Node proximity premium of multi-user industrial properties

Abstract

This study looks into the impacts that nodes have on industrial properties. The main nodes examined are Mass Rapid Transit (MRT) stations, expressway entry/exit points, Changi Airport, seaports, checkpoints, and the Central Business District (CBD). Intuitively, greater proximity to these nodes will correlate to higher prices due to its associated benefits. This study aims to quantify and compare the premium, if any, for the aforementioned nodes. While there have been numerous literature published to enhance understanding of the relationship of transport accessibility and connectivity to property prices, few have discussed and compared their impacts on the industrial sector. After data treatment, the minimum linear distances of the determined nodes are computed using a hedonic regression model to identify its premium and relationship. Results revealed statistically significant positive impacts of MRT and CBD proximity on industrial values. Specifically, for every 1 kilometre closer the subject property is to the nearest MRT station and CBD, price will increase by 0.0855% and 0.135% respectively. Conversely, it found statistically significant negative impact of expressway, checkpoints, seaports and airport proximity on industrial values. Specifically, for every 1 kilometre closer the subject property is to a checkpoint, airport, seaports and expressways, price will decrease by 0.0318%, 0.0118%, 0.0376% and 0.121% respectively. These findings can serve as a guide for valuers and policy makers to supplement future planning with improved knowledge of these relationships for better justifiability and accuracy of values.