Correspondence: Shuk Man Chiu, Department of Real Estate and Construction 5/F, Knowles Building The University of Hong Kong Pokfulam Road Hong Kong. Tel: (852) 3182 5385; Fax: (852) 3182 5311; E-mail: msmchiu@hkusua.hku.hk

¹is currently an Associate in an international property fund, mainly responsible for the asset management of direct property investments in Hong Kong and Greater China. She is currently a member of The Hong Kong Institute of Surveyors and The Royal Institute of Surveyors. Her research interests include bidding strategies in real estate auction market, real estate economics, investment and finance.

²is currently an Assistant Professor in the Department of Public and Social Administration, City University of Hong Kong. Before joining the university, he practised building control in the Buildings Department, the Government of Hong Kong Special Administrative Region, and then worked as a Post-doctoral Fellow in the Department of Real Estate and Construction, The University of Hong Kong. His research interests include housing studies, urban renewal, heritage conservation, real estate economics and finance, and building performance assessment.

Received 19 October 2007; Revised 19 October 2007.

Abstract

While a great deal of research attention has been placed on the linkages between tenant mix and rental income in a retail facility, the facility's physical attributes have never been seriously studied. In fact, whether a retail facility, particularly a planned shopping centre, succeeds or perishes, depends very much on the physical design of the facility. To straddle the current research gap, this study focuses on the provision of public space, including atria, passageways and other circulation areas for the patrons, in the retail facilities in Hong Kong. Employing the data of 118 planned shopping centres, the authors empirically study the relationship between the overall rental levels of the centres and the percentages of floor space in the centres designated as public space. The results of the regression analysis show that the annualised rental incomes of the centres increase at a decreasing rate with the ratios of public floor space to retail floor space in the centres. There is an optimal upper limit for the ratio of 1.32. The findings of this study have far-reaching implications in the strategic planning and management of planned retail facilities.