Bioye Tajudeen Aluko

Client influence in residential property valuations: an empirical study

Purpose – In recent years, studies have established that valuation estimates are likely to be biased estimates of market values due to client influence. These studies, which have made a significant contribution to real estate literature, were based mainly on UK, USA and New Zealand experience. The purpose of this paper is to examine the prevalence of client influence and the impact on valuation in Nigeria.Design/methodology/approach – A questionnaire survey was administered to estate surveyors and valuers to gauge their professional opinion with regard to client influence, sources of such influence and types of threats used by clients. A behavioural experiment, incorporating two non‐valuation factors, was also included for the respondents to role‐play the decision of an estate surveyor and valuer subject to an ethical dilemma.Findings – The survey revealed that nearly 80 per cent of estate surveyors and valuers claimed some knowledge of client influence, mostly from a private individual. The results of th...

Examining valuer's judgement in residential property valuations in metropolitan Lagos, Nigeria

Purpose – The purpose of this research is to examine whether valuers consider and interpret intrinsic value elements in a residential property the same way in a familiar location. The price people pay for a complex commodity like residential property is a sum of the utility of various intrinsic and extrinsic characteristics. The skill of the valuer rests in the recognition of value‐enhancing elements in order to arrive at a value for the subject property.Design/methodology/approach – Relevant data for the study were gathered from a controlled‐experiment involving some residential properties and administration of questionnaires backed up with oral interviews on a random sample of 59 valuation firms in metropolitan Lagos, a commercial nerve‐center in the country. The data were analyzed using both descriptive statistics and analysis of variance.Findings – The study showed that there are differences in the means and interpretation of value‐enhancing variables amongst valuation firms sampled. The study, inter ...

Client Feedback Pressure and the Role of Estate Surveyors and Valuers

Feedback plays an important role in valuation behaviour and judgement accuracy. In mortgage‐lending related assignments, client feedback can blur the assignment objective and independent nature of valuation judgements. This study investigates the importance of client feedback in relationship to the assignment objective. A survey revealed that 33% of sampled Nigerian estate surveyors and valuers had perceived role perceptions as price validators. However, this perceived role perception was not found to be statistically associated with feedback pressures that clients may apply.

Building urban local governance fiscal autonomy through property taxation financing option

The continued productivity of urban economies depends upon the provision of urban infrastructure and social services. And, a large share of the service‐provision role is conventionally assigned to local government as tastes and preferences vary among individuals and communities. This requires financing the public expenditures and, although, there are other sources of revenue, taxation is very central to effective and efficient service‐delivery. The paper, therefore, examines the role of property taxation in this regard with a view to promoting and building urban local governance autonomy in cities of developing world. The paper also examines the essentials of a good property tax and problems of its administration in Africa urban local governments. Consequently, a prima facie case for property tax reforms is made in order to improve the revenue‐generating potentials of the tax. More importantly, the paper concludes that the real challenge towards sustainable fiscal autonomy for urban local governance in developing countries is to rally all actors or stakeholders at the policy planning and administration of property tax stages. This will ensure effective mobilization of all for the success of such tax.

Corporate business valuation for mergers and acquisitions

Business combinations including mergers and acquisitions are important features of corporate structural changes. The Investments Securities Acts (ISA), 1999 charge the Securities and Exchange Commission with the responsibility to review and approve all business combinations in Nigeria. And, real property is an integral factor in many of such strategic business decisions and, need to be set in a business context. This paper, therefore, examines how corporate business entities are and could be valued for mergers and acquisitions through exploratory research. It also explains the relevance of goodwill, marriage value, and fair value concept in corporate business asset valuation. The paper found out inter ‐ alia that the value of holding property to the business needs to be measured against the return that the equity could achieve both within the business and elsewhere. It also, prima facie , shows that the role of the valuer is not one of accountant but interpreter of financial and physical information with a clear understanding of the nature of the business under consideration in merger and acquisition.

