Assessment Of Office Property Development In Akure

Project and Seminar Material for Estate Management

Assessment Of Office Property Development In Akure


Abstract


In this study, our focus was on the Assessment Of Office Property Development In Akure. The study is was specifically focused on examining the characteristics of existing purpose built for Office property in Akure; determining the trend in the development of office property in Akure between 2012 to 2021; evaluating the demand pattern for Office Property in Akure between 2012 to 2021 and investigating the Factors contributing to void in the existing Office property.

The study adopted the survey research design and randomly enrolled participants in the study. A total of 100 responses were validated from the enrolled participants where all respondent are Architects, Builders, Surveyor & Valuers, Quantity Surveyors and Town Planners.

The study concludes that: The problems associated with office property development in Akure revealed to be: limited access to finance, Low consumer purchasing power; Inefficiencies in customs and port administration; Unpredictable and weak policy framework; and, Poor management practices and low entrepreneurial skills.


Table of Content


Chapter One:

Introduction

  • 1.1 Background of the study
  • 1.2 Statement of the problem
  • 1.3 Objective of the study
  • 1.4 Research question
  • 1.5 Significance of the study
  • 1.6 Scope of the study
  • 1.7 Limitation of the study
  • 1.8 Definition of terms

Chapter Two:

Review of Literature


Chapter Three:

Research Methodology

  • 3.1 Research Design
  • 3.2 Population of the study
  • 3.3 Sample size determination
  • 3.4 Sample size selection technique and procedure
  • 3.5 Research Instrument and Administration
  • 3.6 Method of data collection
  • 3.7 Method of data analysis
  • 3.8 Validity and Reliability of the study

Chapter Four:

Data Presentation and Analysis

  • 4.1 Data Presentation
  • 4.2 Answering Research Questions

Chapter Five:

Summary, Conclusion and Recommendation

  • 5.1 Summary
  • 5.2 Conclusion
  • 5.3 Recommendation
  • References
  • Appendix

Chapter One


Introduction

1.1 Background of the Study

The property development industry consists of a large number of interrelating sectors linking the supply of land and building so demand. The main members of this industry are the property developers and the builders, the property dealing companies and the financial institutions. This study focuses on the role and diverse nature of developers in our study area.

Property developers are viewed as key figures in the urban growth processes. This is mainly due to the fact that they make the initial decision to acquire land for development, either for sale, letting, or as owner-occupier (Mamman 1996). These developers manifested themselves in a different and varieties of ways and forms, resulting in diversity in the development industry. It is justifiable to state here that, an empirical understanding of property development industry is critical for a full understanding of urbanization processes as well as a basis for effective urban planning. A focus on population growth and change is not enough to provide an understanding of urban growth and the form it takes, one must also understand the strategies of the actors who carry out urban development (Graham, 1994).
It is noteworthy to state here that property development industry is diverse. Its diversity has been shown in the works of notable scholars. This diversity is inherent in theoretical models such as the ‘structures of provision’ approach (Gore and Nicholson, 1991), the institutional approach (Healey, 1992) and the realist approach (Ganderton, 1994). Empirical analysis tend either to treat developers as a undifferentiated homogeneous group or to focus on players in a specific sector of the industry such as residential land development, particularly the most prominent, not on the range of players who are involved in the creation of urban space. This is a barrier to the identification of the varying strategies and prevents a fuller appreciation of urbanization processes. These studies also tend to fail to indicate the extent to which the developers or actors under analysis are representative of the area’s development industry in such terms as their scale of operations. (Coiacetto, 2000a).There are handful of exception that deal empirically with diversity in the development industry, this exceptions does not assume that all developers are the same, it investigates the strategies of a cross-section operating in a particular place during a given period. See for examples Coiacetto (2000b, Kaiser and Weiss (1969), Orbison (1988), Schler (1966) and Weiss (1987).

Given the fact that property developers play a very vital role in the expansion of our fringes, a great deal of information needs to be known about their activities as well as their behaviour so that the diversity exhibited by the developers in the development industry will provide us with a sound basis for effective understanding and classification of the industry..

