Indemnity
This manual and the support tools shall be used at the user’s own responsibility.
Japan Sustainable Building Consortium and the Institute for Building Environment and Energy
Conservation bear no responsibility for the assessment results of this manual and the support tools
and for any damages caused by their use.

c 2009 Japan Sustainable Building Consortium (JSBC)
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CASBEE Property Appraisal Manual

1(2009 Edition)

Content
Terminology ................................................................................................................................. 2

Preface Assessing environmental considerations for property based on CASBEE ..3
CASBEE Property Appraisal Manual (2009 Edition) .....................................................5
1.Reasons for developing this manual (Domestic trend on property appraisal) .......................... 5
1.1.
1.2.

Proliferation of CASBEE and diversified use ............................................................................ 5
Move toward considering environmental added values in the Japanese property appraisal
industry ................................................................................................................................... 16

2.Concept of manual.................................................................................................................. 19
2.1.
2.2.
2.3.

General description ................................................................................................................. 19
Significance and purpose of CASBEE and property appraisal............................................... 19
Associating CASBEE with property appraisal ........................................................................ 20

3.Relations with property appraisal, etc. .................................................................................... 22
3.1.
3.2.

Similarity between CASBEE and property appraisal .............................................................. 22
Studying image of determining pricing factors from CASBEE assessment items .................. 23

4.Explanation of major items in this manual .............................................................................. 25
4.1.
4.2.
4.3.
4.4.
4.5.

Assessment procedure ........................................................................................................... 25
CASBEE assessment items and pricing factor determination ................................................ 25
Value indicated by the income approach (Direct capitalization method) ................................ 27
Sales comparison approach ................................................................................................... 28
How to use the support tool .................................................................................................... 29

5.Case studies based on this manual ........................................................................................ 33
5.1.
5.2.
5.3.
5.4.
5.5.

General description of the model case ................................................................................... 33
Assessment conditions for the model case ............................................................................ 33
Relationship between the most effective usage of property in view of the environment and theplanned usage........................................................................................................................ 37
Analyzing environmental added value factors by CASBEE and applying methods of thesurveyed value ....................................................................................................................... 37
Adjusting estimated values and determining the surveyed value........................................... 48

6.Conclusion: Issues surrounding property appraisal in the low-carbon era ............................. 49

References...................................................................................................................... 51
1.Objective surveys and subjective surveys on property markets ............................................. 51
1.1.
1.2.

Results of opinion surveys on the environment among investors and tenants ...................... 51
Impact of environmental performances on property rent ........................................................ 57

c 2009 Japan Sustainable Building Consortium (JSBC)
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CASBEE Property Appraisal Manual(2009 Edition)

Terminology
Terminology on property appraisal in this manual
CASBEE or Comprehensive Assessment System for Built Environment Efficiency, as its name indicates, is asystem designed to assess environment efficiency as well as buildings. Properties are generally defined as“land and improvements on the land,” meaning buildings and structures combined with the land.
Therefore, it should be noted that this Property Appraisal Manual applies not only to buildings but also to thesites of the buildings.
The type of “property appraisal” varies from assessments performed by qualified people “licensed real estateappraisers to those performed broadly and generally. The use of such words as “prices” and “values” used inassessment also varies.
In explaining the pricing theory, it is important to use commonly-used expressions for such unfamiliar words as“net income” and “capitalization rate” in order to make their meanings more understandable.
For these reasons, these words are defined and used as follows in this manual:
Property
Real estate appraisal
Price investigation
report by real estateappraisers
Property appraisal
Price
Value
Net income
Capitalization rate
Direct capitalization
methodDCF method

Discount rate

Land and improvements on the land (as defined in Article 86.1 in the Civil Code)Price assessment by licensed real estate appraisers based on the real estate appraisal
standards
Price assessment by licensed real estate appraisers based on specific assessment purposes
including those not based on the property appraisal standards
Value assessment of real estate including the “real estate appraisal” and “price investigation
report by licensed real estate appraisers” as well as those voluntarily performed by people
involved in real estate business for investment and other purposes.
Economic value expressed by monetary value
Broad concept including economic value, other specifications and levels, etc.
Proper income from a property. Net income calculated by deducting maintenance costs,
utility costs, taxes and property insurance costs, etc. from the total revenue such as rent, etc.
A rate used in directly calculating the value of the property based on the net income of acertain period (normally 1 year). It includes changes in predictions on factors that affect the
future revenues and uncertainty (risks) accruing from the predictions.
A method of calculating the value of a property by dividing the net income of a certain period(normally 1 year) by the capitalization rate. The risk of change in net income must be
considered through the capitalization rate. For this reason, for properties with the sameamount of expected net income, the rate is higher(lower) for a property with high(low) risk of
the change and, as a result, the value tends to be lower (higher).
Discounted Cash Flow Analysis. A method of tallying both present values of the net operating
income of a property during the holding period and the reversionary value (as calculated bydeducting the sales costs from the expected sales value) of the property at the end of theholding period based on the assumption that the property is held for a certain period of time(for example, 10 years).
A rate used in the DCF method to discount the future net income or the future reversionary
value to the current value. As changes in the net income during the assumed holding period
are reflected in the predictions of the net income, it is necessary to consider the other risks ofchanges in the net income and reversionary value.

The environmental performance assessment by CASBEE is designed as a tool to appropriately assess theasset values of buildings rather than the prices of sites, which weigh heavier in the property appraisal. In thissense, the assessment by CASBEE can be described as the “building asset value assessment.” It is also
important to note that CASBEE deals broadly with the assessment of both the environment of buildings and theenvironment of sites. In this sense, the assessment targets are the same as the property appraisal. However,
CASBEE deals with the environment within a site rather than the price of a site.
The words “property appraisal,” meanwhile, are used not only for real estate appraisal but also for voluntary
assessment by the broad range of people involved in property business. For this reason, the discussion on the
CASBEE- Property Appraisal deals mainly with the property appraisal based on the broad definition of “asset
values of buildings + the environment of the sites,” which could be easily understood by a wide range of people
involved in property and construction businesses.

c 2009 Japan Sustainable Building Consortium (JSBC)
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CASBEE Property Appraisal Manual3(2009 Edition)

Preface Assessing environmental considerations for property based on
CASBEEThe development of a low-carbon society has become one of the biggest challenges facing humankind in orderto achieve green societies. The building industry needs to accept responsibility for its discharge of hugeamounts of CO2. The increase in demand for low-carbon measures will lead to a reduction in the assessment
results of properties with poor low-carbon measures, and give rise to a new environmental risk for properties.
In recent years, environmental performance assessment tools for buildings such as CASBEE and LEED, etc.
have been used in building markets around the world for DfE, design for environment, communications between
clients and designers and for construction-related authorities to promote green buildings and to visualize
building specifications. However, little progress has been made in using the tools to assess the environmental
aspects of the property values.
Under such circumstances, the CASBEE R&D Committee has launched a subcommittee called “Working Group
for CASBEE and Property Appraisal” in order to develop a tool to objectively and transparently assess theimpact of DfE on property values. The subcommittee came up with a framework to incorporate the impact of
DfE on property values into the existing CASBEE. This manual describes the subcommittee’s result.
The property industry in the United States and Europe in recent years has been pointing at the vicious cycle ofstakeholders trying to avoid their responsibilities as a major reason for delays in constructing green buildings asshown in Fig. 1. One of the major reasons for triggering such a vicious cycle is the lack of a system for sharing
information on environmental considerations for properties provided by the people concerned and improved
added values such information brings. The most important mechanism for turning the vicious cycle into a
positive cycle as shown in Fig. 2 is to assess the environmental specifications of buildings and visualize andshare among the people concerned a mechanism for enhancing added values to be brought about by the DfE.
The new appraisal framework has been developed for such purposes and is the first of its kind in the world. Thismanual identifies the similarity in concept between the environmental performance by CASBEE (environmental
quality of the building / environmental load of the building) and the calculation of value indicated by the income
approach of property (net income of the property / capitalization rate of the property) based on the direct
capitalization method, and also identifies which CASBEE appraisal items are specifically associated with theproperty appraisal. While the tool is still incomplete and requires improvement, it is innovative in structurally
analyzing environmental aspects of the property appraisal.

Owners/Users
所有者・利用者
Only few green buildings available
in環境配慮建築を選びたいがspite of their willingness to choose

選択できる建物数が少ない

Shift of responsibilities among stakeholders
due to the lack of relevant information

Investors/Developers
Little demand for green buildingsin spite of their willingness to invest in

Designers/Builders
設計者・施工者

Few commissions for green buildingsin spite of their capabilities
環境配慮建築を作ることはできるが発注が少ないFig.1 Vicious spiral in the construction market:
State of shifting the responsibility*Referencec 2009 Japan Sustainable Building Consortium (JSBC)
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CASBEE Property Appraisal Manual(2009 Edition)

Owners/Users
Select green buildingsin the hope of operation costs reduction,enhancement of productivity andcorporate image, etc.

Sharing information on green buildings
through “CASBEE for Property Appraisal”

Investors/Developers

Designers/Builders

Invest in green buildingsin the hope of increase of demand,
Capitalization rate and values

Contribute to increasing demand
for green buildings through enhancing
the quality and reducing the priceFig.2 Onward spiral towards market transformation
In developing a low-carbon society in the future, the building industry must undergo dramatic changes because
it currently produces a huge amount of CO2. Most conventional efforts for energy saving and CO2 reduction in
the industry have mainly targeted the designing and construction industries and users. However, efforts that
ignore the real estate industry, which consists of industrial groups such as finances and developers who arelocated on the upper stream of the building industry, have only limited ripple effects. This is because, in manycases, the real estate industry as orderers are deeply involved in determining the design specifications, in otherwords, the quality of the buildings. It is strongly hoped that the development of the tool will increase interest
among the real estate industry in promoting green buildings, convert the above vicious cycle into a positive
cycle and contribute further to the development of a low-carbon society in Japan.

* Reference document
RICS (Royal Institution of Chartered Surveyors),“-Breaking the Vicious Circle of Blame- Making the Business Case for Sustainable Buildings,” 2008

c 2009 Japan Sustainable Building Consortium (JSBC)
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CASBEE Property Appraisal Manual

5(2009 Edition)

CASBEE Property Appraisal Manual (2009 Edition)
1.

Domestic trend on property appraisal

1.1.

CASBEE and its diversified use

1.1.1.

What is CASBEE

CASBEE, the Comprehensive Assessment System for Built Environment Efficiency, is a system for assessing
and rating the comprehensive environmental performance of the designated building(s) from two major aspects:
1) the environmental quality to be enhanced through its service performance, amenity, etc. and 2) theenvironmental loads to be reduced through energy and resource saving, etc.
Labeling based on BEE
The assessment result is determined by the value of the Built Environment Efficiency (BEE), a quotient index of
Q (building environmental quality) as dividend and L (building environmental loads) as devisor (Fig. 1-1). It
briefly and explicitly indicates the diverse environmental performances of a building.
Resource consumption, CO2, etc.

Hypothetical Boundary

Q (Environmental Quality)＝

Built Environment
Efficiency

L (Environmental Load)

BEE

Exhaust, noise,drainage, waste heat,etc.

Site boundary

Water pollution, etc.

Fig. 1-1 CASBEE assessment by environmental quality (Q) and load (L)A building with a higher BEE value (e.g. higher Q value and lower L value) is assessed to be more green.
Specifically, it is ranked according to five-grade system in terms of the BEE value from “S (Excellent)” over 3.0
points to “C (Poor)” under 0.5 points. This assessment result is indicated on BEE graph of L (0-100 points) as
the horizontal axis and Q (0-100 points) as the vertical axis, which graphically visualizes the environmental
performance for clear comparison between different buildings (Fig. 1-2).
BEE

注2

BEE=3.0100

建築物の環境品質 Q
建築物の環境品質・性能 Ｑ

Q (environmental quality)

Rank
S: Excellent
A: Very good
B+: Good
B-: Fairly poor
C: PoorS

BEE=1.5
A

BEE=1.0
B+: Green building(Model case): Poor green building

B50

BEE=0.5

C
0
0

50

100

L
(environmental load) L
建築物の環境負荷

Fig. 1-2 Rating based on BEE
A committee was set up in 2001 by the Institute for the Building Environment and Energy Conservation (IBEC)
under the guidance of the Ministry of Land, Infrastructure, Transport and Tourism started to develop CASBEE.

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CASBEE Property Appraisal Manual(2009 Edition)

The first assessment tool “CASBEE for Office” was developed in 2002, followed by CASBEE for New
Construction in July 2003, CASBEE for Existing Building in July 2004 and CASBEE for Renovation in July 2005.
Japan Sustainable Building Consortium has been responsible for the development and the promotion since
2009.
These CASBEE assessment tools have been developed based on three principles: (1) To make assessment
through life cycles of buildings, (2) To make assessment of buildings in both “environmental quality (Q)” and“environmental load (L),” (3) To make assessment by using BEE (Built Environment Efficiency), which is a newassessment indicator developed based on the concept of “environment efficiency.”
CASBEE, as shown in Fig. 1-3, comprises the life cycle-based basic tools and expansion tools designed forspecific individual purposes. These are collectively called the “CASBEE Family.”
1) Housing category[Legend]

CASBEE for Home (Detached House)

Tools developed

Launched in Sep. 2007

Tools to be developed
CASBEE for Home (Existing Detached House)
CASBEE for Home (Dwelling Unit: tentative name)2) General building category

CASBEE for New Construction (Brief version)
Launched in July 2004, last-revised in July 2008

CASBEE for New Construction

CASBEE for Temporary Construction

Launched in July 2003, last-revised in July 2008

Launched in July 2004

CASBEE for Existing Building

CASBEE for Existing Building (Brief version)

Launched in July 2004, last-revised in July 2008

Launched in Apr. 2009

CASBEE for Renovation

CASBEE for Renovation (Brief version)

Launched in July 2005, last-revised in July 2008

Launched in Apr. 2009

CASBEE for Property Appraisal
Newly launched in Dec. 2009

CASBEE for Commercial Interior (tentative name)
CASBEE for Building Information Modeling
CASBEE for Heat Island
Launched in July 2005, last-revised in July 2006

CASBEE for an Urban area + Buildings

3) Urban category

Launched in Nov. 2007

CASBEE for Urban Development
Launched in July 2006, last-revised in Sep. 2007

CASBEE for City (tentative name)

CASBEE for Urban Development(Brief version)
Launched in Nov. 2007

Fig. 1-3 Component of CASBEE Family
1.1.2.

Use for building administration(1) Use by central government
Amid increasing urgency to implement anti-global warming measures, CASBEE has been broadly used for
introducing central government measures. The Environmental Action Plan (2004.06) clearly stipulates the (1)development and promotion of CASBEE, (2) development and publication of CASBEE for Existing Building, (3)creation of certification system and (4) support by local governments for introducing CASBEE. CASBEE also
plays an important role in placing orders for public buildings based on the Green Contract Law. The
Environmental Load Reduction Program on Government Facilities by the Ministry of Land, Infrastructure,
Transport and Tourism (2006.08) stipulates that the Standards for the Environmental Performances ofGovernment Building and the Guidelines for Assessment of Environmental Friendliness of Government Building
Facilities and Renovation Plan used for public buildings to be constructed by the central government must
conform to CASBEE. On the national policy front, the report on evaluation and review of the Kyoto Protocol
Target Achievement Plan (2007.09) urges the expansion of coverage by CASBEE tools and the promotion of
the tools.
Meanwhile, CASBEE is also used for subsidization programs. “The Model Project to Promote CO2-savingc 2009 Japan Sustainable Building Consortium (JSBC)
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CASBEE Property Appraisal Manual

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Houses and Buildings,” which started a public offering in April 2008, is designed to support the development of aleading project for CO2-saving houses and buildings. For this project, CASBEE is used as an assessment
indicator to select projects to be subsidized. The new construction project in the “model project to promote
CO2-saving houses and buildings” requires the achievement of environmental performance equivalent to B+ or
higher by CASBEE.
“The Leading Model Project for Excellent, Long-term Houses” based on the “Vision of the House for 200 Years”
promoted by the Housing Bureau, Ministry of Land, Infrastructure and Transport and Tourism has a system inplace to subsidize 2/3 or less of the construction costs for parts of buildings that use advanced materials,
technologies or systems in model projects that contribute to longer life cycles of houses by introducing such
advanced methods. The “model project to promote CO2-saving houses and buildings” also has a system inplace to subsidize 1/2 or less of the construction costs for parts of buildings that use advanced methods inleading projects for houses and buildings with excellent CO2-saving effect. These subsidies are expected toplay an important role in the proliferation of green buildings as the approved projects show the actual economic
effects of the measures.
Effective use of natural energy

Introduction of highly efficient● Using solar radiation energies such as solar
batteries and solar heat collection equipment, etc.
● Using geothermal energies (heating, hot water,
etc.)● Introducing lighting control systemusing human detection sensors● Introducing sophisticated air
conditioning control● Introducing highly efficientelevators, etc.

<Example of a model project>● Introduction of optical duct system (introducing
natural lights into rooms)<Example of a model project>● Double skins (changing
operational modes according to
the season of the year in thespace created between the twolayers)Solar heat collection
equipment

Solar battery panel
Greening ofrooftops

Thermal storage tank

Fuel cell

Others● Creating comfortable external spaces,
etc. by greening of rooftops, etc.

Introduction of highly efficient heat source system● Introducing fuelcells
● Introducing efficientenergy management
system, etc.

<Example of a model project>● Introducing thermal
distribution system among
multiple buildings by usinglarge thermal storage tanks

Fig. 1-4 Image of the Model Project to Promote CO2-saving Houses and Buildings * Reference 1(2) Use by local governments
In recent years, the building administrations by local governments are also increasingly requiring building
owners to use CASBEE assessment for their buildings. They are requiring building owners to submit
assessment results for buildings of larger than predefined sizes. The summaries of the results submitted are
publicly released on the Internet. It is designed to promote efforts for green buildings through the information
disclosure. Nagoya Municipal Government has required building owners, since April 2004, to submit results
based on CASBEE-Nagoya. So far, 16 local governments (as of December 2009) have introduced CASBEE.

c 2009 Japan Sustainable Building Consortium (JSBC)
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CASBEE Property Appraisal Manual(2009 Edition)

Table 1-1 Status of reporting CASBEE results to local governments
Local
government

Size(Minimumfloor area)

Effective
date

Number of reports (cases) (as of March 31, 2009)
FY2004

FY2005

FY2006

FY2007

FY2008

Nagoya city
Osaka city
Yokohama city
Kyoto city
Kyoto pref.
Osaka pref.
Kobe city
Hyogo pref.
Kawasaki city
Shizuoka pref.
Fukuoka city
Sapporo city
Kita-kyushucity
Saitama city
Saitama pref.

2,000 ㎡
5,000 ㎡
2,000 ㎡
2,000 ㎡
2,000 ㎡
5,000 ㎡
2,000 ㎡
2,000 ㎡
5,000 ㎡
2,000 ㎡
5,000 ㎡
5,000 ㎡
2,000 ㎡
2,000 ㎡
2,000 ㎡

2004.4
2004.10
2005.72005.10
2006.42006.42006.82006.10
2006.10
2007.72007.10
2007.112007.112009.42009.10

148
26
－
－
－
－
－
－
－
－
－
－
－
－
－

234
72
93
21
－
－
－
－
－
－
－
－
－
－
－

210
97
123
104
37
60
68
81
38
－
－
－
－
－
－

229
109
113
93
45
101
136
162
47
120
18
20
5
－
－

173
73
102
68
33
115
104
187
40
222
37
77
18
－
－

Aichi pref.

