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Volume 37, Issue 2 (2022)
GeoRes 2022, 37(2): 221-230 |
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Received: 2021/12/24 | Accepted: 2022/04/11 | Published: 2022/06/20
Received: 2021/12/24 | Accepted: 2022/04/11 | Published: 2022/06/20
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Shafia M, Rezvani A, Tabasi M, Malek Sadati S. Comparing the Effect of Different Features of Two Commercial Large-Scale Buildings on Economic Prosperity in District 9 of Mashhad. GeoRes 2022; 37 (2) :221-230
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1- Department of Architecture, Faculty of Art and Architecture, Mashhad Branch, Islamic Azad University, Mashhad, Iran
2- Department of Economics, Faculty of Economics and Administrative sciences, Ferdowsi University, Mashhad, Iran
2- Department of Economics, Faculty of Economics and Administrative sciences, Ferdowsi University, Mashhad, Iran
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Introduction
In today’s world, cities, much like commercial enterprises, must actively market and position themselves within the global arena. In this context, urban managers have adopted various initiatives to create attractive urban images and high-quality environments that convey a superior quality of life as a competitive advantage. Architecture, through its physical attributes and the diverse spatial qualities it generates, plays a crucial role in enhancing the competitive standing of cities. Numerous historical examples in architecture and urban design demonstrate how strategic and well-planned use of architectural works by urban management has contributed to the creation of distinctive and appealing urban identities aimed at attracting international investment. In the contemporary process of globalization, territorial boundaries have diminished in significance and spatial distances have effectively contracted [Matlabi, 2015], with urban growth increasingly driven by a city’s ability to attract people and capital from beyond its immediate region [Florida, 2003].
For instance, the success of the Guggenheim Museum in Bilbao prompted many European cities, following the decline of industrial activities, to pursue the construction of iconic cultural buildings as a means of redefining their urban identity and positioning themselves on the global investment and tourism map. This phenomenon, commonly referred to as the “Bilbao effect,” has played a significant role in shaping global markets, national economies, financial capital flows, and transformations in local patterns of residence and activity [Noori & Rafieian, 2016]. Accordingly, architecture not only represents the contemporary condition and form of cities but has also become a valuable instrument for unlocking and enhancing their economic potential [Piatkowska, 2012].
According to some scholars, architecture should today be evaluated based on its capacity to stimulate economic potential by generating economic benefits for various stakeholders, including individuals, organizations, and even entire cities [Klingmann, 2015]. Such evaluation requires reliable and robust analytical tools, and changes in surrounding property values have been widely adopted as a practical and commonly used indicator in numerous studies. This is because land and housing price indices constitute one of the most comprehensive, expressive, and functional measures for assessing changes in environmental quality [Kheyroddin, 2017]. Accordingly, increases in property transaction prices are employed as indicators of urban value and economic growth, alongside other contributing factors. This approach has been applied extensively in empirical research [Chui & Chau, 2005], and findings suggest a strong and statistically significant relationship between rising property prices and increases in gross domestic product [Campbell & Cocco, 2007].
A substantial body of research has focused on the relationship between architecture and economic performance, examining this issue from both qualitative and quantitative perspectives. For example, Ahlfeldt and Maennig [2010], in their analysis of three major stadiums in Berlin, have identified a direct economic impact radius of approximately 3,000 m for large-scale architectural projects on surrounding areas. In another study, examining the influence of architectural reputation through an analysis of 24 works by Frank Lloyd Wright within a single city, Ahlfeldt and Mastro [2012] have concluded that property values decrease with increasing distance from such landmark buildings. Specifically, price premiums of up to 8.5% were observed within 50 m of these works, declining to approximately 5% at distances between 50 and 250 m. Similarly, Ahlfeldt and Kavetsos [2014], in a study of the economic impacts of iconic architecture through two stadiums constructed on former stadium sites in London, have reported that the landmark status of architectural works increased surrounding property prices by more than 15%.
Despite the growing international literature, quantitative studies aimed at measuring the economic impacts of architectural works on urban growth remain scarce in Iran. While some research has addressed the economic consequences of implementing optimized construction patterns [Rezvani, 2015] or the social impacts of large-scale development projects, there is still debate regarding the necessity and effectiveness of such projects. Some scholars argue that large-scale developments fail to fulfill their promises of economic revitalization and spatial and environmental enhancement [Sarkheyli et al., 2018]. In contrast, proponents contend that the social benefits of large-scale architectural projects eventually diffuse to lower socio-economic groups, ultimately generating broader societal gains [Noori & Rafieian, 2016]. In this context, there is a notable lack of quantitative analyses that assess the extent and mechanisms through which architectural quality contributes to economic growth.
