Econometric forecasting model for rents in the British retail property market

This paper develops a model for forecasting rents for the U.K. retail property market. The model is estimated at both the national and regional level using OLS and SURE respectively. Particular attention is devoted to the multicollinearity of the model, an issue often not considered in multivariate forecasting since the predicted values of models suffering from multicollinearity are unbiased. However, the question of the stability of the multicollinearity is often ignored. This paper draws attention to this problem in the context of this application.