IMPACT OF LOCATIONAL VARIABLES ON COMMERCIAL SHOPHOUSE LAND VALUES IN SINGAPORE

Abstract

This dissertation investigates the various locational variables that explain the variation in commercial shop houses land values in Singapore. In this study, transaction data of shop houses in Singapore is used to develop a hedonic price model to study the impact of the locational variables on their value. The impact of locational attributes of commercial properties in Singapore is seldom a topic of study, especially in the context of shophouses. Most research which has been done relate to residential properties. Hence this dissertation will shed some light upon the impact of locational factors (distance to the nearest Mass Rapid Transit, bus stop, expressway, amenities and Central Business District) on the value of shophouses as well as to determine if land area has an impact on the value of the shophouse. From empirical evidence, this study has confirmed and added to existing literature the positive impacts and externalities that locational and structural attributes bring to shophouse prices. Most of the findings are, as hypothesised, prove that accessibility and location do play a part in affecting the prices of shophouses in Singapore. The study also establishes the premium or discount that a buyer is willing to pay for different variations in locational attributes based on the estimated coefficient. Plattage has also been found to exist in shophouses. Results of this study will be beneficial at the micro and macro level, aiding investors and potential buyers as well as policy makers gain insight into this area of study.