Green offices beat traditional buildings by 28% over 10 years

• Green-certified offices outperformed comparable buildings by a cumulative 28.2% over the past decade, confirms the MSCI Green Property Index.
• Higher rental income, lower vacancies and stronger operational efficiency continue driving superior long-term investment performance.
• The evidence is shifting green buildings from a sustainability choice to a mainstream investment strategy.

A Decade of proof: Green Buildings deliver better investment returns

After ten years of independent measurement, South Africa's green-certified office buildings have moved beyond environmental credentials to establish themselves as superior long-term investment assets.

The 2025 MSCI Green Annual Property Index confirms that green-certified Prime- and A-grade office buildings have outperformed comparable non-certified offices by a cumulative 28.2% over the past decade, reinforcing the growing business case for sustainable real estate.

Published annually since 2016 by MSCI in collaboration with the Green Building Council South Africa (GBCSA) and sponsored by Growthpoint Properties, the index provides one of the country's most comprehensive and globally aligned assessments of how certified green buildings perform against conventional commercial property.

Based on performance to December 2025, the report concludes that sustainability is no longer simply an environmental objective—it has become a measurable driver of income growth, operational efficiency and long-term asset value.

Ten years of outperformance

The latest index shows green-certified Prime- and A-grade office buildings generated an annualised total return of 6.98% over the past decade compared with 5.26% for non-certified office assets.

That 172-basis-point annual advantage has steadily compounded over time to produce an overall return premium of 28.2%. Importantly, the research spans an entire commercial property cycle, including periods of economic expansion, the COVID-19 pandemic, market disruption and subsequent recovery.

Rather than reflecting short-term market conditions, the findings suggest that green-certified buildings continue to benefit from structural advantages that increasingly influence investor and tenant behaviour.

Higher income, lower costs and fewer vacancies‍

While conventional offices recorded slightly stronger returns during 2025 alone, largely due to rental recoveries from a weaker base, the long-term fundamentals remain firmly in favour of green-certified buildings.

According to the index:

• Green-certified offices generated 34% higher gross income per square metre than comparable non-certified buildings.
• Operating costs consumed only 41% of income, compared with 48% for traditional offices.
• Vacancy levels averaged 10.3%, well below the 13.1% recorded by non-certified assets.

These operational advantages continue translating into stronger profitability and more resilient income streams.

Monthly net operating income reached R152 per square metre for green-certified offices compared with R102 per square metre for conventional buildings.

Asset values also reflected stronger investor confidence.

Green-certified offices achieved average valuations of R21,251 per square metre, substantially ahead of the R14,510 per square metre achieved by non-certified properties.

Lower capitalisation rates further indicate that investors continue placing a premium on buildings capable of delivering consistent, sustainable income.

Why Green Buildings continue winning‍

According to Eileen Andrew, Vice President: Client Coverage at MSCI South Africa, the real value of the index lies in measuring performance across an extended period rather than focusing on individual years.

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"One year of performance never tells the full story. What makes the MSCI Green Annual Property Index particularly valuable is that it now provides a decade of consistent local evidence."

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She says the long-term data consistently demonstrates that green-certified offices benefit from:

• Stronger income generation;
• Lower vacancy levels;
• Greater operational efficiency; and
• Superior long-term investment returns.

Andrew adds that these characteristics are becoming increasingly important as investors seek assets capable of delivering resilient performance throughout changing market conditions.

Certification creates confidence‍

For Georgina Smit, CEO of the Green Building Council South Africa, the latest findings reflect the growing maturity of South Africa's sustainable property sector.

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"Certification provides a credible, independent framework for measuring and communicating building performance."

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She says the index has created an increasingly valuable local evidence base demonstrating that sustainable building practices deliver measurable financial benefits for owners, investors and occupiers alike.

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"We have local primary data that shows green building certification does not have to be a cost, it can actually be a competitive advantage. We need to spread the message of green and get every building in South Africa on a sustainability journey."

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Growthpoint: Sustainability is now a business strategy‍

As one of South Africa's largest owners of green-certified commercial property, Growthpoint Properties continues expanding its portfolio of certified assets as part of its broader environmental, social and governance (ESG) strategy.

According to Timothy Irvine, Head of Asset Management: Offices at Growthpoint Properties, the latest index demonstrates the growing alignment between occupier expectations, sustainability objectives and financial performance.

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"The MSCI Green Annual Property Index continues to demonstrate that sustainable buildings are not only delivering environmental benefits but also creating measurable value for occupiers and investors."

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He says increasing demand for efficient, resilient and healthier workplaces continues supporting long-term portfolio performance while strengthening the investment case for certified buildings.

Retail sector also showing momentum

The 2025 report also tracked 33 green-certified retail properties, which outperformed comparable non-certified retail assets during the year.

Although the retail dataset remains smaller than the office sector, MSCI believes the results indicate that many of the financial advantages associated with certification are now beginning to emerge across multiple commercial property sectors.

The future of commercial property is green

Ten years ago, the commercial property industry debated whether green buildings justified their additional investment.

Today, the evidence tells a very different story. Higher rental income, lower vacancies, stronger operational efficiency, reduced running costs and superior long-term returns have transformed green certification from an environmental aspiration into a proven investment strategy.

As institutional investors, landlords and occupiers increasingly prioritise resilient, future-ready assets, the 2025 MSCI Green Annual Property Index provides compelling evidence that sustainable buildings are not only better for the environment, they are increasingly delivering stronger financial performance as well.

For investors, the message is becoming increasingly clear: green buildings are no longer the future of commercial property, they are rapidly becoming its benchmark.

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