THE EFFECTS OF CLUSTERING ON OFFICE RENTS: EMPIRICAL EVIDENCE FROM THE RENTAL OFFICE MARKET IN HO CHI MINH CITY

Du T. Huynh ()
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Du T. Huynh: Fulbright Economics Teaching Program and Harvard Graduate School of Design 232/6 Vo Thi Sau, District 3, Ho Chi Minh City, Vietnam

Theoretical and Empirical Researches in Urban Management, 2014, vol. 9, issue 1, 5-26

Abstract: This article investigates the positive effects on rents by office clustering in Ho Chi Minh City. The density of buildings in the CBD increases labor productivity and creates added value for the whole economy, stimulating economic growth and development. Applying similar methodologies and approaches used to identify the clustering effects in Houston and Amsterdam, I separated the rent effects of location density. After controlling main characteristics of buildings including: the location, age, size, quality and operational status, I find a strong positive effect of being located in dense office areas. For every time the size of the office district doubles, the rents tenants are willing to pay increases by 4.3 to 7.1 percent. This finding extends the literature of the clustering effects from the developed world to the developing one. In other words, the results support the argument that real estate market behavior is remarkably similar from place to place.

Keywords: Clustering effects; agglomeration economies; Ho Chi Minh City; rental office market. (search for similar items in EconPapers)
Date: 2014
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Persistent link: https://EconPapers.repec.org/RePEc:rom:terumm:v:9:y:2014:i:1:p:5-26

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