Floris Blok (PhD candidate at the Department of Land Economy), and Professor Franz Fuerst (Professor of Real Estate and Urban Economics at the Department of Land Economy) have contributed to a report entitled 'Rent capitalisation patterns of extreme weather hazards – Evidence from Switzerland'
The report was a collaboration between the University of Cambridge, Wuest Partners, and Swiss Life Asset Managers.
Professor Fuerst said:
"As large parts of Europe, the US south-west and other parts of this planet are in the grip of extreme heatwaves and wildfires, the need for a two-pronged strategy, mitigation and adaptation, once again becomes painfully clear. Our study of the Swiss rental housing market is perhaps the first to directly compare the magnitudes of green rental premiums to natural hazard discounts in the same set of properties. Although far from being sufficient or efficient, it looks like markets are starting to provide the right kind of (dis-)incentives to pursue both parts of this vital strategy."
The report is the first in a new series entitled 'Thematic ESG Research', from Swiss Life Asset Managers.
They said of the report,
"Around 18 000 anonymised data points on net residential rents in Switzerland were analysed. Both increased natural hazard risk and the energy efficiency certification of buildings have an impact on the rental prices of residential real estate. The study focused on the impact of ten natural hazards, including floods, mudflows, landslides, rockfalls, avalanches, hail, storms and heat on rental prices. It also examined the impact of Minergie© ratings on rents."
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