Www.henley.ac.uk Thursday June 25 th 2015 Danielle Sanderson: School of Real Estate and Planning...
-
Upload
hector-clark -
Category
Documents
-
view
216 -
download
2
Transcript of Www.henley.ac.uk Thursday June 25 th 2015 Danielle Sanderson: School of Real Estate and Planning...
www.henley.ac.ukThursday June 25th 2015
Danielle Sanderson: School of Real Estate and Planning
Determinants of Satisfaction
amongst Occupiers of UK
Commercial Property
2
• Introduction:
– Why does occupier satisfaction matter?
– A Service-Profit Cycle for Property Management
• Occupier Perceptions: Satisfaction with Service Quality
– Literature Review
– Data
– Methodology
– Results
• Behavioural Intentions: Lease-Renewal and Willingness to Recommend
• Key Findings
Determinants of Satisfaction
amongst Occupiers of UK
Commercial Property
3
• Traditionally tenants were treated as a “source of upwardly mobile income” Nowadays we must recognize that “it is the tenants that are mobile and that their custom must be earned” (Edington, 1997, p.xii)
• 25-year Commercial Leases superseded by leases of little more than 5 years, with break clauses (IPD, Strutt & Parker, 2012)
• The provision of commercial property is a business, and businesses need satisfied customers in order to survive (Fornell, 2007)
• “The Tenant as Customer: Does Good Service Enhance Property Performance?” (Sanderson, 201X!)
- But what is “Good Service?”
Why does Occupier Satisfaction Matter?
Service-Profit Cycle for Commercial Property
Demand for Property
Good Service
Satisfied Occupiers
Renew Lease
Recommend Landlord
Good Reputation
• Characteristics of SERVICE include “intangibility, relative inseparability of production and consumption, and relative heterogeneity by virtue of involving the interaction of service personnel and customers, making each instance of service different” (Schneider & White, 2004, p8)
• Many researchers have attempted to assess, define and model quality in service encounters, including Kano, Grönroos and Gummesson
• Most widely used approach is SERVQUAL (Parasuraman, Zeithaml, & Berry, 1985, 1988, etc!), based upon gaps between the service expected and the service experienced
• Original model included ten determinants of service quality: Access, Communication, Competence, Courtesy, Credibility, Reliability, Responsiveness, Security, Tangibles and Understanding
• Subsequently condensed into five dimensions: ‘Tangibles’, ‘Reliability’, ‘Responsiveness’, ‘Assurance’, and ‘Empathy’
• SERVPERF is a variant of SERVQUAL which focuses on perception of performance, without the need to measure expectations (Cronin & Taylor, 1992)
Occupier Satisfaction with Service QualityLiterature Review
• Variants of SERVQUAL applied to Real Estate (mostly US Residential Brokerage)
• RESERV uses the five dimensions of SERVQUAL plus an additional two: Professionalism and Availability
• PROPERTYQUAL, designed to investigate occupier satisfaction with office buildings, uses SERVQUAL’s five dimensions plus property-specific ones: Cleanliness, Building services, Signage, Security, Parking and Building aesthetics
• Aspects of property management which “keep, push or pull” office occupiers have been assessed for their impact on satisfaction and loyalty (Appel-Meulenbroek, 2008)
• Property Industry Alliance and CORENET GLOBAL UK: annual surveys between 2007 and 2013 to assess the satisfaction of occupiers of UK Commercial Property
Occupier Satisfaction with Service QualityLiterature Review (contd.)
• 4400 + Interviews conducted by Real Service between 2002 and 2014, comprising:
– 1293 interviews with occupiers of Industrial property (usually the owner of the business)
– 1334 office occupiers (office manager or other senior member of staff)
– 1689 store managers in shopping centres
– 166 store managers on Retail Parks
• Across all the interviews, more than 400 different questions were asked, covering around 50 general topics
• For this research, these questions were categorised into 35 categories, to be used as explanatory and dependent variables in the quantitative analysis
• Respondents were asked to rate their satisfaction with aspects of their tenancy, using an ordinal response scale of ‘1’ to ‘5’
• Legitimacy of performing quantitative and statistical analysis with such a scale is discussed by Carifio & Perla (2007) and Hair et al. (2014)
Occupier Satisfaction with Service QualityData
8
• Satisfaction with Property Management
• Overall Satisfaction
• Stated Likelihood of lease renewal
• Willingness to Recommend Landlord or Property Manager
Dependent Variables
9
Independent Variables• Amenities and Toilets• Approvals and Documentation• Building• Cleaning• Communication• CSR and Values• Customer service• Health and Safety• HVAC and Lighting• Image• Landlord performance• Leasing process• Lifts and escalators• Location and Vicinity
• Maintenance• Marketing and events• Occupier website• Parking and public transport• Reception• Refuse and Recycling• Renovation• Rent Value• Responsiveness• Security• Service Charge Value• Signage• Tenant mix• Understanding needs
10
Correlations with Overall Satisfaction
11
Y
Structural Equation Modelling using SMART PLS
• Formative Indicators – Multicollinearity?
