Depreciation between Conventional and Green Office Buildings

The principal aims of this paper are; (1) to determine the rate of depreciation for certified green and conventional purpose-built office (PBO) and; (2) to assess the relationship between building categories and green building classifications toward influencing the rental depreciation of PBO buildings. Using cross sectional survey of twenty-seven buildings in Golden Triangle area of Kuala Lumpur, the data collected were analysed using Frequency and Descriptive statistics to establish the rate of depreciation for green and conventional PBO buildings. Furthermore, the correlation and regression techniques were used to assess the significance of building categories and classifications in influencing the rental depreciation of PBO buildings. This study successfully identifies the average rate of depreciation within the dataset, with 46.77 percent. In comparison of average depreciation rate between green office buildings and conventional, the rate was observed higher in conventional class as to contrast with green class PBO buildings. Results from the correlation analysis explain the age, building categories and classifications were strongly correlated to the rental depreciation. Lastly, regression results evidenced the building categories and classifications significantly predict the rental depreciation model in 2014.