Asymmetric Space Market Adjustment in the London Office Market

Patric Hendershott, Colin Lizieri and Bryan MacGregor

Real Estate & Planning Working Papers from Henley Business School, University of Reading

Abstract: Models of the City of London office market are extended by considering a longer time series of data, covering two cycles, and by explicit modeling of asymmetric rental response to supply and demand model. A long run structural model linking demand for office space, real rental levels and office-based employment is estimated and then rental adjustment processes are modeled using an error correction model framework. Adjustment processes are seen to be asymmetric, dependent both on the direction of the supply and demand shock and on the state of the rental market at the time of the shock. A complete system of equations is estimated: unit shocks produce oscillations but there is a return to a steady equilibrium state in the long run.

Keywords: office market models; rental adjustment; asymmetric responce; vacancy rate (search for similar items in EconPapers)
JEL-codes: O18 R15 R33 (search for similar items in EconPapers)
Pages: 34 pages
Date: 2008
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Working Paper: Asymmetric Space Market Adjustment in the London Office Market (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:rdg:repxwp:rep-wp2008-07

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