– Significance of Path Weights
• Reflective Indicators – Composite reliability - Cronbach’s Alpha
– Indicator reliability - statistically significant outer loadings in excess of √0.5 (i.e. 0.708)
– Convergent validity - Average Variance Explained (AVE) of a construct is greater than 0.5
– Discriminant validity - Fornell-Larcker Criterion and cross-loadings
• Assessment of Model– The significance of path coefficients (assessed by Bootstrapping)
– R2 – the coefficients of determination
– f2 – the effect size
– Stone-Geisser Q2 – the predictive relevance (assessed by Blindfolding)
– q2 – its effect size
Occupier Satisfaction with Service QualityMethodology
13
Importance-Performance Grid, adapted from Fornell (2007)
Low Importance & Strong
Performance - Maintain or
Reduce Investment or
alter target market
High Importance &
Strong Performance -
Maintain or Improve
Investment – Competitive Advantage
Low Importance & Weak
Performance - Inconsequential – do not waste
resources
High Importance &
Weak Performance -
Focus Improvements
here – Competitive Vulnerability
Performance
Importance
14
Path Model for Retailers
15
Retailers: Path Coefficients
16
Retailers: Effect Size of Relationships
17
Importance-Performance Analysis
Retailers’ Overall Satisfaction
18
Path Model for Office Occupiers
19
Office Occupiers: Path Coefficients
20
Office Occupiers: Effect Size of Relationships
21
Importance-Performance AnalysisOffice Occupiers’ Overall
Satisfaction
22
Path Diagram for Industrial Occupiers
23
Industrial Occupiers: Path Coefficients
24
Industrial Occupiers: Effect Size of Relationships
25
Importance-Performance Analysis
Industrial Occupiers
26
Retailers: Lease Renewal Intention and Willingness to Recommend Landlord
27
Office Occupiers: Lease Renewal Intention and Willingness to Recommend Landlord
28
Industrial Occupiers: Lease Renewal Intention and Willingness to Recommend Landlord
29
• Logistic Regression: Willingness to Recommend Landlord as a function of SERVQUAL dimensions
• For Industrial properties the most significant predictors of willingness to recommend are the SERVQUAL dimensions of Tangibles and Empathy
• For each unit increase in satisfaction with tangibles, the odds of a respondent recommending the landlord increase by a factor of 2.18
• For each unit increase in satisfaction with empathy, the odds of a respondent recommending the landlord increase by a factor of 2.5
• For office properties, the most significant predictors of willingness to recommend are the SERVQUAL dimensions of Assurance (4.78*) and Empathy (1.77)
• For retailers in shopping centres, the best predictors of willingness to recommend are Empathy (3.85) and Assurance (2.29), with Responsiveness (1.39) being significant at the 10% level
*(Odds ratios shown in brackets)
Service Quality in Commercial Property Management and its impact on Occupiers’
Willingness to Recommend
30
31
Summary of Key Relationships
Retailers
32
Summary of Key Relationships
33
Summary of Key Relationships
34
Summary of Key RelationshipsOccupier Satisfaction
35
Summary of Key Relationships
36
Summary of Key Relationships
37
Empathy of property manager (Communication and Understanding Occupiers’ Business Needs) is crucial for Occupiers’ Overall Satisfaction
Assurance (Professionalism and CSR), Reliability and perception of receiving Value for rent and service charge have most impact on lease renewal intentions
Empathy and Assurance are most important for Advocacy
Tangibles (mainly the location, form & function of the building) strongly influence occupiers initial choice of premises, but feature less strongly in their overall satisfaction and behavioural intentions
Amenities, HVAC, Security & Signage matter to industrial and office occupiers yet are often considered inadequate
Clear and transparent service charge documentation helps occupiers understand expenditure and improves perception of receiving value for money
Determinants of Satisfaction amongst Occupiers of UK Commercial Property: Key Findings