2020, Vol.30, No.4

Korea Real Estate Review 2023 KCI Impact Factor : 0.56

pISSN : 2092-5395 / eISSN : 2733-8339
https://journal.kci.go.kr/krer

This paper analyzed the factors that affect the occupancy costs of co-working space companies, the key criteria in establishing their branches in a building. A hedonic price model was estimated on all 50 buildings where the top three co-working space providers put up a branch during the last five years. The dependent variable is the occupancy cost, and the explanatory variables are the characteristics of the company, its location, and the building. The data showed that 38 (76%) of the 50 buildings analyzed had a floor area of 16,500㎡ (5,000 pyeong), and the distance to the nearest subway station averaged about 200 meters. The regression results reveal that the factors that had the greatest impact on the occupancy costs were the total floor area and the efficiency ratio (the ratio between the rented space to the total floor space) of the building, which significantly differed across the companies and submarkets. We hope that the findings of this study will provide guidance on decision making by the co-working space providers as well as potential investors and asset management companies of the buildings occupied by the co-working space companies.

TI is an effective rent support method in which the landlord provides the tenant an allowance for improvements to the office interior. Despite the growing popularity of TI in Seoul office market, there has been no attempt to collect data and study the phenomenon. This study documents the practice of TI, rent free and fit out arrangements. As of the fourth quarter of 2016, 19 buildings were confirmed to provide TI. All of them were large, relatively new buildings with expensive rents, high management and utility costs, and a high vacancy rate. We have conducted simulations for lease arrangements with varying provisions for rent free, fit out, and TI. The results suggest that the most effective support scheme for the landlord entails rent free and TI in the form of a cash payment towards the cost of building construction, and subsequently depreciated annually by the landlord. On the other hand, the most effective support scheme for the tenant consists of rent free and TI from the landlord, with the TI amount given in cash as an asset of the tenant and depreciated annually.

This paper analyzes the impact of the transactions involving out-of-town buyers on apartment prices in the Seoul metropolitan region using the data over the period from the first quarter of 2009 till the fourth quarter of 2019. The result of correlation analysis reveals a strong positive correlation between the share of transactions attributable to out-of-town buyers and the rate of appreciation of apartment prices. The result of a Granger causality test suggests that causality runs from the appreciation of prices to an increase of transactions, and to an increase in the transactions involving out-of-town buyers. From a time-series regression model including an AR(1) term, the share of transactions attributable to out-of-town buyers was found to have a significant positive effect on price appreciation and a larger explanatory power. The effect of the variable remains valid in a model that includes the building completions and corporate bond yields designed to control for the housing market conditions and the macroeconomic environment, respectively. Our findings suggest that purchases by out-of-town buyers driven by investment demand need to be contained to reduce volatility of housing price in the Seoul metropolitan region.