ECONOMETRIC ANALYSIS OF INDUSTRIAL SPACE DEMAND BY CLUSTERS

Abstract

There is a need to analyse the demand for industrial space usage due to the complex nature of the industrial property market. However, as industrial space demand is highly dependent on the performance of the manufacturing sector, a better understanding of the nature of the different industrial clusters in the manufacturing sector is necessary. This study aims to develop simple econometric models of industrial space demand for the different industrial clusters. This is because an econometric model can provide a panoramic view of the movement of the dependent variable with regards to other economic factors. The econometric models formulated are based on historical data on the allocation of factory space and industrial land as well as other macroeconomics variables such as Gross Domestic Product (GDP) and unit labour cost which are available in publications. These models can then be used as a guide for future industrial land use planning and allocation purposes.