A cointegration approach to understanding Singapore’s industrial space supply

Abstract

Observes that the timely and sufficient provision of industrial space helps to facilitate industrial activities that contribute to economic growth. An understanding of the interactions between the economy and the real estate market is useful to local policy decision makers and developers in ensuring the ready availability of industrial space without incurring unnecessary excess vacancy. This article hopes to build upon existing research by applying cointegration analysis and error‐correction modelling to examine the supply dynamics of Singapore’s industrial property market. The presence of long‐run equilibrium relationships between industrial property supply, economic and real estate variables is tested using cointegration analysis. The persistence profile examines the effect of system‐wide shocks to the cointegration relations to determine whether they are true cointegrating vectors.