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Certified office and retail properties outperformed peers, proving the long-term value of sustainable real estate
July 10, 2025 | Staff Reporter | Africa | Facilities Management
The MSCI South Africa Green Annual Property Index for 2024 continued to reinforce the investment rationale for sustainable, resource-efficient real estate. Published annually since 2016 in collaboration with the Green Building Council of South Africa (GBCSA) and sponsored by Growthpoint Properties, the index offers an independent and globally aligned assessment of how green-certified properties compare to their non-certified counterparts in terms of investment performance.
For 2024, the index showed that green-certified Prime & A-grade offices produced a total return of 10.1% which was 120bps above that of non-certified office assets of a similar quality during the year. Since the index’s launch in 2016, green-certified offices have outperformed non-certified assets by a cumulative 28.2%, delivering superior capital growth and operational resilience. This outperformance was driven by a higher capital growth on the back of a 34% higher gross income per square meter, a significantly lower operating cost to income ratio (39% vs 46%) and a 30bp lower capitalisation rate.
The 2024 MSCI South Africa Green Annual Property Index reaffirms the investment edge of green-certified commercial real estate. The long-term outperformance of green-certified offices signals growing occupier and investor preference for sustainable, resource-efficient real estate and reinforces the strategic competitiveness of portfolios with a strong green building footprint.
Timothy Irvine, Head of Asset Management: Offices at Growthpoint
Timothy Irvine, Head of Asset Management: Offices at Growthpoint, said, “The 2024 MSCI South Africa Green Annual Property Index reaffirms the investment edge of green-certified commercial real estate. The long-term outperformance of green-certified offices signals growing occupier and investor preference for sustainable, resource-efficient real estate and reinforces the strategic competitiveness of portfolios with a strong green building footprint.”
Long-Term Outperformance
Published in April 2025, the 2024 index covered a sample of 242 prime and A-grade office properties with a combined value of R54.7bn, including 122 green-certified buildings. Reflecting the growing momentum of green certification beyond the office sector, the index also captured the performance of 33 green-certified retail properties.
For green-certified retail property, the outperformance was similar in 2024. Green certified retail property delivered a total return of 13.2%, 130bps higher than that of non-certified retail with the outperformance driven by an 80bp lower capitalisation rate and a 18% higher net operating income per square meter. Similar to the green office sample, certified retail properties also boasted a lower cost-to-income ratio of 41% compared to the 44% of its non-certified peers.
Green-certified offices also had a lower discount rate, driven in part by a lower vacancy rate (11.1% vs 14.8% for non-green certified prime and A-grade offices) – reinforcing the premium placed on green office accommodation by occupiers and valuers alike.
Since the index’s inception in 2016, prime and A-grade green-certified offices have consistently delivered stronger capital growth than non-certified office properties each year, underscoring the resilience and value proposition of sustainable buildings. Green-certified office assets have outperformed their-noncertified counterparts by a cumulative 28.2%.
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