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An Econometric Model of Retail Rents in the United Kingdom

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Abstract

The present study constructs a model of retail rent determination at the aggregate level in the United Kingdom. While recognising the influence of very localised factors in the determination of retail rents, this paper explores the importance of broad economic forces and trends in the retail property market as determinants of retail rental values. A dynamic specification based on GDP, consumer expenditure and past values of retail rents in the U.K. This model provides satisfactory results and it is subsequently used to produce dynamic forecasts four quarters ahead. The forecasts suggested that U.K. retail rents would exhibit a slight recovery in the second half of 1994 terminating the downward trend since the first quarter of 1990. However, a small drop again was forecast for the first half of 1995.

Suggested Citation

  • Sotiris Tsolacos, 1995. "An Econometric Model of Retail Rents in the United Kingdom," Journal of Real Estate Research, American Real Estate Society, vol. 10(5), pages 519-530.
    • Handle: RePEc:jre:issued:v:10:n:5:1995:p:519-530
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    1. C.F. Sirmans & Krisandra A. Guidry, 1993. "The Determinants of Shopping Center Rents," Journal of Real Estate Research, American Real Estate Society, vol. 8(1), pages 107-116.
    2. Durbin, J, 1970. "Testing for Serial Correlation in Least-Squares Regression When Some of the Regressors are Lagged Dependent Variables," Econometrica, Econometric Society, vol. 38(3), pages 410-421, May.
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    Cited by:

    1. Chung Yim Yiu, 2023. "The Impacts of Shopping Tourism on Retail Sales and Rents: Lessons from the COVID-19 Quasi-Experiment of Hong Kong," JRFM, MDPI, vol. 16(6), pages 1-13, June.
    2. Catherine Jackson & Craig Watkins, 2007. "Supply-Side Policies and Retail Property Market Performance," Environment and Planning A, , vol. 39(5), pages 1134-1146, May.
    3. Terence Tai‐Leung Chong & Alex Wing‐Ho Yiu, 2019. "Nexus between visitor arrivals and residential property rents in Hong Kong," Pacific Economic Review, Wiley Blackwell, vol. 24(3), pages 464-478, August.
    4. Arvydas Jadevicius & Brian Sloan & Andrew Brown, 2012. "Examination of property forecasting models - accuracy and its improvement through combination forecasting," ERES eres2012_082, European Real Estate Society (ERES).
    5. Catherine Jackson & Craig Watkins, 2005. "Planning Policy and Retail Property Markets: Measuring the Dimensions of Planning Intervention," Urban Studies, Urban Studies Journal Limited, vol. 42(8), pages 1453-1469, July.
    6. 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.

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    JEL classification:

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

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