Commercial Property Index Construction Methodology: A Review on Literature and Practice

Abstract

This paper reviews the literature on commercial property index construction methodology. Alongside this, index construction methodology employed by various organizations in producing existing commercial property indices is also discussed. The aim of the review is to identify the best possible methodology option to adopt in developing Kuala Lumpur Office Price Index (KL - OPI). Among the Asean countries, Singapore is the only country in this region that produces retail and office price index. In the case of Malaysia, this is the first study of this nature in the country, which outcome would be useful indicator for the industry. Having reviewed the existing methodologies of commercial property indices, it is best to model KL-OPI by adopting the hedonic price method

Keywords

• appraisal-based
• commercial property
• hedonic
• Kuala Lumpur
• transaction-based