TRANSACTION TIMING AND MARKET EXPECTATION OF COMMERCIAL PROPERTIES IN AKURE, NIGERIA.

Abstract

. A fundamental characteristic differentiating real estate investments from mainstream financial assets is the time involved in buying or selling or letting once a decision to transact has been made and the timescale is not only long but it is also uncertain. This study examined the factors influencing the transaction time of letting commercial properties in Akure, Nigeria with a view to accessing investors’ market expectation. The specific objectives are to assess the likely time to achieve full letting of commercial property, examine the differences between expected rents and the realised rents from commercial properties in the study area, identify the factors influencing the time to fully let the commercial property and to assess the relationship between the letting time and the eventual letting price of commercial properties with the target population of the firms of Estate Surveyors and Valuers in Akure from whom the data on leased commercial properties in their portfolio from 2014 -2018 were obtained. The sampling size was the total number of registered and practicing estate surveyors and valuers in Akure which was put at 26, out of which 23 were retrieved and the total number of commercial properties which were the 141 commercial properties in their portfolio for which they could provide complete information. Data analysis used were frequency distribution, weighted mean score, independent sample t-Test and Spearman correlation analysis to resolve the stated analysis. The data analysis used were for the average letting time for shopping malls, office spaces and lock up shops which showed an average of 1-6months while the period of warehouses on the other hand showed an average of 1-9months. The study also revealed that there were no statistical differences between expected rents and the realised rents from commercial properties in the study area except for warehouse. Factors influencing the time to fully let commercial properties in Akure from the study were location, good market performance, state of repairs of the property, the size of the property, total number of rooms in the property, owners’ motivation and the year the property was let. Equally from the study, the relationship between the letting time and letting price varied among the commercial property types. The study recommended amongst others that the present market situation should be improved upon by reducing average letting time for all commercial property types to maximum of 3 months through provision of measures such as rent incentives and availability of well displayed letting data.