Effects of industrial heritage adaptive reuse on apartment prices: Evidence from F1963 in Busan

Industrial facilities created through industrialization often become idle as urban economies restructure, leaving underused industrial sites as persistent spatial challenges. In this context, industrial heritage has been increasingly reframed as a resource for urban regeneration. Here, a key strategy is adaptive reuse: reprogramming existing industrial buildings while retaining historical and physical traces. However, empirical evidence on whether and how such projects generate neighborhood-level externalities that are capitalized into housing prices remains limited. This study examines F1963, an adaptive reuse project completed in 2016 in Busan, South Korea, and estimates its effect on nearby apartment prices. We analyze apartment transaction records from 2008–2022 using a hedonic pricing framework combined with a quasi-experimental propensity score matching–difference-in-differences design. We find a statistically significant post-reuse price premium within the treatment area, with an estimated magnitude of approximately 1.5% per square meter. Thus, the adaptive reuse of industrial heritage can generate measurable neighborhood benefits that are capitalized into housing values. Furthermore, they support incorporating market-based indicators alongside internal operational metrics when evaluating the broader impacts of industrial heritage-led regeneration.