Despite the fact that developers role and behaviour have been widely studied within the content of Euro-America cities (Chapin and Weiss, 1960, 1962, Weiss et, al. 1966, Kaiser, 1968, 1969, Kenny, 1972, Clawson, 1971, Goldberg 1974, Goldberg and Ullinder, 1976) nevertheless this issue has not received the much needed attention in Nigeria.
To understand and appreciate this vital industry, there is a need on the part of those who formulate public policy that guide and shape urban development to understand the industry, the behaviour of its participants and the impact of public policies on its function. In a process as complex and costly as property development, where private participation is necessary, public policy based on partial or lack of knowledge will not only fail to produce necessary reforms, but create new problems with unintended side effects (Martin, 1976). Furthermore, planners and other policy makers play but one role in the urban development process. They do not build cities and towns, rather cities and towns are mostly built by private / pubiic sector’s interest and developers in particular.


1.2 Statement of the Problem

Location of office properties has been a difficult concept to understand. Although the primary objective of Office properties is the derivation of financial gains, while that of residential properties is for habitation, shelter and comfort, the demand for land is a reflection of the profitability or utility derivable from its use. The greater the benefit to be obtained from a particular use, the higher the rent that the user will be willing to pay for it.
Nevertheless, the Development Assistance Committee of the OECD (DAC, 1994) defines the private sector as “a basic organizing principle for economic activity where private ownership is an important factor, where markets and competition drive production and where private initiative and risk-taking set activities in motion” In Nigeria, the private sector is said to include any self-employed person or any employer of labour who does not belong to the government or public sector (Oyeranti, 2004). Put differently anyone who is an employer or self-employed and who does not belong to the government or public sector is believed to be operating in the private sector (Olayiwola and Busari, 2001). The private sector also refers to all economic institutions, business firms, foundations, and cooperatives etc. that are not owned by the government. The private sector enterprises are often described by other names such as capitalism, free enterprises system, the voluntary exchange economy, the market system, and the profit system (Imaga, 2003).

Property change in use is the use of land or buildings thereon for a purpose different from that which the land or building was originally zoned and intended for. Thus, change in use is occasioned by number of factors. Such factors are mostly, economic in nature. At the advance level however, change of use is synonymous with increase in the intensity of use, triggered by increase in demand. It is acknowledged that private land developers are key actors in urban growth processes (Dankani, 2010), and this is largely attributed to the fact that, they make initial decisions to acquire land for development either for sale, letting, or as owner – occupier (Mamman, 1996). Against this backdrop this study will be carried on the assessment of office property development in Akure.


1.3 Objective of the Study

The main objective of this study is to have an assessment of office property development in Akure. Specifically, the study aims;

  1. To examine the the characteristics of existing purpose built for Office property in Akure
  2. To determine the trend in the development of office property in Akure between 2012 to 2021
  3. To evaluate the demand pattern for Office Property in Akure between 2012 to 2021
  4. To investigate the Factors contributing to void in the existing Office property

1.4 Research Question

  1. What are the characteristics of existing purpose built for Office property in Akure.
  2. What is the trend in the development of office property in Akure between 2012 to 2021.
  3. What is the demand pattern for Office Property in Akure between 2012 to 2021.
  4. What are the Factors contributing to void in the existing Office property.

1.5 Significance of the Study

The finding of this study will be of benefit to the following groups;

Firstly, tenants who are charged rents based on different reasons, especially when the properties are of the same nature (physically). This will again enable the investors not only to understand how occupier thinks, but also why and the things they consider before acquiring properties for certain uses.

Secondly, the generality of the public can now understand the reason why the rents being commanded by these properties have to differ.

Lastly, this research work will help to determine the factors influencing, commercial and residential properties which is an essential pre-requisite to successful development as well as stimulating interest in the students to carryout out further research on the topic.


