The Effect of Accessibility on Retail Rents – Testing Integration Value as a Measure of Geographic Location
||The Effect of Accessibility on Retail Rents – Testing Integration Value as a Measure of Geographic Location
||16th Annual European Real Estate Society Conference in Stockholm, Sweden
||This paper tests whether integration value, a measure of geographic location, can help explain retail rents. The concept integration value, developed within the research field Space Syntax, can be understood as a measure of the accessibility of a certain location in a street network. The measure is constructed using graph theory and uses the shape of the street network as its only input. The hypothesis is tested using data on rental contracts from Downtown Stockholm. Rent per square meter is regressed on integration value, distance to the city centre and a number of other control variables that capture different characteristics of the shop and rental contract. Integration value is correlated with the distance to the city centre which makes this a crucial control variable. A statistically significant effect of integration value on retail rent is found. In the first regression the city centre is defined as the location generally agreed to be the centre of Stockholm (Sergels Torg). Another procedure was also used in which the rental data was used to find the city centre: The inner city was divided into a rectangular grid with limits defined by the outermost shop locations found in the database. The grid had a spacing of 100 meters in both dimensions. A set of regressions were run where the assumed city centre was placed at each point in the grid. The point in the grid where the regression showed the highest fit (R2) was interpreted as the location where the retail market places the city centre."
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||Price and Rent Determination
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