2,000 ㎡

2009.10

－

－

－

－

Total
994
377
431
286
115
276
308
430
125
342
55
97
23
－
－

－

－

Gross total

3,859

These local governments have implemented the following policies by using CASBEE to increase theproliferation of green buildings:
1) Application conditions for comprehensive design system
Some local governments define CASBEE assessment results as application conditions for the comprehensive
design system, which is an approval system for exceptions to limits on floor area ratios, etc. This is one of theadvanced uses of CASBEE for improving the urban environment through building administration. Currently, thefollowing local governments are using CASBEE for their comprehensive designing system:
・ Osaka City: A construction is approved in the case of B+ or higher (from October 2004)
・ Yokohama City: A construction is approved in the case of A or higher (from April 2006)
・ Nagoya City: The floor area ratio will be deregulated by up to 250% instead of the normal 200% in thecase of S or higher (from June 2005)
2) Application conditions for subsidies
For new construction of multiple-dwelling houses, building owners applying for building cost subsidy programs
administered by local governments are required to submit their CASBEE assessment results.
・ The “Osaka City Advanced Environmental Housing Development Project” (July 2005, the project ends by
the end of March 2007)
In the case of application for subsidies for the above project for multiple-dwelling houses, building owners
are required to obtain A or higher by CASBEE-Osaka, and constructions are to be approved in the order ofhigher BEE values.
・ The “Nagoya City Downtown Apartment Supply Project” (November 2005)
The prioritization for constructions for the above project is determined based on the results of
CASBEE-Nagoya.
3) Advertisement display obligation
Kawasaki municipal government has the “Kawasaki City Environmental Performance Display for
Multiple-Dwelling Houses for Sale System,” which obliges building owners of multiple-dwelling houses todisplay CASBEE assessment results on their advertisements. The municipal government requires thatadvertisements of multiple-dwelling houses for sale among all the specific buildings (new buildings with a total

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CASBEE Property Appraisal Manual

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floor area of over 5,000 ㎡, etc.) must display the environmental performance of the houses for sale and that
documents necessary for such advertisements must be submitted to the municipal government (an obligation todisplay in advertisements and an obligation to report to the municipal government when displayed). The
municipal government also encourages sellers of such multiple-dwelling houses for sale to explain to buyers
about the environmental performance of the houses.
4) Certification systems unique to local governments
Yokohama municipal government has developed the “Yokohama city green buildings assessment certification
system” to certify the assessment results. This is a certification system implemented uniquely by Yokohama
municipal government based on CASBEE-Yokohama and is different from the third party certification systemcurrently in use by the Institute for Building Environment and Energy Conservation (IBEC), etc. The system isimplemented based on the “Green Building Assessment Certification System Guideline” defined by Yokohama
municipal government. The Yokohama city green building assessment certification committee, which consists ofacademic experts, etc. assigned by the Yokohama mayor determines certifications and, if successfully certified,provides certificates.

100

S

BEE=3.0

BEE=1.5

A+

BEE=1.0B

川崎市分譲共同住宅環境性能表示
機能性・耐用性Q (Quality)

居住性

-

B

50

省エネルギー

BEE=0.5

C
0

50

5
4
3
2
1

100

Retail shop
Hospital
Apartment
Hall
OfficeFactorSchoolRestaurant
Hotel

L (Load)Fig. 1-6 “Status of reporting environmental
床面積2,000m2超
performanceassessment in Nagoya city

緑・まちなみ周辺への配慮

省資源・リサイクル

総合評価
CASBEE 川崎

Fig. 1-5 Label for “Kawasaki city
environmental performance display for
multiple-dwelling houses for sale”

c 2009 Japan Sustainable Building Consortium (JSBC)
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CASBEE Property Appraisal Manual(2009 Edition)

Table 1-2 CASBEE-related policies by local governments
Local
government

Tool

Conditions

Incentives

Nagoya city

New
Construction(Briefversion)Osaka city

New
Construction(Briefversion)

Used as conditions for theComprehensive designingsystem (B+ or higher)(1) The subsidy is available
to those with grade “A” orhigher in the Osaka city
excellent environmental
housing development
project. In addition,
constructions are to beapproved in the order ofhigher BEE values. (To be
ended by the end of March,
2007)(2) Osaka city
comprehensive
environmental assessment
system manifestation forbuildings (CASBEE-Osaka
OF THE YEAR) (from 2005)

Yokohamacity

NewConstruction(Briefversion)(1) Used as conditions for theurban area environmental
designing system(comprehensive designingsystem) (A or higher) (from2005)(2) Yokohama city
environmental performance
display for buildings (from
April 1, 2010)(3) Used as assessment
items in the assessment
policy for the urban plan
proposal system (from 2008)(1) Yokohama city green
building assessment
certification system

Osaka pref.

New
Construction(Briefversion)Kawasakicity

NewConstruction(Briefversion)Note(1) Additional deregulationof limits on floor area ratios isprovided according to theassessments by
CASBEE-Nagoya when theComprehensive designingsystem is applied (by up to250% instead of the normal
200% in the case of “S”)
(2) Used for prioritizing
providers to be selected for
the Nagoya city downtown
apartment supply project
Reporting is
obligatory when
applying for theComprehensive
designing system
for the site area of
1,000 ㎡ or more

(1) The manifestation system“Osaka Green BuildingAward”
Kawasaki city environmental
performance display for
multiple-dwelling houses forsale

c 2009 Japan Sustainable Building Consortium (JSBC)
Copyright○(1) Preferential interest rates
in partnership with banks(Bank of Yokohama,
Sumitomo Trust & Banking)

Reporting is
discretionary for
5,000 ㎡ or less

CASBEE Property Appraisal Manual

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Local
government

Tool

Sapporocity

NewConstruction(Briefversion)Kita-kyushu
city

New
Construction(Briefversion)Conditions

Used as conditions (B+ or
higher) for site locations ofspecial buildings, etc. (Article51) and the Comprehensive
designing system (Article
59.2)

Home
(DetachedHouse)

1.1.3.

Incentives

Note(1) Preferential interest rates
in partnership with banks(North Pacific Bank)

Reporting is
discretionary forless than 5,000 ㎡(1) Used as conditions forselecting excellent regional
houses for rent(2) Used as conditions forselecting Kita-kyushu
downtown multiple-dwellinghouses supply projects(development projects forexcellent buildings, etc.) (B+or higher)(3) Used as conditions forpreferential interest rates*
and interest payment
subsidies** (B+ or higher)* “Heartfulpreferential
housing interest
rate system”(Preferential
interest rates forbuyers ofmultiple-dwellinghouses anddetached
houses. 0.1%
lower in interest
rate than thenormal loan rate
at relevant
financial
institutions(FY2008))** “Kita-kyushu
city living
assistanceprogram” (Themunicipal
government
subsidizes part ofthe interest
payment for five
years. Interest
rate subsidization
rate: annual 1%,
up to 1 million
yen)(1) Used as conditions forpreferential interest rates*
and interest payment
subsidies** (B+ or higher)

Use by private companies(1) Use by designers for DfE (Design for Environment)
CASBEE is designed to check the environmental performance in the designing stage of buildings andobjectively indicate to building owners the content of DfE. It can also be used by building owners and designers
themselves to provide indicators for defining indirect goals for assessing ISO14000-based environmental
management actions.
According to the survey*Reference 2 conducted among companies belonging to the Building Contractors Society(BCS) (23 Design Committee members), many of the companies have already adopted CASBEE for theirdesigning work. As shown in Fig. 1-7, 70% of the companies have their own standards proactively using
CASBEE (for New Construction).

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All projects regardlessof the usage and size:
17%

Only for projects
demanded by local
governments ororderers:
30%
Proactive
standard:
30%

Supporting byspecificallydesignating theusage and size:
22%

Passivestandard: 70%
Supporting specificallydesignated projects:
30%

Fig. 1-7 Status of using CASBEE for New Construction (Brief version) by builders*Reference 2
Effective tool

11

Externally appealing

3

Requests from local governments andcustomers likely to increase
Others20Fig. 1-8 Major reasons for proactively adopting CASBEE*Reference 2(2) Use for selecting competitive design proposals, PFI providers
The U.S. standard “LEED” is already in wide use by state and municipal governments to order construction of
public buildings and the use is prevailing also among private buildings. In Japan, too, the use of CASBEE isincreasing for judging competitive design proposals, selecting PFI providers and defining environmental
performance conditions for the designing stage. CASBEE is used also by builders and designers or by owners
and tenants of buildings for defining environmental
performance goals. It can also be used, for example, not only
by local governments but also by private building owners topresent
todesigners
comprehensive
environmental
performance goals or to increase scores for designers who
propose the maximum environmental performance within
limited budgets.
川崎市分譲共同住宅環境性能表示
機能性・耐用性(3) Use for environmental labeling for asset assessment ofbuildings

居住性

5
4
3
2
1

省エネルギー緑・まちなみ周辺への配慮

省資源・リサイクル

総合評価

CASBEE can also be used as an environmental performanceassessment tool for labeling by third parties, etc. This manualis expected to use as a tool for assessing the asset value ofbuildings.

CASBEE 川崎(4) Use for determining preferential interest rate eligibility
Some private financial institutions provide preferential interest
rates for housing loans to buyers of houses with good
assessment results based on the advertisement display
obligation system. The “Kawasaki City Environmental
Performance Display for Multiple-Dwelling Houses for Sale
System” by Kawasaki municipal government, for example,
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Fig. 1-9 Preferential housing loans basedon “Kawasaki city environmental
performance display for multiple-dwellinghouses for sale system”

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provides preferential interest rates of up to 1.2% (at the start of the system) according to the results of
CASBEE.
(5) Use for environmental performance diagnosis and renovation design for ESCO projects and existingbuilding stock renovations
CASBEE can be used for proposing operational monitoring commissioning and renovation designing ofbuildings for the Energy Service Company (ESCO) projects and renovations of existing building stocks.
CASBEE for Renovation is a tool available for energy-saving renovations, etc.
(6) Use as an international tool
The International Organization for Standardization (ISO) is also working on the development of the international
standard on the method of assessing environmental performance of buildings called “TC59/SC17.” CASBEE, if
it complies with the international standard, may be used internationally in the future through, for example, themulti-national cross-certification of environmental labels, etc. CASBEE has been translated and published inforeign languages such as English and Korean. In China, a group led by Professor Jiang of Qinghua University
developed and publicly released in August 2003 the environmental performance assessment system “GOBAS:
Green Olympic Building Assessment System” which utilized the concept of CASBEE for use in designing,building and operating facilities for the 2008 Beijing Olympic Games. Soon, the comprehensive environmental
assessment system will be used for international competitive bidding in China and Asia in which Japanesecompanies are expected to increase their participation.
1.1.4.

Use for education

An increasing number of architectural schools including universities are using CASBEE. Many universities withthe faculty of architecture are using CASBEE for environmental planning trainings, etc. Architects already inbusiness are also hoping that CASBEE is used by architecture-related craft unions and academic groups for theContinuing Professional Development (CPD).
1.1.5.

Assessment certification system and assessor registration system

The CASBEE certification system and assessor registration system has been implemented by the Institute for
Building Environment and Energy Conservation (IBEC). The CASBEE certification has also been implemented,
since March 2008, by 11 organizations accredited by IBEC.
(1) Assessment certification system
The various usages of CASBEE are described in the previous sections of this manual. Securing reliability andtransparency are of crucial importance in providing CASBEE assessment results to third parties. The
assessment certification system is designed to secure reliability in providing such information and aims toachieve proper operation and proliferation of CASBEE by reaffirming the accuracy of its assessment results. It
is designed to be used by designers, building owners and constructors, etc. to secure the reliability of the asset
value assessments and labeling, etc. of their buildings. This certification system covers a broad range ofbuildings including new construction, existing buildings, renovations, urban development and homes (detachedhouses). As of December 2009, 93 buildings have been certified.
(2) Assessor registration system
CASBEE is in principle designed to assess the buildings quantitatively to the extent possible. However, as it
also includes some qualitative assessment items, experts versed in knowledge and technology on thecomprehensive environmental performance assessment of buildings are required. For this reason, the“assessor registration system” has been established. People wishing to be assessors need to take the“assessor training course” and successfully pass the “assessor exam” and make “registration.” Currently,“CASBEE for Building Assessor” who can handle CASBEE for New Construction, for Existing Building and for
Renovation, and “CASBEE for Detached House Assessor” who can handle CASBEE for Home (DetachedHouse) are available. Japanese 1st-class architects are qualified to take the “CASBEE for Building Assessor”
exam. As of December 2009, there are approximately 6500 CASBEE Asessors, including Building Assessors
and Detached Hosuse Assessors, across the country.
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6000

5000

CASBEE戸建評価員
CASBEE for Detached House Assessor
CASBEEfor Building Assessor
CASBEE建築評価員

4000

2440

3000

2000

2760

1000

0
2004

2005

2006

2007

2008

2009.4

Fig. 1-10 Number of registered CASBEE assessors
1.1.6.

Study on assessment tools and market reform

Japanese and Canadian experts on environmental performance assessment tools have long been involved in
the joint study on the visualization of environmental performance through assessment and on the issue ofmarket transformation as they attach special importance on these themes. Since the international workshop“Strategic market reform for proliferation of green buildings” in Tokyo in December 2006, the workshop on thethemes has been held continuously as described in Table 1-3 below.
The themes have attracted global attention especially after the World Sustainable Building Conference “SB08”
was held in September 2008. The conference also included forums on the themes described inTable 1-4. In the forum on the theme of “Special Forum 8: BEAM (Building Environmental assessment methods)
and Market Transformation,” Professor Ray Cole of British Colombia University in Canada and otherresearchers and users of assessment tools of various countries presented their tools and had a discussion. At
the forum, the concept of property appraisal using CASBEE was presented as a model case in Japan.
Table 1-3 Major outcomes of forums on assessment tools and market reform
Title
International Workshop on
Strategic Market Transformation for the
Promotion of Sustainable Buildings
2nd Joint Japan-Canada Workshop on
Building Environmental Assessment
Methods & Market Transformation-Responding to the Urgency of Climate
ChangeWorkshop on Market Transformation for
the Promotion of Sustainable Buildings

Date
Dec. 2006

Place
Tokyo

Jun. 2007

Vancouver

Apr. 2008

Tokyo

SB08 “Special Forum 8: BEAM andMarket Transformation”

Sep. 2008

Melbourne

Joint workshop of IEA, ISO, IEC on:
International Standards to Promote
Energy Efficiency and Reduce Carbon
Emissions
Joint symposium by Japan Business
Federation/WBCSD“Energy-saving
efforts in consumer and businesssectors”

Mar. 2009

Paris

Jul. 2009Tokyo

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Description“Market Transformation through Assessment/Ratingof Building Performance,” Shuzo Murakami, andothers“Transforming the Building Market throughAssessment of Building Performance,” Shuzo
Murakami, and others“Spread of CASBEE and Market Transformation of
Building Industry,” Shuzo Murakami”Impact of Building Environmental Assessment
Methods,” R. Cole, and others“Market Transformation brought about by Necessity
for Reducing Environmental Risks,” Shuzo
Murakami“Assessment Tools for Building Performance toPromote Energy Efficiency in the Building Sector,”
Shuzo Murakami“Global trend on energy-saving regulations forbuildings” (Shuzo Murakami)

CASBEE Property Appraisal Manual15(2009 Edition)

Table 1-4 Themes of relevant SB08 special sessions
Theme
Special Forum 8: BEAM andMarket Transformation
Special Forum 9: Valuing
Sustainability - Measuring the
Financial Performance ofSustainable Buildings
Special Forum 11: Financing
sustainable property

Speaker
Ray Cole (British Colombia University, Canada), Vanessa Gomes de Silva(Campinas State University, Brazil), Shuzo Murakami (Building Research Institute,Japan), Paul King (UKGBC, U.K.), Tom Hicks (USGBC, U.S.A.)
Richard Lorch (Building Research & Information), Thomas Luetzkendorf (Karlsruhe
University, Germany), John Goddard (RICS Oceania), Richard Reed (Deakin
University, Australia), David Lorenz (RICS EU), others
Craig Roussac (INVESTA, Australia), Daryl Browning (ISPT, Australia), Tomonari
Yashiro (The University of Tokyo, Japan)

Reference1
Materials for the Third Symposium on CO2-Saving Houses and Buildings, Institute for Building Environment and Energy
Conservation
2“FY2008 Survey Report on CASBEE among BCS Design Committee Companies,” Building Contractors Society

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1.2.

Move toward considering environmental added values in the Japanese property appraisal
industry(1) Reasons why the economic effects of green buildings were not analyzed in Japan
Despite the increasing popularity of CASBEE including those designed for local governments, its economic
effects and effects of additional values have rarely been analyzed unlike the certification of buildings by LEED in
the United States and Green Star. The possible reasons for this are as follows:
In 2001 when the R&D efforts for CASBEE started, the first property investment company, Japanese Real
Estate Investment Trust (J-REIT), was listed on the stock market in Japan. Following the listing, property
securitization-related transactions became active in the property markets in Japan until around 2007 in the “fundboom.” Property for investment traded in the markets were subjected to due diligence to check overt risks forinvestors such as the legality, structural safety, and environmental risks (asbestos, PCB, etc.) of buildings aswell as such risks as soil contamination and earthquakes, etc. Any insufficiencies in overt risk aversion weredeemed as “devaluing factors.”
Meanwhile, such environmental load factors as CO2 emissions and wastes generated while building, operating
and demolishing buildings or loss of bio-diversity as a result of development were not considered as theabove-mentioned “overt risks.” Property investment companies and private funds settled their accounts every
six months or a shorter cycle and placed their emphasis on improving short-term performance and consideredthat environmental load risks against which there were no statutory regulations were only potential factors andlow-priority items.
(2) Beginning of consideration for environmental added values and theory
Under such circumstances, the thesis report commemorating the 10th anniversary of the Tokyo Association ofReal Estate Appraisers, released in October 2005, carried an article titled “A note on environmental value added
for real estate” (Masato Ito) (Reference3). The article attempted to explain theoretically the fact that reducing“environmental risks,” improving images of assets and improving cash flow through energy saving, etc., whichwere not considered important factors for property investment in those days, could create added values. The
article can be summarized as follows:
The value of a property, like other assets, is determined by three factors – “Expense characteristics” (how muchcost is assumed for it), “Marketability” (how much it’s priced in markets) and “Profitability” (how much profit isexpected from it).
For the “Expense characteristics,” sellers have solid reasons for considering the factor. If sellers have paidreasonable additional costs for properties with high environmental performance, the sellers naturally want to
add the costs to the sales prices. However, in the market, such properties cannot necessarily be traded atprices with such an additional factor in mind. For the “Profitability” of properties, the properties may be acceptedby reasonable markets as long as they can generate profits in terms of investment. For this reason, the“Profitability” is important for green properties.
The value of a property that reflects the “profitability” or the “value indicated by the income approach” can becalculated by dividing “net income produced by the property” (deducting such costs as maintenance, taxes andinsurance, etc. from the total revenues produced by the property including rent, etc.) by “capitalization rate of
the property” (the percentage of net income to the amount of investment in the property). Formula-1 shows theformula for the value indicated by the income approach (in the case of the direct capitalization method).
Value indicated by the income approach ＝ Net income produced by the property
Capitalization rate of the property(Formula-1)

The above formula shows that the higher the net income the property can produce, the higher the property
value becomes. It also suggests the more stable the net income is (= lower the risk of changes in the net
income), the lower the capitalization rate becomes for the property investment, leading to higher property
values.
Thus, the increased “net income” could lead to the increased property value. The reduction in the “capitalization
rate” in the denominator could also lead to an increase in the property - value. The more stable the net income
is, the lower the capitalization rate can become for investors. For example, investment in 10-year government
bonds involves almost no risk of changes in the interest rate or no risk of loss of principal at maturity, making it
possible for investors to invest at the capitalization rate in the range of 1.3% (as of November 17, 2009).

