The Impact of Site Location on the Rental Value of Commercial Properties

THE IMPACT OF SITE LOCATION ON THE RENTAL VALUE OF COMMERCIAL PROPERTIES USING SPATIAL ANALYSIS TECHNIQUE

Associate Professor Dr. Buang Alias

Dr. Haji Ibrahim @ Atan bin Sipan

(Universiti Teknologi Malaysia) and

En. Oliver Valentine Eboy

(Universiti Malaysia Sabah)

ABSTRACT

Research into the development of location specific valuation model is scarce and difficult The main aim of this study is to identify appropriates statistical model to be integrated with GIS in generating property values. Several statistical techniques were used amongst which includes Linear or OLS Regression Model, Geographically Weighted Regression (GWR) Model and Trend Surface Analysis (TSA) Model. The study initially identifies 17 variables such as road type, road direction, availability and proximity to car parks, schools, university, central business district, industrial area, construction site, shopping centre, sports centre, recreation centre, office area, bank, post office, bus and taxi station, and view of surrounding, significant in influencing the values. Proximity to police station is found to be insignificant. The result shows that the Statistical model with in built Geographical Weighted Regression model (GWR) provides a better value prediction than OLS and TSA. This research group is of the opinion that the GRW model could be useful for future research to identify impact of location on property values.