The development of a hedonic price model of retail property facilities design

Previous research has shown that there is a strong influence of building design on the rental price of commercial property. Studies, such as Vandell and Lane (1989), have dealt with the pricing of good architecture in a hedonic framework. This current study considers the influence of commercial retail facilities design on shopping centres in the city centre of a major Malaysian city, in order to ascertain customer satisfaction in terms of willingness to pay rent for a property facility. The level of importance of various attributes such as flexibility, quality of facilities' engineering services, appearance, image, accessibility and location are used in the process of deriving a hedonic pricing model. The results are used to determine whether the fluctuations in the level of rental prices determined from the model could justify the cost of incorporating specific levels of the attributes. This paper reports on the first phase of the research, which uses a systematic and structured approach to analyse design attributes in a manner, which can be easily validated and updated by property owners.