Assessment of risk factors affecting real estate development projects in Nigeria

Purpose This paper, which is part of a wider study on risk management practices in Nigeria, is aimed at assessing the risk factors affecting real estate development projects. Design/methodology/approach This paper employed an explanatory sequential mixed-methods design to rank and categorise 44 risk factors affecting real estate development across the six geopolitical zones of Nigeria. While 250 questionnaires were sent to development firms registered with REDAN, personal interviews were conducted with 13 purposively selected developers. Quantitative data was analysed using descriptive statistics and principal component analysis, while qualitative data was analysed using a thematic approach. Findings Out of the 250 questionnaires distributed, 84 were correctly filled and returned, giving a response rate of 33.6%. Descriptive statistics results show that inflation, exchange rate and tariffs/levies were the most dominant out of the 44 risk factors assessed, while economic and political risks are the predominant risk categories under the STEEP framework. Using PCA, the 44 risk factors were condensed to ten categories of risks, including economic, environmental, contractual, capacity, insecurity, technical, social, civil unrest, global conflict and stakeholders. The qualitative findings validated most of the quantitative results and more. Practical implications Findings from this study would assist both local and international developers in making informed decisions regarding real estate development in Nigeria and other countries that share similar characteristics with Nigeria. Originality/value This is the first study to thoroughly assess real estate development risk factors across the six geopolitical zones of Nigeria.