THE DETERMINATION OF OFFICE RENTALS IN THE SINGAPORE OFFICE SPACE MARKET

Abstract

This study presents an econometric investigation of office rent determination in Singapore over the period of first quarter 1989 to second quarter 2001. The single equation model based on demand and supply interactions was used. The findings are that the independent variables, changes in GDP lagged two periods and gross office stock supply lagged eight periods, are significant in affecting office rental movements in the Singapore office property market. The forecasting adequacy of the estimated model was also examined and compared with forecasts derived from commonly used alternative statistical methodologies. The forecasted results based on the estimated model were better than the results obtained from the commonly used alternative statistical methodologies, especially for forecasts more than one period.