Office market can be the market place to be negotiated between the lessee or purchaser looking for new space and the lessor or owner holding the space. Therefore, to figure out the rental scheme of office building, to understand that the value of offi...
Office market can be the market place to be negotiated between the lessee or purchaser looking for new space and the lessor or owner holding the space. Therefore, to figure out the rental scheme of office building, to understand that the value of office building is determined by the building nature and its location. This will give the lessee or owner to decide the rental charge properly and the investor to make a decision reasonably.
Furthermore, to study on the rental scheme of office building, the provider who constructs and develops the office building is able to make a decision on nominal investment level comparing with investment cost and return, and be efficient for the time and cost to collect the office information, and acquire the basic knowledge on office market research.
Though the research on office building so far was mainly focused on the downtown, Yeoiy and Kangnam area of Seoul, that on local metropolitan was not carried out. Therefore, this research is focused on Seoul as well as 5 local metropolitans such as Pusan, Daegu, Incheon, Daejeon and Kawngju city. This research is based on the hedonic price function, which show the value of structural quality, local characteristics and surrounding environment of office building, and the log-log function on the type of hypothetical function.
The analytical approach can be divided into three categories as follows:
1.Rental schemes can be observed by the rent and total rent, rent plus management expenses, as the dependent variable in Seoul and 5 local metropolitans. The typical research up to now could not be concluded on variables which shall be the dependent variable. Therefore, this research will compare two types of the dependent variable which suits to each regions.
2.Rental scheme will be studied upon small, medium and large scale of office market in Seoul and 5 local metropolitans respectively.
3.Rental scheme will be examined, as the problem of transaction rate from deposit based rent to monthly rent is complemented by using the data of monthly rent with deposit in Seoul and that of deposit based rent in 5 local metropolitans.
As described on the above, the determinants of office rental in Seoul and 5 local metropolitans will be as follows:
First of all, in case the total rents was adopted as the dependent variable composed of the rent and total rent in regional analysis, high coefficient of determination can be achieved. Depending upon region, the determinants of office rental can be varied with, and the impact of each variable might be different.
In comparative analysis between Seoul and local metropolitans, the rent of large scale of office can be increased in Seoul and decreased in local metropolitans as the scale of building larger and keep longer. The rent of small and medium scale of office can be increased in both Seoul and local metropolitans as the scale of building larger and keep longer.
The variable of surrounding environment influences a lot in 5 local metropolitans and does not in Seoul. The analysis to complement the problem of transaction rate from deposit based rent to monthly rent shows that the level of rent at downtown, Youyi and Kangnam area in Seoul differ from the analytic result taken into consideration of the whole of Seoul. This might be caused by the fact that the rent was devalued due to the preference of deposit based rent and the transaction index from deposit based rent to monthly rent in Kangnam area. In 5 local metropolitans, the difference of a little coefficient value and test of significance can be varied with.