Researchers emphasize that the emergence of high-quality buildings is not accidental; rather, it is the outcome of sound initial programming, as well as sustained effort, collaboration, and shared vision between architects and informed clients. To achieve favorable economic outcomes, such considerations must be incorporated at the earliest stages of planning, as building programming constitutes the first and most critical task of architectural practice [Pena & Parshall, 2012]. Designers and planners are consistently confronted with the challenge of selecting among numerous competing factors. Accordingly, the present study seeks to elucidate the relationship between different dimensions of architectural quality and economic growth by examining the desirability of surrounding areas through quantitative analysis and empirical data. This investigation focuses on two large-scale commercial architectural projects located within the geographical boundaries of District 9 of Mashhad
Methodology
This study adoptd a correlational approach with a causal–comparative design to examine two large-scale architectural projects with commercial functions located in District 9 of Mashhad. The aim was to assess the relationship between the extent to which these architectural works benefit from identified quantitative and qualitative attributes and the manner in which their economic potentials are realized. The primary rationale for selecting this study area lied in the specific status of large-scale developments, defined as projects exceeding 20,000 m² according to the resolution No. 5046/98/5/Sh dated 28/03/2019 of the Mashhad City Council, with commercial functions during the study period, as well as the relative stability of urban infrastructure and the predominance of residential land use, which has been consistently reinforced in urban development plans.
Within the study area and during the period from 2010 to 2018, only two large-scale commercial projects were developed. Both projects obtained construction permits in 2013, and their commercial components became operational in 2016. This limited number of comparable projects within the defined spatial and temporal framework provided a suitable basis for independent and comparative analysis.
Architectural quality and the attributes of desirable architectural works have been extensively discussed by numerous scholars. Although theoretical perspectives differ in terms of specific criteria and components, they share substantial commonalities in their overall structure. To enhance the validity of the conceptual framework, this study employed an adapted methodology based on an assessment tool developed by the UK Construction Industry Council for evaluating design quality. This tool, known as the Design Quality Index (DQI), is rooted in the Vitruvian triad and incorporates an additional dimension related to resources, including financial, temporal, natural, and human resources [Nadimi, 2010]. The DQI provides a comprehensive framework for evaluating a broad range of criteria defining building quality [Gann et al., 2003] and consists of ten thematic categories grouped under three main headings: “Functionality,” “Build Quality,” and “Impact.” Each thematic category includes between six and fifteen evaluation questions, resulting in a total of 91 statements [Spellerberg et al., 2010].
The DQI functions as an assessment method for evaluating architectural design quality through a structured questionnaire, enabling comparative analysis of strengths and weaknesses relative to existing conditions [Sholeh et al., 2017]. Drawing on this approach, along with a review of related studies and expert consultations, 23 key concepts were ultimately selected for evaluation in the present research. To assess the influence of these concepts, the opinions of licensed architects who are members of the Mashhad Construction Engineering Organization were collected through a questionnaire survey. The sample size was determined using Cochran’s formula with a margin of error of 0.1, resulting in a minimum required sample of 95 respondents; ultimately, 121 completed questionnaires were collected.
The questionnaire was designed in accordance with the format proposed by the Design Quality Index. After providing a general introduction to the study, respondents were first asked to rate the overall importance of each of the 23 key concepts in enhancing architectural quality and value using a scale from 1 to 10. Subsequently, to evaluate the characteristics of the two case-study projects, respondents assessed the extent to which each project benefited from the identified concepts using a five-point Likert scale. Content validity was examined using a logical–content approach, and prior to questionnaire distribution, the clarity and relevance of the questions were reviewed by experts and revised accordingly. The reliability analysis of the questionnaire yielded a Cronbach’s alpha coefficient of 0.958, indicating excellent internal consistency.
For analytical purposes, a weighted score was calculated by multiplying the importance assigned to each concept by the degree to which each case-study project exhibited that concept. The mean of these weighted scores for each key category served as the basis for subsequent analyses.
