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Classifying Local Retail Property Markets on the Basis of Rental Growth Rates

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  • Catherine Jackson

    (Centre for Property Research, Department of Land Economy, University of Aberdeen, Elphinstone Road, Old Aberdeen, Aberdeen, AB24 3UF, UK, c.c.jackson@abdnac.uk)

Abstract

Diversification strategies for the property element of portfolios have traditionally been undertaken on a sectoral/regional basis, primarily due to data restrictions. However, the standard regions in the UK are defined for administrative purposes and are likely, therefore, to be composed of heterogeneous property markets. The development of an alternative classification, based on local property markets, is investigated. This is based on annual retail rental growth rates and is developed using cluster analysis. A number of issues emerge. Throughout the various stages of development and tests for temporal stability, the local markets group according to broad underlying rental drivers. However, more tightly defined clusters are unstable over time as a consequence of rental volatility at the local level. It is clear that markets do not form groups conforming to the geographical regions that are widely analysed and that traditionally form the basis for diversification.

Suggested Citation

  • Catherine Jackson, 2002. "Classifying Local Retail Property Markets on the Basis of Rental Growth Rates," Urban Studies, Urban Studies Journal Limited, vol. 39(8), pages 1417-1438, July.
    • Handle: RePEc:sae:urbstu:v:39:y:2002:i:8:p:1417-1438
    DOI: 10.1080/00420980220142709
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    References listed on IDEAS

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    Cited by:

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    2. Vincent Claude B & Eastman Byron, 2009. "Defining the Style of Play in the NHL: An Application of Cluster Analysis," Journal of Quantitative Analysis in Sports, De Gruyter, vol. 5(1), pages 1-23, January.

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