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Maintenancecosts
Utility costs

Other costs

Costs of green property

Repair costs

Environmental added values related toincreased net income

Fig. 1-11

Environmental
risks

Depreciation rate
Marketability
risks
Business risks

Other property
risksCap. Rate ofgeneral financial
assetsEnvironmental
added values
Risk premium, etc. of a green property

Taxes
Cost of property as usual

Total revenue produced by property

Environmental
added values

Risk premium, etc. of an average property

Net income ofgreen property

Net incomeof property
as usual

Capitalization rate of property (before depreciation)

Property investment, meanwhile, involves depreciable assets and risk of changes in income and damage risks.
For this reason, even in the Marunouchi district of Tokyo where the income is regarded as most stable, the rateis around 4% (as of November 17, 2009) and in areas where changes in rent fluctuate wildly, the rate is around
10% or even higher (as of November 17, 2009).
Fig. 1-11 shows the above points in terms of net income and capitalization rate.
As shown in the left hand graph of Fig. 1-11, reduction in utility and repair costs as a result of improved energy
saving and durability could lead to increased net income and increased income as a result of improved
productivity also could lead to increased net income.
For the capitalization rate, as shown in the right hand graph of Fig. 1-11, risk premiums peculiar to the property
and depreciation rate are added to the capitalization rate of general financial assets (long-term government
bonds, etc.). For the green property, reduction in risks related to future environment-related taxes andenvironmental regulations as well as reduction in the depreciation rate as a result of improved service life could
lead to reduction in the capitalization rate (the rate before depreciation). Furthermore, the green property may
also produce the effect of improved images and reduce marketability risks.

Environmental added values related to reduced
risk premium

Image of added values represented in net income and capitalization rate(partial revision of Reference3)(3) Expansion of environmental added value theory
The above-mentioned environmental added value theory was later discussed by the Survey and ResearchCommittee of Japanese Association of Real Estate Appraisal and, in FY 2007, the committee launched the“Working group on environmental added value (chaired by Masato Ito).” The group studies model cases ofenvironmental added values realized in Japan, views on environmental regulation risks and environmental
performance assessment systems associated with CASBEE etc. The group also performs, on a trial basis,
environmental added value assessment based on model cases. The results of these efforts are reported in the“Value of property with consideration for the environment is sure to increase – theory and implementationof ’environmental added value’ of property” (June 2009) (Reference4)
For an associating CASBEE with real estate appraisal, CASBEE(PA)WG was launched in June 2008, and thejoint discussion with the Japanese Association of Real Estate Appraisal started. The study by the group was
taken over by Working Group for CASBEE and Property Appraisal, which developed this manual.
The Land and Water Bureau of Ministry of Land, Infrastructure, Transport and Tourism launched in FY 2008 the“Study group on value of ’environment’ in property markets.” The purpose of the group is to help various
stakeholders including users and investors as well as developers understand and evaluate property withconsideration for environment (or “green property” termed by the group) and to study conditions required byproperty markets including the supply of information to secure a long-term and stable flow of funds to property

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CASBEE Property Appraisal Manual(2009 Edition)markets.
The group in FY 2008 decided to study the current status of regulatory systems on property and the advanced
cases as well as property investment trends. The group conducted hearing surveys in the United States andEurope to understand the advanced status in foreign countries and studied issues and policies required forvarious stakeholders to understand and recognize the value of the “environment” for property. (Reference5)- Environmental measures are currently madein terms of corporate social responsibility(CSR).
- Energy-saving and tree-planting
technologies are making progress, but
methods of evaluating them and theinformation are in short supply, making it
impossible to evaluate them in the market.

Property

Expected effects

Environmental property- Energy-saving property- Property with green space and rooftop
gardening- Property utilizing natural energies such as
solar and biomass, etc.

Developing conditions
Studying methods ofevaluating environmental
property in property markets

Providing necessary
information

Increasing awarenessabout environmental
value in property markets

Long andstable supplyof funds[Investors]- Domestic institutional
investors- Individual investors- Foreign investors, etc.

Supply ofgood property

Promoting useofenvironmental
property[Property companies]- Real estate companies- Construction
companies, etc.

- Increasing
environmental property- Increasing
environmental value of
property- Promoting environmental
symbiotic land use- Improving environmental
and energy technology[Tenants]- General companies- Local publicorganizations, etc.

Fig. 1-12 Scheme to study developing conditions for property markets required for proliferation ofgreen property*Reference 6

Reference3“A note on environmental value added for real estate” (Masato Ito), Thesis report commemorating the 10th anniversary of
the Tokyo Association of Real Estate Appraisers
http: //www.tokyo-kanteishi.or.jp/sonota/rep10th.html
4“Value of property with consideration for environment is sure to increase – theory and implementation of ’environmental
added value’ of property” (Survey and Research Committee of Japanese Association of Real Estate Appraisal),
Jutaku-shimpo-sha
5“New business with consideration for environment !! – Sustainable property foreseen by the moves ofmultiplestakeholders” (Sustainable Property Study Group), Gyosei Corp., 2009
6
Document “Study group on value of ’environment’ in property markets”

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2.

Concept of manual

2.1.

General description

This manual describes the importance of associating CASBEE with property appraisal first, followed byassociating CASBEE assessment items with property appraisal items. These items can be classified into overt
and potential items. This manual also describes how detailed items of the CASBEE assessment items can betranslated into pricing factors and how they can be reflected in property values. It also explains methods ofcalculating property values. At the end, case studies based on this manual are presented.
By using this manual:・ People in the construction industry can create CASBEE assessment score sheets simply by following
the conventional instructions of the CASBEE assessment.
・ People who perform property appraisal can record increase/decrease in income and capitalization ratein environment-related items that are likely to influence the property appraisal by directly using thescore sheets.
・ Standard tables are available for calculating the value indicated by the income approach and the value
indicated by the sales comparison approach by using the environment-related items and the table ofincrease/decrease in income and capitalization rate.
The CASBEE assessment table used by people in the construction industry is added with the pricing factor
table used by people in the property industry and, thus, various documents to be referred for appraisal purposes
can be created.

2.2.

Significance and purpose of CASBEE and property appraisal

As mentioned earlier, 16 local governments in Japan have been using CASBEE in accepting applications forbuilding permits, indicating that the use of CASBEE for New Construction is making steady progress. As of
March 2009, the number of assessment results reported to local governments exceeds 3,800.
However, the use and popularity of such tools as CASBEE for Existing Building and CASBEE for Renovation,
while they are already available for use, have been lagging far behind the CASBEE for New Construction.
Meanwhile, Japan currently has a huge stock of existing buildings, raising the necessity for the proliferation ofenergy-saving renovations, renovations designed to cut CO2 emissions and green renovations, etc. Under suchcircumstances, it is important to further promote the popularity of tools for existing buildings and renovations.
Environmental performance assessment for existing buildings and for renovated buildings can also be used forthe assessment of buildings as assets. For this reason, it is very important to “simplify” the criteria for
determining the necessity for renovating buildings in stock.
CASBEE assessment does not include cost and profitability assessment in the scope of its assessment.
However, demand is on the increase for using CASBEE assessment results for property appraisal. If propertytransaction market participants focus more on the relationship between CASBEE items and pricing factors, theuse of CASBEE in property transaction markets and even the popularity of green buildings could increase
further.

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CASBEE Property Appraisal Manual(2009 Edition)

2.3.

Associating CASBEE with property appraisal

CASBEE and property appraisal were traditionally regarded as separate assessment methods and no tool to
associate them with the value evaluation point of view was developed. Fig. 2-1 shows the association between
CASBEE and property appraisal.
For appraisal of securitized property, for example, engineering reports (ER) on overt risks that are reflected inmarket values including the legality of buildings, necessity and costs of renovations, existence of harmful
substances, soil contamination and earthquake risks, etc. must be developed by experts other than licensed
real estate appraisers and licensed real estate appraisers must perform property appraisal by explicitly
presenting written appraisal tables that describe their decisions and the basis for using the content of the ER forreal estate appraisal.
As CASBEE has many items that can be used for determining pricing factors, as mentioned in explaining thebackground, it may be possible to develop a tool to associate them for use in property appraisal.

CASBEE Users

Property Appraisers(Building owners, designers,
builders, manufacturers, local
governments, etc.)(Investors, developers, licensed
real estate appraisers, etc.)

CASBEE Assessment

Real Estate Appraisal

CASBEE
ManualReference
Sheets*Annex Tables ofWritten Appraisal

CASBEE
Score
Sheets*for judging
pricing factors
from the related
CASBEE
Indicators

including judgment &the grounds forproperty appraisal
based on ER*Reference is
optional.

*Provision is
optional.

CASBEE for Property Appraisal
Manaual(This document)

Reference iscompulsory whenreferring to ER.

Engineering
Report (ER)
Reference iscompulsory forthe securitizedproperty appraisal.

Current framework (CASBEE and Property Appraisal are not linked.)
Future framework to be added (CASBEE is linked to Property Appraisal.)Fig. 2-1 Associating CASBEE with property appraisal (example of real estate appraisal)

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The tool needs to be used by a broad range of people including the current main users of CASBEE such asbuilding designers, building owners, builders, manufacturers and local governments as well as such market
participants as investors, developers and licensed real estate appraisers. The existing CASBEE users need tounderstand the positioning and the use of property appraisal so that they understand that the tool can be used
to assess buildings as assets and to determine the necessity for renovation of buildings in stock. People
involved in property appraisal need to understand that pricing factors can also be determined by using CASBEE
assessment items just as they perform property appraisal referring to engineering reports.
Mutual understanding and collaboration will be indispensable in the future between CASBEE users andproperty appraisers.
It must be noted, however, that the tool, just like written appraisal tables associated with engineering reports,
does not cover all the pricing factors for a property and should be used for analyzing some of the factors(especially pricing factors related to environmental performance).

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3.

Relations with property appraisal, etc.

3.1.

Similarity between CASBEE and property appraisal

This section describes the property pricing theory based on which CASBEE is used for property appraisal andalso describes the related concepts.
As described in 1.2., the value that reflects the “profitability” of property, or to put it differently, the “value
indicated by the income approach” can be calculated by dividing the “net income produced by the property (theincome after deducting the maintenance costs, taxes and insurance costs, etc, from the total incomes producedby the property including the rent, etc.)” by the “capitalization rate of the property (the percentage of net income
to the amount invested in the property).” Formula 1 shows the value indicated by the income approachcalculation formula (for direct capitalization method).
Net income produced by the property
Capitalization Rate

Value indicated by the income approach ＝(Formula-1)

The above formula and “Built Environment efficiency (BEE)” formula by CASBEE are very similar. (Fig. 3-1)(1) Increased rent revenues(2) Reduced repair costs[Property value in terms of profitability](3) Reduced utility costs

Value indicated by the income
approach of the property*=

Net income produced by the property(2) Reduced depreciation(3) Reduced environmental risks

Capitarization Rate
* In the case of direct
capitalization method(4) Effect of improved image[Built Environment efficiency (BEE)](1) Environmental quality improvement (Q1)
(2) Durability improvement (Q2)

Q (Environmental quality of the building)

BEE=

L (Environmental load of the building)(4) Sustainability ranking of the building(3) Energy saving (LR1)

Fig. 3-1 Conceptual images of value indicated by the income approach formula (for direct capitalization
method) and CASBEE environment efficiency formula (Revision of Reference7)

For example, improved environmental quality could lead to increased rent ((1) in the above figure) while
improved durability could lead to reduced repair costs and reduced depreciation ((2) in the above figure) andenergy saving could lead to reduced utility costs and reduced environmental risks ((3) in the above figure). In
addition, the sustainability ranking of the building eventually could be reflected in the effect of improved image((4) in the above figure).
In the CASBEE formula, high environmental efficiency (BEE) can be achieved by reducing the environmentalload in the denominator while increasing the environmental quality in the numerator. This does not represent themonetary value itself but represents the similarity of the value indicated by the income approach formula in thatthe value of the property increases by increasing the cash flow amount as well as by reducing risk premiums.
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Table 3-1 shows the relevance between CASBEE assessment items and property appraisal items. Indoor
Environment items are mainly related to the increase in the total revenues while Q2 “Quality of Service” items
are mainly related to the reduction in costs and the future reduction in environmental risks. Energy items thatcurrently attract the most attention are related to the reduction in costs and the future reduction in environmental
risks. Outdoor Environment on Site items and CASBEE ranking (BEE) contribute to the improved image. It
cannot be reflected in the present pricing but has potential for future pricing.
Table 3-1 Relevance between CASBEE assessment items and property appraisal items
CASBEE assessment items

Increased
total revenue○○○○

Q1-1 Noise & Acoustics
Q1-2 Thermal Comfort
Q1-3 Lighting & Illumination
Q1-4 Air Quality
Q2-1 Service Ability
Q2-2 Durability &Reliability
Q2-3 Flexibility & Adaptability

Property appraisal items
Reduced
Reduced risks
costs

○
○
○

○
○
○

Q3 Outdoor Environment on Site
L1 Energy
L2 Resource & Material
L3 Off-site Environment

○
○

○
○
○

CASBEE Ranking

3.2.

Improved
image○

Studying image of determining pricing factors from CASBEE assessment items

Table 3-2 shows the content of the above Table 3-1 compiled from the property appraisal point of view.
Fig. 3-2 shows an image of analyzing how detailed items of CASBEE assessment items can be translated into
pricing factors and how they can be reflected in property values based on the property appraisal point of view.
This manual represents the current results of such ongoing analysis.
Table 3-2 Viewpoint of CASBEE assessment items and property appraisal items
CASBEE assessment
items
Q1
Q2
L
L1
Q3
BEE Ranking

Viewpoint of property appraisal
Many of the items could lead to increased total revenue
Many of the items could lead to both reduced costs and reduced risks
The items are mainly related to reduced risks
The items could lead to reduced cost
The items could produce the effect of improved image as a result of increased
market recognition and could contribute to reduced property investment risks

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CASBEE Property Appraisal Manual(2009 Edition)

CASBEE assessment items

Increase/Decrease incapitalization rate

Increase/Decrease in
Expenditures

Increase/Decrease in
Revenues
CASBEE for New Construction (2007 Edition) [Exhibit A] Image of sheet to determine pricing factors based on CASBEE assessment items
XX building

Comparison: Items that are likely to impact values

enter figures and comments.

Score Sheet

Completed

Concerned categories

Summary of environmentally conscious
efforts in design

Total
Score

weightingcoefficie
nts

Background noise level
1
Equipment noise2
1.2 Sound Insulation
Sound Insulation of Openings
1
Sound Insulation of Partition Walls
2
Sound Insulation Performance of Floor Slabs (light3
Sound Insulation Performance of Floor Slabs (heav4
1.3 Sound Absorption
2 Thermal Comfort
2.1 Room Temperature Control
1
Room Temperature Setting
2
Variable Loads and Following-up Cont
3
Perimeter Performance
Multiunit-based heating pump4
Zoned Control
5Temperature and Humidity Control
6
Individual Control
7
After-hours Air Conditioning
8
Monitoring Systems
2.2 Humidity Control
2.3 Type of Air Conditioning System
3 Lighting & Illumination
3.1 Daylighting
1
Daylight Factor
2
Openings by Orientation

LR3

4.2
4.0
4.0
4.0
5.0
5.0
5.0
3.0
4.3
4.5
4.0
4.0
5.0
5.0
5.0
3.0
5.0
3.9
3.6
4.0
－

1
2 Consideration of Local Environment
2.1 Air Pollution
2.2 Heat Island Effect
2.3 Load on Local Infrastructure
1
Reduction of Rainwater Processing Lo
2
Sewage Load Suppression
3
Traffic Load Control
4
Waste Treatment Loads
3 Consideration of Surrounding (Neighborhood) Environment
3.1 Noise, Vibration & Odor
1
Noise
2
Vibration
3Odor
3.2 Wind Damage & Sunlight Obstruction
1
Restriction of Wind Damage
2
Restriction of sunlight obstruction
3.3 Light Pollution
1
Measure for Light that Spills Outside
2
Measures for Reflected Solar from Bu
BEE Value
Increase/Decrease Value after Analyzing CASBEE Items

4.9
3.5
5.0
3.0
3.0
3.0
3.0
3.0
3.0
4.3
4.3
5.0
5.0
3.0
4.0
4.0
4.0
5.0
5.0
5.0
3.39

0.40
0.15
0.40
0.50
0.50
0.40
0.60
0.40
0.20
0.35
0.50
0.30
0.20
0.30
0.10
0.10
0.20
0.30
0.25
0.30
0.60
-

Increase/D
Increase/D
Increase/D ecrease inecrease inComparison
ecrease in Capitalizati
Revenues(Multiplied
Spending
on Rate(Multiplied
Result)(Marked) (Addition/D
Result)eduction)

Score

weightingcoefficie
nts

4.1

1.05

4.2

1.03

0.00%

1.03

3.0
3.0
3.0
3.0
3.0
3.0
3.0
3.0
3.0
3.0
3.0
3.0
-

-

4.2

1.00

0.00%

1.00
1.00

-

-

4.2

Q Environmental Quality of the building

Q1 Indoor Environment
1 Noise & Acoustics
1.1 Noise

Items Used for Appraisal and the Basis

Entire Building and ComResidential and Accomodation sect-0.30%

-

1.02

0.00%

1.02
1.00

1.00
1.00
1.02
1.00

1.02

1.00

Items included in Chapter 3 II5 (Performance of
Building) of General Japanese Real EstateAppraisal Standards. For housing, it is also
necessary to consider the display of theperformance base on the Housing Quality
Assurance Act (operational notes).

1.00
1.00

1.00
3.9

1.01

0.00%

1.01
1.00

-0.20%

1.02

Consider this whenevaluating the-0.20%
1.02
capitalization
rate
1.00

1.00

4.3
Consider thiswhen evaluating
rental revenues-[Below describes the basis for evaluating
increase/decrease, etc. for each column. This
sheet gives explanations per item.]
Items included in Chapter 3 II5 (Performance of
Building) of General Japanese Real EstateAppraisal Standards. For housing, it is also
necessary to consider the display of theperformance base on the Housing Quality
Assurance Act (operational notes).

1.00
1.00

Evaluatethe 4.9
cost1.00
reduction
per3.5item1.00
separately
-

0.30
0.33
0.33
0.25
0.50
0.25
0.25
0.25
0.25
0.25
0.33
0.40
0.33
0.33
0.33
0.40
0.70
0.30
0.20
0.70
0.30

1.08

1.00
1.00

4.3

Basis

1.00

1.00

1.00

Consider this whenevaluating thecomparative price ofthe land/building
combined

Same as 2

1.00
1.05

D

-0.50%

1.00
1.10

Considering landmark effects

Fig. 3-2 Image sheet to determine pricing factors based on CASBEE assessment items

Reference
7"Supplementary documents for the 8th CASBEE Open Seminar” by Ito and others, July 24th, 2008, IBEC

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CASBEE Property Appraisal Manual

25(2009 Edition)

4.

Explanation of major items in this manual

4.1.

Assessment procedure

The “CASBEE Property Appraisal Support Tool” has been developed to support the property appraisal to be
conducted by using this manual.
This support tool is available for free download at the CASBEE web site.
<URL for free download of the CASBEE Property Appraisal Support Tool>
http://www.ibec.or.jp/CASBEE/english/download.htm
The support tool consists of the following:・ To determine pricing factors from CASBEE assessment items “Sheet A”
・ To make assessment by reflecting the above results in the value indicated by the income approach (direct
capitalization method) “Sheet B”
・ To make assessment by reflecting the above results in the sales comparison approach “Sheet C”
Fig. 4-1 shows the assessment workflow.
(1) First, perform the environmental performance assessment of the building by using the CASBEE
assessment tool.
(2) Transfer the CASBEE scores to “Sheet A” of the support tool and determine pricing factors while reviewing
the score of each of the relevant assessment items.
(3) Perform the real estate appraisal by using “Sheet B” and “Sheet C” by reflecting the results of “Sheet A” on
them.

