Project Materials

ABSTRACT

The study was aimed at analyzing the impact of inadequate infrastructure delivery on commercial property in Lagos state. The survey research was used in this study to sample the opinion of respondents. This method involved random selection of respondent who were administered with questionnaires. The target population of the study comprised of residents of selected commercial areas in Lagos state. The questionnaire administered was one hundred and ten (110) copies and one hundred copies retrieved which constitute the sample size. The descriptive and analytical approach was adopted using Chi-square to test and analyze the hypotheses earlier stated. The findings revealed that inadequate infrastructure delivery has a significant impact on commercial property development in Lagos stateand that poor funding by the government of Lagos state on commercial properties is a problem facing real property development. It was therefore concluded from the findings that basic problem that has contributed to the inadequate infrastructure facilities within the commercial areas is lack of finance. It was recommended that government needs to finance properties by providing infrastructural facilities and adequate maintenance of the facilities within commercial areas. The financing of this is in the life of improving the atmosphere and life span of the areas. The government is to make adequate funds available for easy provision of the facilities and equally to be able to replace and repair any facilities that are out of functioning in commercial areas.

CHAPTER ONE

INTRODUCTION

1. BACKGROUND TO THE STUDY

Infrastructure has been described as the sum of all facilities that enable a community to work effectively, such as water supply, electricity, roads, and telecommunication services, that are present in an area and move people, products, resources, waste energy, and information, thereby creating a habitable environment for humans. Infrastructure, according to Nubi (2011), is the engine that propels the city forward. It creates an encouraging climate for the city’s economic growth and development.Property values are determined by a variety of factors, including protection, accessibility, location, finishes, and the level of infrastructure facilities available.

Most of our towns and cities in Lagos State have been beset by infrastructural degradation caused by government negligence until recently, when the current regime took over the mantle of leadership in the state by Governor Sanwolu in 2019.The situation is not entirely dissimilar to what is possible in other states. In addition to other public services such as sewer, water supply, natural gas and electric services, schools and police stations, highways, airports, and so on, the term infrastructure refers to all the physical, social, and economic elements required to serve the population. According to Fox (2014), as quoted in Yomi (2011) “Infrastructure is described as a collection of social services derived from a set of public works historically provided by the government in order to boost private sector output and enable household consumption. Roads, hospitals, schools, water supply, sanitation, and other utilities are among them. All these services largely determine how healthy and prosperous an individual would be and how long he will live’’. The Oxford Advanced Learners Dictionary (2010) definesInfrastructure refers to the essential systems and services that a country or organization needs. Buildings, transportation, water and power supply, and the administrative structure are all examples. Donald (2012)defines Infrastructure is defined as the physical structure and facilities built or acquired by government agencies to improve governmental function and provide water, electricity, waste disposal, transportation, or other related services to help achieve common social and economic goals.As previously stated, the definition’s key characteristic includes physical features, services, or amenities that are typically placed in place by public participation and expenditure and are aimed at promoting a society’s efficient functioning. When society progresses, the need for basic infrastructure to ensure the well-being of its citizens emerges. The majority of infrastructure is capital intensive in terms of procurement and possibly also maintenance and these services are typically provided by the various levels of government in the federation, though private sector involvement is now gradually becoming visible due to the current administration’s liberalization policy in some aspects of the national economy (Iseh2011).Infrastructural development is the process of putting in place the basic infrastructure and facilities that are required for a specific operation or pursuit. However, no country can claim substantial growth or a growing economy unless it invests in basic infrastructure for its citizens’ well-being. Amis and Kumar (2010) Infrastructure, it is claimed, aids individuals in coping with the various aspects of poverty. As a result, if people are denied access to basic resources, they become impoverished. As a result, cities with the largest number of disadvantaged people are often those with the worst infrastructure. Property refers to something to which a person may assign a monetary value and to which he has a legal claim. (Van Doren, Cited in Tiu et al, Undated).The author defines property as “the dominion a man exercises over external items of the natural, absolute, and inalienable right” in its various applications.

Any object to which an individual or a company has legal title is considered property. Property may refer to tangible objects like homes, vehicles, or appliances, as well as intangible items like stock and bond certificates that guarantee future value.

