Application of Quantitative Risk Analysis in Property Development Projects in Nigeria: A Review

Nnamani, Obinna Collins; Sam-Otuonye, Chika Clara; Razali, Najib

doi:10.15396/eres2018_8

Cited by 5 publications

(8 citation statements)

References 22 publications

(30 reference statements)

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“…The above conclusion is particularly relevant to emerging African real estate markets where studies have suggested that risk analysis and uncertainty management in RED were still analysed without recourse to robust and sophisticated appraisal techniques (Ogunba, 2004;Olaleye et al, 2007;Nnamani, 2017). Further, there are particular volatilities associated with economic and other market indices in African markets resulting in high level of investment risk and uncertainty.…”

Section: Resultsmentioning

confidence: 93%

“…The study of Carmichael et al (2011), while affirming the arguments of Dyson and Oliveira (2007), argued that appraisers' hesitancy toward ROA derives from the lack of data required as input variables and unintuitive nature of ROA. Other factors influencing the choice of appraisal techniques especially among appraisers in emerging markets include; lack of expertise, lack of sound data, and giving priority to experience (Nnamani, 2017).…”

Section: Factors Influencing the Adoption Of Real Option Modelsmentioning

confidence: 99%

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Management of Uncertainty in Real Estate Development Appraisals: A Literature Review

Ayodele

Olaleye²

2018

JARER

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This paper provides an in-depth examination of various concepts related to the forms and sources of uncertainty, as well as the management of uncertainty in real estate development (RED). The study also examines factors influencing the adoption of Real Option Analysis (ROA) in RED given the need to improve the knowledge of stakeholders in RED appraisal, and to ensure best practices. Based on desktop analysis of past authors' perspectives, orientations and submissions regarding the management of uncertainty in RED appraisal, the findings reveal that while there are varying forms and sources of uncertainty in RED appraisals, there are also diverse methods used to manage the uncertainty of it. It is, however, noted that the methods employed are dependent on RED appraisers and other institutional factors. The consensus from previous studies favours ROA in managing uncertainty in RED. This paper adds to the debate for the need to embrace ROA in managing the effects of uncertainty in RED appraisal.

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Section: Resultsmentioning

confidence: 93%

Section: Factors Influencing the Adoption Of Real Option Modelsmentioning

confidence: 99%

Management of Uncertainty in Real Estate Development Appraisals: A Literature Review

Ayodele

Olaleye²

2018

JARER

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“…With the cruciality of real estate developers to the growth, development, and transformation of the global economy comes their relative susceptibility to incidences of idiosyncratic and systematic risks. While citing the geographical immobility of such investments as the reason for the susceptibility, policymakers and scholars have decried the paucity of evidence supporting any serious devotion to professional risk management by developers in emerging economies like Nigeria (Adeleke et al, 2020;Nnamani, 2017;Ogunba, 2004). As a result, it is implicit by its conspicuous inadequacy in empirical research that property developers in such economies lack the requisite risk management maturity to tackle uncertainties that characterize their property markets (Ayodele & Olaleye, 2020; Dugeri, 2011;Echendu, 2020).…”

Section: Organizational Learning and Risk Management Maturity: System...mentioning

confidence: 99%

Organizational Learning and Risk Management Maturity: Systematic and Meta-Analyses Approach

