Long-run equilibrium for the Greater Paris office market and short-run adjustments

Catherine Bruneau () and Cherfouh Souad ()
Additional contact information
Catherine Bruneau: CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique

Post-Print from HAL

Abstract: While there is an abundant literature on office market modelling, only few studies focus on the Greater Paris case, which stands as the largest office market in Europe. This article aims at contributing to the understanding of the Parisian rental office market underlying mechanisms. We use cointegration techniques including Gregory–Hansen structural break approach to model the market over the period 1990–2013. We employ a two-stage error correction framework to identify the long-run equilibrium rent as well as the short-run adjustments in rent, vacancy rate and stock. The findings show that once allowances are made for a regime shift in the long-run rent relationship, the specified model explains relatively well the Parisian market. The long-run results confirm the role of employment and total stock as long-run determinants of rental values. Yet, in the short-run, due to the inertia arising from the intrinsic features of the office market, lagged dependent variables appear to be drifting rents away from their equilibrium.

Keywords: Greater Paris office market; error correction model; Gregory–Hansen; structural break; French commercial property (search for similar items in EconPapers)
Date: 2015
References: Add references at CitEc
Citations: View citations in EconPapers (2)

Published in Journal of Property Research, 2015, vol. 32 (4), p. 301-323. ⟨10.1080/09599916.2015.1089310⟩

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

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:hal:journl:hal-01451151

DOI: 10.1080/09599916.2015.1089310

Access Statistics for this paper

More papers in Post-Print from HAL
Bibliographic data for series maintained by CCSD ().