HEDONIC PRICE MODEL OF HIGH-TECH INDUSTRIAL RENT
ONG SUAT GHEE
ONG SUAT GHEE
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Abstract
This study seeks to explore the use of statistical analysis in developing a hedonic price
model that could examine the high-tech industrial property characteristics that are
associated with high-tech industrial rental variations. Physical, locational, financial and
economic variables have been included into the research to determine the significant
determinants of high-tech industrial rents
A total of 282 rents have been gathered from 1991 to 1999 to cover a nine-year study
period for the research In developing the hedonic price model, the study has undertaken a
useful comparison between the multiple and stepwise regression techniques The results
show that the multiple regression technique displays better explanatory power. This
technique is later used to develop the hedonic model for the study.
The results indicate that seven variables - Floor Level, Flexibility of Floor Span, Amenities,
Additional Facilities, Location, Prime Lending Rate and Capitalization Rate are significant
in explaining rental variations All variables are significant at the 5 % level except Prime
Lending Rate, which is significant at the 10% level Research has also shown that 61.7% of
the rental variations can be explained by the significant determinants.
This study has extended the use of regression valuation techniques to an area that has
received little research attention. The results could aid in providing an initial valuation framework for valuers and is a first step toward the creation of a high-tech industrial
property index.
Keywords
Hedonic price model, Stepwise regression, Multiple regression, Valuation framework, High-tech industrial property index
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Date
2001
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Thesis