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Are the Markets for Factories and Offices Integrated? Evidence from Hong Kong


  • Charles Ka Yui Leung

    (Department of Economics, Chinese University of Hong Kong, Hong Kong)

  • Peiling Wei

    (Department of Economics, Chinese University of Hong Kong, Shatin, Hong Kong)

  • Siu Kei Wong

    (Department of Real Estate and Construction, The University of Hong Kong, Pokfulam, Hong Kong)


Due to the relocation of manufacturing facilities from Hong Kong to Mainland China, it is widely believed that some vacant private factories have been used as offices in Hong Kong. Yet there is no direct and systematic evidence to support this speculation. In fact, according to MacGregor and Schwann (2003), industrial and commercial real estate shares some common features. Our research attempts to investigate empirically the price and volume relationship between industrial and commercial real estate, using both aggregate and disaggregate data from the industrial and commercial property markets in Hong Kong. The study was built on the observation that economic restructuring and geographical distance will affect the substitutability (and thus the correlation) of different types of property, and utilizes commonly used time series techniques for analysis. Policy implications are discussed.

Suggested Citation

  • Charles Ka Yui Leung & Peiling Wei & Siu Kei Wong, 2006. "Are the Markets for Factories and Offices Integrated? Evidence from Hong Kong," International Real Estate Review, Global Social Science Institute, vol. 9(1), pages 62-94.
  • Handle: RePEc:ire:issued:v:09:n:01:2006:p:62-94

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    Cited by:

    1. Charles Ka Yui Leung & Patrick Wai Yin Cheung & Erica Jiajia Ding, 2008. "Intra-metropolitan Office Price and Trading Volume Dynamics: Evidence from Hong Kong," International Real Estate Review, Global Social Science Institute, vol. 11(2), pages 47-74.

    More about this item


    aggregation bias; geographical distance; industrial real estate; substitutability;
    All these keywords.

    JEL classification:

    • L85 - Industrial Organization - - Industry Studies: Services - - - Real Estate Services


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