Posted: 2022 | Pages: 74 | Format: MS Word | Chapters: 1-5 | Others: Questionnaires & References

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ABSTRACT

Voids in commercial property investments is caused by; bad tenant selection, inefficient maintenance and management of property, lack of feasibility and viability study by professionals, unreasonable increase in rent, use of inferior building materials, property location, inadequate parking space and poor implementation of obligations. The objectives are; to identify the prevalence of voids amongst various categories of commercial properties, to identify the major causes of these voids, to identify the extent to which voids has affected commercial property investment and to proffer solutions in reducing the incidence of void. The study adopted survey research approach. The property owners, tenants, Estate Surveyors and Valuers and estate developers formed the population of study. A sample size of 266 was chosen using Taro Yamane model while stratified random sampling technique was used to select the sample. Data retrieved from 245 completed questionnaires was subsequently presented in tables while simple percentage and frequencies was used to analyse data. The chi-square test statistics was used to test the hypothesis. The findings shows that voids occur more in office spaces and ware houses, voids occur mostly due to economic downturn, rental loss in property contribute to void, the government experience decline in revenue generated due to void, and quackery has raised the occurence of void. The work therefore proposed effective property management practice as a measure for reducing voids. It also went ahead to recommend that owners, property developers and property managers make wise decisions and be smart when investing, developing and managing commercial properties. The study strongly posited that if the incidence of voids will be successfully reduced, there is need for good and close working relationship between landlords, property managers and tenants.

CHAPTER ONE

1.0     INTRODUCTION

1.1     BACKGROUND OF THE STUDY

Amongst the various resources known to man, land stands out as the most indispensable. This is owing to the fact that every activity of man takes place on land. Umeh (1973) believes that ‘when you touch land, you touch the centre of human existence’. Anything that affects land directly or indirectly affects whatever is on land, including man. Thus far, the value and importance man has and is still attaching to land which has no substitute has rarely manifested towards sustainable use. This situation perhaps, may have been as a result of the fact that the demand for land has continued to increase and will not relent, whereas land’s supply is only but fixed. This has resulted in various land uses as residential, commercial, industrial, etc., competing amongst themselves for the available space.

Housing is fundamental to people’s physical, psychological, social and economic well being in any country. Whether rural or urban settlement, housing is the most visible expression of a country’s ability to satisfy the basic needs of its populace. Yet, the provision of this basic need still poses a problem to every country particularly the developing countries to which Nigeria belongs.

The phenomenal rise in population, number and size of our cities over the past few years have manifested in acute shortage of dwelling units. Consequent upon this, rents for landed properties have continued to increase. The end result being partly that rent for some properties becomes unaffordable for the class of people it was meant for, the property becomes unoccupied, the landlord looses rent and the effective property supply in the property market reduces.

Various opinions abound as to what constitute voids and what their causes are. Akalemeaku and Egbenta (2013) believe that ‘the major cause of void in commercial properties is non-use of professionals in property development’. Remoy (2010) appears to be more interested in the consequences of voids than in exploring what constitute it. According to him vacancy has to do with the number of years but the fact is that whether a property is vacant for a day or two years or more, it affects the revenue of investors, developers, and property managers and can increase potentials for risk to these players in the market.

This research therefore is a guided effort to unravel the consequences of voids on commercial properties as an investment in the study area. It sets forth specifically and majorly to assess the rental loses due to voids by obtaining the differences between actual returns on commercial properties in the study area as against the expected or anticipated returns.  The study also intends to assess the overall impact void properties have on its neighbourhood.