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Article
Publication date: 1 October 2004

Peter F. Colwell and Catherine Jackson

Models of the commercial property market have become increasingly sophisticated in recent years. However, the retail sector and, more specifically, analysis of retail markets at…

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Abstract

Models of the commercial property market have become increasingly sophisticated in recent years. However, the retail sector and, more specifically, analysis of retail markets at the local level, have been comparatively neglected. This paper makes inroads into this gap in property research. Retail rental change at the local level is explored, focusing on consumer expenditure as the key determinant of change. The appropriateness of proxy variables is investigated and the mechanisms of rental change are examined. This highlights issues and difficulties unique to local level analysis. Following this, the relationship between rental change and underlying changes in consumer expenditure is investigated. The stability of a panel model of rental change is examined, with differences in market functioning identified across diverse groups of key local retail investment markets. These differences highlight the re‐emergence of northern markets during both the economic decline and recovery phases of the last decade of the 20th century. Rental levels in larger and smaller markets are also seen to respond to changes in consumer expenditure to significantly different degrees, in periods of both decline and recovery.

Details

Journal of Property Investment & Finance, vol. 22 no. 5
Type: Research Article
ISSN: 1463-578X

Keywords

Article
Publication date: 29 January 2021

Stephen Clark, Nick Hood and Mark Birkin

This study aims to measure the association between local retail grocery provision and private residential rental prices in England. Renting is an important sector of the housing…

Abstract

Purpose

This study aims to measure the association between local retail grocery provision and private residential rental prices in England. Renting is an important sector of the housing market in England and local grocery provision is an important aspect of service provision and consumers are known to be highly sensitive to the branding of this type of retailing.

Design/methodology/approach

This research uses a novel data source from a property rental Web platform to estimate a hedonic model for the rental market. These models incorporate information on the nature of the properties and their neighbourhoods, with an emphasis on how different retail brands are associated with rental prices. This retail brand is captured on two scales: the provision of local branded convenience stores and the provision of larger stores.

Findings

The study finds clear differentials in how the local grocery brand is associated with rental prices. When controlling for commonly explored confounding factors, “Luxury” retailers such as Waitrose and Marks and Spencer are associated with higher rental prices, while “Discounter” retailers are associated with lower rental prices. This finding has many implications, particularly in relation to potential price changes in an already challenging housing market for many people.

Research limitations/implications

This is an observational study and as such only associations (not causation) can be implied by these findings.

Originality/value

The focus of this research is on the private residential property market, an important market in England but one that has enjoyed less scrutiny than the sales or socially rented markets. Rather than using general accessibility to retail, this research has differentiated the association by the retail brand and store size, two very important aspects of consumer choice.

Details

International Journal of Housing Markets and Analysis, vol. 14 no. 4
Type: Research Article
ISSN: 1753-8270

Keywords

Article
Publication date: 13 March 2007

Kim Hin (David) Ho

The paper aims to form system dynamics modeling in introduced in conjunction with econometric analysis and planned scenario analysis which will uniquely structure the process…

2037

Abstract

Purpose

The paper aims to form system dynamics modeling in introduced in conjunction with econometric analysis and planned scenario analysis which will uniquely structure the process whereby the ex ante capital values of the prime retail real estate sector.

Design/methodology/approach

The integrated system dynamics model investigates the structural factors affecting a unique expectation‐centered capital value (CV) formation of the prime retail real estate sector, through system dynamics modeling, econometric analysis , and the analysis of planned scenarios. This model extends beyond the usual lags and time line aspect of the price discovery process. The retail real estate sector is investigated within the Singapore context, as this sector changes dynamically and non‐linearly in relation to rental, cost and general demand expectations and to exogenous shocks like the Severe Advanced Respiratory Syndrome (SARS) outbreak. These macroeconomic factors are introduced to investigate their impact on retail space CVs through sensitivity analysis, during the simulation period of 20 quarters from the zero reference quarter (2Q2002).

Findings

The paper finds that simulation runs of the expectations‐centered system dynamics model are based on three scenarios. Sensitivity analysis is conducted for each scenario. Optimistic scenarios' CVs are lower than those of the likely scenario, owing to developers forming excessively high expectations that cannot be met by the actual rental levels. Pessimistic scenarios' CVs are highest. Based on bounded logic and the conditions for all scenarios, there are huge differences in expectations resulting in a large disparity in the endogenous CVs. Low actual rents are primarily due to poor informational efficiency, as the prime retail real estate sector is not transparent enough, and that many transactions are privately closed. Expectations cannot be met as the market information is not disseminated extensively through the agents and players. The scenarios clearly highlight the problem of informational non‐availability in the sector. The main policy implication is a need for a more transparent system of sharing rental and pricing information for the retail real estate sector, which is meaningful for real estate developers, investors and urban planners to sustain the retail real estate sector's viability.