To evaluate the economic impacts of each project on its surrounding area, a hedonic pricing analysis combined with the difference-in-differences (DiD) method was employed [Shafia et al., 2021]. In this multivariate statistical approach, the effects of other environmental characteristics were treated as constant. This method, widely used in urban economic studies, is known as hedonic analysis [Rosen, 1974]. According to the hedonic pricing function, residential units with a greater number of desirable attributes tend to command higher market prices [Sedaghati & Nouriyan, 2016]. Accordingly, the internal and external qualities of architectural works can also be regarded as positive local attributes [Jim & Chen, 2009].
In this analytical framework, the effects of architectural interventions are assessed not by measuring changes within the projects themselves but by examining variations in surrounding areas. To isolate the effects of the architectural projects from other local influences, the difference-in-differences method was applied. This approach, originally derived from clinical research designs comparing treated and untreated groups before and after intervention, focuses on the average differences in outcomes between the two groups across two time periods [Ahlfeldt & Kavetsos, 2014]. In this study, four sets of averaged data were analyzed, comprising property prices in areas influenced by each architectural project compared with more distant areas, across periods before and after project implementation. Since unobserved external factors are assumed to affect both groups similarly, their influence can be effectively controlled through differencing, allowing the remaining variation to be attributed to the intervention itself—namely, the development of large-scale architectural projects [Wooldridge, 2013].
Property transaction prices in the surrounding areas were obtained from the Iranian Real Estate Market Information System, the official website of the Ministry of Roads and Urban Development, and real estate listings published in the Khorasan newspaper. The collected data were standardized based on apartment prices per square meter and implemented within the ArcGIS environment. To obtain representative market prices and reduce potential bias arising from inaccurate price reporting, transaction prices over three-month periods were averaged across three key time points: the beginning of the study period, the time of project operation, and the end of the study period. For graphical analysis and visualization of price trends over time, raster surfaces were generated using interpolation through the Kriging method, which relies on statistical models to estimate unknown values based on surrounding known points. To facilitate comparative analysis of price dynamics, apartment prices were classified into four levels, ranging from the highest to the lowest values
Findings
To examine the correlation between architectural qualities and the economic impacts of the two architectural works, a comparative analysis of diagrams was conducted. The results obtained from the questionnaires were presented in the form of a radar chart, illustrating the comparative extent to which the two architectural projects benefit from the evaluated quantitative and qualitative attributes.
For spatial comparison, another diagram was produced based on dividing the distance between the two architectural works, identified on the study-area map, into five equal segments and extending this division across the surrounding area. The average property price at the beginning of the study period in each spatial cell was considered the base price, and the percentage change in prices during the two subsequent time intervals was calculated and displayed. The mean value applied to each cell was assessed using a standard deviation test relative to the overall mean, indicating that 95.77% of the data fell within the confidence interval. This result confirmed the normality of the applied mean values used in the analysis.
Comparative examination of the diagrams indicates that at the beginning of the study period, the surrounding areas of both projects exhibited relatively high desirability and captured the highest apartment sale values. However, several years after the operation of these two architectural works, the trends in property purchase and sale prices in their respective vicinities followed distinctly different patterns. Based on the difference-in-differences approach, these divergent trends can be attributed to the differing qualities and characteristics of the two architectural projects.
The average growth in property prices across the entire study area at the end of the study period, relative to the base year, was approximately 317%. This increase was largely influenced by inflation and broader economic conditions. Given the stability of land-use functions and urban infrastructure in the area, an initial assumption would be that such price increases would occur relatively uniformly across the study area. Nevertheless, apartment units in the vicinity of the Armitage project experienced price increases approximately 51% higher than the overall average, with this effect observable up to a distance of about 250 meters from the project; however, major arterial roads acted as limiting boundaries for this influence. In contrast, the area surrounding the Aban Plaza project lagged behind the average growth rate of the study area, with property prices increasing by approximately 285% relative to the base year, around 32% lower than the overall average.
This divergence in economic impacts showed a strong correspondence with the pattern observed in the radar chart, which reflects the extent to which each project benefits from the evaluated quantitative and qualitative architectural attributes. The average level of benefit from these attributes was calculated at 38.76% for the Aban Plaza project, whereas the Armitage project achieved a level of 62.91%, representing an advantage of approximately 24%. Correspondingly, the surrounding area of the Armitage project experienced property price growth about 30% higher than that of the area around the Aban Plaza project. These findings indicated a direct relationship between the degree to which an architectural work incorporates evaluated quantitative and qualitative attributes and the generation of economic vitality in its surrounding area.
