Caustic factors, reasons for low demand of purpose built commercial real estate projects and conversion to residential real estate projects in Ajegunle Oyo, Atiba L.G.A., Oyo State
FEATURED PAPER
By Christian Osita Ifediora
Department of Estate Management
Ajayi Crowther University Oyo
Oyo State, Nigeria
ABSTRACT
The study examined the factors responsible for conversion of purpose built commercial real estate projects (shopping complex) to residential real estate projects (self-contained accommodations). The identified projects are within Ajegunle community and are can be through Ajegunle Yidi road Oyo, the study identified location, which is predominantly rural and agrarian, income of the locals which is relatively low and absence of other commercially viable ventures as reasons why there is low demand of the purpose built commercial real estate projects and increase in demand for self-contained accommodations, absence of ready intending occupants, presence of tertiary institutions like ACU and FSS, desire for privacy and location as factors responsible for the conversion from commercial to residential accommodation. The findings indicated that location was critical as it is part of the identified reasons and as well as identified factor, as it was ranked highest as factor responsible for conversion. The study advised that developers (investors) need to seek professional advice on property development and should pay attention to the identified reasons and factors to avoid embarking on projects that will not attract the expected patronage.
Key words: Factors, conversion, commercial, residential, real estate project.
INTRODUCTION
Investment in any real estate development requires careful study and needs experts’ advice for investors to really make the right choice and invest properly. This is particularly true because investment in real estate involves huge capital outlay. For investors to make meaningful decision on the choice and best in addition sustainable decision, one needs a careful study of the prevailing conditions and market situations within the area he or she intends to invest in any real estate project. A real estate investor does not need real estate project only for non-profit like prestige, social status etc. but for financial returns that may come in form of rent or proceeds from sale.
If a real estate project is to be developed for any for any use say residential, commercial etc, certain factors must be considered especially as it relates to the location, issues of demand, income of the prospecting users or to whom it is intended for and so on. It is not just enough to embark on real estate development without a corresponding study of the market forces (conditions) hence intending developers needs experts like Estate Surveyors to advice on the likely markets condition/forces that will play or prevalent within the locality the developers intends to site or develop their real estate project.
It is not good to venture into real estate project with intention to make return only for the real estate project developed to remain unoccupied for years, thus void is what experts tries to avoid as this ties down the capital invested on the project. In this study, there has been clear evidence that purpose built commercial real estate projects remained unoccupied for years thus leading decision to change the use. The investors believe this actions/decision will help attract tenants to the property.
This work however looks at the issues of conversion of purpose built commercial real estate projects (complex) to residential self-contained accommodation as evidence abound which attest to the fact that these real estate projects could not attract tenant and could not be let before the investors took decision of converting them to self-contained accommodations (residential real estate). Moreso, it looked at the reasons why there was poor demand for purpose built commercial real estate projects and the corresponding increase in self-contained accommodation which primarily led to the conversion of such projects.
Aim and Objectives of the study
The aim is to assess the major reasons why there is low demand of the purpose built commercial real estate projects and conversion of same to residential real estate projects (self-contained accommodations).
To achieve the aim stated, the objectives were postulated as follows:
- To identify the factors responsible for lack of demand for purpose built commercial real estate projects (complex).
- To identify the factors responsible for increase in demand for private real estate projects (self-contained accommodation) in the study area.
- To identify the reasons for conversion from commercial to residential real estate projects and as well rank their impacts.
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How to cite this paper: Ifediora, C. O. (2020). Change of use: caustic factors, reasons for low demand of purpose built commercial real estate projects and conversion to residential real estate projects in Ajegunle Oyo, Atiba L.G.A., Oyo State; PM World Journal, Vol. IX, Issue V, May. Available online at https://pmworldlibrary.net/wp-content/uploads/2020/04/pmwj93-May2020-Ifediora-change-of-use-from-commercial-real-estate-to-residential-projects.pdf
About the Author
Chrisitan Osita Ifediora
Oyo State, Nigeria
ESV Osita Ifediora, B.Sc. (Estate Management), M.Sc. Estate Management (Project Management), ANIVS, RSV, is Lecturer in the Department of Estate Management, Faculty of Environmental Studies, Ajayi Crowther University, Oyo, Oyo State, Nigeria. Can be contacted on ositaifediora@gmail.com or co.ifediora@acu.edu.ng
