The factors that determine shopping centre rent in Wuhan, China
| Published date | 07 March 2016 |
| DOI | https://doi.org/10.1108/JPIF-04-2015-0021 |
| Pages | 172-185 |
| Date | 07 March 2016 |
| Author | Qiulin Ke,Wencan Wang |
| Subject Matter | Property management & built environment,Real estate & property,Property valuation & finance |
The factors that determine
shopping centre rent
in Wuhan, China
Qiulin Ke
The Bartlett School of Planning, University College London, London, UK, and
Wencan Wang
Star Capital, Shanghai, China
Abstract
Purpose –The purpose of this paper is to investigate the factors that affect the retail rent of shopping
centres in Wuhan, an important city in central China.
Design/methodology/approach –The study uses a data set of 68 shopping centres in urban
Wuhan. A regression model is constructed to estimate the impact on retail rent of a composite range of
variables that would capture the physical c haracteristics, s patial characteris tics, potential
attractiveness of shopping centres and market condition.
Findings –The empirical findings suggest the ceiling height, closeness to metro line station, being
situated in commercial central area, vacancy rate and income have significant impact on rental level.
Unexpected, the retail mix has a significant negative impact on rent. The impact of the more
determining factors found in Western research –size, age, parking space and anchor tenant –is not
supported in the Wuhan study.
Practical implications –While 68 shopping centres are included in the test, the sample size is
relatively small. The comparatively short history of retail market in Wuhan would not allow to test the
rent adjustment process.
Originality/value –This is the first paper to investigate retail rent determinants in a second-tier city
in China. The results of the study give designers, developers and investors critical insights into the
determinants of retail rent in an emerging market.
Keywords China, Determinants, Regression modelling, Retail rents, Shopping centres, Wuhan
Paper type Research paper
1. Introduction
The concept of “shopping mall”was first introduced in the USA and its primary
function –the provision of a wider range of goodsand services to shoppers in units with
far larger unit footprints than individual department store (Tay et al.,1999)–remains
unchanged. The first suburban enclosed shopping centre, the Southdale Center, opened
near Minneapolis in the USA in 1956 and became the template for subsequent centres
across North America and Western Europe. The success of these malls has been
underpinned by the expansion of the car ownership, improvement to transportation
infrastructure and residential decentralization. The shopping centres, especially
out-of-town shopping centres dominated the retail landscape in these countries for
decades and have been regarded as the most successful land use, real estate an d retail
business concept of the twentieth century (Beyard and O’Mara, 1999).
While the purpose-built shopping centre has become an established feature on the
retail landscape in Western economies, in China the dedicated shopping centre is a
relatively recent innovation and has become a driver of change in retailing patte rns.
China did not have real shopping centres until the mid-1990s. The first wave of retail
development began in the largest cities of Beijing, Shanghai, Guangzhou and Shenzhen
Journal of Property Investment &
Finance
Vol. 34 No. 2, 2016
pp. 172-185
©Emerald Group Publishing Limited
1463-578X
DOI 10.1108/JPIF-04-2015-0021
Received 8 April 2015
Revised 1 September 2015
26 October 2015
Accepted 2 December 2015
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/1463-578X.htm
172
JPIF
34,2
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