Discussion
This study aimed to elucidate the relationship between various architectural qualities in large-scale commercial projects and economic growth, based on quantitative studies and extractable statistical data for two architectural projects located in District 9 of Mashhad. Although numerous studies have examined the impact of landmark and branded projects on sustainable social development [Anabestani, 2017], urban development [Anabestani et al., 2013], and local economic enhancement [Noori & Rafieian, 2016], the present investigation addressed a gap by evaluating how the quality and features of such projects influence the extent and manner of these developments. The importance of this issue becomes particularly evident when reviewing international literature on large-scale architectural projects that have failed to achieve their intended economic goals [Cosme, 2017], highlighting the need to examine the factors affecting their outcomes.
In this study, the relationship between the level of economic dynamism in the surrounding area, measured through changes in residential property values, and the quantitative and qualitative architectural features, based on 23 main concepts adapted from the "Design Quality Index" tool, was examined for two commercial projects. The results indicated that a 24% higher compliance of the Armitage Golshan project with the aforementioned main concepts led to a 30% increase in the value of apartment transactions within a 50-meter radius, extending up to approximately 250 meters from the project. These findings align with previous studies [Ahlfeldt & Maennig, 2010; Ahlfeldt & Mastro, 2012; Ahlfeldt & Kavetsos, 2014], although the earlier research typically assessed only one architectural feature, whereas this study evaluated the level of compliance of both projects with all 23 main concepts in comparison to each other.
Among these concepts, establishing appropriate connectivity with the city and access to urban infrastructure, particularly public transportation systems and major transit routes, was identified as having the most significant impact, followed by the provision of retail centers, restaurants, nightlife, and other locally scarce functions, as assessed by respondents. In contrast, similar studies have emphasized the role of a central theme (theme-o-centric) as the most critical feature for driving economic dynamism. This theme may relate to a sport, historical event, recreational activity, or a well-known brand [Hannigan, 1998; Klingmann, 2015].
Although the Armitage project scored 30% higher in leveraging this thematic concept than the Aban Plaza project, the overall importance of this concept was lower compared to other concepts. This is justifiable given the limited number of comparable projects within the study area, as the scarcity of alternatives reduces the immediate influence of a thematic brand on consumer choice. This underscores the necessity of localizing international studies on the economic impacts of architectural projects, considering the unique context and characteristics of Iran. No similar studies were found in the Iranian context, making this research a pioneering effort in this domain.
In this research, only changes in surrounding property values were used as an indicator of economic dynamism, a method widely regarded as valid and reliable in comparable studies. However, for a more comprehensive understanding, access to demographic data, micro- and macroeconomic analyses, and evaluation of a larger number of architectural projects is necessary to derive generalizable conclusions. The relationship between architecture and economic performance or architectural economic functions remains an area with many unclear aspects, particularly in Iran. This study attempted to address the topic within the constraints of available data, integrating urban economics perspectives with the qualitative and quantitative features of architectural works, though further extensive studies are required to fully capture the complexity of economic dynamism.
Conclusion
Increased compliance with the identified architectural qualities leads to greater desirability and economic dynamism in the surrounding area and city. Consequently, the identified factors can serve as guidance for prioritizing considerations during various stages of project development. Investments made to enhance these qualities are likely to yield long-term benefits in terms of project acceptance and the stimulation of economic activity in both the project vicinity and the wider urban area.
Acknowledgments: None.
Ethical Permission: In this study, the principles and guidelines of research ethics, including honesty, confidentiality, and integrity, were observed by the authors.
Conflict of Interest: This article is derived from the doctoral dissertation of Mehdi Shafiea at the Faculty of Art and Architecture, Islamic Azad University, Mashhad Branch, entitled “The Role of Architectural Works in Urban Economic Development, Formulating Principles and Strategies for Leveraging Architectural Economic Opportunities in the Development of Mashhad City”, conducted under the supervision of Dr. Alireza Rezvani and Dr. Mohsen Tabasi, with consultation from Dr. Seyed Saeed Malek-Alsadat. The authors declare no conflict of interest; none of the authors were involved in the design or execution of the case studies used in this research, nor did they receive any financial assistance or support from them.
