Abstract
Modelling commercial property price is limited relative to its housing counterpart. This situation is also applicable in Malaysia with only a handful studies on commercial property market with none focusing on the influence of location submarket. This study therefore modelled the commercial property location submarket using hedonic price model. Using a rich commercial property transactions data with 11,460 observations, OLS models were estimated. The first model was a market wide model without the location submarket and the second model accounted for location submarket. The study found that modelling location submarkets improves model’s fit, reduces error, and eliminates heteroskedasticty thereby improving the accuracy of the price modelling. The findings of this study have implication to commercial property investors, financial institutions, public tax institutions, and appraisers.