Posted: 2023 | Pages: 64 | Format: MS Word | Chapters: 1-5 | Others: Questionnaires & References

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CHAPTER ONE

1.1 BACKGROUND OF THE STUDY

Commercial real estate refers to buildings or land intended to generate a profit, either from capital gain or rental income. Commercial property includes office buildings, industrial property, medical centers, hotels, malls, retail stores, farm land, multi-family housing buildings, warehouses and garages (Wikipedia, 2011)

In recent times, commercial real estate development which involves putting a land into more profitable uses by way of construction or erecting structures in such a way as to serve commercial purposes has been on the increase in Enugu State, this is due to the availability of investors injecting huge capital outlays and resources into commercial buildings since the rate of returns recouped from such investment is far higher than some other categories of real estate investment.

The rate at which existing residential properties are being converted into office spaces, halls etc. has been on the high side considering the increasing demand for corporate offices, warehouses and even shops especially in areas such as Ogui road, New haven, Independence Layout and Agbani road. Successive increase of commercial activities in some of these locations have begun altering the initial land use assigned to the area since most buildings along the road now serve as commercial purposes and becoming more busier by the day Okpara (2011).

The development of commercial properties is usually triggered of by increase in the size of the numbers of both public and private users which makes the demand for such properties positive based on the willingness to pay rent irrespective of the high rental value for commercial properties.

However, development of commercial real estate started way back in the early 1970’s during the oil boom era, during which government and private sectors injected billions of naira into the real estate but more predominantly was massive investment in commercial real estate such as chain stores, market building, shopping complexes, warehouses, offices and halls as a result of the emergence of contractors, clearing and forwarding agencies and a host of other users of commercial real estate in the entire country.

Similarly, over the last decade shopping malls have evolved in the country springing up across the states, there have been many developments in the retail sector since the advent of shopping malls 10 years ago when the palms shopping mall, Lekki Lagos opened shop. Before the retail outlets were mainly urban-based in major cities of the country. Today the game has changed with many malls opening shop in second tier cities such as Enugu state as well as a host of other states. The retail business space continues to transform with the development of formal western style malls with its activities helping improve the activities of the state.

Commercial real estate development as an investment option represents a whole lot of opportunities in the interests of the economy and welfare of the people. It has now grown to be one of the largest industries and fastest growing economic sectors. consequently a new report by one of the nation’s online platform- PropertyPro which focused on the trends of Nigerian real estate market in the first quarter of 2018 has revealed that the sector still retained its position as the fifth (5^th) contributor to the Gross Domestic Product (GDP) despite. However, as a growing sector of the economy there is need for involvement of professionals in the real estate field to tackling setbacks experience over these years so as to enhance the productivity of the sector to clear doubts of investors who are willing to invest in commercial real estate development in Enugu urban.

It is against this background that the researcher embarked on this research work in order to ascertain the role of estate surveyors and valuers in commercial real estate development.