Author Contributions: Shafia M (first author), Introduction Writer/Main Researcher/Discussion Writer (45%); Rezvani A (second author), Methodologist/Assistant Researcher/Statistical Analyst (40%); Tabasi M (third author), Assistant Researcher/Statistical Analyst (5%); Malek Sadati SS (fourth author), Assistant Researcher/Statistical Analyst (10%)
Funding: None.
In today’s world, cities, much like commercial enterprises, must actively market and position themselves within the global arena. In this context, urban managers have adopted various initiatives to create attractive urban images and high-quality environments that convey a superior quality of life as a competitive advantage. Architecture, through its physical attributes and the diverse spatial qualities it generates, plays a crucial role in enhancing the competitive standing of cities. Numerous historical examples in architecture and urban design demonstrate how strategic and well-planned use of architectural works by urban management has contributed to the creation of distinctive and appealing urban identities aimed at attracting international investment. In the contemporary process of globalization, territorial boundaries have diminished in significance and spatial distances have effectively contracted [Matlabi, 2015], with urban growth increasingly driven by a city’s ability to attract people and capital from beyond its immediate region [Florida, 2003].
For instance, the success of the Guggenheim Museum in Bilbao prompted many European cities, following the decline of industrial activities, to pursue the construction of iconic cultural buildings as a means of redefining their urban identity and positioning themselves on the global investment and tourism map. This phenomenon, commonly referred to as the “Bilbao effect,” has played a significant role in shaping global markets, national economies, financial capital flows, and transformations in local patterns of residence and activity [Noori & Rafieian, 2016]. Accordingly, architecture not only represents the contemporary condition and form of cities but has also become a valuable instrument for unlocking and enhancing their economic potential [Piatkowska, 2012].
According to some scholars, architecture should today be evaluated based on its capacity to stimulate economic potential by generating economic benefits for various stakeholders, including individuals, organizations, and even entire cities [Klingmann, 2015]. Such evaluation requires reliable and robust analytical tools, and changes in surrounding property values have been widely adopted as a practical and commonly used indicator in numerous studies. This is because land and housing price indices constitute one of the most comprehensive, expressive, and functional measures for assessing changes in environmental quality [Kheyroddin, 2017]. Accordingly, increases in property transaction prices are employed as indicators of urban value and economic growth, alongside other contributing factors. This approach has been applied extensively in empirical research [Chui & Chau, 2005], and findings suggest a strong and statistically significant relationship between rising property prices and increases in gross domestic product [Campbell & Cocco, 2007].
A substantial body of research has focused on the relationship between architecture and economic performance, examining this issue from both qualitative and quantitative perspectives. For example, Ahlfeldt and Maennig [2010], in their analysis of three major stadiums in Berlin, have identified a direct economic impact radius of approximately 3,000 m for large-scale architectural projects on surrounding areas. In another study, examining the influence of architectural reputation through an analysis of 24 works by Frank Lloyd Wright within a single city, Ahlfeldt and Mastro [2012] have concluded that property values decrease with increasing distance from such landmark buildings. Specifically, price premiums of up to 8.5% were observed within 50 m of these works, declining to approximately 5% at distances between 50 and 250 m. Similarly, Ahlfeldt and Kavetsos [2014], in a study of the economic impacts of iconic architecture through two stadiums constructed on former stadium sites in London, have reported that the landmark status of architectural works increased surrounding property prices by more than 15%.
Despite the growing international literature, quantitative studies aimed at measuring the economic impacts of architectural works on urban growth remain scarce in Iran. While some research has addressed the economic consequences of implementing optimized construction patterns [Rezvani, 2015] or the social impacts of large-scale development projects, there is still debate regarding the necessity and effectiveness of such projects. Some scholars argue that large-scale developments fail to fulfill their promises of economic revitalization and spatial and environmental enhancement [Sarkheyli et al., 2018]. In contrast, proponents contend that the social benefits of large-scale architectural projects eventually diffuse to lower socio-economic groups, ultimately generating broader societal gains [Noori & Rafieian, 2016]. In this context, there is a notable lack of quantitative analyses that assess the extent and mechanisms through which architectural quality contributes to economic growth.
