Measuring The Effects Of Brand Mix In Retail Rents

Gözde Karahan and Kerem Yavuz Arslanli

ERES from European Real Estate Society (ERES)

Abstract: Choosing a location on retail streets means being next to many other brands. This proximity allows companies to reach more users and foot traffic. Furthermore, this costs firms as in paying higher rents. It is difficult to predict the rents on the retail streets. Therefore, rent estimation studies are much more critical when necessary to make estimates throughout the country.In the paper, the brand mix variable, which is a significant factor in determining rent in shopping centres, was also tested for retail streets. For the brand mix definition, the brands in the catchment areas of the retail stores were used. In the hedonic rent model, physical variables of the retail stores are included as well as spatial variables.As a result of the model, the effects of physical variables of stores on rent are explained. In the model results, it was seen that being a single storey increased the unit rent of the store, while the more gross leasable area and building age negatively affected the unit rent. The relationship between the brand mix and the rent is positive. However, the model's explanatory power, which is built by considering only physical variables, is higher. It is already known that internal variables have significant effects on rental values. However, even if the brand mix cannot be used alone in determining rent, it is understood from the model outputs that it is an important determinant. By diversifying the location data, it will be possible to produce more inclusive models.

Keywords: Hedonic Model; Istanbul retail market; Retail rents; Retail street (search for similar items in EconPapers)
JEL-codes: R3 (search for similar items in EconPapers)
Date: 2022-01-01
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