The impact of sustainability certification on office rent levels: evidence from Prague

Purpose This study examines whether sustainability certification is associated with higher office rents in Prague. While existing literature documents rent premiums in developed markets, empirical evidence from Central and Eastern Europe (CEE) remains limited. Design/methodology/approach Using a cross-sectional dataset of 125 Class A office buildings collected in 2025, this study estimates a semi-log hedonic model of asking rents as a function of location, certification status (BREEAM, LEED, WELL) and energy performance (the Czech PENB). Sixteen additional building and location characteristics are tested and found not to improve the specification. The analysis is complemented by location-specific Welch two-sample t-tests. Findings The results indicate a statistically significant certification premium of 8.8%, net of location and energy performance, which persists across all analysed submarkets. Unconditional submarket comparisons show larger raw rent differentials of 13%–17%, indicating that a substantial share of the raw premium reflects energy performance and location. The controlled estimate is comparable to premiums reported in mature Western European office markets, suggesting sustainability certification functions as an internationally consistent pricing signal even in a less mature CEE market. Originality/value This article contributes rare empirical evidence from the CEE region, specifically the Prague office market, with direct implications for valuation practice, investment strategy and ESG-related decision-making in post-transition economies.