Commercial real estate is land that is used for commercial purposes. Commercial property often refers to buildings that house businesses, but it may also refer to land that is used to produce revenue or large residential rental properties. Commercial property, also known as commercial real estate, investment property, or income property, is real estate that is intended to benefit from either capital gains or rental income. Despite the infrastructures, a commercial property (housing estates or buildings) should be capable of maintaining its value at all times, as well as the right of possessions, uses, and disposals; excisable upon it. (Ihuah and Benebo, 2014)The value of commercial property is related to the form of interest substituting in that real estate, but these rights are often strengthened or increased by the sufficiency of the necessary infrastructures given to the housing estate. Also, although the property’s position and level of demand and supply are important, the accessibility environment and the availability of other infrastructures in the area where the real property is located should be given much more weight in determining property values(Ihuah and Benebo, 2014). According to (Schram, 2012) Though the value of a property is not inherent, it is determined by the advantages that can be derived from it, as well as the availability of a willing and able buyer to pay for it. As a result, the adequacy or inadequacy of these infrastructures provision to a housing estate unit can be believed to affect the property value. The adequacy or inadequacy of the requisite infrastructures provision of commercial housing are domineering in determining whether the real property value should be appreciating or nominal, it is emphasized here. (Ihuah and Benebo, 2014) But, in the circumstance of the study where it is assumed that the infrastructures are inadequate, the probability that the expected improved and sustainable commercial property value will dwindle is very high.The overall significance of adequate commercial property infrastructure delivery cannot be overstated; their importance of provision, which is to increase real estate prices as well as promote the social and economic lives of people in that built environment, is critical in this report. Furthermore, adequate infrastructure is expected to be the driving force behind a society’s rapid growth of socioeconomic activities; therefore, diverting attention away from their adequate provision should not be compromised. However, Lawal (2002), Ihuah and Eaton (2013) and Ihuah and Fortune (2013) argued that the Federal Housing Authority of Nigeria has focused its efforts primarily on the provision of a large number of housing units while neglecting to provide sufficient infrastructure to these existing housing units. And this is reflected in the poor physical condition of the majority of these housing infrastructure in the Nigerian real property sector (Kadiri, 2014; Ihuah and Fortune, 2013; NHP Report, 2011). Even where some of these infrastructures are given to housing properties, their maintenance and upkeep has proven difficult due to the lack of a post-construction management system for the upkeep of the infrastructures provided in Nigeria (Ihuah and Benebo, 2014). However, the issues with insufficient infrastructure provision are not limited to a single cause; rather, they are caused by a combination of factors. According to (Ihuah and Benebo, 2014; Ayodele and Alabi, 2011), it is assumed to be creating a diminishing impacts on the value of commercial properties located in Lagos state. As previously stated, having sufficient infrastructure was supposed to increase real estate prices and the built environment. Infrastructure provision, on the other hand, is being improved within society with the aim of contributing to the development of  real property (Gardner, 2005).These objectives are often defeated due to insufficient provision of these critical infrastructures in commercial areas, as well as the fact that they are challenged within the study’s basic framework. Hence, it is further expected that an examination be conducted on the impact of inadequate infrastructure delivery and relate the findings to  commercial property in Lagos state.

1.2 STATEMENT OF PROBLEM

Economic property location has become a complex concept to grasp. While the primary goal of commercial properties is to generate profit, the primary goal of residential properties is to provide habitation, shelter, and comfort, land demand is a representation of the profit or utility that can be derived from its use. The higher the rent that a user is able to pay for a specific usage, the greater the value that the user may derive from it.

The three levels of government, federal, state, and local, have all played down the provision of infrastructure services over the years. It worsens the situation in Nigeria, perhaps because they are unaware of the importance of such provisions in commercial areas. In Nigeria, the limited infrastructure is marked by inadequate and unsustainable maintenance of commercial and real estate assets.

As the population of commercial areas in developing countries continues to rise, there are indications that, despite the critical role infrastructure plays in the physical and socioeconomic growth of individuals and communities, and despite the efforts made to address the issue, the problem is worsening (Schram, 2012). According to Donald (2012), insufficient infrastructure and housing is one of the major problems facing the housing scheme. According to (Schram, 2012), there are many commercial areas in districts allocated for housing scheme for more than ten years without the provision of infrastructure which includes Lagos state which is densely populated.

