Comparative analysis of risks and returns on residential property sub-market in Lagos: Case study of 1004 Estate

Al-Ameen, A Okonu; Obinna, L Umeh; Akinwande, Timothy; Oluwaseun, A Muraina

doi:10.5897/jlma2019.0006

Cited by 6 publications

(3 citation statements)

References 22 publications

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“…The risk-return performance of RRE investment in the 1004 estate's property submarket of Lagos State was analysed by Okonu et al (2019). The study evaluated the total return and risk of investing in residential apartments within the estate and found that there was high risk associated with the returns in these apartments.…”

Section: Some Related Studies In Nigeriamentioning

confidence: 99%

Assessment of Residential Real Estate Investment Performance in Lafia Metropolis, Nigeria

Agava

Popoola

Ajayi

2023

INTREST

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Investors are expected to be guided through investment performance measurement and analysis in order to safeguard against potential loss of investment returns or the capital invested. Whereas residential real estate (RRE) constitutes a significant part of the portfolios of individual and institutional investors across the globe, the assessment of risk-return performance of RRE investment in Nigeria generally has not been well researched. Investors in real estate (RE) in the Lafia city of Nasarawa State, like other cities in Nigeria, still rely on mere intuition, sales comparison and the rule of thumb in real estate investment decisions-making. Consequently, these ill-informed investors often venture into poorly conceived and subsequently financially disastrous real estate investment projects thereby failing to achieve their desired investment objectives. Hence, this research was conducted to evaluate the performances of RRE investment in Lafia metropolis of north-central Nigeria with a view to guiding existing and potential real estate investors and practitioners in the region in making informed property investment decision. A survey research design was adopted to collect transacted residential property value data from estate surveying and valuation firms as well as reputable estate agent offices in the study area. Mean scores, property value index and holding period return model were used to analyse the rental/capital value indices and total return performance respectively. The modified value-at-risk model was used to assess risk while the modified Sharpe ratio was used to evaluate the risk-return performance of RRE investment performance in the study area. The research findings revealed, among others, a progressive increase in rental and capital values of RRE within the study period. RRE investment showed an average rental growth of 6.8% per annum and capital value growth of 9.4% per annum. On the basis of investment returns, it was found that Angwan Doka outperformed other selected neighbourhoods in the study area with an average mean total return and risk-adjusted return of 13.76% and 0.80% per annum respectively while Shabu underperformed other locations with average mean total return and risk-adjusted return of 12.17% and 0.55% per annum. The study recommended, among others, that potential real estate investors should consider investing in residential real estate in Angwan Doka since this location gives higher total and risk-adjusted returns on residential property investment relative to other locations in the city.

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Section: Some Related Studies In Nigeriamentioning

confidence: 99%

Assessment of Residential Real Estate Investment Performance in Lafia Metropolis, Nigeria

Agava

Popoola

Ajayi

2023

INTREST

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“…The performance of residential property investment in Lagos State was assessed by Okonu et al (2019), using 1004 residential estate as a case study. The data, which were retrieved from the managing company for the period from 2010 to 2017, was analysed and the return-to-risk ratio determined.…”

Section: Studies That Compared Performance Of Direct Real Estate Investment Assets In Nigeriamentioning

confidence: 99%

A Review of Studies on Real Estate Investment Performance in Nigeria

Agava

Bello

Dairo

2021

INTREST

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This study has been conducted to review the studies conducted on property investment performance in Nigeria with the aim of providing a clear insight into the trend, authors’ affiliations, performance measurement techniques and the geographical focus of these studies. Published and unpublished research works in this research area were sourced and reviewed. The data and information used were sourced from online databases such as Google, Google Scholar, ScienceDirect, ProQuest, and ResearchGate. Printed journals (local and international), published and unpublished Masters and PhD theses were also among the sources of the data used. Descriptive statistics were used to analyse the authors’ contributions, affiliations, geographical focus and the annual research trend of real estate investment performance in Nigeria and the results reported. The study found that the first study conducted on the performance of real estate investment was Olaleye (2000) followed by Olaleye (2002). Olaleye, A., Oyewole, M. O. and Dabara, D. I. were found to be the most active and leading researchers on this research area with contributory scores of 3.87, 3.61 and 3.21 respectively. On the average, about 2 studies on the subject were carried out annually with focus majorly on the Lagos property market, Southwest Nigeria. The review further revealed that nominal rate of returns, Sharpe index and coefficient of variation were the common performance measurement indices often adopted by majority of the previous authors. This study recommends that collaborative effort should be established among scholars of estate management and practicing estate surveyors and valuers with a view to bridging the gap between theory and practice and boosting property data banking in Nigeria. The geographical scope of real estate investment performance in Nigeria needs to be expanded to adequately cover all the regional property markets.

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“…If the cost is higher than the market value of the project, it brings losses. (Okonu, Umeh, Akinwande, and Muraina, 2019). According to Bahamid, Doh and Al-Sharai (2019), "reduction of risk is a major task in real estate delivery process, while uncertainty is the main condition within which real estate project is implemented."…”

Section: Introductionmentioning

confidence: 99%

Risks Associated with Real Estate Project Delivery in Southwest Nigeria

et al. 2023

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Real estate project has many factors that affect successful delivery. Among such factors is risk. This is responsible for the failure of many real estate project in Nigeria. However, this study is focused on the risks associated with real estate project delivery. The study adopted multi-stage sampling design among the professionals in Estate Surveying and Valuation Firms registered by the Nigerian Institution of Estate Surveyors and Valuers in Southwest Nigeria. A set of questionnaires was administered on 476 respondents with 88% response rate. Both descriptive and inferential statistical tools were used to analyse the data. The descriptive tools include mean, percentage, tables and charts. The inferential statistical tool was factor analysis which was carried out with the aid of Statistical Package for Social Science (SPSS). The study assessed the various risks that affect real estate projects and classified them into two components. Suggestions were given on how to manage them to promote successful delivery of real estate projects in Southwest Nigeria.

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Comparative analysis of risks and returns on residential property sub-market in Lagos: Case study of 1004 Estate

Cited by 6 publications

References 22 publications

Assessment of Residential Real Estate Investment Performance in Lafia Metropolis, Nigeria

Assessment of Residential Real Estate Investment Performance in Lafia Metropolis, Nigeria

A Review of Studies on Real Estate Investment Performance in Nigeria

Risks Associated with Real Estate Project Delivery in Southwest Nigeria

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