Fig. 4-1 Assessment workflow

4.2.

CASBEE assessment items and pricing factor determination

This section describes the method of linking CASBEE assessment items to determination of pricing factors forproperty.
First, it should be noted that pricing factors consist of factors already reflected in market values (overt factors)
and potential factors that are yet to be reflected in market values or factors that should be reflected in market
values in the future (potential factors). The potential factors should not be included in the real estate appraisal,
as the property appraisal is an act of indicating the market value of the property in monetary value. However, it
is also important for property market participants to make investment decisions from long-term perspectives
including the potential factors.
The property appraisal including the analysis of potential factors may include voluntary appraisals by market
participants for their investment decisions and price investigation reports for which licensed real estateappraisers perform for specific purposes.

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CASBEE Property Appraisal Manual(2009 Edition)

The pricing factors can be summarized as shown in Table 4-1.
Table 4-1 Application of overt and potential factors
Type of factors

Reflection in market
valuesApplication to realestate appraisal

Application to priceinvestigation reports
by licensed realestate appraisers

Overt factors
Potential factors

○
×

○
×

○
○

Long-term
investment
decisions byproperty market
participants○○

The subsections below describe CASBEE assessment items in view of each of the overt and potential factors.
(1) Improved environmental quality (Q-1~Q-3) and increased rents, etc.
i. Relevance with overt factors
The impact should be understood and analyzed through comparison of examples of property for rent and/or
through hearing surveys with tenant brokers, etc. See References 1.2. for the method of the analysis.
ii. Relevance with potential factors
There may be some cases where the relationship between the environmental quality and rent fees cannot beclearly identified in areas where property to be assessed are located. In such an event, the rates of potential
increases in rent should be estimated by referring to the general relationship (See References 1.2.2.)
between scoring and the unit price of rent.
There are many potential factors that increase property values such as natural lights, natural ventilation,
relaxation spaces, preservation of the biological environment, etc., but they are not overt factors (See
References 1.1.(2)). Information to be provided in the future by the Intellectual Productivity ResearchCommittee can also be used as reference for these factors.
(2)-1 Improved durability (Q-2) and reduced repair costs, etc.
i. Relevance with overt factors
Factors that can identify estimated repair costs, etc. and can be reflected in estimated cash flows may beclassified as overt factors.
ii. Relevance with potential factors
If estimated repair costs, etc. cannot be identified, data on lifecycle costs per environmental consideration
item should be amassed to understand and analyze the trends.
(2)-2 Improved durability (Q-2) and reduced depreciation ratio
i. Relevance with overt factors
If the durable years of the materials of the building including the structural frame are available and thedifferences in the depreciation ratio with the durable years of standard materials can be calculated, suchfactors may be classified as overt factors. In such an event, the factors should be quantified by understanding
the percentage of composition between the land and the building (structural frame and facilities) and the
durable years.
ii. Relevance with potential factors
If the durable years of the materials are not available, data on durable years of the same material should be
amassed to understand and analyze the trends.
(3)-1 Energy saving (LR-1) and reduced utility costs
i. Relevance with overt factors
The utility costs should be estimated based on the specifications of the facilities. If the estimated costs can bereflected in the cash flows, they may be classified as overt factors.
ii. Relevance with potential factors
If the utility costs cannot be estimated, such indicators as PAL and ERR, etc. and such data as reduced
energy costs should be amassed to understand and analyze the trends.

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CASBEE Property Appraisal Manual27(2009 Edition)(3)-2 Energy saving (LR-1) and reduced environmental risks
i. Relevance with overt factors
It is currently impossible to associate reduced environmental risks with overt factors.
ii. Relevance with potential factors
The reduction (purchasing emissions rights, etc.) in net incomes as a result of systematized emissions control
should be estimated to calculate risk premiums for reference purposes also by taking into consideration thepresumed probability.
(4) Sustainability ranking and improved image
i. Relevance with overt factors
It is currently impossible to associate reduced environmental risks with overt factors.
ii. Relevance with potential factors
The relationship with BEE scores should be analyzed for a property whose capitalization rates can be
identified (It should be noted that it is time-consuming to make significant analysis).

4.3.

Value indicated by the income approach (Direct capitalization method)

See “Case Study Sheet B” for application to the value indicated by the income approach (the direct
capitalization method).
For increase or decrease in revenues, the multiplied results of increased or decreased values on Sheet A
should be reflected in the evaluation of revenues.
For increase or decrease in costs, as it is difficult to reflect numerical values directly on Sheet A, costs in items
that could affect the increase or decrease in costs (represented by “D” on Sheet A) should be evaluated.
For increase or decrease in capitalization rates, added or deducted results of increased or decreased values on
Sheet A should be reflected in “Increase or decrease by CASBEE factors” of the capitalization rate evaluationtable on the Direct Capitalization Method Sheet.
The calculation principles are shown in the table below.

Table 4-2 Relevant environmental effect and increased/decreased values
Environment-related
effectIncrease/decrease

Type offactorImproved thermal
comfort

Revenues

Overt

Improved lighting &illumination

Revenues

Overt

Improved quality ofservice

Revenues

Overt

Improved reliability

Capitalization rate

Overt

Reducedpre-depreciation yield
as a result of increased
service life

Capitalization rate

Overt

Increased/
decreased
value
Increasedby aboutXX%
Increasedby aboutXX%
Increasedby aboutXX%
Decreasedby XX P
Decreasedby XXP

ReasonBased on comparison of rent cases and theopinions of tenant brokers
Based on comparison of rent cases and theopinions of tenant brokers
Based on comparison of rent cases and theopinions of tenant brokers
Improved durability as a result of using theseismic response control structure andstabilized tenant demands were taken into
consideration for the evaluation.
The difference in the depreciation rate
between the service life of 50 years and 100
years each was calculated assuming thepercentage of the building value is at 0.3
and the percentage of the structural frame is
at 0.7.
(1×0.3×0.7÷50)-(1×0.3×0.7÷100)

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CASBEE Property Appraisal Manual(2009 Edition)

Excluding risk premiumon possible
enhancement in CO2emissions control in the
futureCapitalization rate

Comprehensive effectof the above items

Value indicated by
the income approachby the direct
capitalization method

4.4.

Potential

Decreasedby XX P＋XX%

The percentage of obligatory reduction in
the total CO2 emissions was estimatedbased on the expected emissions
regulation. And the risk of loss in revenues
as a result of purchasing the Green Power
Certificate worth the percentage wasconverted into risk premium.
For example, …
See attached table.

Sales comparison approach

See “Case Study Sheet C” for application to the sales comparison approach.
The sales comparison approach is used, in many cases, only for land in the current real estate appraisal. It israrely used for transactions that combine buildings (houses for rent such as tenant buildings, etc.) and the sites.
However, this approach can also be effective as transaction prices are often determined based on the unit priceper total floor area or rental area (dedicated to rent) in the property investment markets.
As the direct capitalization method considers the percentage of each of the CASBEE assessment items:“increase/decrease in revenues,” “increase/decrease in costs” and “increase/decrease in capitalization rates,”
the theoretical percentage of increase/decrease in values can also be estimated based on the outcomes of themethod. (See the “Comparison” column on Case Study Sheet A.)
The sales comparison approach for buildings and sites combined, as mentioned earlier, is not yet a popular realestate appraisal method. And as it employs theoretical increase/decrease in values, it may be suited more forprice investigation reports by licensed real estate appraisers and voluntary assessments by investors rather
than for real estate appraisal.

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CASBEE Property Appraisal Manual

29(2009 Edition)

4.5.

How to use the support tool

4.5.1.
Transferring CASBEE assessment results
First, the applicable CASBEE assessment results should be transferred into this support tool.

View

Transfer

Clear

Fig. 4-2 Main screen of CASBEE Property Appraisal Support Tool

On the main screen, select from the pull-down menu a version (2008 or 2006 version) of the assessment
software.
Then, on the score sheet of the assessment software, specify an area of the results to be transferred, and copy
& paste the specified area to inside the area marked in red on the “Score Transfer Sheet.” For items outside thered-marked area, transfer necessary information to each of the cells marked in light blue.
On PCs equipped with macro functions, specify files that contain data to be transferred by pressing the “View”
button on the main screen and click the “Transfer” button to automatically transfer the necessary informationand scores to the support tool.

Clear

Fig. 4-3 Score Transfer Sheet to transfer CASBEE results (excerpt)
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CASBEE Property Appraisal Manual(2009 Edition)

4.5.2.

Sheet A “Analyzing pricing factors by CASBEE score sheet”

CASBEE assessment results transferred are indicated on the left side of Sheet A “Analyzing pricing factors by
CASBEE score sheet.” The factors should be analyzed by reviewing the results and should be entered into the“Items Used for Appraisal and the Reasons” column (in blue cells on the right).
(1) Increase/Decrease in Revenues
For example, an item that is expected to see a 1% increase in rent should be entered as “1.01”. The multiplied
results of major items (Q, L and rankings), middle items (Q1, Q2…, L1,L2… levels), minor items (1,2… levels)and the result of the total tally are displayed.
(2) Increase/Decrease in spending
The symbol U (up) or D (down) instead of numerical values should be entered for cost evaluation.
(3) Increase/Decrease in capitalization rate
Increase/decrease should be entered by +/- XX% per item. The added or deducted results of major, middle andminor items and the result of the total tally are indicated.
(4) About Comparison
For example, in view of increase/decrease in revenues, increase/decrease in spending, increase/decrease incapitalization rate and other effects, an item that is expected to see a 1% increase in value should be entered as“1.01”. The multiplied results of major, middle and minor items and the result of the total tally are displayed.

(Omitted)

Fig. 4-4 Sheet A “Analyzing pricing factors by CASBEE score sheet“ (Excerpt)
4.5.3.

Property appraisal

The results of pricing factor analysis of environmental performance by using CASBEE assessed in thepreviously-mentioned Sheet A “Analyzing pricing factors by CASBEE score sheet“ are quoted by Sheet B“Value indicated by the income approach (direct capitalization method)” and Sheet C “sales comparison

c 2009 Japan Sustainable Building Consortium (JSBC)
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CASBEE Property Appraisal Manual31(2009 Edition)

approach.” Property appraisal should be performed (by entering in blue cells) based on the “Value indicated by
the income approach (the direct capitalization method)” or the “sales comparison approach” while reviewing theresults.

Clear(Omitted)
Link with Sheet A

Fig. 4-5 Sheet B “Value indicated by the income approach (direct capitalization method)” (excerpt)[Sheet C] Sales comparison approach

0（Note） The sales comparison approach is not necessarily popular for appraisal of land and buildings combined,
but is described for reference purposes as an example of appraisals including potential pricing factors, etc.

Major transactions adopted and estimating comparative prices
No.

General description

Transaction
dateTransaction
price

(ａ)
Address:

Clear

Standardization Regional
Circumstantial Timefactors
adjustment
adjustment adjustmentcomparison

(ｂ)

(ｃ)

(d)

(e)

100
100

100
100

100
100

100
100

Difference inbuilding
qualityadjustment

Individual
factor
CASBEE

Individual
factorOther
than (g)

100
100

100
100

100
100

(f)

(g)

(h)

Comparative
price

XXX

Type of structure XX and(1)number of floors XX

March 2009 10,000 yen/ m2

Total floor area XX m2

10,000yen/m2

Link with
Sheet A

Built in Year XX

Address:

a×b×ｃ×ｄ×e×ｆ×ｇ×ｈ×ｉ

XXX

Type of structure XX and(2)number of floors XX

May 2009

10,000 yen/ m2

100
100

100
100

100
100

100
100

100
100

100
100

100
100

June 2009

10,000 yen/ m2

100
100

100
100

100
100

100
100

100
100

100
100

100
100

10,000 yen/ m2 10,000 yen/ m2

Total floor area XX m2
Built in Year XX

Address:XXX(3) Type of structure XX andnumber of floors XX

10,000 yen/㎡

Total floor area XX m2
Built in Year XX↑
This can also be included in a separate item “Breakdown of individual factors.”

Fig. 4-6

Sheet C “Sales comparison approach”

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CASBEE Property Appraisal Manual(2009 Edition)

4.5.4.

Notes

i. As shown in Fig. 2-1, the work of linking the CASBEE scoring sheet with the property appraisal by using thismanual is basically discretionary.
ii. The sheets of the support tool shown in this manual are an example and can be modified at the appraisers’
own discretion. As appraisers usually have their own forms for the “direct capitalization method” and “sales
comparison approach,” etc., appraisers can replace them with their own.
iii. This manual and the support tool are provided solely for the purpose of showing the concept of performing
property appraisal by using CASBEE, and appraisers must determine each numerical value and the basis attheir own responsibility.
iv. Appraisers must abide by relevant laws and standards including laws on real estate appraisal and real estateappraisal standards and other notes and guidelines, etc. in the event of using this manual and the support tool.

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CASBEE Property Appraisal Manual33(2009 Edition)

5.

Case studies based on this manual

It has been so far explained the concept of this manual, the relevance with property appraisal, the theory of“environmental added value” of property and potential applications to future assessment methods, etc. This
chapter describes applications of assessment methods described in the previous chapters based on one model
case.
This model case assumes that the assessment purpose is to make long-term investment decisions. For thispurpose, both the overt and the potential factors as explained in 4.2. will be considered. This model case, insummary, is assumed to be Table 4-1 “Price investigation reports by licensed real estate appraisers.”

5.1.

General description of the model case

[Display of land]
Location
Lot number
District number XXX
XXX XXX XXX Ward, Tokyo XXXXX
Building site
Percentage of fee simple co-ownership of the above: 69/100

Registered area
3,400 m2

[Display of one building]
Location Address: XX-XXX, XXX Ward, Tokyo
Structure: Steel framed reinforced concrete structure and steel framed, three floors under the ground, 21
floors above the ground
Building type: Offices, shops, parking lots
Gross floor area: 35,000.00 m2[Display of condominium unit]
Building number: XX - XX
Structure: Steel framed, 1 floor under the ground, 21 floors above the groundExclusive area: 24,000 m2(Area for rent: 18,000 m2)

5.2.
5.2.1.

Assessment conditions for the model case
Understanding the area in terms of regional environment

To understand the regional environment of the area to which the property belongs, it is necessary to consider
the scope of influence the planned building will have, the regional vegetation and the ecosystem as well as theusage of the land, etc.
For this survey, the scope was defined as the whole XX Ward in Tokyo by taking into consideration the usage
and the size, etc. of the planned building and the fact that environmental data such as the locations of off-shores
and distribution of vegetation, etc. are readily available.
5.2.2.

Regional environmental statusA) Current status of land usage and the ratio of green coverage, etc.
According to the “Basic Policy of XX Ward,” while XX Ward has abundant green areas such as temples, shrinesand gardens, the ratio of green coverage is only about 18%. XX Ward faces Tokyo Bay, but the entire shore iscovered by artificial sea walls. While the boom for large-scale development projects for business offices has
somewhat subdued, the number of multi-family building constructions remains high based on the trend ofpeople returning to live downtown from the suburbs, reducing the ratio of green coverage.
B) Status of regional vegetation
According to the “Handbook of Japanese Vegetation (Akira Miyawaki, Shibundo Publishing),” this area belongs
to Tokyo Bay Area and the “potential natural vegetation” where vegetation peculiar to the entire naturalenvironment is available and the ability of the area is classified as the “Machilus Group” where the evergreen
broad-leaved trees of machilus dominate the high tree layer. However, such vegetation remains only in limited
places such as gardens, etc.
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CASBEE Property Appraisal Manual(2009 Edition)

Some of the recent redevelopment projects including those in the neighboring wards include measures torestore such vegetation, but some of the tree-planting measures include many foreign species.
C) Status of ecosystem
It is difficult at a glance to observe the natural ecosystem in this area where highly mature commercial andbusiness districts or high-rising residential building districts are located. However, according to the “Basic Policyof XX Ward,” the quality of the seawater is improving as a result of proliferation of the sewage system. Various
fishes including goby, conger eels, large-eyed herrings, rockfish, greenlings, gray mullets, and sea bass can beobserved along the shore. For birds, while the majority of birds observed are those commonly seen in cities
such as jungle crows, sparrows, bulbuls, gray starlings, etc., black-headed gulls, Japanese wagtails, spotbill
ducks, etc. can also be observed often at watersides and white-eyes, great tits and Japanese pygmy
woodpeckers at gardens and temples/shrines.
However, no raptores such as goshawks, kestrels, and owls, which inhabit more sophisticated ecosystems, canbe observed, allowing jungle crows to thrive without their natural enemy and to make a mess of garbage
collection sites, which has given rise to a major social issue. Thus, the ecosystem pyramid is in an incomplete
shape.
D) Status of air and heat island
The issue of sea breezes blocked by groups of high-rising buildings and the issue of the heat island
phenomenon in inner land associated with it have also been increasingly pointed out.
5.2.3.

Right direction of regional environment

As mentioned in the “Basic Policy of XX Ward,” the future direction of the regional environment should be to
improve the air pollution and the heat island phenomenon and restore the natural ecosystem by restoring thenatural vegetation of the area, preserving large green areas such as temples/shrines and gardens anddeveloping green networks that link such green areas with roads, shores, rivers and developed land.
5.2.4.

Status of property(1) LandThe site conditions are as follows:
Table 5-1 Conditions for site
Local transportation
systemStreetAdministrativerequirement
Supply/treatment
systems
Buried cultural assets
and their status
Soil contamination andthe status

Plot requirement
OthersDirect to XX Station on XX Line
Facing the Tokyo metropolitan road of about 30m in width at equal height
Commercial zone, fire-prevention district, building coverage ratio 80%, designatedfloor-area ratio 700%
Permitted floor-area ratio 900% (increase in floor-area ratio may be possible due tothe redevelopment area plan)
Electricity, gas, water supply, sewage already available
The site is not designated as a buried cultural assets area.
The engineering reports, etc. say, as a result of geographical history surveys, nosign of usage that could cause soil contamination was found and there is little
concern for soil contamination.
For this reason, it was determined soil contamination does not affect the pricing of
the property. (However, in the event any soil contamination is found as a result of
detailed surveys, the surveyed value of this model case may be affected dependingon the content of the result.)
About 60m in lot width, about 50m in depth, located at the corner, shaped almost ina rectangle and is flat.
A park is located in the south as well as a large garden across a Tokyo Metropolitan
road. The property faces Tokyo Bay across two blocks in the east.

