The purpose of this study is to assess the performance of commercial properties in Ikot Ekpene. Commercial property investors have been confronted by series of investment challenges borne out of poor investment appraisal yet/performance measurement of commercial property investment cannot be over emphasis and though it has been taken for granted, the failure been traceable to poor or neglect in performance appraisal or pre-investment analysis. The aim of this research is to assess the performance of commercial property investment in the study area. It objective are to identify and examine the various types of commercial property in IKot Ekpene, make a comparative assessment of the returns of commercial properties in Ikot Ekpene 2010-2019 period, evaluate the risk involved in commercial property within the study area, examine method of performance measurement of commercial properties. This research seeks to point out to potential investors the commercial property that can yield good returns. It analyses the risk and returns  involved in these properties. The commercial properties considered in this study and shopping malls, office properties and ware house. Amongst the three commercial property types considered in this research, it is concluded that shopping center with the means returns of 0.07666 performs better than office properties and ware houses which have the mean return of 0.07774 and 0.076 respectively. It also performs better because the target market for shopping center is as high as the increasing population of commercial urban dwellers and the need for shopping properties is very high compared to other commercial properties, moreover everybody in the urban area gets involved in businesses that are carried out in the shops. As such many investment seem to demand for shopping properties more than other commercial properties and this leads to higher rent received from this property. Therefore from the result obtained from this research, the commercial property investors are strongly advised to invest in shopping centers for early recoupment of returns and capital.


Title Page - - - - - - - - i

Declaration - - - -      - - - ii


Acknowledgements - - - - - - - iv

Abstract - - - - - - - - v

Table of Content  - - -       - -       - - vi

List of Table/Status - - - - - - - viii



1.1 Background of the Study - - - - - - 1

1.2 Statement of Problem - - - - - - - 3 

1.3 Aim and Objectives of the Study - - - - - 4

1.4 Research Questions -  - - - - - 4

1.5 Scope of the Study - - - - - -    - 4

1.6 Significance of the Study - - - - - 5

1.7 Location of the Study - - - - - - 5



2.0 Introduction - - - - - - - - - 7

2.1 Concept of Investment Performance  - - - - - - 7

2.2 Techniques for Commercial Investment Appraisal - - - - 11

2.3 Returns on Investment - - - - - - - 13

2.4 The effect of Location on the performance of Commercial Properties - 14

2.5 The Risks and Returns in Commercial Property Investment - - - 15

2.6 Commercial Property Performance in Ikot Ekpene and its Environs - 16

2.7 Direct Property Performance - - - - - - - 19

2.8 Basis for Assessment of Property Investment Performance      - - 19

2.9 The Need for Performance Measurement - - - - - 20

2.10 Measurement of Returns - - - - - - - 22



3.0 Introduction - - - - - - - - - 27

3.1 The Research Design - - - - - - - - 27

3.2 Sources of Data - - - - - - - - 28

3.3 Study Population - - - - - - - - 28

3.4 Sample Size and Sampling Technique - - - - - 28

3.5 Method of Data Collection - - - - - - - 29

3.6 Data Analysis Techniques and Procedures - - - - - 29



4.1 Introduction - - - - - - - - 31



5.0 Introduction - - - - - - - - - 39

5.1 Summary of Major Findings - - - - - - - 39

5.2 Conclusion - - - - - - - - - 41

5.3 Recommendations - - - - - - - - 42




1.0 Introduction 

1.1 Background of the Study 

The Nigerian Commercial property market has remained relatively under research in the past decades. This is due to the absence of reliable and standard property market database. The theme of this research is to assess the performance of commercial investment in Ikot Osurua and its environs. The study of performance of commercial property investment in very important at this time when emphasis is on investment performance analysis in many parts of the world. This will provide for better investment decision and risk management for commercial investors in Ikot Osurua and its environs and comparable location in Nigeria. 

This is even more important in  Nigeriawhere only few studies have been carryout on the level of performance achieved by property investment. In order to determine whether a commercial real estate is achieving its strategic goal and to improved and investment performance. Computation of relevant performance measurement need to be carry out commercial property which could come in form of office space malls, retail stores, shopping centers, banks, petrol station, hotels, restaurant amongst others has an important role in real estate markets. Its importance relates to three different factors. First as a factor of production, commercial property provides the space to house the activities of business and industry. Second as a financial assets, commercial property constitutes a significant part within asset market. Third, as an investment medium, it provides revenue to its holders based on value Ustaoglu (2003). Also rising rents have been described as an attraction for rental real estate development as prospect of rental growth is also an important viability consideration.

Increase in rental value of commercial properties result from increase in population and the economy based of the researched area. As a result of this, residential properties are being converted to shopping complex, offices and other commercial used along major routes in Ikot Osurua and its environs, the study area. These characteristics make commercial property attractive for investors; the investor reaction to this development has been to increase the number of commercial outlets at the expense of residential property development consequently in many town and cities of Nigeria, open spaces within the vicinity of public institutions have been design or developed to accommodate commercial outlets.

