An analysis of the rental market in Malta vis-a-vis commercial property

Abstract

This thesis compares user costs and rents for office and industrial space in Malta between the years 2000 and 2008. It aims to identify possible pricing anomalies that may emerge therefrom and will test the hypothesis that rents follow changes in the user cost. Results indicate that the hypothesis that rents follow changes in the user cost is rejected for both office and industrial space. During the period under review rents followed a relatively stable path. Conversely user costs have experienced greater volatility mostly driven by volatility in the expected capital growth rate. As a result the existence of extended periods of disequilibrium in the rental market has emerged indicating the possibility of unexploited profit opportunities.