A conjoint analysis of Johannesburg office tenants' preferences, South Africa
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Date
2019
Authors
Siamuzyulu, Moono Arnold
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Abstract
Purpose – This study established the factors that influence office relocation decisions in the
Johannesburg metropolitan area. The study aimed to obtain rank ordering (importance) of nine
(9) selected factors that can be used to guide relocation and other investment decisions within
the metropole.
Design/Methodology/Approach – Literature review of a plethora of studies was used as the
basis for this study. A questionnaire used by (Weaver, 1985) in the USA to conduct a conjoint
study in the real estate sector was adapted to suit the South African context. Additional
variables and levels were added, to better reflect the context of the study. Data was collected
from office users in P‐grade, A‐grade and B‐grade properties whilst a conjoint methodology was
used to analyse the data.
Findings – The results showed that the most important factor influencing tenants’ preferences
was parking followed by Landlord reputation; Size of the building was third in importance with
Security as fourth and Green Rating fifth. Accessibility of the building was sixth; Location of the
building, seventh with the rental cost (total cost of occupation) and the grade of the building
being the bottom two factors in eighth and ninth places respectively. These results reinstate
earlier findings in the South African market albeit the differences in the factor importance.
Research Limitations/Implications – The study looked at nine (9) variables each with three (3)
levels. The increased number of variables and levels added to the complexity of the user profiles.
In addition, the sample only included office tenants in P‐grade, A‐grade and B‐grade office
buildings in the greater Johannesburg metropolis. Current literature shows that newer
“preference” procedures like stated preference elicitation reveal deeper and broader information
on customer preferences than that obtained using choice‐based conjoint analysis.
Originality/Value – The research makes scholarship and practice contributions to the fields of
property management, tenant acquisition, and tenant management specifically illustrating the
application of market research techniques to the office market in an emerging economy, which is
not a common area of scientific interest mainly due to unavailability of data inter alia. The use of
conjoint analysis in the determination of preferences for would‐be tenants in the South African
office market will go a long way in reducing financial losses attributable to low occupancy levels
and high tenant churn.
Description
A research report submitted to the Faculty of Engineering and the Built Environment,
University of the Witwatersrand, Johannesburg, in partial fulfillment of the requirements
for the degree of Master of Science in Property Management and Development
2019