Hedonic modelling of high street retail properties: a quality design perspective

Abstract

Purpose

The purpose of this paper is to investigate the relationship between urban design quality and the real estate value of high street retail properties. Quantitative research on the added value of quality design has seen little advancement during the past two decades and hedonic analysis of the high street retail sector remains embryonic. This paper bridges this gap by providing empirical evidence on the added value of quality design.

Design/methodology/approach

The study uses a unique dataset of 301 Belfast City Centre retail transactions during the period 1994‐2009. Ordinary least squares (OLS) regression analysis is used to estimate a hedonic pricing model that utilises a composite range of variables. These variables were designed employing quantitative and qualitative approaches complementarily to strengthen the value of the empirical research.

Findings

The findings suggest that aspects of quality design such as connectivity, frontage continuity and variety, material quality and massing appropriateness add to real estate value. These findings supplement those on sector‐specific value determinants that emphasise the high impact of location, tenant characteristic and Zone‐A price calculations.

Practical implications

In analysing high street retail rent determinants this paper focuses on the impact of various aspects of quality design to inform investors and developers about those aspects that are highly valued by city centre retail tenants. Policy makers benefit from the findings through empirically justified built environment benchmarks for improving the quality of life in our cities.

Originality/value

This study provides a quantitative model for measuring urban design quality which uses data from a UK city but has a wider application range. It bridges a significant gap in the literature related to hedonic investigation of the added value of quality design by providing a holistic approach to quality.

Citation

Nase, I., Berry, J. and Adair, A. (2013), "Hedonic modelling of high street retail properties: a quality design perspective", Journal of Property Investment & Finance, Vol. 31 No. 2, pp. 160-178. https://doi.org/10.1108/14635781311302582