Forthcoming JRER Paper
CHAIN AFFILIATION, STORE PRESTIGE AND SHOPPING CENTER RENTS
This study aims at testing whether, and to what extent, chain affiliation within regional and super-regional shopping centers affects store rent levels. The rent impact of chain affiliation is assessed in interaction with store prestige. The research rests on a database of 1,367 retail leases running over the 2000-2003 period in eleven regional and super- regional shopping centres located in Montreal and Quebec City, Canada. Findings suggest that, when compared with independent and local chain-affiliated stores selling low-end goods, middle and high-end goods chain stores operating at upper levels of affiliation are charged a rent premium. Such a profit-sharing scheme between major, high-end chain stores and mall owners, it is argued, will occur under a regulatory environment which limits the local supply of top retail space.