Researchers emphasize that the emergence of high-quality buildings is not accidental; rather, it is the outcome of sound initial programming, as well as sustained effort, collaboration, and shared vision between architects and informed clients. To achieve favorable economic outcomes, such considerations must be incorporated at the earliest stages of planning, as building programming constitutes the first and most critical task of architectural practice [Pena & Parshall, 2012]. Designers and planners are consistently confronted with the challenge of selecting among numerous competing factors. Accordingly, the present study seeks to elucidate the relationship between different dimensions of architectural quality and economic growth by examining the desirability of surrounding areas through quantitative analysis and empirical data. This investigation focuses on two large-scale commercial architectural projects located within the geographical boundaries of District 9 of Mashhad
Methodology
This study adoptd a correlational approach with a causal–comparative design to examine two large-scale architectural projects with commercial functions located in District 9 of Mashhad. The aim was to assess the relationship between the extent to which these architectural works benefit from identified quantitative and qualitative attributes and the manner in which their economic potentials are realized. The primary rationale for selecting this study area lied in the specific status of large-scale developments, defined as projects exceeding 20,000 m² according to the resolution No. 5046/98/5/Sh dated 28/03/2019 of the Mashhad City Council, with commercial functions during the study period, as well as the relative stability of urban infrastructure and the predominance of residential land use, which has been consistently reinforced in urban development plans.
Within the study area and during the period from 2010 to 2018, only two large-scale commercial projects were developed. Both projects obtained construction permits in 2013, and their commercial components became operational in 2016. This limited number of comparable projects within the defined spatial and temporal framework provided a suitable basis for independent and comparative analysis.
Architectural quality and the attributes of desirable architectural works have been extensively discussed by numerous scholars. Although theoretical perspectives differ in terms of specific criteria and components, they share substantial commonalities in their overall structure. To enhance the validity of the conceptual framework, this study employed an adapted methodology based on an assessment tool developed by the UK Construction Industry Council for evaluating design quality. This tool, known as the Design Quality Index (DQI), is rooted in the Vitruvian triad and incorporates an additional dimension related to resources, including financial, temporal, natural, and human resources [Nadimi, 2010]. The DQI provides a comprehensive framework for evaluating a broad range of criteria defining building quality [Gann et al., 2003] and consists of ten thematic categories grouped under three main headings: “Functionality,” “Build Quality,” and “Impact.” Each thematic category includes between six and fifteen evaluation questions, resulting in a total of 91 statements [Spellerberg et al., 2010].
The DQI functions as an assessment method for evaluating architectural design quality through a structured questionnaire, enabling comparative analysis of strengths and weaknesses relative to existing conditions [Sholeh et al., 2017]. Drawing on this approach, along with a review of related studies and expert consultations, 23 key concepts were ultimately selected for evaluation in the present research. To assess the influence of these concepts, the opinions of licensed architects who are members of the Mashhad Construction Engineering Organization were collected through a questionnaire survey. The sample size was determined using Cochran’s formula with a margin of error of 0.1, resulting in a minimum required sample of 95 respondents; ultimately, 121 completed questionnaires were collected.
The questionnaire was designed in accordance with the format proposed by the Design Quality Index. After providing a general introduction to the study, respondents were first asked to rate the overall importance of each of the 23 key concepts in enhancing architectural quality and value using a scale from 1 to 10. Subsequently, to evaluate the characteristics of the two case-study projects, respondents assessed the extent to which each project benefited from the identified concepts using a five-point Likert scale. Content validity was examined using a logical–content approach, and prior to questionnaire distribution, the clarity and relevance of the questions were reviewed by experts and revised accordingly. The reliability analysis of the questionnaire yielded a Cronbach’s alpha coefficient of 0.958, indicating excellent internal consistency.
For analytical purposes, a weighted score was calculated by multiplying the importance assigned to each concept by the degree to which each case-study project exhibited that concept. The mean of these weighted scores for each key category served as the basis for subsequent analyses.
To evaluate the economic impacts of each project on its surrounding area, a hedonic pricing analysis combined with the difference-in-differences (DiD) method was employed [Shafia et al., 2021]. In this multivariate statistical approach, the effects of other environmental characteristics were treated as constant. This method, widely used in urban economic studies, is known as hedonic analysis [Rosen, 1974]. According to the hedonic pricing function, residential units with a greater number of desirable attributes tend to command higher market prices [Sedaghati & Nouriyan, 2016]. Accordingly, the internal and external qualities of architectural works can also be regarded as positive local attributes [Jim & Chen, 2009].