Nwaibe

Ogbuefi

Egbenta

2022

BEL

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This paper summarizes the arguments and counterarguments within the scientific discussion on the issue of investigating the role of developers in the economic development of the country. The relevance of this scientific problem decision is that the risk management maturity on the part of developers is often underestimated when researching developing real estate markets. Systematization of the literary sources and approaches for solving the problem of risk management proved the presence of a significant number of studies that confirm the hypothesis that some of the developers have not reached the normalized risk management maturity scale. The main purpose of the paper is to explore the role of organizational learning in enhancing risk management maturity, as a means of setting research agenda for its empirical evaluation in emerging economies. Using the Preferred Reporting Items for Systematic Reviews and Meta-Analyses (PRISMA) approach, the article systematizes the scientific literature on the importance of organizational learning in managing real estate investment maturity risks in emerging economies like Nigeria. The object of the research was indexed studies on Web of Scholar, Google Scholar, Emerald and Pubmed databases. Qualitative analysis methods have become a methodical toolkit for determining the parameters of organizational learning that contribute to the achievement of risk management maturity. The paper confirms and theoretically proves that risk knowledge acquisition, integration and transformation had potentials of respectively leading to sustainable risk identification, assessment and mitigation in property development projects. The results of the study form the basis for the understanding by scholars, practitioners and policy makers of their contribution to scientific research on the issues of a risk management mature property development sector in emerging economies. The strengths of this study are that it aims to identify the importance of organizational learning in risk management mature property investment in emerging markets.

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“…In some cases, finished projects are shut off by project financiers due to the inability of the investors to pay or repay loans. As a result, developers face possible monetary constraints, which could be devastating to investors Nnamani (2018). Therefore, it is evident that numerous unpredictable and unbalanced factors can be attributed to the property development investment project in Nigeria.…”

Section: Introductionmentioning

confidence: 99%

“…In addition, the study highlighted the limited awareness and necessity of efficient risk management in a property development project. Similarly, Nnamani (2018) examined the application of quantitative techniques for risk analysis in the investment appraisal of suburban properties in the Enugu area of Nigeria. The study examined the prevalence of risk analysis and the application of the methods by estate surveying and appraisal firms in the evaluation of suburban property investments.…”

Section: Introductionmentioning

confidence: 99%

Risks in feasibility and viability appraisal process for property development and the investment market in Nigeria

Jagun

2020

JPIF

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PurposeThe feasibility and viability appraisal technique is becoming increasingly crucial in the planning systems, theory, applications and outputs for property development and project investments. This paper aims to account for the findings of the practices associated with risk in the feasibility and viability appraisal process. Also, it examines the need for a practical framework for conducting a feasibility and viability appraisal, which can be employed by estate surveyors and valuers in NigeriaDesign/methodology/approachThis study adopted purposive sampling techniques to administer 240 sets of questionnaires, out of which 210 sets were well-thought-out to be useable for the analysis after data screening. Statistical package for social sciences (SPSS), structural equation modelling (SEM) and analysis of movement structures (AMOS) were the main analytical tools used to carry out the reliability test, normality test, exploratory factor analysis, confirmatory factor analysis, measurement and structural model.FindingsThe analysis results indicated that the P-values of the various forms of concepts of risks in feasibility and viability appraisal process (preparation) for property development and the investment market was statistically significant: technological factor - 0.000; political factor- 0.000 and economic factor- 0.000. However, a non-significant effect was found with socio-environmental factors on the preparation of housing development appraisal with P-value 0.155, and that risk management is neither holistically implemented in the feasibility and viability appraisal process nor extensively taken into cognisance.Research limitations/implicationsThis paper reports the results of the practices among estate surveyors and valuers in regarding the risk associated in the preparation stages of the feasibility and viability appraisal processPractical implicationsThere are limited studies that suggest risk management factors in the appraisal reports for property development. Although previous studies have identified the risk factors, there is a lack of emphasis on management, which entails identification, assessment, monitoring and control. This study, therefore, recommends the incorporation of risk management into the feasibility and viability appraisal process implemented by estate surveyors and valuers. It is envisaged that the process will protect investors from the potential risk factors associated with investments in property development.Originality/valueThe study highlighted the need for practical or empirical research to be used to assess the significant risk factors that are needed to be reflected in the preparation stages of the feasibility and viability appraisal conduct of estate surveyors and valuers in Abuja, Nigeria.

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Application of Quantitative Risk Analysis in Property Development Projects in Nigeria: A Review

Cited by 5 publications

References 22 publications

Management of Uncertainty in Real Estate Development Appraisals: A Literature Review

Management of Uncertainty in Real Estate Development Appraisals: A Literature Review

Organizational Learning and Risk Management Maturity: Systematic and Meta-Analyses Approach

Risks in feasibility and viability appraisal process for property development and the investment market in Nigeria

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