The impact of accessibility on the location value of commercial real estate

Bart De SmedtProf. Dr. Ann Verhetsel

Department of Transport and Regional EconomicsUniversity of Antwerp

ERES Conference 2009 – June 24th - Stockholm Royal institute of Technology

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Introduction

Globalisation Obliterating role of space and location

Porter (1998) Competitive advantages still heavily localized. Importance of spatial proximity and face to face contacts.

Each global decision has its micro economic implications in which location is still a key element.

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Qualitative research

• Role of accessibility within the broader set of location factors

- Which are the different location factors that influence a location decision?- Changes in time?- Changes in importance related to specific sectors

(Logistics, Offices, Retail)• Clear definition of accessibility

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Location factors: from cost reduction to quality and network benefits

Economic Economic

Neoclassical Neoclassical

factorsfactors

Behavioral Behavioral

factorsfactors

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Definition accessibility

Based on Geurs and Ritsema van Eck (2001)

- Transport component (transport cost, travel time)- Land-use component (location and spreading, demand and

supply)- Temporal component (time constraints of participants and

network)- Individual component (subjective needs and abilities)

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Quantitative research

• Different sectors of commercial real estate (Logistics, offices and retail)

• Different accessibility profiles (car, rail, inland waterway, airport, harbor)

How do the different sectors react on different accessibility profiles and how is it reflected in the location value?

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Revealed preference

Based on a large set of transaction data Challenge due to strong protective attitude of

Belgian real estate market.

Import them in GIS related environment and add an accessibility profile to each transfer.

Based on comparison certain typologies will appear between accessibility and location value.

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Spatial Occupation of Offices in Brussels (1950)

Spatial Occupation of Offices in Brussels (2005)

11District North

European Area

Central Station

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Stated preference

DISCRETE CHOICE MODELINGBased on the typologies we can build up discrete choices to

further analyze which accessibility attributes have the largest impact on location value.

The respondents will be asked to make trade-offs between

certain attributes.

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Goal of further research

• To identify and quantify the magnitude of the accessibility attributes that are important for each sector.

• To identify if there are sector specific policy issues that are disclosed by the comparison of the revealed and the stated preference.

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Thank you for your attention.