Posted: 2023 | Pages: 72 | Format: MS Word | Chapters: 1-5 | Others: Questionnaires & References

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CHAPTER ONE

1.0       INTRODUCTION

1.1       BACKGROUND TO THE STUDY

Property management is a vital aspect of the real estate profession. As different from other commodities, the deliverable in property management is service. A well – managed property has the tendency of yielding high returns to its owners when its issues are minimal. The responsibility of good property management lies on the property manager who ensures that good quality service is rendered to the clients. Commercial properties are those designed, built and operated for any use other than residential, industrial, agricultural and more. These buildings can be dedicated to a single, homogeneous use such as corporate headquarters or they can be a complex combination of room for public interaction, space for commercial activity, classrooms, workspaces, cooking and dining facilities and even living quarters such as those found in dormitories. Commercial property investment like shops, offices etc. has been on the increase and with the increased urbanization and population growth, management of these properties by property managers has become necessary with its associated problems. Little consideration has been given to this aspect of problems of commercial property management practice especially in Enugu due to the rate of commercial activities in the city. Such focus has been limited to users’ satisfaction in property management services; while only one study examined problems of commercial property management practice (Oladoku & Ojo, 2012; Abolade, Omirin & Dugeri, 2013). The practice is however prone to a lot of problems which are capable of preventing or at best reducing the chances of realizing anticipated investment objective.  In other words, the achievement or success of the art of nursing and directing an investment in landed property with a view to obtaining maximum return is a function of how well a property manager is able to effectively prevent and/or overcome seeming obstacles in the course of the discharge of its duties (Oladokun & Ojo, 2012). Therefore, the need to evaluate the problems associated with commercial property management practice arises.

According to Ogbuefi (2002), the manageability of an investment is the extent to which it requires monitoring and periodic change. Property management is therefore defined as the operation, control and oversight of real estate as used in its most broad terms. Commercial properties are hugely attractive to investors due to their perceived tenant risk, than is obtainable in residential properties. Thus, the success of controlling and directing an investment in landed property with a view to yield the highest possible return is a function of how well a property manager is able to effectively overcome risks associated with the property especially in the discharge of its duties. Commercial properties are often relatively large and complex buildings, some of which are multi-storeyed or high rise type. The complexity involved in terms of the physical attribute of the structure and diverse and multiple occupants informed the need for specialized skill and training for efficient and effective service delivery.

Commercial property management entails the application of specialized skill to care for the investment, sometimes of an individual, household or corporate body in buildings with the aim of securing highest return. It has the purpose of establishment and optimization of the owner’s investment. Investment in commercial property is most times expressed as the biggest investment of a household due to its capital requirement for its procurement, the success of such capital-intensive investment could be attributed to its management (Oladokun and Ojo, 2012).

Management problems hinder effective operations of property management activities. Depending on the magnitude of the problems, ineffective service delivery could bring about client dissatisfaction as well as prevent the achievement of the owners’ investment objective(s). The property manager who is known to have the requisite skills required to deliver quality service could therefore be seen to be incompetent if unable to achieve the objectives of the client in terms of yielding the highest possible return which is the main goal of an investment in commercial property.

These questions therefore arise as to what hinders commercial property management practice in Nigeria? To what extent would investors be encouraged to invest in commercial real estate? What are the likely problems that can prevent the realization of investors’ investment objectives? What are the problems arising from commercial property management that might make the investment unattractive to investors?