Projections in the Industrial Property Market using a Simultaneous Equation System

Robert Thompson () and Sotiris Tsolacos ()
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Sotiris Tsolacos: Jones Lang LaSalle Londong WIA 2BN UK, http://www.joneslanglasalle.com/

Journal of Real Estate Research, 2000, vol. 19, issue 2, pages 165-188

Abstract: A three-equation simultaneous system is used to model the industrial property market in Great Britain. Strong relationships are found between new industrial building supply and both real rents and construction costs, and between rents, industrial floorspace availability and the gross domestic product. The performance of ex post simulations of new building supply, rents and floorspace availability are satisfactory with the exception of rent simulations post 1993. The central forecast of the model indicates a quiet market until 2001 (lower level of new supply, constant levels of real rents and increasing availability of industrial space) but a more active market in 2002 and 2003. This study suggests that simultaneous equation models can prove useful alternative tools in analysing the industrial property market and generating forecasts both at the aggregate and more localised level of analysis.

JEL-codes: L85 (search for similar items in EconPapers)
Date: 2000
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