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Retail rent dynamics in two Chinese cities

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  • Qiulin Ke
  • Michael White

Abstract

This paper examines the retail rent dynamics of two Chinese cities, Beijing and Shanghai. We use an error correction modelling framework to estimate long-run equilibrium relationships and short-term dynamic corrections. The study period covers 1999-2012. We also run tests to examine the presence of structural breaks. The empirical results suggest that both supply and demand significantly affect retail rents for both cities in the long run. However, in the short term, the change of rent responds to change in income for Shanghai market. Both markets have a rapid speed of adjustment, especially Shanghai market that is more price and income elastic. The results shed some light on the behaviour of retail rent adjustment processes in one of the largest and fast growing emerging markets.

Suggested Citation

  • Qiulin Ke & Michael White, 2015. "Retail rent dynamics in two Chinese cities," Journal of Property Research, Taylor & Francis Journals, vol. 32(4), pages 324-340, December.
    • Handle: RePEc:taf:jpropr:v:32:y:2015:i:4:p:324-340
    DOI: 10.1080/09599916.2015.1092464
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    References listed on IDEAS

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    1. Qiulin Ke & Michael White, 2009. "An econometric analysis of Shanghai office rents," Journal of Property Investment & Finance, Emerald Group Publishing Limited, vol. 27(2), pages 120-139, March.
    2. Benjamin, John D & Jud, G Donald & Winkler, Daniel T, 1995. "An Analysis of Shopping Center Investment," The Journal of Real Estate Finance and Economics, Springer, vol. 10(2), pages 161-168, March.
    3. Jinfeng, Wu & Zhilong, Tian, 2009. "The impact of selected store image dimensions on retailer equity: Evidence from 10 Chinese hypermarkets," Journal of Retailing and Consumer Services, Elsevier, vol. 16(6), pages 486-494.
    4. Jian Liang & Mats Wilhelmsson, 2011. "The value of retail rents with regression models: a case study of Shanghai," Journal of Property Investment & Finance, Emerald Group Publishing Limited, vol. 29(6), pages 630-643, September.
    5. Benjamin, John D. & Boyle, Glenn W. & Sirmans, C. F., 1992. "Price discrimination in shopping center leases," Journal of Urban Economics, Elsevier, vol. 32(3), pages 299-317, November.
    6. E.C.M. Hui & C.Y. Yiu & Y. Yau, 2007. "Retail properties in Hong Kong: a rental analysis," Journal of Property Investment & Finance, Emerald Group Publishing Limited, vol. 25(2), pages 136-146, March.
    7. Patric Hendershott & Maarten Jennen & Bryan MacGregor, 2013. "Modeling Space Market Dynamics: An Illustration Using Panel Data for US Retail," The Journal of Real Estate Finance and Economics, Springer, vol. 47(4), pages 659-687, November.
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    Cited by:

    1. Chang, Yuk Ying & Anderson, Hamish & Shi, Song, 2018. "China and international housing price growth," China Economic Review, Elsevier, vol. 50(C), pages 294-312.

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