Ayodele, T O and Olaleye, A (2022) Fundamental sources of uncertainty in real estate development: Perspectives from an emerging market. International Journal of Construction Management, 22(14), pp. 2775-2787. ISSN 1562-3599
Abstract
This study examines the fundamental sources of uncertainty in real estate development (RED) and the management measures adopted from the perspective of the Nigerian market. A closed-ended questionnaire was served on property development/appraisal firms, and the data were analysed using descriptive statistics and principal component analysis. The findings showed that uncertainty sources in RED are attributable to firms/stakeholders' influence, project team’s capability, economic/market data and project information. These sources have variances of 18.080%, 12.303%, 12.013% and 10.462%, respectively, and cumulatively explain 52.859% of the total variance. Furthermore, the results showed that 'clearly defined project objectives and priorities', 'clearly spelt out relationship between project stakeholders', 'SWOT analysis of the project', 'conducting pilot studies' and 'clear communication between project stakeholders' were the most adopted uncertainty management measures. The study concluded that there is a prevalence of external uncertainty sources impacting on development projects in the Nigerian market, and the management approaches are directed towards stakeholders' management and a thorough analysis of the project and market variables. An understanding of these uncertainty sources and the management measures adopted reduces the chances of wrong appraisal advice and decision, thereby resulting in increased investors' confidence and the professional relevance of the development advisor is justified.
| Item Type: | Article |
|---|---|
| Uncontrolled Keywords: | investment appraiser; Nigeria; real estate development; risk; risk management; uncertainty sources |
| Index terms: | emerging market, appraisal, real estate development, project stakeholder, questionnaire, Nigeria, variance, investor, statistics, property development, project team, principal component analysis, risk management, uncertainty management |
| Subjects: | economic development, factor and component analysis, Geography, measurement and scaling, sociology, statistical analysis, data collection methods, risk assessment, mathematical modelling, project delivery, economic analysis |
| Topics: | Urban Studies, International Construction, Risk Management, Stakeholder Management, Research Practice, Geographical Context, Project Management |
| Descriptive scope: | 3 PCA |
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