Green-certified office space delivers a total return of 10.1% during 2024, retail 13.2%

Green certified Prime and A-grade offices produced a total return of 10.1% during 2024, 120 basis points above non-certified office space of a similar quality according to the latest MSCI South Africa Green Annual Property Index.
Since the index’s launch in 2016, green-certified offices have outperformed non-certified assets by a cumulative 28.2%, delivering on capital growth and operational resilience.
“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,” commented Timothy Irvine, Head of Asset Management: Offices at Growthpoint Properties.
The 2024 index covered a sample of 242 prime and A-grade office space with a combined value of R54.7 billion including 122 green-certified buildings, also capturing the performance of 33 green-certified retail properties.
“The index has shown over several years that green-certified offices typically have better investment returns than non-certified offices. This year’s expansion to include the retail sector is exciting for us and reflects our commitment to supporting the drive for green across all building typologies. Through this expansion, we’re looking forward to tracking these results, and bringing new insights to market,” said Georgina Smit, Head of Technical, GBCSA.
The outperformance of green-certified Prime and A-grade offices was driven by a higher capital growth on the back of a 34% higher gross income per square metre, a significantly lower operating cost-to-income ratio (39% versus 46%) and a lower 30 basis point lower capitalisation rate.
For green certified retail assets, the outperformance was similar with a total return of 13.2%, 130 basis points higher than that of non-certified retail, driven by an 80-basis point lower capitalisation rate and an 18% higher net operating income (NOI) per square metre. Similar to the green office sample, certified retail properties boasted a lower cost-to-income ratio of 31% compared to the 44% of non-certified retail assets.
“After nine years of consistent outperformance both on valuations and income, there can be no doubt about the fact that certified properties deliver higher returns to investors. The next step in this journey is to show that certified properties better mitigate Climate Risk and MSCI is well equipped to do that,” noted Eileen Andrew from MSCI.