STUDY ON RETAIL SPACE’S REPOSITIONING TO LOGISTIC CENTRE
LI MINGJUN
LI MINGJUN
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Abstract
This paper conducted an empirical study on the similarities of retail rental prices
and warehouse rental prices with the purpose of supporting an initiative named
repositioning from a retail space to a mini distribution centre. As the retail sector
was so heavily dampered by the ongoing pandemic shock and the competition
with online shopping, bringing back the footfall had become a critical problem to
solve for both landlords and tenants. With the data collected from URA and
JTC, the single and multiple regression models for both sectors did reveal some
similarities on the coefficients of 25th percentile and 75th percentile rents when
compared to the median rents. The former would usually have a higher positive
value while the latter would have a lower positive one. In other words, the
changes in lower end rents would affect the median rents to a greater extent
than the higher end ones. Sadly, due to limitations of data, the paper could not
conduct a qualitative study on the repositioning strategy itself, but will serve as
an exploration on building a financial bridge for landlords and tenants that had
only focused on one submarket in their past experience. Nevertheless, with the
vast growth in e-commerce and expectation on delivery quality, the
repositioning concept would not be an odd proposal in the near future.
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Date
2021-10-06
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