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The effect of urban redevelopment on retail shopping property values: a case study in Hong Kong

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  • Wadu Mesthrige Jayantha
  • Chu Chun Ming

Abstract

Purpose - Redevelopment, an essential aspect of the urban regeneration process, brings positive externalities to neighbourhoods. This study evaluates the effect of the improvements of neighbourhoods, brought about by redevelopment, on nearby ground-floor retail shopping property values. This study uses a hedonic price model to determine whether there is a relationship between redevelopment work and nearby shopping property values and the influence of neighbourhood improvements on the price of shopping properties if there is such relationship. The analysis is based on three large-scale redevelopment projects, each having a commercial space ranging from 30,000 to 50,000 sq.ft. The results show that an improved neighbourhood environment brings significant value enhancement to nearby shopping properties. Potential tenants are willing to pay a sale rental price premium ranging from 13% to 34% on shops located near redeveloped areas. The results also reveal that potential shop tenants are willing to pay a premium of 0.1% more on a shop with a cockloft. These findings imply that a neighbourhood environment that has been improved through well-planned redevelopment projects adds value to nearby properties. This study contributes an indication of the amount a tenant or buyer would be willing to pay on shops near redeveloped areas and can be used as a reference for users, developers and investors.

Suggested Citation

  • Wadu Mesthrige Jayantha & Chu Chun Ming, 2015. "The effect of urban redevelopment on retail shopping property values: a case study in Hong Kong," International Journal of Urban Sciences, Taylor & Francis Journals, vol. 19(3), pages 379-399, November.
    • Handle: RePEc:taf:rjusxx:v:19:y:2015:i:3:p:379-399
    DOI: 10.1080/12265934.2015.1095111
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    Cited by:

    1. Murakami, Jin & He, Yiming, 2018. "Highway investment in deindustrialization: A territorial analysis of office property transactions in Hong Kong, 2002–2013," Journal of Transport Geography, Elsevier, vol. 66(C), pages 200-212.
    2. Yun-Myong Yi & Tae-Hyoung Tommy Gim, 2018. "What Makes an Old Market Sustainable? An Empirical Analysis on the Economic and Leisure Performances of Traditional Retail Markets in Seoul," Sustainability, MDPI, vol. 10(6), pages 1-22, May.
    3. Heesun Lim & Chang-Deuk Eom & Byeong-il Ahn, 2021. "Estimation of the Values of Wooden Materials in Urban Regeneration: The Case of Seoullo in Korea," Sustainability, MDPI, vol. 13(17), pages 1-15, September.
    4. Tae-Hyoung Tommy Gim, 2018. "Tourist Satisfaction, Image, and Loyalty from an Interregional Perspective: An Analysis of Neighboring Areas with Distinct Characteristics," Sustainability, MDPI, vol. 10(4), pages 1-18, April.

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