<Determining the most effective use of the land>
Based on the above factors, it was determined the land can be used most effectively as a site for a high-risingbuilding with offices and shops. As the land is likely to play a major role in fostering the regional environment

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CASBEE Property Appraisal Manual

35(2009 Edition)

together with Tokyo Bay and the neighboring gardens, it is also necessary to create corridors for sea breezes
and to plan the introduction of regional vegetation.
(2) Building
The building is a new construction to be completed in XX, 200X. Based on the instructions of the building owner,
the plan includes more green specifications than the normal building specifications. The highlights of suchspecifications are as follows:c 2009 Japan Sustainable Building Consortium (JSBC)
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CASBEE Property Appraisal Manual(2009 Edition)

Table 5-2 Conditions for building
Environmental
consideration
item
Improved
surrounding
environment

Major item

General description and expected effectTree-planting on pedestrian deck

Alleviating heat island phenomenon, recharging
underground water, tie-up with the surrounding green area
(property with normal specifications must also make similar
considerations for the tie-up)

Tree-planting in open space
Energy saving /resource saving

Temporary storage of rainwaterHigh heat insulating/high airtightwalls
Design for natural light intake
Hybrid natural ventilation system

Individual air-conditioning
LightsCogeneration system
Ice thermal storage system
Highly efficient turbo refrigerator
Water saving
Long life cycle

Eco-material

Extensive recycled water intake
Seismic resistant grade: S(skyscraper + seismic response)
Ceiling height 3000mm
Electric outlet 60VA
Using circulation materials/low
environmental load materials

Reducing loads on regional infrastructures
Using high heat shielding/insulating Low-ε pair glass andsimple air flow. Also using many stone-pitching single
window PCa plates to reinforce heat insulation
Taking in natural light through a combination of glass curtain
walls at the corners
Installed at offices on each floor. Natural ventilation dampers
are installed at three faces of the building to take external air
naturally into offices and ceilings and to discharge internal
air on the suction faces through natural ventilation
Creating VAV zones consisting of 28 segments per floor.
Each zone is controlled by sensors.
Creating dimmed zones consisting of 20 segments per floor
where the initial lighting adjustment is made and daylight iscontrolled.
Turning on/off (dimming) lights at toilets and emergency
evacuation stairs by using human detection sensors
Generating power by gas engines and supplying the exhaust
heat to an exhaust heat recovery absorption-based hot andchilled water generator
Using night-time discount electric power based on the heatstorage type-based load shift contract. Also reducing
environmental loads through peak-cut.
Using highly efficient turbo refrigerators at offices
Using water recycled in Tokyo for flushing toilets
Increased life cycle
Improving functionality and securing flexibility in upgrading
facilities
Possibly for resource recycling, etc.

Fig. 5-2 Standard floor plan

Fig. 5-1 Whole cross-section
c 2009 Japan Sustainable Building Consortium (JSBC)
Copyright○

CASBEE Property Appraisal Manual37(2009 Edition)

5.3.

Relationship between the most effective usage of property in view of the environment andthe planned usage

As a result of considerations for 5.2.3. Right direction of regional environment and 5.2.4. Status of property, it
was determined the property can be used most effectively as an green large-scale building with offices andshops and achieving the status of the most effective use is feasible.

5.4.

Analyzing environmental added value factors by CASBEE and applying methods of thesurveyed value

The surveyed value of the property was determined by the cost approach, sales comparison approach andincome capitalization method (direct capitalization method and DCF method). As the property has already gone
through the scoring of environmental performances by CASBEE, the environmental added value factors werealso analyzed by using the CASBEE scoring sheet.
5.4.1.

Analyzing pricing factors by CASBEE scoring sheet

As the CASBEE scoring sheet comprehensively covers items related to improving the environmental quality ofgreen buildings (indoor environment, quality of service, outdoor environment) and to reducing environmentalloads (energy, resources & materials, off-site environment), pricing factors were analyzed by using the score.
The results of the analysis are shown in [Sheet A] Table 5-7. The following elements were included in applying amethod to determine surveyed values.
Effect of increase in revenues
5%
Effect of spending cut
Yes (the specific amount should be evaluated separately)
Effect of capitalization rate reduction -0.5%
5.4.2.

Applying cost approachi. Reproduction cost of land for a site of a building
The reproduction cost of the land was calculated at 25,500,000,000 yen (7,500,000 yen/㎡) by the sales
comparison approach. (The table was omitted.)ii. Reproduction cost of a building
The reproduction cost of a building was calculated at 8,300,000,000 yen (237,000 yen/㎡) based on theconstruction agreement and engineering reports, etc.
The breakdown and additional costs for green specifications are as follows:
Table 5-3 Additional costs for green specifications for the model building
Construction item

AmountAmount of green
specifications

Note

Main body

5,600,000,000

48,000,000

Natural ventilation system, Low-εglass, others (seismic responsecontrol equipment is excluded fromthe amount of green specifications)Electricity

900,000,000

15,000,000

Dimming lighting systems, etc.

Plumbing and sanitation

400,000,000
207,000,000

Natural ventilation control holes,
chambers, control systems, heat
reservoirs, etc.

Air-conditioning

Elevator

1,000,000,000

300,000,000

Exterior

100,000,000

12,000,000

Total

8,300,000,000

282,000,000

c 2009 Japan Sustainable Building Consortium (JSBC)
Copyright○

38

CASBEE Property Appraisal Manual(2009 Edition)iii. Reproduction cost of a building and the site
Based on the above, the reproduction cost of a building and the site was calculated at 33,800,000,000 yen(land: 25,500,000,000 yen, building: 8,300,000,000 yen).
iv. Accrued depreciation and value indicated by the cost approach of a building and the site
As the compatibility between a building and the site is good and the building is new, the accrued depreciation
was determined to be unnecessary and the value indicated by the cost approach of a building and the site wascalculated at 33,800,000,000 yen (land: 25,500,000,000 yen, building: 8,300,000,000 yen).
v. Value indicated by the cost approach of property
The percentage of the right to the property at 69% as stated in the “Memorandum on Constructing Kyodo
Building” was determined to be appropriate and the value indicated by the cost approach value of the property
was calculated as follows:(the value indicated by the cost approach value of a building and the site) X (the percentage of the right) ≒(the value indicated by the cost approach value of the property)
33,800,000,000 yen X 69% ≒ 23,300,000,000 yen
5.4.3.

Applying income capitalization method

i. Value indicated by the income approach by direct capitalization method
By indefinitely earning a stable net income at the capitalization rate, the value indicated by the income approach
was calculated at 27,209,000,000 yen by using the direct capitalization method as shown in [Sheet B] Table 5‑
8 Profit value of the model case (by direct capitalization method, Sheet B).
The effect of constructing the planned building with more green specifications than the normal specifications
can be summarized as shown in Table 5-4. Table 5-5 shows the breakdown of the energy effects.
Table 5-4 Environmental effect and increased/decreased values of the model building
Environment-related
effectIncrease/decreaseIncreased/decreasedvalue
Increased byabout 2%

Improved thermal
comfort

Revenues

Improved lighting &illumination

Revenues

Increased byabout 1%

Improved quality ofservice

Revenues

Increased byabout 2%

Improved reliability

Capitalizatio
n rateDecreasedby 0.1P

Reducedpre-depreciation
capitalization rate asa result of increased
life cycle
Excluding risk
premium on possible
enhancement in
CO2 emissions
control in the future

Capitalizatio
n rateDecreasedby 0.2P

Capitalizatio
n rateDecreasedby 0.2P

c 2009 Japan Sustainable Building Consortium (JSBC)
Copyright○

ReasonThe precise air-conditioning control at 28 zones of the standard
floor was evaluated by taking into consideration the opinions oftenant brokers, etc.
The precise air-conditioning control at 20 zones of the standard
floor was evaluated by taking into consideration the opinions oftenant brokers, etc.
The large capacity electric outlet of 60VA and the ceiling height of
3,000mm were evaluated by taking into consideration the opinionsof tenant brokers, etc.
Improved durability as a result of using the seismic responsecontrol structure and stabilized tenant demands were taken into
consideration for the evaluation.
For the service life of over 100 years, the difference in depreciation
between the service life of 50 years and 100 years each was
calculated, assuming that the percentage of the building value is at
0.3 and the percentage of the structural frames is at 0.7.
(1×0.3×0.7÷50) - (1×0.3×0.7÷100)
The energy consumption in the case of the normal specifications is
75,000GJ (2.1GJ/㎡), which can be translated into over 1,500kl incrude oil. For this reason, it is likely the property is subject to theenvironmental protection ordinance of the Tokyo Metropolitan
government, which obligates certain businesses to reduce the total
amount of CO2 emissions. On the assumption that the CO2
emissions must be reduced by about 800t, which is about 25% of
the about 3200t-CO2 emitted by the normal specifications and thata Green Power Certificate worth about 800t must be purchased,
the risk of loss in revenue could be about 40 million yen per year.
The amount was converted into the risk premium.*

CASBEE Property Appraisal Manual39(2009 Edition)

Comprehensive
effect of the above
items

Value
indicated by
the income
approach by
the direct
capitalizatio
n method+19%

See Exhibit.

*This is different calculation basis from “Tokyo Cap-and-Trade Program” of Tokyo Metropolitan Government. Please refer to the latest
information when implementing an assessment.

Table 5-5 Energy effects of the model building
Item
Building

Energy saving

Exterior
Base lighting at exclusiveareaLighting

Lighting at toilet
Air-conditioning

Ventilation
Heat source

Low‐ε glass
Daylight control/initial lighting
adjustment
Turning on/off lights by humandetection sensors
Natural ventilation/night purge
Complex heat sources (turbo +absorption + cogeneration)
Sub-total

Amount of reduction inenergy2,460
GJ/year
2,350

GJ/year

300

GJ/year

3,920

GJ/year12,260GJ/year21,290GJ/yearii. Value indicated by the income approach by DCF method
Based on the assumption that the property is sold after retaining it for a certain period of time, the total net
income at the current value during the retaining period and the resale value at the current value after theretaining period were added to calculate the value indicated by the income approach of the property at
26,963,000,000 yen as shown in Table 5-10.
In applying the DCF method, the amount equivalent to the risk premium related to environmental regulations
was excluded while evaluating the discount rate and the final capitalization rate for a property with normal
specifications as the potential decline in revenue for a property with normal specifications related toenvironmental regulations was reflected in the cash flow (See the table below).
Table 5-6 Value indicated by the income approach of the model building
Property
Capitalization rate a
Environmental regulatory risk
premium b
Future uncertainty c
Final capitalization rate dRevenue stability during retaining
period e
Discount rate f

5.0%

Property withnormal spec.
5.5%
-0.2P

+0.3P

+0.3P

5.3%
-0.5p

5.6%
-0.5P

4.5%

4.8%

ReasonEvaluated by the direct capitalization
methodPossible reduction in revenues alreadyreflected in the cash flow
Uncertainty over revenue projections after
the retaining period ended was reflected.
d=a+b+c
Stable revenues based on periodic building
lease contracts were considered.
f=a+b+e

The DCF method Note) also produced an added value of about +17% as the direct capitalization method did.
iii. Value indicated by the income approach
Based on the above, the following values were produced:
Value indicated by the income approach by the direct capitalization method: 27,209,000,000 yen
Value indicated by the income approach by the DCF method:
26,963,000,000 yen
Both of the values are almost equal, which confirms that the value calculated by the DCF method can beverified by the value calculated by the direct capitalization method, which tends to be more substantiative.
Based on the above, the value indicated by the income approach was estimated at 27,000,000,000 yen.

c 2009 Japan Sustainable Building Consortium (JSBC)
Copyright○

40

CASBEE Property Appraisal Manual(2009 Edition)

5.4.4.
Applying sales comparison approach
Appropriate cases are selected after collecting many transaction cases of houses for rent and their sites that are
similar to the model property, and their transaction values, if necessary, are adjusted according to thecircumstances and the timing of the transactions, and then, values produced after comparing regional factors
and individual factors are compared to calculate the estimated value of the property.
The sales comparison approach for houses for rent and their sites is not necessarily used generally for theproperty appraisal. However, the method is applied in this report as cases of sophisticated office buildings forrent that are similar to the model case are available from buildings owned by property investment companies.
For environmental consideration items, as the impact on value indicated by the income approach (increased
revenues, reduced costs, reduced capitalization rates, etc.), which was considered on [Sheet A] CASBEE
scoring sheet can be used also for considering the impact on the value itself, the [Sheet A] also calculated thecomparative percentage (percentage of increased/decreased values) of individual factors of CASBEE.
As a result of adjustment according to the circumstances and the timing of the transactions, regional factors andindividual factors (differences in grades of land and buildings) as stated in the [Sheet C] Table 5-11 as well as
the consideration for individual factors of CASBEE, the value indicated by the sales comparison approach of theproperty was calculated at 27,200,000,000 yen (1,510,000 yen per area for rent).

Note)
It stands for “Discounted Cash Flow Analysis.” It is a method of producing an indicated value by the following procedure:
define the assumed retaining period of a property by investors (10 years in this case study) and predict the net income (netcash flow) to be produced during the retaining period and the resale value at the end of the retaining period (after deducting
sales costs) and, then, apply a discount rate to both the net income and the resale value to calculate the current values and,then, aggregate them to produce the indicated value. For the capitalization rate, while the direct capitalization method
employs the capitalization rate, the DCF method employs the discount rate and the final capitalization rate (the capitalization
rate used for calculating the resale value). In this case study, as shown in Table 5-6, the discount rate and the final
capitalization rate are calculated by considering the future uncertainty about the capitalization rate and the revenue stability
during the retaining period, etc.

c 2009 Japan Sustainable Building Consortium (JSBC)
Copyright○

Q1

Summary of environmentally conscious
efforts in design

enter figures and comments.

1.05: Items which likely impact prices

4.2
4.0
4.0
4.0
5.0
5.0
5.0
3.0
4.3
4.5
4.0
4.0
5.0
5.0
5.0
3.0
5.0
3.9
3.6
4.0
3.0
3.0
3.0
3.0
5.0
5.0
5.0
5.0
4.2
4.6
4.0
5.0
5.0
3.7
4.0
3.0
5.0
3.0
4.0
3.0
5.0

0.40
0.15
0.40
0.50
0.50
0.40
0.60
0.40
0.20
0.35
0.50
0.30
0.20
0.30
0.10
0.10
0.20
0.30
0.25
0.30
0.60
0.40
0.30
0.40
0.60
0.15
0.70
0.30
0.25
0.25
0.50
0.33
0.33
0.33
0.30
0.25
0.25
0.25
0.25
0.20
0.50
0.50
3.0
3.0
3.0
3.0
3.0
3.0
3.0
3.0
3.0
3.0
3.0
3.0
3.0
3.0
3.0
3.0
3.0
3.0
3.0
3.0
3.0
3.0
3.0
3.0
3.0
-

4.2

3.9

4.3

4.2

4.2

0.00%

0.00%

0.00%

0.00%

0.00%

-0.30%

1.08

1.00

1.00

1.00
1.00

1.00
1.01

1.00

1.01
1.00

1.00
1.00

1.02

1.02
1.00

1.00
1.00

1.03

The precise sensor control at 20 zones of thestandard floor was evaluated by taking into
consideration the opinions of tenant brokers, etc.

The precise air-conditioning control at 28 zones ofthe standard floor was evaluated by taking into
consideration the opinions of tenant brokers, etc.

CASBEE Property Appraisal Manual

1.00

1.00

1.00

1.00
1.00

1.00
1.00

1.00
1.00
1.00

1.01
1.00
1.00

1.00

1.01

1.00

1.00

1.00
1.02
1.00

1.00

1.02

1.00
1.00

1.00
1.00

1.00

1.03

Entire Building and ComResidential and Accomodation sectItems Used for Appraisal and the Basisweightinweightin
Increase/ Increase/ Compariso
Total Increase/
Score
Score
Basis
Decrease Decrease Decreaseggncoefficie
coefficieininin(Multiplied

4.1[Exhibit A] Image of sheet to determine pricing factors based on CASBEE assessment items

1
Background noise level2
Equipment noise
1.2 Sound Insulation
Securing External Wall Performance (T-2)
1Sound Insulation of Openings
2
Sound Insulation of Partition Walls
Sound Insulation Performance of Floor Slabs (light-we
3Sound Insulation Performance of Floor Slabs (heavy-w
4
1.3 Sound Absorption
2 Thermal Comfort
2.1 Room Temperature Control
1
Room Temperature Setting
2
Variable Loads and Following-up Cont
Using LOW-ε Glass
3
Perimeter PerformanceStandard Floor Zone VAV28
4
Zoned Control
5Temperature and Humidity Control Controlled by Sensors Installed Per Zone
6
Individual Control
7
Non-regular Hour Air-conditioning
8
Monitoring Systems
2.2 Humidity Control
2.3 Type of Air Conditioning System
3 Lighting & Illumination
3.1 Daylighting
1
Daylight Factor
2
Openings by Orientation
3
Daylight Devices
3.2 Anti-glare Measures
1
Glare from Light Fixtures
2
Daylight Control
3.3 Illuminance Level
Up to 1200Lx by Specifications (Dimmed to 700Lx by Sensors)
1
Illuminance2
Uniformity of IlluminancePrecise Zoning by Sensors
3.4 Lighting Controllability
4 Air Quality
4.1 Source Control
1
Chemical Pollutants
2
Asbestos
3
Mites, Mold etc
4Legionella
4.2 Ventilation
Using Natural Ventilation on Standard Floor
1
Ventilation Rate
2
Natural Ventilation Performance3
Consideration for Outside Air Intake Different External Walls for Air Intake and Discharge
4
Air Supply Planning
4.3 Operation Plan
CO2 Monitoring
1
2
Control of Smoking

1 Noise & Acoustics
1.1 Noise

Indoor Environment

Q Environmental Quality of the building

Concerned categories

CASBEE for New Construction (2007 Edition)
XX building
Completed
Score Sheet

Table 5-7 Analyzing pricing factors in model case (Sheet A)(2009 Edition)41

c 2009 Japan Sustainable Building Consortium (JSBC)
Copyright○

c 2009 Japan Sustainable Building Consortium (JSBC)
Copyright○－－

1 Building Thermal Load
2 Natural Energy Utilization
2.1 Dirct Use of Natural Energy
2.2 Converted Use of Renewable Energy
3 Efficiency in Building Service System
4 Efficient Operation
4.1 Monitoring
4.2 Operation & Management System

Monitoring Per System, Equipment

Conduit for Natural Wind, Night Purge, etc.
ERR25% or higher－

ＬＲ Environmental Load Reduction of the building

LR1
0.30
0.20
0.30
0.20
0.50
0.50

4.0
5.0
3.0
5.0
5.0
5.0
5.0

0.40

-

0.30
0.50
0.50

Energy0.40

Implementing Such Efforts as Open Spaces, Tree-planting, Joint efforts with Shiodome Town
Development Council

0.30

0.30
0.40
0.60
0.33
0.33
0.33
0.40
0.33
0.33
0.33
0.31
0.48
0.80
0.20
0.33
0.23
0.23
0.09
0.23
0.23
0.19
0.20
0.20
0.20
0.20
0.20
0.29
0.31
0.60
0.40
0.31
0.38
0.17
0.17
0.11
0.11
0.22
0.22
0.30

4.0
4.0
4.0

3.0

Planting on Pedestrian Deck to Coordinate with Surrounding Green Land

－

4.1
4.0
3.0
5.0
4.0
4.3
5.0
3.0
5.0
3.5
3.2
3.0
4.0
3.6
5.0
3.0
3.0
3.0
4.0
4.0
4.0
4.0
4.0
4.0
4.0
4.4
4.6
5.0
4.0
5.0
3.9
4.0
5.0
5.0
3.0
3.0
4.0

5.0

Outdoor Environment on Site

1
Provision of Space & Storage
2
Use of Advanced Information System Electric Outlet Capacity 60VA/㎡
3
Barrier-free Planning
1.2 Amenity
Height of Ceiling 3000mm
Perceived Spaciousness & Access to View
1
2
Space for Refreshment
3
Décor Planning
2 Durability & Reliability
2.1 Earthquake Resistance1
Earthquake-resistance2
Seismic Isolation & Vibration Damping Seismic Response Control Structure
2.2 Service Life of Components
Service Life of Over 100 Years by Specifications
Service Life of Structural Frame Materials
1
Necessary Refurbishment Interval for Exterior
2
Necessary Renewal Interval for Main Interior F
3
Necessary Renewal Interval of Replacing Pipes
4
Necessary Renewal Interval for Major Equipment and Services
5
2.4 Reliability
1
HVAC System
2
Water Supply & Drainage
3
Electrical Equipment
4
Support Method of Machines & Ducts
5
Communications & IT Equipment
3 Flexibility & Adaptability
3.1 Spatial Margin
1
Allowance for Floor-to-floor Height Floor-to-Floor Height 4350mm
2
Adaptability of Floor Layout
3.2 Floor Load Margin
3.3 Adaptability of Facilities
1
Ease of Air Conditioning Duct Renewa
Ease of Water Supply and Drain Pipe Renewal
2
3Ease of Electrical Wiring Renewal
Ease of Communications Cable Renewal
45Ease of Equipment Renewal
6
Provision of Backup Space

Quality of Service
1 Service Ability
1.1 Functionality & Usability

1 Preservation & Creation of Biotope
2 Townscape & Landscape
3 Local Characteristics & Outdoor Amenity
3.1 Attention to Local Charcter & Improvement of Comfort
3.2 Improvement of the Thermal Environment on Site

Q3

Q2

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

3.0
3.0
3.0
3.0
3.0
3.0
-

1.02

5.0
5.0

5.0

4.0

D
1.00

1.00

1.00

1.00

1.00

1.00

0.00%

1.02
1.00

1.00

0.00%

-0.20%

1.00

1.00

1.00

4.0

1.00
1.00
1.00

1.00

1.00

1.00

1.00

0.00%

1.00

1.00

1.00

1.00

1.00

1.00
1.00
1.00

1.00
1.00
1.00

1.00
1.00

Reflecting the yields will be considered in LR3.

