EconPapers    
Economics at your fingertips  
 

Network Effects and Broadband Connectivity in Office Building

Tien Foo Sing, Juvette Lee Kin Pang and Wong Ah Long
Additional contact information
Juvette Lee Kin Pang: Department of Real Estate, National University of Singapore, 4 Architecture Drive, Singapore 117566,, http://www.nus.edu.sg
Wong Ah Long: Suntec City Development P/L

International Real Estate Review, 2002, vol. 5, issue 1, 146-168

Abstract: Suntec City (hereafter referred to as Suntec), “Asia’s Vertical Silicon Valley,?is one of the real estate examples where broadband and information & communication technologies (ICT) have been strongly embraced to enhance the competitiveness and marketability of its office space. In a mailed questionnaire survey participated in by 24 major commercial developers who are members of the Read Estate Development Association of Singapore (REDAS), 60% of the sample developer firms experienced strong competition in attracting and retaining lessees against office buildings equipped with ICT and broadband facilities. Sixty-seven percent of those who felt competition from the better-connected buildings indicated that they have plans to upgrade the existing ICT and broadband facilities over the next three years. They expected the upgrading to enhance the marketability of the building (71%) and also be able to attract tenants who are willing to pay a premium for the ICT and broadband services (43%). In the post- upgrading period, the majority of respondent firms felt that ICT and Broadband services would have positive impacts on occupancy rate (58%), rent (46%), and running and maintenance costs of the building (61%). We developed an incremental net present value model, which encapsulates the above factor and a network externality, to estimate the economic gain of investing in ICT and broadband connectivity in the Suntec City Tower One case. Based on our assumptions of the input variables, we found that the differentiating premium associated with the ICT and broadband connectivity was equivalent to 3.86% of the unit rental value. When probabilistic uncertainties were added to selected variables in a simulation process, the ICT and broadband related rental premium increased to 5.27%.

Keywords: Information and communication Technology; Broadband Connectivity; Network Externality (search for similar items in EconPapers)
JEL-codes: L85 (search for similar items in EconPapers)
Date: 2002
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.gssinst.org/irer/wp-content/uploads/2020/10/vol-5-no-1-network.pdf Full text (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ire:issued:v:05:n:01:2002:p:146-168

Ordering information: This journal article can be ordered from
Global Social Science Institute, 9200 Corporate Blvd., Suite 420 Rockville, MD 20850
https://www.gssinst.org/gssinst/index.html

Access Statistics for this article

International Real Estate Review is currently edited by Professor Sing Tien Foo and Professor Ko Wang

More articles in International Real Estate Review from Global Social Science Institute Global Social Science Institute, 9200 Corporate Blvd., Suite 420 Rockville, MD 20850.
Bibliographic data for series maintained by IRER Graduate Assistant/Webmaster ().

 
Page updated 2025-03-22
Handle: RePEc:ire:issued:v:05:n:01:2002:p:146-168