VARIATIONS IN RENTAL LEVELS WITHIN SHOPPING CENTRES

Abstract

A distinctive feature of shopping centres is that their rentals are nowhere near as susceptible to the differences in the physical attributes of the units and changes in consumption pattern as are the other sectors of the property market. Even within a shopping centre, shop rents demonstrate very marked differences. It is therefore necessary to recognise every factor that governs rental levels and closely monitor the controllable factors so as to maximise the return on the investment. Shopping centres today are being confronted with overbuilding. With the intensification of retail competition where shopping centres lie in close proximity to each other, the internal factors affecting rentals become more significant. Shopping centres today are being confronted with overbuilding. With the intensification of retail competition where shopping centres lie in close proximity to each other, the internal factors affecting rentals become more significant. This study has endeavoured to examine the factors accounting for the variations in rental levels within shopping centres and to test whether the rental differentials in practice are in pursuit of the fundamental economic concept of rent. The lesson derived from the case studies is that the theories concerning the factors affecting rentals are not totally applicable to all form of shopping centre design, constituency, layout and management. In consequence, all the intricate factors should be considered carefully prior to the planning and marketing of each shopping centre to ensure maximum overall rental return on the investment.