Public private partnerships/private finance initiatives for financing infrastructure in public tertiary institutions in Nigeria

Purpose – The purpose of this paper is to investigate the factors that influence the adoption of private finance initiatives (PFIs) for infrastructure projects in tertiary institutions of learning. It also determines the relationship between the levels of awareness, years of experience and the identified factors. Design/methodology/approach – Data for this study were gathered from administration of questionnaires. The instruments were administered after validation on the stakeholders in the concerned departments. Data collected were analyzed using descriptive, cluster and correlation analyses. Findings – There is a high level of awareness and experience in public private partnerships (PPPs) among the respondents on the initiative. It is found that nature of project, risk involvement and the technical capabilities are the three most influential factors. There is correlation between the identified factors. There is also a significant relationship between the respondents’ years of experience in PPP and “tech...

Factors influencing the choice of property portfolio diversification evaluation techniques in Nigeria

Purpose – The purpose of this paper is to examine the factors that have influenced the use of implicit (naive) techniques in property portfolio diversification evaluation in the Nigeria property market. This is necessitated by the need to look at the ways by which the property portfolio diversification evaluation practice in the market could be made to improve and adjust to ever changing global trends in this area.Design/methodology/approach – The authors of this paper administered questionnaires, backed up with interviews, on 28 institutional property investors and 128 real estate practitioners in three locations (commercial nerve centres) of the country, namely, Lagos, Abuja and Port‐Harcourt metropolitan areas. Data were analysed with the use of frequency distribution, mean and standard deviation measures, relative importance index and Pearson Chi‐Square test.Findings – The results of the study in this paper revealed, among others, that lack of time series data and the small size of many of the investo...

The estate surveyors and valuers and the magic number: A point estimate or a range of value?

Property value is imprecise because of the imperfection of the property market. But, estate surveyors and valuers in Nigeria traditionally have continued to express this value as a single amount. This paper, therefore, attempts to examine the rationale behind this approach and the attendant problems associated with it. Besides, the paper, amongst other things, recommended that estate surveyors and valuers should expand the scope of their services beyond the confines of point estimates so that clients be informed as to the amount of possible deviation and the magnitude of risk in the value estimate through the adoption of statistical techniques.

EVALUATING MANAGERS DIVERSIFICATION OF REAL ESTATE PORTFOLIOS: EVIDENCE FROM NIGERIA

While there is evidence on the effectiveness of diversifying real estate portfolio geographically, or by property type, there is lack of empirical evidence to justify whether diversification of managers is worth pursuing. This study produces evidence on the effectiveness of diversifying by managers and property types. The study collected data on capital and annual rental values from three (3) main Property Investment and Development Companies in Lagos Metropolis, Nigeria. From the data so collected, annual total returns (IRR), on residential properties, for a period of between 1997 and 2001 on the managers’ portfolio were calculated. Under the assumptions that investments are held long and that constant correlation model or excess return to standard deviation represents the covariance structure of assets’ returns, the studys analyses suggest that diversification of managers and property types produce improved performance. It also opens the possibility that an efficient portfolio developed by using constant correlation analysis may not be more efficient than a naively diversified portfolio as some of the naive diversification strategies are found to be effectively efficient.

Valuation of Yoruba Sacred Shrines, Monuments, and Groves for Compensation

A sacred site is a place, which is considered holy and is partially or wholly reserved for magico – religious or ceremonial functions. Because of this, compensation valuation upon compulsory acquisition of these places is a complex and specialised one requiring the interpretation of law and our past cultural heritage. Consequently, the chapter, adopting a survey technique and simple descriptive statistics, examines sacred places, the provisions of the enabling compensation laws, the valuation process and the attendant problems in the assessment of compensation that fully equalled the pecuniary detriments faced by owners upon acquisition of these sites in the Yorubaland. This chapter reveals the conflicting provisions in the compensation enactments and the threat of the extinction of the role of traditional worshippers or priests, which is an outcome of the assessment of compensation of the places in the study area. In addition, based on empirical evidence of recent transactions on sacred places in the country the chapter concludes that compensation can hardly be adequate for sacred sites because of their social and cultural importance functions, although a review of the compensation laws, as well as training of curators of shrines and sacred places, may be necessary to ensure reliability of compensation valuation in the Yorubaland portion of Nigeria.