DYNAMICS AND ASYMMETRIC RENT ADJUSTMENTS IN THE OFFICE MARKET IN WARSAW

Dynamics of rent, vacancy, supply and demand on the office market of emerging commercial real estate markets have long been under-researched. The paper fills the gap in economic literature by investigating the growing office market in Warsaw. In particular, we evaluate whether the influence of deman...

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Bibliographic Details
Published in:International journal of strategic property management 2020-11, Vol.24 (6), p.428-440
Main Authors: Nowak, Krzysztof, Gluszak, Michal, Belniak, Stanislaw
Format: Article
Language:English
Subjects:
Analysis
asymmetric adjustments
Commercial real estate
demand shock
Management
Marketing
Office buildings
Office leases
office market
poland
Rent control
Rents
Supply & demand
supply shock
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Summary:Dynamics of rent, vacancy, supply and demand on the office market of emerging commercial real estate markets have long been under-researched. The paper fills the gap in economic literature by investigating the growing office market in Warsaw. In particular, we evaluate whether the influence of demand and supply shocks differ depending on the current market conditions. Using Error Correction Model approach, we investigated the rent adjustments on the office market in Warsaw, which is the major property market in Central and Eastern Europe. We replaced variables of the basic model with asymmetric variables to check for asymmetric adjustments in the office market. The study period covers data from 2005:1Q to 2016:1Q. The empirical results suggest that demand shock had a stronger impact on rent when the market vacancy rate was below the average for the period considered. Additionally, the demand shock had a stronger impact on rent when the rent was above the equilibrium level.
ISSN:1648-715X
1648-9179
DOI:10.3846/ijspm.2020.13647