1.6 Scope of the Study

The study covers a period of nine years (2012 to 2021) and it is restricted to Assessment Of Office Property Development In Akure


1.7 Limitation of the Study

This research work is specifically on the Assessment Of Office Property Development In Akure. In the limitation on research work of this magnitude or nature can be carried out without limitation. Hence, during the course, certain constraints were encountered.

Cost:

The cost of thorough research is not what can be afforded by a student. The prices of materials needed for this work has gone up and transport fee has also gone up.

Time:

The time was one of the limitations in the process of carrying out this research work.

Scarcity of Literature:

The research encountered some problems in collection of literature especially on the bank History and operations. This are hindered the smooth running of this work.


1.8 Definition of Terms

Rent:

The universal dictionary of the English language (1971) defined rent as the regular payment made for the use of land or buildings that belongs to someone else. The Economist defined rent as “the revenue from land resources that is equal to the value of its marginal services rendered in a productive process” (Richfield, 1974).
In summary therefore, the word rent is that fixed periodic payment made by a tenant to his landlord for the exclusive possession and use of leased property.

Properties:

According to the High Court, the Court of Appeal and the Supreme Court, property is the right to possession, enjoyment and disposition of all rights and things subject to ownership.

Property is therefore a legal right expressing the relationship between a person, the owner and his possession of the thing owned.

A Residential Property:

According to Kilpatrick (1999) is a land use in which housing predominates, as opposed to industrial and commercial areas. Housing may vary significantly between, and through, residential areas. These include single-family housing, multi-family residential, or mobile homes.

Commercial Property:

According to Malys (2012), this refers to buildings or land intended to generate a profit, either from capital gain or rental income. It includes office buildings, industrial property, medical centers, hotels, malls, retail stores, farm land, multifamily housing buildings, warehouses, and garages. In many states, residential property containing more than a certain number of units qualifies as commercial property for borrowing and tax purposes.


Chapter Five


Summary, Conclusions and Recommendations:

5.1 Introduction

This chapter summarizes the findings on the Assessment Of Office Property Development In Akure. The chapter consists of summary of the study, conclusions, and recommendations.


5.2 Summary of the Study

In this study, our focus was on the Assessment Of Office Property Development In Akure. The study is was specifically focused on examining the characteristics of existing purpose built for Office property in Akure; determining the trend in the development of office property in Akure between 2012 to 2021; evaluating the demand pattern for Office Property in Akure between 2012 to 2021 and investigating the Factors contributing to void in the existing Office property.

The study adopted the survey research design and randomly enrolled participants in the study. A total of 100 responses were validated from the enrolled participants where all respondent are Architects, Builders, Surveyor & Valuers, Quantity Surveyors and Town Planners.


5.3 Conclusions

With respect to the analysis and the findings of this study, the following conclusions emerged;

The study concludes that: The problems associated with office property development in Akure revealed to be: limited access to finance, Low consumer purchasing power; Inefficiencies in customs and port administration; Unpredictable and weak policy framework; and, Poor management practices and low entrepreneurial skills. The problems found to be with severe effect on the property development in Akure are: Poor/low quality products; High cost of building materials; Limited access to funds in money and capital markets; High import dependency of the nation’s economy; Complexities in the legal framework; Unpredictable and weak policy framework; and, High cost of equipment and working capital. The prospects of property development in Akure leads to the establishment of macro-economic stability which shows that the relationship of the problems to prospects is strong hence, the problems is significant in light of prospects


5.4 Recommendation

Based on the findings the researcher recommends that;

  1. The practicing Estate Surveyors and Valuers should know that in fixing of rent, the rent passing on residential and commercial properties should not be the same.
  2. Property owners should always make rent passing on residential properties a bit higher than rent passing on commercial properties largely on the account of the use the property is put.
  3. Owners of properties should always put their properties to its highest and best use which as the findings revealed could be residential or commercial.
  4. Rent for commercial properties are best measured by per square metre (M2) while rent for residential are measured taking into consideration the number of rooms or flats provided.

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