A Conjoint Analysis of Johannesburg Office Tenants’ Preferences

Purpose– This study focuses on establishing the factors that realistically influence office relocation decisions in the Johannesburg metropolitan area. The goal of the study aimed to obtain rank ordering (importance) of nine selected factors.Design/Methodology/Approach–A questionnaire used in the USA to conduct a conjoint study in the real estate sector was adapted to suit the South African context and sent to office tenants. Additional variables and levels were added, to better reflect current findings of the literature. A conjoint methodology was used to analyse the data.Findings– According to the conjoint analysis, the most important factor is parking followed by Landlord reputation; Size is third in importance with Security at fourth and Green Rating in fifth place. Accessibility of the building is sixth; Location of the building is seventh with the rental cost (total cost of occupation) and the grade of the building being the bottom two factors in eighth and ninth places respectively.Research Limitations/Implications–The sample only included office tenants in P-grade, A-grade and B-grade office buildings in the greater Johannesburg metropolis. Current Literature shows that newer “preference” procedures like stated preference elicitation reveal deeper and broader information on customer preferences than that obtained using choice-based conjoint analysis.Originality/Value–The research specifically illustrates the application of market research techniques to the office market in an emerging economy. The use of conjoint analysis in the determination of preferences for would-be tenants in the South African office market will go a long way in reducing financial losses attributable to low occupancy levels and high tenant churn.