Planned urban industrialization and its effect on urban industrial real estate valuation: The Singapore experience

Abstract

This paper investigates the challenge posed by an optimal balance of land use because of chronic land resource scarcity, in conjunction with the growing requirement for quality-intensive industrial accommodation in the island-state city of Singapore. Optimizing land resource, under a strong physical planning framework and its physical planning administration, is envisaged to set the conditions that facilitate the creation of values for urban industrial real estate assets. This value creation enables urban industrial real estate values to find their steady state levels, under a structure of causal links. It can significantly represent, although not completely, the efficient price mechanism for allocating land to its highest and best industrial use. Thus, a generalized multiple regression analysis model is estimated to robustly explain urban industrial real estate asset value in terms of the structural price-discovery factors, under the physical planning framework and its administration. This paper extends the urban real estate valuation model to incorporate a geographic information system that enables a spatial distribution analysis of urban industrial real estate asset values. © 2005 Elsevier Ltd. All rights reserved.