life of the building.

What the green premium looks like in numbers

The precise premium varies by asset type, location, supply-demand balance, and whether the building is truly high performance. However, several widely cited studies provide useful reference ranges that help anchor underwriting discussions, even when local market datasets are still maturing.

Below is a practical summary of commonly referenced evidence points. These are not guarantees, but they are directionally useful for developers and asset managers planning product and capex decisions.

Evidence snapshot	What it suggests	Source
LEED-certified offices showed an average annual rent premium versus comparable non-LEED buildings in a large US sample	Certification often correlates with higher effective rents in flight-to-quality conditions	CBRE
LEED-certified Class A urban office sales showed a price per square foot premium over noncertified buildings (Cushman and Wakefield research cited by USGBC)	Certified assets can trade at higher values where investor demand is strong	U.S. Green Building Council
Premium certified buildings have been seen to command rental premiums in some markets (compiled evidence)	The premium appears in multiple markets, especially when supply is constrained	World Green Building Council
High performance buildings linked to reduced operating expenses and higher asset values and occupancy	Operating performance can lift NOI and reduce vacancy risk	GRESB
Kuala Lumpur green certified Grade A office stock share rose sharply over five years, driven by multinational demand	Local demand-side pressure exists even without universal mandates	JLL

In Southeast Asia, the premium often shows up first in Grade A office leasing, prime mixed-use assets with corporate tenants, and increasingly in industrial and logistics where global supply chains and ESG reporting are influential. Residential is evolving too, especially where buyers value lower maintenance costs and heat resilience, but pricing signals can be noisier in owner-occupier markets. Over time, as energy disclosure becomes more common and buyers compare operating costs more transparently, residential premiums can strengthen.

How developers actually capture the premium

Capturing the premium is not primarily about adding more “green features” at the end of the project. It is about design discipline, measurement, and operations. The winning pattern is usually consistent.

First, design must target performance from the start, because retrofitting performance into a finished design is expensive. This includes passive measures such as orientation, shading, glazing strategy, natural ventilation where feasible, and envelope performance suited to humidity. It also includes mechanical and electrical systems designed around real occupancy patterns and local grid realities.

Second, certification strategy should match the target tenant and buyer pool. For multinational corporate tenants, internationally recognized certification can be a procurement requirement. For local markets, a strong national certification designed for the climate can provide credibility and practical relevance. The correct approach often blends both, with careful control of capex so the project does not overbuild relative to achievable rents.

Third, and most importantly, the building must be run as a performance asset. That means metering, continuous commissioning, fault detection, and clear reporting to tenants and investors. Buildings that claim sustainability but cannot prove energy and water outcomes often lose trust quickly. This is where technology moves from optional proptech to a value-protection tool.

Below is a practical developer and asset manager playbook that aligns with what investors increasingly look for, especially in the region’s Grade A segments.

Developer action	Why it supports value	What to measure
Build performance into the design brief and cost plan early	Avoids expensive late-stage fixes and protects comfort outcomes	Modeled EUI, cooling load, envelope performance
Choose certification aligned with tenant and investor expectations	Strengthens leasing confidence and investment committee approval	Target certification level and evidence pack
Implement metering and a building energy dashboard from day one	Enables proof of performance and faster issue resolution	EUI trend, peak demand, tenant sub-metering coverage
Treat indoor environmental quality as a leasing product	Supports retention and tenant satisfaction, not just ESG optics	Temperature stability, humidity control, fresh air rates
Plan brown-to-green pathways for older assets	Converts risk into capex-driven upside and preserves liquidity	Retrofit ROI, payback period, post-retrofit performance

The key is that the premium is earned through outcomes, not slogans. Investors and tenants increasingly respond to assets that can demonstrate performance and provide transparent data that reduces uncertainty.

Where Malaysia and the region can move fastest

Malaysia and Southeast Asia have a practical advantage. New supply is still being built, which allows performance standards to be embedded at development stage rather than retrofitted later. Markets with older building stock face harder economics because deep retrofit can be disruptive and costly. In contrast, Southeast Asian developers can leapfrog by designing modern, efficient, data-enabled buildings aligned with global procurement and finance expectations.

Kuala Lumpur’s example shows how quickly green stock can become a large part of the Grade A category when tenant demand and developer response align. JLL The next stage is likely to be deeper operational transparency, where energy performance is not just predicted but regularly reported. As that becomes normal, buyers and tenants will increasingly compare assets based on evidence. That is where the premium strengthens, because the best buildings become obvious.

There is also a financing dimension. Green buildings are increasingly linked to sustainability-linked loans and green financing narratives, which can support capital structure decisions. Even when the rent premium is modest, a combination of lower operating costs, better occupancy, and better financing can lift returns. In a higher-rate environment, anything that stabilizes cash flow and protects exit options becomes more valuable.

What this means for Mymland

For Mymland, the green premium story is not just a global headline, it is a product and positioning opportunity. Developments that can credibly deliver certification aligned with tropical performance, measurable operating outcomes, and tenant-ready reporting are more likely to lease faster, attract stronger partners, and defend value through market cycles. The regional direction is clear: capital is increasingly selective, tenants are increasingly evidence-driven, and buildings that can prove sustainability performance are moving closer to the definition of “prime.” The fastest advantage comes from treating sustainability as a design and operations system, not as a branding layer.