The spatial pattern of industrial rents and the role of distance

Abstract

Purpose

The objective of this paper is to re‐appraise intra‐urban rent models in the context of a multi‐nodal landscape. Primarily, the study focuses on the early work of Alonso and, more recently, Di Pasquale and Wheaton. Although the latter use a more sophisticated approach, both models lead to similar outputs, notably a declining rent gradient from the central business district (CBD). However, throughout the twentieth century there has been a considerable process of urban industrial change. Di Pasquale and Wheaton recognise this and argue that this has led to an almost flat industrial rent gradient.

Design/methodology/approach

To assess the current impact on industrial rents a hedonic rent regression model is applied which enables us to standardise for property characteristics.

Findings

The results support the hypothesis that the rent gradient from the CBD for a large city is still downward‐sloping, albeit very shallow. More interesting is the significance of proximity to motorway junctions. The analysis supports the hypothesis of a multi‐nodal rent surface. Proximity to a motorway junction is the most important locational variable with a much steeper and negative gradient than that to the CBD, albeit over a shorter distance.

Originality/value

These results imply that the draw of the CBD in terms of agglomeration economies and its accessibility to labour for a city the size of Glasgow still remains, but its attractions are much denuded with the development of a national motorway network.

Citation

Dunse, N., Jones, C., Brown, J. and Fraser, W.D. (2005), "The spatial pattern of industrial rents and the role of distance", Journal of Property Investment & Finance, Vol. 23 No. 4, pp. 329-341. https://doi.org/10.1108/14635780510602408