Predicting the Monetary Value of Office Property Post Renovation Work

Abstract

Recently, the construction industry has experienced an increase in the volume of renovation work aimed at improving the physical and economic performance of buildings. However, owners often hesitate to execute renovation projects because they find it difficult to guarantee an improvement in the monetary value of buildings after their renovation. Therefore, by applying multiple regression analysis to data collected from 98 actual renovated office cases, this study develops a model to enable convenient estimation of the monetary value of renovated office buildings compared with existing methods. The application of the model to 2 validation cases shows: (1) an average error rate of 1.5%; and (2) the need for comparatively less information for implementing the model. Essentially, it will enable the owners to make decisions regarding the execution of building renovation projects based on an estimation of the monetary value of buildings after renovation, which will bolster the renovation market.