1.00

-0.20%

0.00%

For the service life of over 100 years, thedifference in depreciation between the service lifeof 50 years and 100 years each was calculated
assuming the percentage of the building price is at
0.3 and the percentage of the building is at 0.7.
(1×0.3×0.7÷50)-(1×0.3×0.7÷100)

1.00
1.02

1.00

Improved durability as a result of using the seismic
response control structure and stabilized tenant
demands were taken into consideration for theevaluation.

1.01-0.10%

1.00

1.03
1.00

-0.30%The large capacity electric outlet of 60VA and theceiling height of 3,000mm were evaluated by taking
into consideration the opinions of tenant brokers,
etc.

1.00

1.00

1.00
1.01

1.01

1.00
1.00
1.00

4.7

1.05

1.02
1.00
1.01

0.00%

-0.30%

1.01
1.00

1.02

4.0

5.0

3.0

4.1

4.4

3.5

4.1

4.0

42
CASBEE Property Appraisal Manual(2009 Edition)

Fire Retardant
Insulation Materials
Refrigerants

LCCO2 Emission Rate 72%

Reduction of Rainwater Processing LoTemporary Storage of Rainwater
Sewage Load Suppression
Traffic Load Control
Waste Treatment Loads

3 Consideration of Surrounding (Neighborhood) Environment
3.1 Noise, Vibration & Odor

1
2
3
4

Off-site Environment
1 Consideration of Global Warming
2 Consideration of Local Environment
2.1 Air Pollution
2.2 Heat Island Effect
2.3 Load on Local Infrastructure

1
2
3

3 Avoiding the Use of Materials with Pollutant Content
3.1 Use of Materials without Harmful Substances
3.2 Avoidance of CFCs and Halons

2.3 Use of Recycled Materials as Structural Frame Materials
2.4 Use of Recycled Materials as Non-structural Materials
2.5 Timber from Sustainable Forestry
2.6 Reusability of Components and Materials

1
Rainwater Use System
2Gray Water Reuse System
2 Reducing Usage of Non-renewable Resources
2.1 Reducing Usage of Materials
2.2 Continuing Use of Existing Building Skeleton etc

Resources & Materials
1 Water Resources
1.1 Water Saving
1.2 Rainwater & Gray Water

1
Noise
2
Vibration
Installing Deodorizer at Kitchen Ventilation
3Odor
3.2 Wind Damage & Sunlight Obstruction
1
Restriction of Wind Damage
2
Restriction of sunlight obstruction
3.3 Light Pollution
1
Light that Spills Outside
2
Daylight Reflected by External Wall of
BEE Value
Increase/Decrease Value After Analyzing CASBEE Items

LR3

LR2
0.15
0.40
0.60
0.67
0.33
0.63
0.07
0.24
0.20
0.20
0.05
0.24
0.22
0.32
0.68
0.33
0.33
0.33
0.30
0.33
0.33
0.25
0.50
0.25
0.25
0.25
0.25
0.25
0.33
0.40
0.33
0.33
0.33
0.40
0.70
0.30
0.20
0.70
0.30

4.9
3.5
5.0
3.0
3.0
3.0
3.0
3.0
3.0
4.3
4.3
5.0
5.0
3.0
4.0
4.0
4.0
5.0
5.0
5.0
3.39

－

0.30

－

3.6
4.0
3.3
3.0
4.0
3.0
3.0
3.0
3.0
3.0
3.0
3.0
3.2
3.0
3.3
4.0
3.0
3.0

-

-

-

-

-

-

4.3

4.9
3.5

4.2

3.2

3.0

3.6

3.1
1.00

1.00
1.05

1.00

1.00
1.00

1.00

1.00

1.00

1.00

D

D

-0.50%-0.20%-0.20%

0.00%

1.00

1.00
1.10

1.00

1.02
1.00

1.02

1.00

1.00

1.00

Same as 2

Averting risks for reduced revenues as a result of
adopting the Environment Protection Ordinance
was reflected.

(2009 Edition)

CASBEE Property Appraisal Manual43c 2009 Japan Sustainable Building Consortium (JSBC)
Copyright○

44

CASBEE Property Appraisal Manual(2009 Edition)

Table 5‑8 Profit value of the model case (by direct capitalization method, Sheet B)
Items

1 Rent

Unit: 1,000 yen
Designated
Property as
Property
usual (PaU)(DP)

1,737,481

8000 yen/month/㎡ for PaU to which the percentage ofincreased CASBEE income and a half of the reduced
1,641,600
amount of utility costs within the occupied area are added
for DP (Rate of operation is 95% for both.)

2 Common service costs

3 Utility costs

Included in the rent

6 Operating earnings

600 yen/month/㎡ for PaU, while 20% less for DP through123,120 its energy-saving design （Rate of operation is 95% for
both, and the budget table is referred to for calculation.)

98,496

4 Parking lot
5 Others

Calculation basis(in comparison between DP and PaU)

1,000
1,836,977

Not added up due to the operation by the property
management union.
Income from renting places for vending machines and
1,000
antennas, etc.
1,765,720

7 Taxes

170,000

8 Maintenance costs

144,000

9 Utility costs (exclusive area)

98,496The land is based on the actual cost while the building isbased on an assumption.
Assumed to be 750 yen/month/㎡ per area for rent
144,000(including PM fee)
123,120 Same as utility cost income

10 Utility costs (common area)

25,92032,400

11 Insurance premium

8,100

8,100

446,516

477,620

12 Operating expenses
OER（Operating
13
expenses/operating income）
14 Net operating income
15 Profit from operating deposits (+)
16 Capital expenses (-)
17 Net income
18 Capitalization rate
The value indicated by the
19 income approach using thedirect capitalization method(comparison with PaU)

170,000

150 yen/month/㎡ per area for rent, the property to beassessed can be reduced by 20% for energy-saving design

24.3%

27.0% (12÷6)

1,390,461

1,288,100 (6-12)

00 Not considered as this is classified as liquid deposits

30,00030,000 To be assessed by referring to engineering reports, etc.

1,360,461

1,258,100

5.00%

5.50%

27,209,000

Consideration of the rate increase and decrease throughthe analysis of relevant CASBEE assessment itmes

22,875,000 (17÷18)

119

100

[Assessing capitalization rate]
ItemStandard capitalization rate in an
area
Location
Tenant risks
Ownership-related risks
Number of years after built
Floor area
Legality
Increase/decrease by CASBEE
item analysis
Capitalization rate for

Property with
Property to
Configuration basis
normalbe assessed
specifications
5.50%

5.50% To be assessed based on cap. rates of transaction cases-0.20%
0.00%
0.20%
0.00%
0.00%
0.00%

-0.20% Direct route to a nearby station
0.00% Normal multi-tenant building
0.20% Segmented ownership
0.00% 10 years or less
0.00% Standard size
0.00% ER says there is no problem-0.50%
5.00%

c 2009 Japan Sustainable Building Consortium (JSBC)
Copyright○

See Exhibit A
5.50%

CASBEE Property Appraisal Manual45(2009 Edition)

Table 5-9 DCF method (1)Property to beassessed
4.50%

Property with normal
specifications
4.80%

Final
capitalization rate

5.30%

5.60%

Transfer cost rate

2.00%

2.00%

Discount rate

Basis of assessment
Removing environmental risk of property with normal
specifications (-0.2P). Consideration for income stability
through periodic building lease contracts (-0.5P for
each)
Assessing with the capitalization rate (after removing theenvironmental risk for a property with normal
specifications) of around +0.3% by taking into
consideration the uncertainties, etc, over predicted
income at the end of the holding period.
Rate of property brokerage fee, etc. (by taking the sizes
into consideration)

The utility costs are assumed to increase 2% per year from the 5th year.
The rent and other incomes and operating expenses (excluding the utility) are assumed to increase 1% per year from the
5th year.

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46

CASBEE Property Appraisal Manual(2009 Edition)

Table 5-10 DCF method (2)DCF assessment for property to be assessed

Rent
Common area charges
Utility costs (exclusive area)
Parking
Other
Operating income
Taxes
Maintenance and management fee
Utility costs (exclusive area)
Utility costs (common area)
Insurance premium
Operating expenses
OER (operating expenses/operating
income)Operating income
Profit from operating deposits (+)
Capital expenses (-)
Net income
Present value rate
Present value of net income
Net income at sales
Recoverable priceTransfer costs
Recoverable value
Present value rate1
1,737,481
098,4960
1,000
1,836,977

2
1,737,481
098,4960
1,000
1,836,977

3
1,737,481
098,4960
1,000
1,836,977

4
1,737,481
098,4960
1,000
1,836,977

5
1,737,481
098,4960
1,000
1,836,977

6
1,737,481
098,4960
1,000
1,836,977

7
1,737,481
098,4960
1,000
1,836,977

8
1,737,481
098,4960
1,000
1,836,977

9
1,737,481
098,4960
1,000
1,836,977

10
1,737,481
098,4960
1,000
1,836,977

11
1,737,481
098,4960
1,000
1,836,977

170,000
144,000
98,49625,9208,100
446,516

170,000
144,000
98,49625,9208,100
446,516

170,000
144,000
98,49625,9208,100
446,516

170,000
144,000
98,49625,9208,100
446,516

170,000
144,000
98,49625,9208,100
446,516

170,000
144,000
98,49625,9208,100
446,516

170,000
144,000
98,49625,9208,100
446,516

170,000
144,000
98,49625,9208,100
446,516

170,000
144,000
98,49625,9208,100
446,516

170,000
144,000
98,49625,9208,100
446,516

170,000
144,000
98,49625,9208,100
446,516

24.3%

24.3%

24.3%

24.3%

24.3%

24.3%

24.3%

24.3%

24.3%

24.3%

24.3%

1,390,461

1,390,461

1,390,461

1,390,461

1,390,461

1,390,461

1,390,461

1,390,461

1,390,461

1,390,461

1,390,461

30,0001,360,461
0.95694
1,301,877

30,0001,360,461
0.91573
1,245,815

30,0001,360,461
0.87630
1,192,167

30,0001,360,461
0.83856
1,140,830

30,0001,360,461
0.80245
1,091,703

30,0001,360,461
0.76790
1,044,692

30,0001,360,461
0.73483
999,705

30,0001,360,461
0.70319
956,656

30,0001,360,461
0.67290
915,460

30,00030,0001,360,461 1,360,461
0.64393 Total of present value of net income
10,764,944
876,038

1,360,461
25,669,075
513,381
25,155,693
0.64393

Present value of recoverable pricePresent value of net income

16,198,447
10,764,944

DCF assessment value

26,963,000

DCF assessment for property with normal specifications

Rent
Common area charges
Utility costs (exclusive area)
Parking
Other
Operating income
Taxes
Maintenance and management fee
Utility costs (exclusive area)
Utility costs (common area)
Insurance premium
Carbon credit Trading
Operating expenses
OER (operating expenses/operating
income)Operating income
Profit from operating deposits (+)
Capital expenses (-)
Net income
Present value rate
Present value of net income
Net income at sales
Recoverable priceTransfer costs
Recoverable value
Present value rate

1
1,641,600
0123,1200
1,000
1,765,720

2
1,641,600
0123,1200
1,000
1,765,720

3
1,641,600
0123,1200
1,000
1,765,720

4
1,641,600
0123,1200
1,000
1,765,720

5
1,641,600
0123,1200
1,000
1,765,720

6
1,641,600
0123,1200
1,000
1,765,720

7
1,641,600
0123,1200
1,000
1,765,720

8
1,641,600
0123,1200
1,000
1,765,720

9
1,641,600
0123,1200
1,000
1,765,720

10
1,641,600
0123,1200
1,000
1,765,720

11
1,641,600
0123,1200
1,000
1,765,720

170,000
144,000
123,120
32,4008,100

170,000
144,000
123,120
32,4008,100

170,000
144,000
123,120
32,4008,100

170,000
144,000
123,120
32,4008,100

477,620477,620477,620477,620

170,000
144,000
123,120
32,4008,100
12,800490,420

170,000
144,000
123,120
32,4008,100
12,800490,420

170,000
144,000
123,120
32,4008,100
12,800490,420

170,000
144,000
123,120
32,4008,100
12,800490,420

170,000
144,000
123,120
32,4008,100
12,800490,420

170,000
144,000
123,120
32,400
8,100
40,000517,620

170,000
144,000
123,120
32,400
8,100
40,000517,620

27.0%

27.0%

27.0%

27.0%

27.8%

27.8%

27.8%

27.8%

27.8%

29.3%

29.3%

1,288,100

1,288,100

1,288,100

1,288,100

1,275,300

1,275,300

1,275,300

1,275,300

1,275,300

1,248,100

1,248,100

30,0001,258,100
0.95420
1,200,477

30,0001,258,100
0.91049
1,145,493

30,0001,258,100
0.86879
1,093,028

30,0001,258,100
0.82900
1,042,966

30,0001,245,300
0.07910985,071

30,0001,245,300
0.75480
939,953

30,0001,245,300
0.72023
896,902

30,0001,245,300
0.68724
855,823

30,0001,245,300
0.65577
816,625

30,00030,0001,218,100 1,218,100
0.62573 Total of present value of net income
9,738,540
762,202

1,218,100
21,751,786
435,036
21,316,750
0.62573

Present value of recoverable pricePresent value of net income

13,338,536
9,738,540

DCF assessment value

23,077,000

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③

(3)

(2)
②

(1)
①

No.
符号

要

○○年建築

延床面積
○○㎡
Built
in Year XX

Total floor area XX m2○○造地上○階建Type of structure XX andnumber of floors XX

Address:
XXX○区○○２丁目○○年建築

Built in Year XX

延床面積 ○○㎡

Total floor area XX m

2

Type of structure XX andnumberof floors XX○○造地上○階建○区○○２丁目

Address: XXX○○年建築

Built in Year XX

延床面積 ○○㎡

Total floor area XX m

2

Type of structure XX andnumberof floors XX○○造地上○階建○区○○２丁目

Address: XXX

概General description

July
2008
平成20年７月

August2008
平成20年8月

August2008
平成20年8月

取引年月日

Transaction date

100

95

100

95

100

補正
(f)

building quality
adjustment
(f)

110

100

110

CASBEE(g)
CASBEE
(g)

100

100

100

(h)

(h)
(g)以外

1,508,000
yen/m2
1,508,000円/㎡

e×ｆ×ｇ×ｈ×ｉ

Individual factor a×b×ｃ×ｄ×Difference in
Individual
factor 個別的要因
建物品等格差個別的要因
Other than (g)1,600,000円/㎡

1,600,000 yen/ m2

100

100

96

100

100

100

97

100

100

100

100

110

100

100

100

100

100

100

110

100

100

100

100

1,536,000円/㎡

1,536,000 yen/ m2

1,493,800円/㎡

100

98

100

(e)

Regionalfactors
地域要因のcomparison
比較(e)1,493,800 yen/ m2

100

100

100

補正
(d)

Standardization
標準化
adjustment(d)1,400,000円/㎡

97

(ｃ)

Time
adjustment
時点修正
(c)

100

(ｂ)

Circumstantial
事情補正
adjustment(b)1,400,000 yen/ m2

1,250,000
yen/ m2
1,250,000円/㎡(ａ)Transaction
取引価格
value
(a)

Table 5-11 Price evaluation in model case (Market comparison approach Sheet C)

1,510,000円/㎡

1,510,000 yen/ m2

Value indicatedby the sales
比準価格
comparison
approach(2009 Edition)

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48

CASBEE Property Appraisal Manual(2009 Edition)

5.5.

Adjusting estimated values and determining the surveyed value

3 estimated values were obtained based on the above.
Value indicated by the cost approach
23,300,000,000 yen
Value indicated by the income approach
27,000,000,000 yen
Value indicated by the sales comparison approach 27,200,000,000 yen
The value indicated by the cost approach was somewhat lower than the value indicated by the income
approach. This is probably because the demand for sophisticated large buildings in downtown Tokyo remains
relatively high amid declining demand for investment in property, especially for land transactions.
The income capitalization approach calculates theoretical values by focusing on property revenues. For thissurvey, the values were estimated by using the direct capitalization method and the DCF method while mutually
verifying them. The property for this survey is retained for revenues and the market participants (users) also will
likely focus on revenues in determining the value. In this survey, the net income and the capitalization rate, etc.
were also calculated in view of the green construction plan. Such evaluations seem reasonable enough under
the current circumstances where the corporate social responsibility (CSR), etc. are emphasized.
The value indicated by the sales comparison approach is rarely used for property appraisal. However, theindicated value is believed to be a useful reference as it is based on a collection of many similar transaction
cases of property for investment and sufficient study on individual factors related to environmental
considerations.
As a result of considering all of the above, focusing on the value indicated by the income approach and referringto the value indicated by the sales comparison approach and the value indicated by the cost approach, thesurveyed value was calculated as follows:
Surveyed value
27,000,000,000 yen

c 2009 Japan Sustainable Building Consortium (JSBC)
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CASBEE Property Appraisal Manual49(2009 Edition)

6.