Commercial property is an important class of assets for major institutional investors especially in developed economics where they have robust and matured property markets investing with virile capital markets that offer a good number of option such as stock to buy into property investment. This has seen institutional investors such as REITS provision funds, and sovereign wealth funds acquire significant commercial property portfolio in both mature and emerging property markets Newell and Rawal (2009). The importance of this is made more prominent by the quantum of transactions that commercial assets command which is investable globally EPRA. (2009) on this basis, potential investors will need information on property investment to enhance and modify their investment. Though property market is not as centralized and organized as the stock market where past transaction are recorded, but the property appraiser will get information from comparable property within the neighbourhood. So there is need for property performance analysis (using performance measurement concept like return on investment, payback period, internal rate of return, shape ratio index) which will enable the investor know the risk and return characteristics of each property investment before irrevocable decisions are made.

1.2 Statement of Problem 

Commercial property investment are generally confronted by various forms of risks that make it pertinent for a pre-investment appraisal and performance measurement to be accurately carried out to ascertain which investment performs better than the other. Most investors venture into an investment that produces higher income than other without considering the fact that the performance of a business is not mercy dependent on the income such investment is able to produce but depends solely on the yield or return of that investment measured as a percentage of the income generated per annum divided by the total capital outlay of that investment. By this, it performances of various investment potentials to ascertain which of the alternatives a rational investor can go into the major problem in commercial property investment to a prospective investor is their poor understanding of the risks involved which therefore calls for the need for a good performance measurement to be done before venturing into. It investment in commercial property in Ikot Osurua and its environs has been on the increase, as witnessed by rapid development and expansion of Ikot Osurua and environ urban which are possibly motivated by upward movement of rental trend of commercial properties over the years.

Given the level of involvement of investors/developers in commercial property market without considering the fact that not all commercial properties may produce income and return that cover the cost of capital invested. There is therefore the need to be aware of performance of commercial properties in Ikot Osurua and its environ to lead investors aright on the best decision of investment to make amongst the various commercial property type by analyzing the risk and returns in commercial properties. 

1.3 Aims and Objectives     

The aim of this research is to assess the performance of commercial property investments in the study area. In order to achieve this aim, the following objectives were set:

i. To identify the various types of commercial properties in Ikot Osurua.

ii. To examine the returns on commercial properties in Ikot Osurua.

iii. To evaluate the risk involved in commercial property investments within the study area.

iv. To measure performance of commercial property investment in Ikot Osurua.

1.4 Research Questions

i. What are the various types of commercial properties in Ikot Osurua?

ii. What are the returns on commercial properties in Ikot Osurua?

iii. What is the risk involved in commercial property investments in the study area?

v. What is the performance of commercial property investment in Ikot Osurua?

1.5 Hypothesis

Many commercial property investments take place in Ikot Osurua and its environs due to the increasing economic activities and the ever growing population with this trend in population and increasing economic activities, series of researchers have claimed that every property investment in this area perform better in the target area and why wheres many other factors other than population growth are responsible for the performance of comeerical properties.

This has resulted in a great deal of disagreement that is apparent when correlating the location peculiarities of the commercial investment with other factors external to the investment.

1.6Scope of the Study   

The study was mainly focused on performance measurement of shopping centers, office properties and ware house investments. For effective data collection, the study covered the study area such as Atan, Abiakpo Ntak Inyang, Ikot Ubo, Ifuho, Ukana West. It is obvious the real estate investors and property managers over the years have displayed level of conservativeness in information sharing as regards properties. 

The readiness for estate surveyors and valuers, landlords property investors to release accurate information without prejudice may affect the quantity and possible of quality data gathered. 

1.7 Significance of the Study 

The performance measurement of commercial properties is very importance at this time when emphasizing investment performance analysis. This study is thereby conducted to lead investor aright on the best decision of investment to make amongst the commercial property types for earliest recoupment of investment by analyzing the risk and returns of commercial property investment. 

The result of this work would be useful to various groups of real estate investors and researchers. The entrepreneurs, by the nature of their work would need the result of this research work to fast track their planning and cash flow protection. Also real estate developers/investors who part wish huge capitals with a view of future regular income and capital appreciation on property investment would want to know the performance of commercial properties to guide them in investment decision making. 

The real estate professionals are not left out; and as a result of this, the work would be useful in their real estate appraisals and evaluation of proposed property development projects. 

This work will also enlighten students and researchers who may wish to know the performance of the various commercial property types in Ikot Osurua and its environs. 

Nigeria institution of Estate Surveyors and valuers (NIESV) would also benefit from

1.8 Location of the Study 

The study area of this work is Ikot Osurua, it is located in Ikot Ekpene also known as the Raffia City which is a historic town in south-southern State of Akwa Ibom. It is the political and cultural capital of the Annag ethnic group in Nigeria (Nair, 1972). The town is located on the A342 highway that parallels the coast, between Calabar to the South east and Aba to the West, with the state capital, uyo, on this road just to the east. Umuahia is the next town to the north. Ikot Osurua and its environ is located geographically within latitude. It has a land area of about 45 semi (116km2). As at the 2006 National population census 143, 077 people and approximately 5 registered estate surveying firm (NIESU directory Akwa Ibom State Branch). 

The continuous physical, economic and population growth of Ikot Osurua and its environs has been accompanied by the occupancy of the existing space by different types of land use: mainly residential and commercial. 



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