Effect of Revitalisation of Historic Buildings on Retail Shop Values in Urban Renewal: An Empirical Analysis

Wadu Jayantha,Esther Yung

doi:10.3390/su10051418

Abstract

There often exists a tension between heritage conservation and urban redevelopment. However, heritage places are progressively operated as consumption spots and economic commodification, based on scholarly argument, is a major reason for the existence of a heritage resource. In this study, it is argued that revitalisation of historic edifices in districts undergoing urban renewal enhances the values of nearby commercial properties. This study employed a Hedonic Price Model (HPM) to investigate the existence of any relationship between revitalisation of historic building developments and the value enhancement of nearby retail properties located at the ground floor in the old area of Wanchai in Hong Kong. The model used 2961 real estate transactions obtained from buildings in the neighbourhood of three revitalised historical projects in the studied area, where a number of revitalisation projects have been completed. The results show that the revitalised historical projects have generated considerable value enhancements to the retail shopping properties in the vicinity. The results also revealed that the revitalised historical sites exert a greater impact on the retail property prices than do the newly developed nearby residential projects. The findings indicate that through the value enhancement of neighbourhood properties, the revitalisation of historical sites benefit not only the surrounding property owners but also local governments in the vicinity. The finding therefore supports the arguments utilized to advocate urban revitalisation and the idea that heritage resources exist purposely for economic commodification. Moreover, three case studies of the revitalisation of Chinese tenement buildings also provide a qualitative analysis of their social and economic impacts on the community.

Highlights

Urban renewal notably emphasizes heritage conservation and renaissance [1] rather than demolishing and reconstructing deteriorated and obsolete buildings to construct a better living environment
Revitalisation of historic buildings is progressively operated as consumption spots, such as shopping malls
Even though only a few studies so far have employed Hedonic Price Model (HPM) to investigate external price effect of heritage preservation projects [46] on retail and commercial properties, there is a considerable body of literature reporting on the use of HPM to investigate the effects of various structural, locational, and neighbourhood parameters on housing property value

Summary

Introduction

Urban renewal notably emphasizes heritage conservation and renaissance [1] rather than demolishing and reconstructing deteriorated and obsolete buildings to construct a better living environment. Heritage properties often create extensive externalities rather than just comprising the exchange value. According to English Heritage [7], these externalities promote better lives and lifestyles of urban dwellers. It has been criticized that revitalised areas inevitably lead to gentrification and exert social impacts on the community [8,9]. Revitalisation of historic buildings is progressively operated as consumption spots, such as shopping malls. It is argued that heritage resource exists purposely for its economic commodification [10]. The economic effect of revitalisation of the historic edifices on urban renewal areas is worthy of examination

Objectives

Methods

Findings

Conclusion