in South-East Nigeria
FEATURED PAPER
By Kalu Nwojo Awa, Dr. F. O. Nwanekezie, Dr. Paul Chuks Anih
Department of Estate Management
University of Uyo
Uyo, Nigeria
ABSTRACT
The study was carried out to analyse the trend of residential and commercial real estate investments performances in South East, Nigeria with the view to generate forecasting model for future rents and capital values of different classes of properties in the study area. Survey method was used in carrying out the study. Questionnaire were drawn to collect the annual rents and capital values data; regression analysis model was used to determine the trend characteristics of the property rents, capital values and returns as well as to generate the forecasting model. The results showed that the rents and the capital values of the properties increassed significantly with time having P-values <0.05. Properties in Abakaliki on average recorded the highest annual rent growth rate, followed by Aba (10-20% and 10-13.2% respectively); while Owerri recorded the highest average annual capital value growth rate seconded by Aba (6.9 – 10% and 6.2 – 10.6% respectively).
Keywords: Rental values, capital values, trend analysis, Forecasting, residential and commercial properties.
INTRODUCTION
Globally, real estate investments have over the years been adjudged to offer steady growth in value, hence real estate has been considered to possess the characteristic of hedging against inflation. To the investors, real estate offers dual opportunities of value enhancement vis-à-vis rental income and capital value appreciation. The trends of real estate investment performance are factored by demands and supplies levels. Where demands exceed supplies, definitely the rents and prices would soar creating steady increase in returns.
Despite the speculations that real estate rents and capital values are bound to increase with time, it is expedient that real estate investors should be amply informed of the performance history of the various classes of real estate for proper guidance in investment selections that would guarantee investment optimal returns. Observations over the years have shown that most investors naively invest in a particular real estate class and city of their choices without recourse to the historical antecedents of the property market of the cities and the performances of different classes of real estate. These have often led to sub-optimal investment performance particularly when the supplies are not properly matched with the demands.
Therefore, the study was carried out to analyse the performances of residential and commercial real estate investments in South East, Nigeria and to generate a model that would be used in predicting future rents and capital values of residential and commercial real estate in the study area which would guide the investors in their choices of real estate investment and location.
GENERAL AND SPECIFIC OBJECTIVES OF THE STUDY
The study was carried out to analyse the performances of real estate investment in South East, Nigeria; with the view to determine their rental and capital values trend. The specific objectives set out for the study include to:
- examine the trends of residential and commercial real estate investment returns in South East States of Nigeria (2008 -2017)
- generate the forecasting model for the real estate investment rents and capital values and
- determine the mean annual growth rate of the rents and capital values of the different classes of properties in the study area.
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How to cite this paper: Awa, K. N., Nwanekezie, F. O., Anih, P. C. (2020). Trends of Real Estate Investment Performance in South-East Nigeria; PM World Journal, Vol. IX, Issue V, May. Available online at https://pmworldlibrary.net/wp-content/uploads/2020/05/pmwj93-May2020-Awa-Nwanekezie-Chuks-real-estate-investment-performance-in-southeast-nigeria.pdf
About the Authors
Kalu N. Awa
Uyo, Nigeria
Kalu N. Awa is a Lecturer in the Department of Estate Management, University of Uyo, Nigeria. He is presently running a PhD programme in Estate Management at Nnamdi Azikiwe University, Awka, Nigeria. He is an Associate of The Nigerian Institution of Estate Surveyors and Valuers (NIESV) and a registered member of the Estate Surveyors and Valuers Registration Board of Nigeria (ESVARBON). Kalu N. Awa can be contacted at kalunwojo4@gmail.com
Dr. F. O. Nwanekezie
Uyo, Nigeria
Dr. F. O. Nwanekezie is an Associate Professor in the Department of Estate Management, University of Uyo, Akwa Ibom State, Nigeria. He is an associate of the Nigerian Institution of Estate Surveyors and Valuers and a registered member of the Estate Surveyors and Valuers Registration Board of Nigeria (ESVARBON). Dr. Nwanekezie can be contacted at okeynwanekezie@yahoo.com
Dr. Paul Chuks Anih
Uyo, Nigeria
Dr. Paul Chuks Anih is a Senior Lecturer in the Department of Estate Management, University of Uyo, Akwa Ibom State, Nigeria. He is an associate of the Nigerian Institution of Estate Surveyors and Valuers and currently the Head, Department of Estate Management, University of Uyo. Dr. Paul C Anih can be contacted at paulanih@uniuyo.edu.ng