Conclusion: Issues surrounding property appraisal in the low-carbon era

All the countries in the world including Japan have been accelerating their efforts for the post-Kyoto Protocol
agreement including requests and efforts for a low-carbon society. However, the past energy consumption
records indicate that energy consumption continues to increase sharply in the private sector with no sign ofabatement. Efforts for a low-carbon society in this sector are crucial, and the private sector should play a central
role in realizing a low-carbon society. To that end, the private-sector building markets such as offices andhouses should be designed in a way that reflects green in property values and promotes green properties to thewhole society. Mechanisms and tools to visualize such systems are urgently required.
Based on these backgrounds, this manual describes the national and international trends on the property
appraisal at the beginning, followed by the property appraisal manual in the main section of the document. In
the conclusion, this manual describes issues surrounding property appraisal in the low-carbon era.
<Future issues>(1) Clarification and addition of overt items: Partially modify or add names of items that overtly impact theproperty appraisal so that people in the property industry can easily understand. Such items include
assessment of security and sites, etc.
(2) Turning items potentially impacting property appraisal into overt items: Turn CASBEE assessment items that
potentially impact the property appraisal into overt items and develop effective tools. Such items include
tree-planting at sites, preserving the eco-system, bio-diversity, landscape in harmony with the townscape,intellectual productivity, etc. However, doing so requires verifications and time.
(3) Database of CASBEE assessment-based property appraisal cases: Create a database of case verifications
and study models.
i. Comparison between CASBEE scoring and rent (per area): Create a statistical database of CASBEE
rankings and rent in the same area of the same city.
ii. Comparison between CASBEE scoring and rent (per building): Compare specifications, environmental
performances and rent in the same district. Create a database of cash flow items such as energy
costs, maintenance and management costs and the stability of such items.
iii. Conduct opinion surveys among stakeholders.
iv. Expand verifications of model cases and increase the number of model cases.
(4) Proposing to foreign countries: Propose, discuss and improve this proposal for overseas use. Try to makemutual use or unify with proposals from overseas.
(5) Developing mechanisms to share the values of green investment: Study how to develop and proliferatemechanisms to share the values of green investment such as a mechanism for properly sharing the benefitsof energy-saving renovations between owners and tenants, etc. (See Fig. 6-1 for Limited Liability
Partnership)(6) Developing common tools: Continue to develop common tools between the building and the property
industries (CASBEE and property appraisal manual for property appraisal use, a tool for the building
industry to find from CASBEE assessment results any impact on the property appraisal, etc.)

c 2009 Japan Sustainable Building Consortium (JSBC)
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50

CASBEE Property Appraisal Manual(2009 Edition)

Payment of energy costs oncommon space (baseline amount)

Building ownerDistribution of profit/loss based on amountof reduced costs on common space

Building owner

Energy-saving project
Limited Liability Partnership(Members: owners, tenants)

Tenants

Tenants
Distribution of profit/loss basedon amount of reduced costs on
exclusive space

Payment of energy costs on
exclusive space (baseline amount)
Investment inenergy-saving
facilities

ESCO costs

Energy costbilling/payment

Energy costbilling/payment

Procuring funds

Financial
institution

ESCO provider

Principal/interest

Building owner

Energycompany

Credit enhancement

Fig. 6-1 Example of a mechanism to share values of environmentally-friendly investment(2006 Feasibility study project on global warming countermeasures in the private sector (FS project) “Collaborative energy-saving model
project among multiple providers (building owners, tenants) of property for rental income (tenant buildings)” Excerpt from NEDO Report)

c 2009 Japan Sustainable Building Consortium (JSBC)
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CASBEE Property Appraisal Manual

51(2009 Edition)

References
1.

Objective surveys and subjective surveys on property markets

1.1.

Results of opinion surveys on the environment among investors and tenants(1) Opinion survey among investors
Japan Real Estate Institute released in June 2009 the results (53 companies responded) of a survey conductedin April 2009 among 170 property investors on environmental performances on which they place emphasis
when they invest in property.
The results show that property investors place great importance on environmental performances related toserious social issues (soil contamination and seismic response control, etc.) and environmental performances
directly related to revenues ( rent and occupancy rate, etc.) with explicit cost effectiveness (proper maintenanceand facility upgrades, etc.). While they place emphasis environmental performances necessary to bolster social
credibility such as preventing problems with the community and BCP, etc., they place less emphasis onenvironmental performances such as energy saving and resource saving, which they cannot easily understandor verify the return on investment. The results indicate that it is necessary to raise social awareness andimportance in the markets for environmental performances on which investors place less emphasis including
energy saving and resource saving, etc. in order for the markets to properly evaluate economic values of green
properties Fig. 1-1, Reference8).
This survey truly depicts the current status of the Japanese property investment as stated at the preface.

c 2009 Japan Sustainable Building Consortium (JSBC)
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52

CASBEE Property Appraisal Manual(2009 Edition)

Level of importance (Unit: 1 point)
Indoor environment
Consideration for indoor noise
Individual air-conditioning
Use of daylightLighting control
Anti-pollutant measures
Ventilation air volume
Building functionality Flexibility
Barrier-free
Common space
Earthquake resistance, seismic
isolation, seismic response control
Facility maintenanceFunctional maintenance offacilities
Outdoor environment on site
Tree-planting/Crime prevention, etc.
Consideration for townscapeand landscapeUse of energy
Thermal insulation specifications
Cogeneration, etc.
Energy-saving performance
Use of resources
Consideration for water resources
Consideration for recycling
CFC, etc.
Off-site environment
Consideration for noise, etc.
Consideration for daylight, etc.
Traffic load control
Convenience of transportation
Garbage reduction

Fig. 1-1

List of important environmental performances determined by investors*Reference 8

c 2009 Japan Sustainable Building Consortium (JSBC)
Copyright○

CASBEE Property Appraisal Manual

53(2009 Edition)(2) Opinion survey among tenants
Sumitomo Trust & Banking and STB Research Institute conducted the “Opinion survey among companies ongreen buildings”Reference 9. This is an opinion survey among tenants of buildings for rent including property forinvestment (released in July 2009).
The survey was conducted among a total of 2,505 companies listed on the first and second sections of theTokyo Stock Exchange and the Osaka Stock Exchange as well as unlisted companies capitalized at over 50
billion yen and mutual insurance companies. 148 companies responded to the survey. The survey showsinteresting results that contrast with the above (1) though the items on environmental performances and themethods of measuring the importance were slightly different from the above (1).
On the importance of each of the items related to “Consideration for environment,” items closely related tobusiness efficiency such as “high speed network connection,” “OA floor” and “electricity outlet capacity,” etc. aswell as items visibly related to the consideration for the environment such as “energy-saving performance,” CO2emissions reduction” and “classification and reduction of garbage” ranked high on the list of importance (Fig.
1-2)
The survey also asked the respondents how much additional rent they would be required to pay for an green
building in which tenants could “reduce the running costs equivalent to about 5% of the rent.” Of all the
respondent companies, 48% said they were willing to pay the additional rent of 5% while 5% of the companies
were willing to pay the additional rent of 6-8%, indicating that a majority of the companies accept additional rent
payment worth more than the cost reduction (Fig. 1-3)
The survey also asked seven respondent companies for reasons why they were willing to pay additional rent
worth more than the reduced amount of the running costs. All of the seven companies cited “corporate social
responsibility (CSR)” as their reason while four companies also cited “consideration for stricter regulatory
control on the environment,” indicating that they believe being tenants of green buildings is a way of averting
risks. Three companies also cited such reasons as “employees’ improved work efficiency” and “employees’
improved intellectual creativity” by defining broadly the value of green buildings (Fig. 1-4)
(Reference 9)
The opinion survey was conducted among the so-called large companies, which are thought to be more
conscious about the environment. However, the item “Energy saving,” which ranked low also in the survey
among property owners, for example, can be an effective environmental performance indicator for investment if
the economic effects of the item can be presented explicitly to tenants.
Items related to tree-planting such as “preservation of biological environment” ranked low on the list ofimportance also in the opinion survey among tenants. The result of the “Opinion survey on environment among
office workers in downtown” by Mori Building (March 12, 2008) shows the largest number of respondents or
39% cited “tree-planting” as the most significant environmental preservation effort for office buildings. The result
may suggest potential factors that are yet to be visible in the tenant demand.

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54

CASBEE Property Appraisal Manual(2009 Edition)

Importance of environmentally-friendly
items for tenants of office buildings for rent
賃貸オフィスビルに入居する場合の環境配慮項目の重要度（重要度DI）(Importance DI)
0

10

20

30

40

50

60

Consideration for environment
環境配 慮

70

80

72.0

ーン 別制 御2) Zoned control of2）室温ゾ
room temperature

68.9
58.1

3）湿度制
3) Humidity
control御4) Use of4）自daylight(daylighting)
然光の利用（採 光）Indoor
室内環境のenvironmental
快適性
comfort41.95) Lighting(Glarefrom Light Fixtures/Uniformity5）照明（照明器具
がま ぶしくない・室内の明る さが均 一）
of Illuminance)6) Natural 6）自然換
ventilation
気

65.5
38.5

Control of smoking
7）タバコの7)煙やにおいの
拡散防 止

67.6

8) High speed network
connection8）高速
ネッ ト回 線

78.79) Electric 9）コンセン
outlet capacity
ト容 量

75.3

10)
OA floor
10）OAフロア

76.7

11)
Barrier-free
11）バリ
アフリ ー

47.0

12) Allowance for floor-to-floor height (ceiling
12）広さ感 （天井高 等）
height, etc.)13) 13）リSpaceフレッシ
for refreshment
ュスペース

30.1
73.0
75.0
43.6
Outdoor
室外環境onenvironment
（敷地内）
site

6.8

18) Consideration for 18）まちtownscapeand landscape
な み・景観への配 慮

22.319) Energy-saving
performance(thermal19）省エ
ネル ギー性 能（断熱性・高効 率の設備）
insulating/highly efficient facilities)20）自然エenergy
ネル ギー利用（太陽power,
光・風力等）
20) Use ofnatural(solar/wind
etc.)

76.7

Energyエネルギー
reduction effect

削減効果

43.2

21) Introduction of watersaving facilities
21）節水設
備の導 入

23) Use of recyclable construction materials
23）再 利用可 能な建築材 料の利 用

Quality ofservice
サービス性能40.2

14) Seismic isolation/Seismic response control
14）免震 ・制振性 能performance15) Shapeofindoorspace/Adaptability
ofしやす
spaceさ15）室内 空間の 形状・レイア ウトのlayout16）床荷重16) Allowancefor floorのゆとり
loads22) Use of rainwater/Recyclingof graywater
22）雨水 の利用 ・雑排水 の再利 用

90 10061.5

1) Sound 1）遮音配
insulation慮17) Preserving and creating
biologicalenvironment17）生物環
境の保
全と創 出

N=148

52.4

Use of resource
資源
materials

20.3

マテ リアル利用

14.2224) Reductionof CO
2 emissions24）CO2発生量の削 減
25)Preventionof ド進行
heat island(tree-planting/25）ヒー
トア イランの防止effect（緑化・風
通し・日 陰）outside air intake/shade)26) Rainwater
infiltration
26）雨水浸透27) Sorting/Reduction
of・減量対
garbage27）ゴ ミの分別
策

64.2
56.8

Off-siteenvironment
敷地外環境

36.8
64.2

Fig. 1-2 Importance of green items for tenants of office buildings for rent
(Importance DI)(Source) “Opinion survey among companies on green buildings,” STB Research Institute(Note) Importance DI = (the ratio of companies answering “Important” X 1 + the ratio of companies answering “Somewhat important” X0.5) - (the ratio of companies answering “Not so important” X 0.5 + the ratio of companies answering “Not important” X 1)

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CASBEE Property Appraisal Manual55(2009 Edition)

Additional環境配慮型ビルへ入居する場合の賃料上乗せ支払意思額
rent amount willing to pay for environmentally-friendly buildings(When the reduced
amount of the running cost is 5% of the rent)(ランニングコストの削減額が賃料の5％の場合)

N=148

60%
48%

50%
40%
30%
16%

2%

4%
0%

0%

5%

4%

3%

2%

1%

Not pay
支払わない

0%

No無回答
answer

1%

10%以上

2%

Over 10%

4%

9%

6%

8%

4%

7%

10%

14%

6%

20%

Fig. 1-3 Additional rent amount willing to pay for green buildings(Source) “Opinion survey among companies on green buildings,” STB Research InstituteReasons for paying
additional rent worth over reduced amount (5%) of running cost
ランニングコストの削減額（5％）以上に賃料を上乗せして支払う理由
0
0社

1
1社

2
2社

3
3社

4
4社

5
5社

N=7

N=7
複数回答

Multiple answers

6
6社

7 companies
7社

1) Corporate
1）企業の社会的責任
social responsibility（CSR） (CSR)
2) Improved
corporate image2）企業のイメージアップ
3) Improved working efficiency of3）社員の作業効率の向上
employees4) Improved intellectual creativity of4）社員の知的創造性の向上
employees5) Consideration for stricter regulatory

5）環境に対する法制度の厳格化を考慮
control on environment
6)
Others6）その他

Fig. 1-4 Reasons for paying additional rent worth over reduced amount (5%) of running cost
(Source) “Opinion survey among companies on green buildings,” STB Research Institutec 2009 Japan Sustainable Building Consortium (JSBC)
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References
8 Result of survey among property investors (June 2009), Japan Real Estate Institute
9 General description of the result of the ”Opinion survey among companies on environmentally-friendly buildings” (July
2009), Sumitomo Trust & Banking

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CASBEE Property Appraisal Manual57(2009 Edition)

1.2.
1.2.1.

Impact of environmental performances on property rent
Japanese market trend

In considering the impact of environmental performances on the property appraisal, the breakdown of property
by area shows the ratio of offices for rent is relatively small. The CO2 emission by the business sector shows thebiggest increase among all the sectors when compared against the base year of the Kyoto Protocol. In order toachieve the national goal of greenhouse gas reduction, the demand for energy-saving office buildings is
expected to increase further.
This section describes the general description of the rental office market, followed by the current status ofunderstanding and evaluating green property in the rental office market.
CB Richard Ellis, established in 1969, deals mainly in brokering of offices in Japan. It has one of the nation’s
biggest databases of office buildings for rent, covering 130,000 buildings and over 630,000 rooms acrossJapan. CB Richard Ellis Research Institute publishes the “Office Market Report” every quarter, which covers
major office building districts in nine regions, 58 cities and 183 zones across Japan.
i. General description of the rental office market
As of the end of 2008, of the total rental room area of office buildings for rent in Japan (total areas for rent ofrental office buildings) as understood by CB Richard Ellis, the 23 Tokyo wards account for about 60%, Osaka
City about 16%, Nagoya City about 6% and the other major ordinance-designated cities account for the rest on
a proportion almost commensurate with their economic sizes.
Take the 23 Tokyo wards, which have the biggest clusters of office buildings for rent in the nation, for example. A
statistical report in Tokyo (Tokyo Land 2007) shows that the office area (including non-rental buildings) in the 23
Tokyo wards including that of banks as of January 1, 2007 is about 87.45 million m2. If, for example, theavailability of 70% is multiplied, the effective area will be about 61.21 million m2. As the total rental room area ofoffice buildings for rent in the 23 Tokyo wards as of the end of 2006 as understood by CB Richard Ellis is about
32.06 million m2, the statistics covers about 50% of the total though it should be noted the availability is a roughestimate.
The rental office buildings in stock were broken down into the gross floor area and the number of years after
being built. For the breakdown by the gross floor area, small buildings of less than 1652m2 account for 69% interms of the number of buildings. In terms of the gross floor area, however, mid- and large-size buildings of over
9,915m2 account for almost half at 54%. For the breakdown by the number of years after being built, old
buildings of over 25 years account for 40% in terms of the number of buildings and 35% in terms of the grossfloor area while new buildings of less than five years account for 3% in terms of the number of buildings and
13% in terms of the gross floor area.
0%

10%

20%

30%

東京23区
23 Tokyo wards(By gross floor(延床面積別、
area, number1of buildings) 棟数比率）

40%

50%

60%

70%

69%

23 Tokyo wards
東京23区(By gross floor
area,(延床面積別、
aggregate totalof gross floor2
延床面積合計値
area)
比率）

15%

11%

Less
than
500坪未満
2
1652m

0%

東京23区
23 Tokyo wards(By number of(築年数別、
years built, 1
number of buildings)
棟数比率）
東京23区
23 Tokyo wards(By number of(築年数別、
years built, 2aggregate totalof gross floor
延床面積合計値
area)
比率）

10%

20%

15%

20%

40%

3306
– 9915m2
1000～3000坪未満

50%

40%

100%

11%

5%

60%

70%

90%

100%

Over
9916m23000坪以上

80%

10%

47%

35%
Over
25 years
築25年以上

90%

54%

1653
– 3305m2
500～1000坪未満

30%

80%

32%
15–25
years
築15～25年未満

3%

20%
5 – 15 years
築5～15年未満

13%
5築5年未満years or less(Source: CB Richard Ellis Research Institute, as of April 2009)

Fig. 1-5 Composition of rental office buildings in stock in the 23 Tokyo wards

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The room vacancy rate (= vacant room area / total area of rooms for rent) in the office market for the 23 Tokyo
wards has turned upward since late 2007 due to a radical change in economic conditions. In the immediate 1stquarter of 2009, the rate stands at 3.8%. The demand by corporate tenants is affected heavily by economic
conditions of the time and, generally, the rent for each building is determined through negotiations with tenants
based on the building’s comparative evaluation with its competing buildings of such characteristics as thelocation, size and functions, etc. The tenant rent, which is the source of income to be produced by the officebuilding for rent, is determined through comparison under the market conditions of the time. If corporate tenants
can understand the various benefits (Example: reduction in energy cost payment as a result of energy-saving
effects, publicity of corporate attitudes in terms of CSR, etc.) of the energy-saving performance of the buildings
while negotiating the rent, the environmental performances of the tenant buildings may be clearly recognized asa factor in determining the rent.
8 .0 %

23 Tokyo

東京2wards3 区

Major 5

主要5
wards区

Surrounding

周辺18区
18 wards

7 .0 %
6 .0 %
5 .0 %
3.9%

4 .0 %

3.8%

3 .0 %

3.4%

2 .0 %
1 .0 %
'00Ⅰ
Ⅱ
Ⅲ
Ⅳ
’01Ⅰ
Ⅱ
Ⅲ
Ⅳ
’02Ⅰ
Ⅱ
Ⅲ
Ⅳ
’03Ⅰ
Ⅱ
Ⅲ
Ⅳ
’04Ⅰ
Ⅱ
Ⅲ
Ⅳ
’05Ⅰ
Ⅱ
Ⅲ
Ⅳ
’06Ⅰ
Ⅱ
Ⅲ
Ⅳ
’07Ⅰ
Ⅱ
Ⅲ
Ⅳ
’08Ⅰ
Ⅱ
Ⅲ
Ⅳ
’09Ⅰ

0 .0 %(Source: CB Richard Ellis Research Institute)

Fig. 1-6 Transition of average vacancy rate in Tokyo wards

The value called “rent” in the rental office market includes various concepts including “new rent” to be paid by
new tenants, “continuous rent” to be paid by existing tenants, “offered rent” to be proposed by lessors innegotiations with tenants, “negotiated rent” to be presented during the negotiation process and “(new) agreed
rent” to be presented at the final stages of negotiations, etc. And the levels of values also differ. Thus, special
attention is required to the definition of the word “rent.” As the “rent” varies according to various factors including
locations, sizes, functions and market environment, etc., it is also necessary to make comparison by taking
such pre-conditions fully into consideration when evaluating values of a property by considering factors fordifference in rent.
ii. Opinion survey among tenants
CB Richard Ellis Research Institute conducted an opinion survey on offices among corporate tenants in thesummer of 2008 (Tokyo: valid answers 403, Osaka: 279, Nagoya: 124). On the question of “Complaints about
the current buildings,” many respondents cited complaints about “facilities and equipment” and, specifically,
they complained about elevators and segmentation of air-conditioning controls. On the question of “Items theywish to be improved even at additional cost,” the largest number of respondents cited ”earthquake resistance”
as the most wanted item probably for their emphasis on the safety of their employees and the BCP. On thequestion of “motivations for future office relocation and new offices,” many respondents cited such reasons as“expansion of floor space as a result of increased staff” and “reorganizing offices to reduce costs.”
In view of increased awareness about the environment, the question “Wishing to move into buildings with lessenvironmental loads” has been added to the survey since 2008, but very few people responded positively to thisquestion. At around the time of the survey, it probably was difficult to quantify the benefits (such as the cost) andthe environmental performances were rarely perceived to be a direct motive to relocate offices.

iii. Information on energy-saving performance of tenants’ buildings in selecting relocated buildings
In selecting candidate buildings for relocation, corporate tenants generally obtain information such as building

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specifications through brochures. However, such brochures only describe the method and control zones of
air-conditioning for the air-conditioning specification, desk-top lighting for the lighting specification and power
consumption per m2 for the power specification. Thus, corporate tenants currently do not (or cannot) obtainsuch information as unit power consumption, hourly energy consumption and energy efficiency, etc. whenselecting buildings for relocation.
Under such circumstances, it is difficult for tenants to select buildings through comparison of energy
performance against the standard, as there is no explicit description of CASBEE or other assessment results. It
is, therefore, necessary to improve such situations in order for the environmental performances to be perceived
as the basic performance of office buildings for rent.
iv. Compatibility between items for selecting tenant buildings and items for CASBEE assessment (existingbuilding)
The table below shows the association between assessment items for office buildings for rent and CASBEE(existing building) assessment items.
Assessment items for office buildings for rent and CASBEE (existing building) assessment items generally
correspond to each other. However, in selecting office buildings, tenants generally tend to place importance onsuch basic items as proximity to nearby train stations, standard floor area, open hours of the building gates,
earthquake resistance, etc. As the target, scope and purpose of assessment are different between CASBEE
assessment and tenant building assessment, it is only natural that the assessment standard for each item andthe depth and weights, etc. are different. And it will be necessary to take into consideration the relationship withthe priority (weights) in the selection standard of offices while associating with CASBEE assessment.

