Profitability of Office Rental Market in Seoul: An Application of Simultaneous Structural Equations
利用联立结构方程模型估计首尔写字楼租赁市场的超额回报率，发现利率上升时业主倾向于提高押金、降低月租，且非CBD市场比CBD市场更有利可图。
This article is concerned with the estimation of excess rates of return on the office rental market in Seoul using a simultaneous structural equation model. The office rental market in Seoul is spatially divided into CBD and non‐CBD, and the model has three behavior equations of Chonsei price, monthly rent and key deposit, with two identity equations of conversion rate and excess rate of return. This article reveals that it would be rational for the owners to ask tenants for a higher deposit with a lower monthly rent under increasing interest rates because the interest rate has a positive effect on the Chonsei deposit and the key deposit, but a negative effect on the monthly rent. Although high nominal interest rate and low economic growth reduce the excess rate of return on both submarkets, the non‐CBD office rental market would be more profitable than the CBD market despite lower levels of the monthly rent and key deposit.