Overcrowding, high rents, poor residential housing standards,poor commercial building standard and low infrastructure services, as well as high crime rates, have all resulted from the remarkable increase in population, number, and scale of cities over the last few years. The reality in many African commercial areas is that infrastructure needed for housing is not being delivered due to a lack of funds and capacity, as well as increased obligations and mandates for municipalities, and the growing demands of rapid urbanization. Over the next 25 years, UN-HABITAT forecasts that close to three billion people will need accommodation and basic infrastructure services around the world. To meet the demand for housing and basic infrastructure over the next 25 years, 35.1 million housing units per year, or 96,150 per day, or 4,000 per hour, would be needed. This statistic calls for concern due to the importance housing and infrastructure play in our day to day lives. Thereforethis study centers on the impact of infrastructure delivery on commercial property in Lagos state

1.3 AIM AND OBJECTIVES OF THE STUDY

The general objective of this study is to examine the impact of inadequate infrastructure delivery on commercial property in Lagos state.Specifically, the objectives are:

i)    To examine the prevalence of inadequate infrastructure delivery on real estate development in Nigeria.

ii)    To examine factors responsible for inadequate infrastructure delivery in Lagos state.

iii) To examine the impact of inadequate infrastructure delivery on commercial property development in Nigeria       

iv) To investigate factors affecting the provision of housing and infrastructure by real estate developers

v) To recommend ways of improving real property sector in Nigeria

1.4 RESEARCH QUESTIONS

i)    What is the prevalence of inadequate infrastructure delivery on commercial property development in Nigeria?

ii)  What are factors responsible for inadequate infrastructure delivery in Lagos state?

iii) What is the impact of inadequate infrastructure delivery on commercial property development in Nigeria?       

iv)What are factors affecting the provision of housing and infrastructure by real estate developers?

v) What are the ways of improving real property sector in Nigeria?

1.5 HYPOTHESIS

In line with the statement of research problems and the objectives of this thesis, the following hypotheses will be tested:

Hypothesis:

Ho:Inadequate infrastructure delivery does not have a significant impact on commercial property development in Lagos state

H1:Inadequate infrastructure delivery has a significant impact on commercial property development in Lagos state

1.6 JUSTIFICATION OF THE STUDY

The study impact of inadequate infrastructure delivery on commercial property in Lagos state would meet the need for the poor conditions of delivery of infrastructure in Lagos and in Nigeria as a whole; it will also help by recommending ways of reducing thechallenges faced by residents of Lagos towards commercial real propertydevelopment. This study is therefore considered not relevant in several relevant ways.

1.7 SCOPE OF THE STUDY

The study is on the Impact of Inadequate Infrastructure Delivery on Commercial Property and Lagos State, Nigeria as the choice of case study with the view of examining the factors responsible for inadequate infrastructure delivery and also to investigate factors affecting the provision of housing and infrastructure by real estate developers. This study covers various residential properties within the study area for commercial purposes to ensure proper and adequate representation

1.8 STUDY AREA

Lagos sometimes referred to as Lagos State to distinguish it from Lagos Metropolitan Area, is a state located in the southwestern geopolitical zone of Nigeria. The smallest in area of Nigeria’s 36 states, with a population of over 21million, Lagos State is arguably the most economically important state of the country, containing Lagos, the nation’s largest urban area. It is a major financial centre and would be the fifth-largest economy in Africa if it were a country.

It has the highest population density of Nigeria’s states. The actual population total is disputed between the official Nigerian Census of 2016 and a much higher figure claimed by the Lagos State Government. Lagos State annual GDP is 1 trillion naira.

Lagos State is bounded on the north and east by Ogun State. In the west it shares boundaries with the Republic of Benin. Its southern borders are with the Atlantic Ocean. 22% of its 3,577 km2 are lagoons and creeks.

Victoria Island, the financial center of the metropolis, is known for its beach resorts, boutiques and nightlife. To the north, Lagos Island is home to the National Museum Lagos, displaying cultural artifacts and craftworks. Nearby is Freedom Park, once a colonial-era prison, now a major venue for concerts and public events.

CITIES AND TOWNS:Lagos is the most populous city in Lagos State, Nigeria as a whole, and the continent of Africa. The conurbation is one of the most populous in the world. As of 2015, the population of Lagos city was approximately 21 million.Lagos is a port which originated on islands separated by creeks, such as Lagos Island, fringing the southwest mouth of Lagos Lagoon while protected from the Atlantic Ocean by barrier islands and long sand spits such as Bar Beach, which stretch up to 100 kilometres (62 miles) east and west of the mouth. The metropolitan area of Lagos includes Ikeja(which is the capital of Lagos State) and Agegeand Mushin.

Ikeja:Ikeja is the state capital of Lagos State. Ikeja is a well-planned, clean and quiet residential and commercial town with shopping malls, pharmacies and government reserved areas. The Murtala Mohammed International Airport is in Ikeja. Ikeja is also home to Femi Kuti’s African Shrine, Late Chief GaniFawehinmihouse and Lagbaja’s Motherland. It also boasts the largest shopping mall on the mainland.