In this analytical framework, the effects of architectural interventions are assessed not by measuring changes within the projects themselves but by examining variations in surrounding areas. To isolate the effects of the architectural projects from other local influences, the difference-in-differences method was applied. This approach, originally derived from clinical research designs comparing treated and untreated groups before and after intervention, focuses on the average differences in outcomes between the two groups across two time periods [Ahlfeldt & Kavetsos, 2014]. In this study, four sets of averaged data were analyzed, comprising property prices in areas influenced by each architectural project compared with more distant areas, across periods before and after project implementation. Since unobserved external factors are assumed to affect both groups similarly, their influence can be effectively controlled through differencing, allowing the remaining variation to be attributed to the intervention itself—namely, the development of large-scale architectural projects [Wooldridge, 2013].
Property transaction prices in the surrounding areas were obtained from the Iranian Real Estate Market Information System, the official website of the Ministry of Roads and Urban Development, and real estate listings published in the Khorasan newspaper. The collected data were standardized based on apartment prices per square meter and implemented within the ArcGIS environment. To obtain representative market prices and reduce potential bias arising from inaccurate price reporting, transaction prices over three-month periods were averaged across three key time points: the beginning of the study period, the time of project operation, and the end of the study period. For graphical analysis and visualization of price trends over time, raster surfaces were generated using interpolation through the Kriging method, which relies on statistical models to estimate unknown values based on surrounding known points. To facilitate comparative analysis of price dynamics, apartment prices were classified into four levels, ranging from the highest to the lowest values
Findings
To examine the correlation between architectural qualities and the economic impacts of the two architectural works, a comparative analysis of diagrams was conducted. The results obtained from the questionnaires were presented in the form of a radar chart, illustrating the comparative extent to which the two architectural projects benefit from the evaluated quantitative and qualitative attributes.
For spatial comparison, another diagram was produced based on dividing the distance between the two architectural works, identified on the study-area map, into five equal segments and extending this division across the surrounding area. The average property price at the beginning of the study period in each spatial cell was considered the base price, and the percentage change in prices during the two subsequent time intervals was calculated and displayed. The mean value applied to each cell was assessed using a standard deviation test relative to the overall mean, indicating that 95.77% of the data fell within the confidence interval. This result confirmed the normality of the applied mean values used in the analysis.
Comparative examination of the diagrams indicates that at the beginning of the study period, the surrounding areas of both projects exhibited relatively high desirability and captured the highest apartment sale values. However, several years after the operation of these two architectural works, the trends in property purchase and sale prices in their respective vicinities followed distinctly different patterns. Based on the difference-in-differences approach, these divergent trends can be attributed to the differing qualities and characteristics of the two architectural projects.
The average growth in property prices across the entire study area at the end of the study period, relative to the base year, was approximately 317%. This increase was largely influenced by inflation and broader economic conditions. Given the stability of land-use functions and urban infrastructure in the area, an initial assumption would be that such price increases would occur relatively uniformly across the study area. Nevertheless, apartment units in the vicinity of the Armitage project experienced price increases approximately 51% higher than the overall average, with this effect observable up to a distance of about 250 meters from the project; however, major arterial roads acted as limiting boundaries for this influence. In contrast, the area surrounding the Aban Plaza project lagged behind the average growth rate of the study area, with property prices increasing by approximately 285% relative to the base year, around 32% lower than the overall average.
This divergence in economic impacts showed a strong correspondence with the pattern observed in the radar chart, which reflects the extent to which each project benefits from the evaluated quantitative and qualitative architectural attributes. The average level of benefit from these attributes was calculated at 38.76% for the Aban Plaza project, whereas the Armitage project achieved a level of 62.91%, representing an advantage of approximately 24%. Correspondingly, the surrounding area of the Armitage project experienced property price growth about 30% higher than that of the area around the Aban Plaza project. These findings indicated a direct relationship between the degree to which an architectural work incorporates evaluated quantitative and qualitative attributes and the generation of economic vitality in its surrounding area.