Table 1-1 Compatibility between tenant building assessment items and CASBEE assessment items

Charact
eristics

Office building assessment items
Assessment target

Variable

Invariable

LocationTransportation
Roads
Proximity to nearby
train stations
Cluster of businesses
Facilities of
convenience
Surrounding
environment
Standard floor area
Standard floor shape
Pillars and theirlocations
Floor load
Ceiling height
Design, appearance,
size
Entrance
Years since built
Quake resistance
Building nameElevator
Parking lot
Scalability
Entrance
Air-conditioning
Electric outlet
capacity
OA cables
Lighting

Assessment items, standards, etc.

Corresponding
CASBEE
items

Time required to major train stations, number of train lines used,etc.
Adjacency, width, etc.
Traffic line, ease, etc.
Clustering status of office buildings, images of the vicinity, etc.
Banks, post offices, drinking/dining, shops, etc.
(1)

Townscape, prosperity, etc.
Standard floor area, size of segmented areas
Shaped/not-shaped, ease of layout planning, etc.

(2)
(3)

Number of pillars, location, etc.
Standard value, heavy duty zone, etc.
Ceiling height, beams, etc.
Size, high-end atmosphere, etc.
Spatial area of lobby, ceiling height, high-end atmosphere, etc.
Levels of facilities, cleaning, status of interior/exterior, etc.
Standards, seismic response, seismic isolation, etc.
Names, images
Location, spatial area, number of units, etc.
Number of cars to be parked, size, open hours, etc.
Additional wiring, water supply systems, inner stairs, etc.
Brightness, atmosphere, etc.
Available hours, zoning, etc.
2Electricity capacity per m , etc.
Type, (for free access) height, etc.
Lighting, zoning, anti-glare, etc.

(4)
(5)
(6)
(7)
(8)

(9)
(10)
(11)
(12)
(13)

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Security
Interior (floor, wall,ceiling)
Toilets
Kettle room
Common space
Barrier-free

Format, measures per zoning, etc.
(14)
Color and type of wall, ceiling, floor materials (in exclusive andcommon spaces)
Location, spatial area, number, functions (warmlet toilet seat, hotwater), cleanness, etc.
Spatial area, number, heat source, ventilation status, cleanness,
etc.
(15)
Spatial area, fittings, foliage plants, vending machines (soft drinks,
cigarettes), cleanness, etc.
(16)
Toilet, stairs, etc.
(Source: CB Richard Ellis Research Institute)c 2009 Japan Sustainable Building Consortium (JSBC)
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CASBEE Property Appraisal Manual

61(2009 Edition)

Table 1-2

Relations between CASBEE (existing building) environmental items and office building
assessment items

Score Sheet (Existing Building)Concerned categories

Q Environmental Quality of the building
Q1 Indoor Environment
1 Noise & Acoustics
1.1 Noise

Corresponding
items forbuilding
assessment bytenants

1
Background noise level
2
Equivalent noise level
1.2 Sound Insulation
Sound Insulation of Openings
1
Sound Insulation of Partition Walls
2
Sound Insulation Performance of Floor
3
Slabs (light-weight impact source)Sound Insulation Performance of Floor
4
Slabs (heavy-weight impact source)
1.3 Sound Absorption
2 Thermal Comfort
2.1 Room Temperature Control
1
Room Temperature
Variable Loads and Following-up Control
2
3
Perimeter Performance4
Zoned Control
Temperature and Humidity Control
5
6
Individual Control
Non-regular Hour Air-conditioning
7
8
Monitoring Systems
2.2 Humidity Control
2.3 Type of Air Conditioning System
Difference in high and low temperature
1
2
Average airflow speed
3 Lighting & Illumination
3.1 Daylighting
1
Daylight Factor
2
Openings by Orientation
3
Daylight Devices
3.2 Anti-glare Measures
Glare from Light Fixtures
1
2
Daylight Control
3.3 Illuminance Level
1
Illuminance2
Uniformity of Illuminance
3.4 Lighting Controllability
4 Air Quality
4.1 Source Control
1
Chemical Pollutants
2
Asbestos
3
Mites, Mold etc
4Legionella
4.2 Ventilation
1
Ventilation Rate
Natural Ventilation Performance2
Consideration for Outside Air Intake
3
4
Air Supply Planning
4.3 Operation Plan
CO2 Monitoring
1
2
Control of Smoking(10)

Concerned categories

Q Environmental Quality of the building
Q2 Quality of Service
1 Service Ability
1.1 Functionality & Usability

Corresponding
items forbuilding
assessment bytenants(2)
1
Provision of Space & St
2
Use of Advanced Inform (11),(12)(16)
3Barrier-free Planning
1.2 Amenity(3),(5)1
Perceived Spaciousnes(15)2Space for Refreshment(14)
3
Décor Planning
1.3 Maintenance Management(7),(15)1
Comprehensive effort
2
Cleaning
3
Sanitation control
2 Durability & Reliability
2.1 Earthquake Resistance(9)
1
Earthquake-resistance
Seismic Isolation & Vibration Damping
2
Systems
2.2 Service Life of Components
Service Life of Structural Frame
1
Materials
Necessary Refurbishment Interval for2
Exterior Finishes
Necessary Renewal Interval for Main
3Interior Finishes
Necessary Replacement Interval for
4
Air Conditioning and Ventilation Ducts
Necessary Renewal Interval for HVAC
5
and Water Supply and Drainage Pipes
Necessary Renewal Interval for Major
6
Equipment and Services(7),(14)
2.3 Appropriate renewal
Updating finishing materials for1
roofs/external walls
Updating pipes/wiring materials
2
Updating major facilities/equipment
3
2.4 Reliability
1
HVAC System
2
Water Supply & Drainage
3
Electrical Equipment
Support Method of Machines & Ducts
4
Communications & IT Equipment
5
3 Flexibility & Adaptability
3.1 Spatial Margin
Allowance for Floor-to-floor Height(5)1
Adaptability of Floor Layout
(3)
2
(4)
3.2 Floor Load Margin
3.3 Adaptability of Facilities
Ease of Air Conditioning Duct Renewal
1
Ease of Water Supply and Drain Pipe
2
RenewalEase of Electrical Wiring Renewal(9)3Ease of Communications Cable Renewal
4
Ease of Equipment Renewal
5
6
Securing backup space

Q3 Outdoor Environment on Site
1 Preservation of Biotope
2 Townscape & Landscape
3 Local Characteristics & Outdoor Amenity
3.1 Attention to Local Character & Improvement of Comfort
3.2 Improvement of the Thermal Environment on Site(1),(6),(15)(Source: CB Richard Ellis Research Institute based on “CASBEE for Existing Building” 2008 Edition Appraisal Manual(Issued by Institute for Building Environment and Energy Conservation))

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1.2.2.

Analyzing relations between CASBEE and rent

Companies in the United States and Europe are increasingly seeking green office buildings for their self-owned
office buildings or office buildings for rent for CSR purposes. While building green office buildings requires
additional costs, awareness is increasing about the economic benefits of improved property values that can berealized by, for example, increasing tenant satisfaction through improved indoor environments or reduced
maintenance and management fees and responsiveness to environmental risks such as future enhancement ofregulations, etc.
Demand for green office buildings is increasing also in Japan amid increasing social awareness about theenvironment. There are generally three conditions for good office buildings from the viewpoint of corporate
tenants and investors – “Proximity (good location),” “Big (big in size)” and “New (soon after being built).” It ishighly probable that the “environmental consideration (high environmental performances)” will be added to themin the future.
The rent for 21 tenant buildings that underwent CASBEE assessment were surveyed in order to understand theimpact of environmental performances on the current rent of tenant buildings and the relationship between
CASBEE scores and the rent was analyzed. The survey was conducted in Nagoya City where reporting
CASBEE results for buildings of over a certain size was made obligatory for the first time in the country andtargeted tenant buildings whose information about rent are available and that publicly released CASBEE
assessment results.
Fig. 1-7 shows the relationship between BEE values of CASBEE and rent. However, as mentioned earlier, as
the rent is heavily affected by the location, size and the number of years after being built, it was necessary to
remove such impacts. The office buildings surveyed are relatively similar in the location condition (located in theoffice building district in Nagoya City) and are relatively new at 1-3 years old. For these reasons, only the grossfloor areas were adjusted. The gross floor area was classified into four criteria depending on the size – “superlarge,” “large,” “middle” and “small.” The values are based on the comparison with the average rent of eachsize. Fig. 1-7 indicates that the rent tends to increase as the BEE value goes up. While the coefficient ofdetermination “R2” is low at about 0.48, the significant relationship was found at 0.01 level.

平均募集賃料比

Ratio of average offered
規模別
rent by size

2.5
2y = 0.3766x + 0.65
R² = 0.477

p<0.01

C

A

1.5
1
0.5
B-

B+

S

0
0.0

1.0

2.0

3.0

4.0

BEE
Fig. 1-7 Relationship between BEE values and rent

The multiple regression analysis was performed by using the CASBEE major items as explanatory variables
and the rent as a dependent variable in order to find CASBEE assessment items that significantly contribute torent increases. Fig. 1-8 shows the results. The analysis could not find significant results in three items – “Q3:
Outdoor environment on site,” “LR1: Energy” and “LR2: Resources & Materials” while significant impacts on therent were observed in three items – “Q1: Indoor environment,” “Q2: Quality of service” and “LR3: Off-siteenvironment.” Standard partial regression coefficient in the longitudinal axis of the graph represents the impactof each explanatory variable on the rent, and the impact level increases as the absolute value nears 1.
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CASBEE Property Appraisal Manual

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Therefore, better assessment results in “Q1: Indoor environment” and “Q2: Quality of service” could lead tohigher rent while a better result in “LR3: Off-site environment” could lead to lower rent. These findings show thatconsideration for “Q (environmental quality),” which helps increase comfortableness and intellectual productivityof corporate tenants, is perceived as an added value to office buildings and is reflected in the increased rent
while consideration for “LR(environmental load reduction)” is yet to be perceived as such.

R2 = 0.53

LR
Environmental
LR 環境負荷load

Q1

Indoorenvironment
室内環境

Q2

Qualityof service
サービス性能Q3

Outdoorenvironment on※site *室外環境（敷地内）

LR1

Energy
* ※
エネルギー

LR2

※
Resources& Materials*
資源・マテリアルLR3

Off-siteenvironment
敷地外環境

p=0.055
p=0.067

p=0.086（影響度）

Q
Environmental
Q 環境品質qualityp < 0.01

Standard partial regression coefficient β(level of impact)y = -1.574 + 0.662×Q1 + 0.466×Q2 -0.349×LR3
of average offered rent by size
y:y: Ratio
規模別平均募集賃料比

1.00
0.80
0.60
0.40
0.20
0.00
β -0.20
-0.40
-0.60
-0.80
-1.00
標準偏回帰係数<Regression formula>＜回帰式＞* No statistical significance was found when it comes to※ Q3、LR1、LR2の3項目の賃料への影響については
theimpact of Q3, LR1 and LR2 items on the rent.

Q1

統計的な有意性は得られなかった

Q2
LR3
CASBEE
major items
CASBEE大項目

Fig. 1-8 Impact of CASBEE assessment (major) items on rent

However, the results of performing the multiple regression analysis by using the CASBEE middle items as
explanatory variables suggest the possibility that consideration for “LR3.6: Off-site environment” in “LR3:Off-site environment” could lead to increased rent. Consideration for LR (environmental load reduction) could
also be perceived as an added value of office buildings in the future as awareness about the environment andenvironmental risks such as future enhancement of regulations increases.
However, the above-mentioned analysis collected little information on rent (number of samples: 21) and,
therefore, the results only show the general trend. Also for the rent values, as offered rent values (to be
proposed by owners) publicly available in the market for offering to corporate tenants were used for the
analysis, they may be significantly different from agreed rent values. The relationship found between the BEE
value and the offered rent may derive from the tendency of owners to make additional investment to increase
the environmental performances of office buildings that are likely to achieve increased rent. Analysis by using
agreed rent may also be necessary to accurately understand how environmental performances are perceived
as additional values of office buildings.
1.2.3.

Case study (Comparing specifications in same district)

To understand the relationship in office buildings for rent among Q assessment (environmental quality ofbuildings) of CASBEE, facility specifications and rent, office buildings that underwent CASBEE assessment andbuildings with significantly similar rent pricing factors (location, size, etc.) were selected in Tokyo. Afterassessing the latter buildings (those with significantly similar rent pricing factors) by the Q items of CASBEE
assessment, they were compared with office buildings that underwent CASBEE assessment in terms of the
facility levels, Q scores and rent levels.
The following considerations were given in making the comparison:<Criteria to select buildings for comparison>
Considerations were given for differences in the rent accruing from differences in locations and sizes inselecting buildings for comparison. And office buildings for rent with similar size (standard floor area, gross floorarea, etc.) in neighboring areas were selected. However, as some differences in rent were found even among
samples selected based on such consideration, The impact of location, number of years after being built andsize on differences in rent between buildings that underwent CASBEE assessment and buildings selected for

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CASBEE Property Appraisal Manual(2009 Edition)comparison were considered.
<Information disclosure>
Information on buildings was disclosed with the names remaining anonymous to maintain information
confidentiality. The “ratio of gross floor area,” “ratio of standard floor area” and “ratio of estimated rent” in thetable are represented by the percentage of buildings selected for comparison against the basis of 100.0 forbuildings assessed by CASBEE.
<Definition of facility levels>
Spaces used for office purposes on the standard floor were used for comparison while spaces used for shops
and underground spaces used for special purposes were excluded. The facility levels are based on thosedescribed in brochures or the results of the hearing conducted during the Q assessment, etc.
<Definition of rent levels>
The estimated rent level in this section is a rent per 3.3051m2 (or 1 tsubo) including common area charges. The
rent level is highly likely to be an agreed rent when vacant rooms are considered per floor as of June 2009. CB
Richard Ellis Research Institute estimated the rent based on hearing among market experts.
As the absolute rent is determined according to such conditions as location, size and number of years after
being built of each building under the underlying market conditions, it is important to note that the rent anddifferences in the rent of each building change as the market environment changes.
As few samples are currently available for comparison, it is necessary to increase the number of samples in the
future to improve the significance of the comparison study. However, the comparison study in this section canbe concluded as follows: Buildings with high Q scores are generally new buildings in terms of the number ofyears after being built and tend to have relatively high rent.
In many cases, the facility adopted by newly-built buildings is generally adopted by taking into consideration thecost effectiveness of the time. Newer buildings supposedly adopt a higher facility based on changes in social
needs for facilities of office buildings. Thus, newer buildings are evaluated highly in the rental office market, and,as a result, are likely to result in relatively high rents. It should be noted that the “newer buildings” seem toinclude the value of “relatively high facility” and such high facility materializes high environmental quality andcould eventually lead to high Q scores.
On the other hand, even among existing older buildings, those with relatively high environmental quality andenvironmental efficiency as a result of facility renovations, etc. supposedly have potential added values(quantitative and qualitative values produced by high environmental efficiency) in addition to values recognizedby the rental office market (a factor for reduced value according to the number of years after being built and afactor for increased value through facility renovations, etc.). Once a method of measuring such potential valuesof existing buildings is established for the rental office market, the environmental efficiency will clearly berecognized as a factor to increase not only the rent of office buildings for rent but also the asset values of thebuildings.

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CASBEE Property Appraisal Manual65(2009 Edition)

Writers
Preface: Assessing environmental
considerations for property based on CASBEE
CASBEE Property Appraisal Manual
1. Domestic trend on property appraisal
1.1. Proliferation of CASBEE and diversifieduse
1.2. Move toward considering environmental
added values in the Japanese property
appraisal industry
2. Concept of manual
3. Relations with real estate appraisal, etc.

Hiroaki Takai, Takenaka Corporation
Masato Ito

4. Explanation of major items in this manual

Masato Ito, Junko Endo

5. Case studies based on this manual
6. Conclusion: Issues surrounding property
appraisal in the low-carbon era

Hiroaki Takai
Hiroaki Takai, Masato Ito

Reference
1.1. Results of opinion surveys on theenvironment among investors and tenants
1.2. Impact of environmental performance on
property rent
1.2.1 Japanese market trend
1.2.2 Analyzing relations between CASBEE
and rent
1.2.3 Case study (Comparing specifications
in same district)Shuzo Murakami, Director, Building Research InstituteJunko Endo, NIKKEN SEKKEI Research Institute
Masato Ito, Sumitomo Trust & Banking Co., Ltd.

Koichi Matsunaga, CB Richard Ellis Research Institute
Masato Ito

Koichi Matsunaga
Kumi Okumura, Toshiharu Ikaga Laboratory,
Keio University
Koichi Matsunaga

Acknowledgement
This manual is part of the outcomes of the activities of the “The Research Committee for CASBEE” under Japan
Sustainable Building Consortium (Shuzo Murakami, Chairman) and Working Group for CASBEE and Property
Appraisal. We extend our sincere gratitude to all the people concerned for their cooperation.
< Working Group for CASBEE and Property Appraisal >Chairman: Shuzo Murakami (Building Research Institute)
Chief: Hiroaki Takai (Takenaka Corporation), Masato Ito (Sumitomo Trust & Banking Co., Ltd.)
Members: Toshiharu Ikaga (Keio University), Kazuo Iwamura (Tokyo City University), Teruaki Uchida (Japan
Real Estate Institute), Hiroyuki Deguchi (Shimizu Corporation), Naoki Nakamura (Engineering & Risk Services
Corporation), Shin Hayakawa (Nihon University), Hiroki Hiramatsu (CSR Design & Landscape), Koichi
Matsunaga(CB Richard Ellis Research Institute)Observers: Kumi Okumura, Nao Mizoguchi (Toshiharu Ikaga Laboratory, Keio University)
Secretariat: Junko Endo (NIKKEN SEKKEI Research Institute), Kiyohisa Oine, Nobufusa Yoshizawa (Japan
Sustainable Building Consortium)< Those who cooperated >Shigeru Urashima, Tokyo Office, Intel Corporation
Seiichi Hayashida, etc., Davis Langdon & Seah Japan Limited
Yoshihiro Kawazoe, Kenji Moriyama, Japan Real Estate Institutec 2009 Japan Sustainable Building Consortium (JSBC)
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CASBEE Property Appraisal Manual(2009 Edition)

CASBEE Property Appraisal Manual (2009 Edition)
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December 31, 2009

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Japan Sustainable Building Consortium (JSBC)
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