Willingness to pay for healthy office workplace aspects: Preferences of workplace decision makers

Purpose: Interest in healthy office environments has increased among corporate real estate managers and the real estate sector. Not only workers, but also organizations profit through higher competitive advantages. This study aims to identify office tenants’ willingness to pay (WTP) higher rents for healthier office environments. Depending on the WTP, investing in healthy office buildings can be beneficial for landlords through the ability to charge higher rents, potential decreased vacancy risks and higher asset values. Approach: A survey with a stated choice experiment was carried out in 2019 among workplace decision makers in office organizations leasing from the CBRE Dutch Office Fund (multi-tenant, multi-service office buildings on prime locations). The 84 respondents repeatedly chose between three hypothetical office profiles, generated from an orthogonal factorial experimental design varying combinations of eight aspects’ quality levels derived from literature: (1) ‘indoor air quality’, (2) ‘thermal comfort’, (3) ‘exposure to light’, (4) ‘noise & acoustics’, (5) ‘office type’, (6) ‘view’, (7) ‘amenities’ and (8) ‘relative rental price’. Data were analysed to estimate preferences and related WTP values using a Multinomial Logit (MNL) model. Findings: After ‘rental price’, the attributes ‘thermal comfort’, ‘noise & acoustics’ and ‘amenities’ were most important when choosing between office alternatives, plus healthier quality levels were preferred. Although obviously price increases were generally disliked, there was a positive WTP for all healthy office workplace aspects, except exposure to light. Considering all significant healthy office workplace aspects as a whole, the WTP for an improvement from a low to a medium quality office is estimated to range from a conservative 6.37 up to an optimistic 12.33% rental increase, from a medium to a high health quality office from +6.17 up to 12.43% and from a low to a high health quality office from +12.54 up to 24.76%. Originality: Previous studies generally did not focus on healthy workplace preferences of workplace decision makers. Findings contribute to insights for real estate investors, asset managers and developers in which healthy office aspects to implement in their portfolio/projects.