Originality/value

This paper takes system dynamics modeling to the next level of incorporating econometric analysis, to estimate the sensitivity of retail rent to cost and the change in retail rent, for effectively structuring the dynamic process whereby the ex ante CVs of the prime retail sector in Singapore are formed and assessed, through a unique and rigorous expectations‐centered system dynamics model of rents, cost, retail stock, general demand and exogenous factors.

Details

Journal of Property Investment & Finance, vol. 25 no. 2
Type: Research Article
ISSN: 1463-578X

Keywords

Article
Publication date: 5 September 2016

Kim Hin David Ho, Mun Wai Ivan Ho and Mei Ling Christina Quek

Primarily based on Alonso’s bid-rent model, the purpose of this paper is to examine the dynamics of the Singapore’s overall retail rental market by adopting a vector error…

Abstract

Purpose

Primarily based on Alonso’s bid-rent model, the purpose of this paper is to examine the dynamics of the Singapore’s overall retail rental market by adopting a vector error correction model (VECM) estimation.

Design/methodology/approach

This paper uses the proxy for the overall retail rental value, which is indicated by a combination of the shop rent index from 2004 to 2013 and the retail rent index (RRI) in 2014, maintained by the Urban Redevelopment Authority (URA). The independent factors are the real gross domestic product (GDP), monthly earnings of individuals and vacancy rates (VR).

Findings

Such a behavioral model examines the dynamic structures that overshoot and/or diverge from equilibrium.

Research limitations/implications

The variables LOGGDP and VR are co-integrated of order one, I(1), while variables LOGME and LOGSRI are co-integrated of order two, I(2), to enable them to be employed in the VECM model.

Practical implications

The VECM model shows a good fit that allows the error correction term (ecm) together with the economic, financial and rental variables to jointly explain about 79.2 percent of the variation in the overall RRI. With a positive CoinEq1 coefficient that is positive and statistically significant at 5 percent level, it would take a long time for the system to return to its equilibrium once it has been shocked. Another variable that shows significant explanatory relationships includes past rents (index points) in the second order lags [D(LOGSRI(−2))]. The variable [D(LOGGDP(−3))], with a significant t-statistic value at 2.916, also helps to explain the changes in the overall rents.

Social implications

This paper highlights the importance of the first and third differences of the lagged macroeconomic variables of the monthly earnings of individuals is moderately significant. The VR in the first and second differences is significant in accounting for the variation in changes of overall retail rents with their t-statistics values being above 3.0. It is thus meaningful for policy makers to so enhance their in-depth understanding.

Originality/value

This paper fulfills an identified need to study how the results from the ex post forecasting estimates from the VECM for overall retail rents in Singapore can be enabled.

Details

Journal of Property Investment & Finance, vol. 34 no. 6
Type: Research Article
ISSN: 1463-578X

Keywords

Article
Publication date: 27 September 2011

Jian Liang and Mats Wilhelmsson

The purpose of this paper is to estimate the determinants of the retail space rent in Shanghai.

1361

Abstract

Purpose

The purpose of this paper is to estimate the determinants of the retail space rent in Shanghai.

Design/methodology/approach

Hedonic model and spatial regression models are used in the paper. The problem of spatial autocorrelation is tested by Moran's I statistics, and the root mean square error (RMSE) test is performed to find out the best model.

Findings

The significant explaining variables are the age, the area of retail space, the distance to the Jing An CBD centre, the type of the retail and the district of the property. A new classification of district in retail research context is suggested in this paper, and it is proved to be better than the districts set up by government to explain the retail rent variation.

Originality/value

This paper presents the first empirical study about the retail rental market in Shanghai. The research helps retail property investors and retail tenants deepen their understanding of the retail market in Shanghai. Spatial econometrics techniques are first introduced into the empirical retail rent research to produce a more precise estimation.

Details

Journal of Property Investment & Finance, vol. 29 no. 6
Type: Research Article
ISSN: 1463-578X

Keywords

Article
Publication date: 1 March 1999

Kwame Addae‐Dapaah and Cindy Yeo

The retail industry of Singapore has been in a depression since 1993, as a result of structural problems which are a function of, among other things, over‐supply of retail space…

1217

Abstract

The retail industry of Singapore has been in a depression since 1993, as a result of structural problems which are a function of, among other things, over‐supply of retail space vis‐à‐vis retail performance, and rising rentals. This paper argues that percentage lease agreements (also called “turnover rents”), by fostering partnerships between landlords and tenants, could be a viable shopping center management tool for salvaging the retail industry of Singapore.

