Explaining the macro-economy and retail real estate sector dynamic interaction between prime and suburban retail real estate sectors

Purpose - From the perspective of the macro-economy and real estate sector interaction, this paper aims to examine the maturing prime retail real estate sector versus the developing suburban retail real estate sector.Design methodology approach - This paper adopts a highly specific dynamic computabl...

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Bibliographic Details
Published inJournal of property investment & finance Vol. 28; no. 2; pp. 77 - 108
Main Authors Hin David Ho, Kim, bin Ibrahim Muhammad, Faishal
Format Journal Article
LanguageEnglish
Published Bradford Emerald Group Publishing Limited 09.03.2010
Subjects
Developers
Economic conditions
Economic growth
Macroeconomics
Real estate
Retail stores
Retailing industry
Shopping centers
Studies
Singapore
Gross national product
National economy
Singapore
Real estate
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Summary:Purpose - From the perspective of the macro-economy and real estate sector interaction, this paper aims to examine the maturing prime retail real estate sector versus the developing suburban retail real estate sector.Design methodology approach - This paper adopts a highly specific dynamic computable general equilibrium model under system dynamics programming to structure the resulting system complexity within the context of Singapore.Findings - Ex post and ex ante model estimations find that the suburban retail real estate sector is on the whole more susceptible to gross domestic product (GDP) growth policy that affects both GDP expansion and retail rents in actual and expectation terms as well as returns.Research limitations implications - The DCGE model ex ante estimations for the planned scenarios, under low or high GDP growth for the prime and suburban retail real estate sectors, enhances understanding of structural factors and dynamic interaction in the maturation phase of the prime retail real estate sector in Singapore.Practical implications - In comparison, Singapore's suburban retail real estate sector is found to be in a developing phase.Originality value - There is limited local research on the underlying relationship between the economy and the retail real estate sector, although Singapore's retail sector and retail real estate sector form an integral part of sustainable economic expansion.
ISSN:1463-578X
1470-2002
DOI:10.1108/14635781011024845