Tenant Mix and Retail Rents in High Street Shopping Districts

Abstract

Urban areas have long had shopping districts in which retail properties are concentrated. It is argued that the diversity of retail tenants, often called tenant mix, contributes to the image and attractiveness of the high street shopping district. These districts are characterized by fragmented ownership and therefore the tenant mix is outside the control of individual property investors. We aim to explore the relationship between tenant mix and retail rents by studying high street shopping districts in the Netherlands. We start with delineating high street shopping districts using granular data on the spatial distribution of retail jobs. Within each shopping district, tenant mix is measured using detailed information on SBI sector classification and the number of retail properties. We find shopping districts with greater tenant mix show higher retail rents compared to districts with lower tenant mix.