Details

Property Management, vol. 17 no. 1
Type: Research Article
ISSN: 0263-7472

Keywords

Article
Publication date: 11 October 2011

Chung Yim Yiu

The purpose of this paper is to study empirically the effect of a pedestrianisation scheme on retail rent, in a case study in Hong Kong.

1182

Abstract

Purpose

The purpose of this paper is to study empirically the effect of a pedestrianisation scheme on retail rent, in a case study in Hong Kong.

Design/methodology/approach

Most of the previous studies on the impacts of pedestrianised areas on the environment were qualitative ones, and without controls. This study, in contrast, uses panel market data in Hong Kong to estimate the effect in a two‐street‐two‐period controlled model.

Findings

The results show a net 17 per cent increase in rental value of retail shops in the pedestrianised area is achieved, ceteris paribus.

Research limitations/implications

Sample size and number of case study are not large enough to make robust conclusions; some other uncontrollable variables may well be attributed to the increase in rents.

Practical implications

Retail rent is found empirically to be dependent of the external environment.

Social implications

Shoppers' preference for pedestrianisation schemes can be indirectly quantified by the change of retail rent.

Originality/value

This paper presents the first two‐street‐two‐period panel empirical test on the effect of pedestrianisation scheme on retail rent.

Details

Journal of Place Management and Development, vol. 4 no. 3
Type: Research Article
ISSN: 1753-8335

Keywords

Article
Publication date: 1 March 1982

Every sports fan knows the importance of coaching to top soccer and rugby teams and athletes, but in business few realise that coaching is an important tool for making the maximum…

Abstract

Every sports fan knows the importance of coaching to top soccer and rugby teams and athletes, but in business few realise that coaching is an important tool for making the maximum use of the experience and expertise in firms.

Details

Education + Training, vol. 24 no. 3
Type: Research Article
ISSN: 0040-0912

Article
Publication date: 11 March 2019

Adejimi Alli Adebayo, Paul Greenhalgh and Kevin Muldoon-Smith

The retail property market is constantly adopting to the continuous demand of retailers and their consumers. This paper aims to investigate retail property market dynamics through…

Abstract

Purpose

The retail property market is constantly adopting to the continuous demand of retailers and their consumers. This paper aims to investigate retail property market dynamics through spatial accessibility measures of the City of York street network. It explores how spatial accessibility metrics (SAM) explain retail market dynamics (RMD) through changes in the city’s retail rental values and stock.

Design/methodology/approach

Valuation office agency (VOA) data sets (aspatial) and ordnance survey map (spatial) data form the empirical foundation for this investigation. Changes in rental value and retail stock between 2010 and 2017 VOA data sets represent the RMD variables. While, the configured street network measures of Space Syntax, namely, global integration, local integration, global choice and normalised angular choice form the SAM variables. The relationship between these variables is analysed through geo-visualisation and statistical testing using GIS and SPSS tools.

Findings

The study reveals that there has been an overall negative changes of 15 and 22% in rental value and retail stock, respectively, even though some locations within the sampled city (York, North Yorkshire, England) indicated positive changes. The study further indicated that changes in retail rental value and stock have occurred within locations with good accessibility index. It also verifies that there are spatial and statistical relationship between variables and 22% of RMD variability was jointly accounted for by SAM.

Originality/value

This research is first to investigates changes in retail property market variables through spatial accessibility measures of space syntax. It contributes to the burgeoning research field of real estate and Space Syntax.

Details

Journal of European Real Estate Research, vol. 12 no. 2
Type: Research Article
ISSN: 1753-9269

Keywords

Article
Publication date: 1 April 1992

Neil Crosby, Geoffrey Keogh and Geraldine Rees

Examines the methodological issues that arise in generatingstandardised transaction data for use in analysing the determinants ofretail rents. Looks at the issues raised by the…

Abstract

Examines the methodological issues that arise in generating standardised transaction data for use in analysing the determinants of retail rents. Looks at the issues raised by the use of comparative information and the existence of widely accepted conventions for adjusting comparative evidence to allow for the specific physical and legal characteristics of individual properties. Concludes by questioning the need to test valuation convention against market evidence and the notion of open market value is reassessed.

Details

Journal of Property Valuation and Investment, vol. 10 no. 4
Type: Research Article
ISSN: 0960-2712

Keywords

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