FACTORS INFLUENCING EXPANSION OF COMMERCIAL PROPERTY IN KENYA: A CASE OF KERUGOYA TOWN, KIRINYAGA COUNTY
Abstract
This study is on factors that influence expansion of commercial property in Kerugoya town, Kirinyaga county,Kenya. Four study questions guided this study. Literature review focused on expansion of commercial property globally, in Kenya and Africa at large. The study focused on the factors that influence expansion of commercial property which include demographic characteristics, interest rates,market demand and Gross domestic product(GDP). The study used the descriptive survey design. The target population for the study was 112 comprising 42 investors/developers, 30 financial consultants, 10 government departments and 30 property consultants in Kirinyaga County. A sample of 88 respondents was determined based on Yamane formula 1967. Piloting was done on 5 respondents from Kirinyaga County more so the ones who would not be used in the final study. Based on the findings the following conclusions were made: Demographic characteristics, market demand, interest rates and GDP were major determinants of commercial property investment in Kerugoya town.GDP growth contributed the most to the growth in commercial property, followed by market demand, demographic characteristics then interest rates. Hence these four factors i.e. demographic characteristics, interest rates, market demand and GDP had a statistically significant positive influence on investment of commercial property. It was also found that policy measures geared toward improving the economic growth and curbing rising inflation rates and interest rates should be undertaken as they increased the investment levels.The researcher also recommends the following: That future development of commercial properties in Kerugoya should be planned strategically bearing in mind that their development affects the economy of the county. In order for Kenya to bridge the gap between demand for residential housing units and supply, Kenyan developers, real estate firms, the government and all other key stakeholders involved in real estate market, should benchmark to obtain best practices and strategies in order to alleviate or ease the problem of inadequate housing.
Downloads
References
. Abraham, M (2009) An Exploratory study of the factors that influence the capital structure of Commercial property firms in Kenya, Unpublished MBA, Thesis, Strathmore, University,
. Ambrose P. and Barlow. J (1987) Housing provision and House building in Western Europe; increasing expenditure, Declining output? Housing policies under Fiscal austerity, pp. 111-125, London: Greenwood Press.
. Academic Research Paper writing services. (2015) Factors affecting demand and supply of real estate.
. Babbie, E (2002) Survey Research Methods (2nd Ed.). Belmont: Wodsworth.
. Bailey (1966) Effects of race and of other demographic factors on the values of single family homes, Journal Land Economics, 42, May 1966.
. Ball M. (1996) Investing in new Housing: Lessons for the future Bristol, The Policy Press.
. Baum R & Crosby, N (1998) Property investment Appraisal London, Routledge.
. Baum, Andrew E (1995) Can Foreign Commercial property Investment Be Successful? Journal of Commercial property Finance, spring, pp. 81-89.
. Bernard, Messah (2011) Factors Influencing Commercial property Prices, a Survey of Commercial property in Meru Municipality, Un Published MBA Thesis, Kenya School of Business & Management Studies Kenya Methodist University.
. Chen and Hobb (2003) Global Commercial property Index-To capture different levels of market risk, the: journal of Portfolio Management, Special issue, pp. 66-76.
. Chin, Wei, Dent, Peter; Roberts, Claire (2006). An Explanatory Analysis of Barriers to Investment and Market Maturity in Southeast Asian Cities. In: Journal of Commercial property Portfolio Management, vol. 12, no. 1, pp. 49-57.
. Chomba, J M (1999) An assessment of the commercial property prices in the urban areas of Kenya with special reference to commercial buildings in Nairobi, Unpublished MBA Thesis, University of Nairobi.
. Collyns, C and A Senhadji (2003) “Lending booms, commercial property bubbles, and the Asian financial crisis,” in Asset Price Bubbles: The implications for monetary, regulatory, and international policies, eds. W.C. Hunter, G.G. Kaufman, & M. Pomerleano, The MIT Press, Boston.
. CRE Market,Insights,Wired resources/Shannon Shaw.(2015) 10 factors driving commercial real estate growth.
. DiPasquale, Denise and William Wheaton (1992). The market for commercial property and space: A conceptual frame work, in: Journal of the American Commercial property and Urban Economics Association, vol.20 no.1, pp. 181-197.
. Djankov, S, LaPorta, et al R Lopez-de-Silanes, F.; Shleifer, A (2002). The regulation of entry. In: Quarterly Journal of Economics, vol. 117, no. 1, pp. 1-37.
. Djankov, S LaPorta, et al R; Lopez-de-Silanes, F Shleifer, (2003) Courts. In: Quarterly Journal of Economics, vol. 118, no. 2, pp. 453-517.
. Fisher, Jeffrey D and Webb, R Brian (1992) Current Issues in the Analysis of Commercial Real
. Estate. In: Journal of the American Commercial property and Urban Economics Association,vol. 20, no.1, pp. 211-227.
. Fisher, Jeffrey D and Sirmans, C F (1993) The Role of Commercial property in Multi-Asset
. Portfolio.University of Connecticut, Centre for Commercial property and Urban Economic Studies, April, 1993.
. Geoffrey, M (2011) Behavioral factors influencing investment decision in Kenya property market, Unpublished MBA Thesis, Strathmore University.
. Golland A. (1996) Housing supply, profit and Housing production; the case study of United
. Kingdom, Netherlands and Germany, Journal of Housing and Built environment, vol. 11 No. 1, pages 5-30.
. Golland A. (1996) Private sector Housing Development between state and markets in a European context, the cutting edge, Royal institution of chartered surveyors.
. Hancock T. (1998) Caveat Partner; Reflections of partnership with the private sector, Health Promotion international, vol. 13 No. 3.
. Han, J (1996) Targeting market is popular: A survey of pension commercial property investment advisors, in: Journal of Commercial property and Finance Vol. 13, no.1, 1996, pp. 66-75.
. Hartzell, David and J Webb, R. Brian (1993) Commercial property and Inflation during Periods of High and Low Vacancy Rates, Working paper, Commercial property Research Institute Boston.
. Hartzell, D J and Webbs J R (1998) Commercial property Risk and returns expectations, Recent survey Results, Journal of Commercial property Research vol 3 No. 3 1998. Hass Composite index,(2009), Hass Consultants.
. Hassanein&Barkouky (2008) The Egyptian mortgage practice, International Journal of Managing Projects in Business, Vol 1, No 2, Emerald group publishing limited.
. Hoskin and Cardew (2004) Macro Economic Variables and Commercial property Return: An international Comparison, in: The appraisal Journal, spring, pp. 163-170.
. Kibirige, M (2006) Mortgage Financing, How it works in Uganda, the journal of capital markets industry, Uganda, Volume 10, No 2, April-June, 2006.
. King’oriah, George K (2004) Fundamentals of Applied Statistics, Jomo Kenyatta Foundation, Nairobi.
. Lieser, K. & Groh, A.P. (2011). The determinants of international commercial real estate investments. The journal of Real Estate 4(2), 10-15
. Huang, X.W & Ma, Y.H (2015). Research on the influence of realstate investment and economic growth in China. International Conference on Management Engineering and Management Innovation (ICMEMI)
Copyright (c) 2019 IJRDO - Journal of Applied Management Science (ISSN: 2455-9229)
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.
Author(s) and co-author(s) jointly and severally represent and warrant that the Article is original with the author(s) and does not infringe any copyright or violate any other right of any third parties, and that the Article has not been published elsewhere. Author(s) agree to the terms that the IJRDO Journal will have the full right to remove the published article on any misconduct found in the published article.