Discussion
This study aimed to elucidate the relationship between various architectural qualities in large-scale commercial projects and economic growth, based on quantitative studies and extractable statistical data for two architectural projects located in District 9 of Mashhad. Although numerous studies have examined the impact of landmark and branded projects on sustainable social development [Anabestani, 2017], urban development [Anabestani et al., 2013], and local economic enhancement [Noori & Rafieian, 2016], the present investigation addressed a gap by evaluating how the quality and features of such projects influence the extent and manner of these developments. The importance of this issue becomes particularly evident when reviewing international literature on large-scale architectural projects that have failed to achieve their intended economic goals [Cosme, 2017], highlighting the need to examine the factors affecting their outcomes.
In this study, the relationship between the level of economic dynamism in the surrounding area, measured through changes in residential property values, and the quantitative and qualitative architectural features, based on 23 main concepts adapted from the "Design Quality Index" tool, was examined for two commercial projects. The results indicated that a 24% higher compliance of the Armitage Golshan project with the aforementioned main concepts led to a 30% increase in the value of apartment transactions within a 50-meter radius, extending up to approximately 250 meters from the project. These findings align with previous studies [Ahlfeldt & Maennig, 2010; Ahlfeldt & Mastro, 2012; Ahlfeldt & Kavetsos, 2014], although the earlier research typically assessed only one architectural feature, whereas this study evaluated the level of compliance of both projects with all 23 main concepts in comparison to each other.
Among these concepts, establishing appropriate connectivity with the city and access to urban infrastructure, particularly public transportation systems and major transit routes, was identified as having the most significant impact, followed by the provision of retail centers, restaurants, nightlife, and other locally scarce functions, as assessed by respondents. In contrast, similar studies have emphasized the role of a central theme (theme-o-centric) as the most critical feature for driving economic dynamism. This theme may relate to a sport, historical event, recreational activity, or a well-known brand [Hannigan, 1998; Klingmann, 2015].
Although the Armitage project scored 30% higher in leveraging this thematic concept than the Aban Plaza project, the overall importance of this concept was lower compared to other concepts. This is justifiable given the limited number of comparable projects within the study area, as the scarcity of alternatives reduces the immediate influence of a thematic brand on consumer choice. This underscores the necessity of localizing international studies on the economic impacts of architectural projects, considering the unique context and characteristics of Iran. No similar studies were found in the Iranian context, making this research a pioneering effort in this domain.
In this research, only changes in surrounding property values were used as an indicator of economic dynamism, a method widely regarded as valid and reliable in comparable studies. However, for a more comprehensive understanding, access to demographic data, micro- and macroeconomic analyses, and evaluation of a larger number of architectural projects is necessary to derive generalizable conclusions. The relationship between architecture and economic performance or architectural economic functions remains an area with many unclear aspects, particularly in Iran. This study attempted to address the topic within the constraints of available data, integrating urban economics perspectives with the qualitative and quantitative features of architectural works, though further extensive studies are required to fully capture the complexity of economic dynamism.
Conclusion
Increased compliance with the identified architectural qualities leads to greater desirability and economic dynamism in the surrounding area and city. Consequently, the identified factors can serve as guidance for prioritizing considerations during various stages of project development. Investments made to enhance these qualities are likely to yield long-term benefits in terms of project acceptance and the stimulation of economic activity in both the project vicinity and the wider urban area.
Acknowledgments: None.
Ethical Permission: In this study, the principles and guidelines of research ethics, including honesty, confidentiality, and integrity, were observed by the authors.
Conflict of Interest: This article is derived from the doctoral dissertation of Mehdi Shafiea at the Faculty of Art and Architecture, Islamic Azad University, Mashhad Branch, entitled “The Role of Architectural Works in Urban Economic Development, Formulating Principles and Strategies for Leveraging Architectural Economic Opportunities in the Development of Mashhad City”, conducted under the supervision of Dr. Alireza Rezvani and Dr. Mohsen Tabasi, with consultation from Dr. Seyed Saeed Malek-Alsadat. The authors declare no conflict of interest; none of the authors were involved in the design or execution of the case studies used in this research, nor did they receive any financial assistance or support from them.
Author Contributions: Shafia M (first author), Introduction Writer/Main Researcher/Discussion Writer (45%); Rezvani A (second author), Methodologist/Assistant Researcher/Statistical Analyst (40%); Tabasi M (third author), Assistant Researcher/Statistical Analyst (5%); Malek Sadati SS (fourth author), Assistant Researcher/Statistical Analyst (10%)
Funding: None.
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