Interactions within the Office Market Cycle in Great Britain
This article adopts an unrestricted vector autoregressive framework methodology to examine the cyclical activity of office property development in Great Britain. The empirical analysis provides supporting evidence for the significant influence of office rents on the rate of new office construction. Service sector output has a small impact on office development, whereas the results do not establish a relationship with employment and interest rates. The significance of rents is attributed to the tenure characteristics of the market and the important role of developers and property investors in initiating office projects in Great Britain. A period of up to three years appears to be the optimum period between the time that rental signals are generated and the time that buildings are put in place, as a response to those signals.
Volume (Year): 18 (1999)
Issue (Month): 1 ()
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References listed on IDEAS
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- John S. Hekman, 1985. "Rental Price Adjustment and Investment in the Office Market," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 13(1), pages 32-47.
- R Barras & D Ferguson, 1987. "Dynamic modelling of the building cycle: 2. Empirical results," Environment and Planning A, Pion Ltd, London, vol. 19(4), pages 493-520, April.
- Waldo L. Born & Stephen A. Pyhrr, 1994. "Real Estate Valuation: The Effect of Market and Property Cycles," Journal of Real Estate Research, American Real Estate Society, vol. 9(4), pages 455-486.
- Granger, C W J, 1969. "Investigating Causal Relations by Econometric Models and Cross-Spectral Methods," Econometrica, Econometric Society, vol. 37(3), pages 424-38, July.
- John L. Kling & Thomas E. McCue, 1991. "Stylized Facts About Industrial Property Construction," Journal of Real Estate Research, American Real Estate Society, vol. 6(3), pages 293-304.
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