Can a Geographical Analysis of Property Values Aid Business Location Planning?

This paper reports the results of a research project, funded by the RICS Education Trust, that examined the geographical spread of, and shifts in, office property values within an urban area. The aim of this paper is to question whether a geographical analysis of property values can aid business location planning. The research project was divided into two components. After a literature review, a survey of office occupiers and property advisors in Bristol UK identified the key factors that are considered when purchasing or leasing new office premises. A geo-spatial database for a study area in Bristol was then developed to examine the proximity of office property to geographic features that were regarded as important influences on value by respondents to the survey. The survey revealed that both city centre and edge-of-town office occupiers regard accessibility to customers, clients and complementary business activities as the fundamental element of a property decision, over and above the physical and legal characteristics of the property. Many occupiers, particularly large firms, assess city centre and edge/out-of-town locations when making a location decision. The survey identified a trade-off between the advantages and disadvantages of central and out-of-town sites in terms of characteristics such as parking, accessibility and quality of the surroundings. Yet there was a reluctance on the part of property advisors to quantify and reconcile differences in value caused by such polarised locations. Property advisors prefer to concentrate data gathering and analysis within well-defined and often small neighbourhoods or geographical areas. This is despite a recognition of a potential relationship between rents and rent determinants over the wider urban area. The paper suggests that a geographical analysis of property values over a wider urban area using proximity rather than neighbourhood variables that are calculated using a network model may aid business location planning. In order to examine the proximity of office premises to feature attractions that were identified in the survey, a geographical analysis technique called distance mapping was used to locate those properties within specified access times and distances. The results illustrated the importance of network modelling in location decision analysis and demonstrated the value of examining the near environment in this way. Only by developing a realistic network model of communications in an urban area can an accurate picture of how accessibility affects property value be created. The research suggests that a geographical analysis of property values can identify movements in value and shifts in relative accessibility and concludes that this type of analysis may have an important application in business location planning.