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Can Space Syntax Help Us in Understanding the Intraurban Office Rent Pattern? Accessibility and Rents in Downtown Stockholm

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An Erratum to this article was published on 25 July 2008

Abstract

The effect of accessibility upon rent is investigated for office properties located in Downtown Stockholm. Starting from the firm’s cost minimization problem, a translog hedonic model is derived. The results suggest the model has good predictive power in explaining the variation in the log of the rent. A negative rent gradient is obtained with a base approximately 90 m from the postulated focal point. It appears as if Space Syntax adds important information to the understanding of the intraurban office rent pattern.

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Notes

  1. The rent elasticity with respect to size is: \( \frac{{\partial \ln {\text{Rent}}}} {{\partial \ln {\text{Size}}}} = \alpha _{1} + \alpha _{{11}} \ln {\text{Size}} + \frac{1} {2}\alpha _{{12}} \ln {\text{Dist}} + \frac{1} {2}\alpha _{{13}} \ln {\text{Integration}} \). Inserting the coefficient estimates and the mean of ln Size, ln Dist, and ln Integration yields: \(0.882 - 0.005 \times 5.496 + 0.5 \times 0.061 \times 6.548 - 0.5 \times 0.287 \times 0.251 = 1.018\) The standard error for this linear combination of the least squares estimates is computed as the square root of \({\text{Var}}{\left[ {\widehat{\alpha }_{1} + \widehat{\alpha }_{{11}} \overline{{\ln {\text{Size}}}} + \frac{1}{2}\widehat{\alpha }_{{12}} \overline{{\ln {\text{Dist}}}} + \frac{1}{2}\widehat{\alpha }_{{13}} \overline{{\ln {\text{Integration}}}} } \right]} = 0.0158\)

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Acknowledgments

The author is grateful to Adam Finn, Robin Lindsey, Alice Nakamura, Bo Söderberg, seminar participants at the 2004 CORS/INFORMS Joint International Meeting, seminar participants at the University of Alberta and three anonymous JREFE reviewers for helpful comments and suggestions on the manuscript. Any errors are the responsibility of the author. Opinions expressed in this paper are those of the author and do not reflect the views of any other individual or institution.

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Authors and Affiliations

  1. School of Business, University of Alberta, Edmonton, AB, Canada, T6G 2R6

    Rickard Enström

  2. Building and Real Estate Economics, KTH, 100 44, Stockholm, Sweden

    Olof Netzell

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  1. Rickard Enström
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  2. Olof Netzell
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Correspondence to Rickard Enström.

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An erratum to this article can be found at http://dx.doi.org/10.1007/s11146-008-9136-0

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Enström, R., Netzell, O. Can Space Syntax Help Us in Understanding the Intraurban Office Rent Pattern? Accessibility and Rents in Downtown Stockholm. J Real Estate Finan Econ 36, 289–305 (2008). https://doi.org/10.1007/s11146-007-9054-6

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