Effect of vacancy on shopping centres'investment returns in Akure, Nigeria

Abstract

The paper examined the effect of vacancy rate on the rental returns of shopping centres in six major retail areas in Akure. Data on rental values and vacancy rates in 35 shopping centres were collected from 17 estate surveying firms in Akure. The shopping centres had a total number of 1,352 rentable spaces with 1,183 occupied. The data was analysed using Descriptive statistics such as frequency distribution tables and graph, one sample t -statistics and Simple Linear Regression Analysis. The result showed that vacancy in shopping centres are on the increase especially in Oke ijebu axis of Akure thereby causing a decline in the expected returns from the centres. The result further showed that as vacancy rate in shopping centres increases the rent per meter square reduces as owners tends to reduce rent to retain tenants. There is need for shopping centre developers to employ the services of the Estate Surveyors and Valuers to carry out feasibility and viability appraisal of their projects before embarking on them. This gesture will check over supply of centres.