CHAPTER ONE 1.0 INTRODUCTION 1.1 Background of the study
Property investment has been considered as an investment that is very lucrative in the economy of most nations and it is a major investment option that gives investors the courage to invest because it is recognized to have inflation hedge. Unlike other assets class, commercial properties are types of properties that are owned to generate income. It is heterogeneous, physically modifiable and segmented asset which is treated separately (Hendershott et al., 2000). It houses most locations where economic activities take place within an economy. As an investment asset, it represents a means for accumulation of wealth by investors. According to Ibottson and Associates (2001), commercial properties and real estate constitute more than half of the economic wealth in the world.
The economy of Jos has grown significantly well from an agrarian and tourism driven to a business oriented one. The property market of Jos is assumed to be doing well in the sense that property investments with reference to commercial properties in this area has become `particularly strong and generated huge capital profit to its owners. As commercial properties are important part of Jos landscape, which service both the business and financial aspects of the locality, it contributes immensely to the growth of real Gross Domestic Product (GDP).
In addition, the office market has been given a lot of attention by most practitioners as compared to order sectors of property. This is because, the office market is usually seen to be well established with quite regular transactions over a long term and mostly has good geographical locations than some other property class (Higgins & Valence, 2000).
There is no particular place referred to as the real estate market due its characteristics. These property characteristics usually make it difficult for a uniform price to be fixed on properties of the same type even if they are located close to each other. The prices of commercial properties are often volatile due to the fact that they are determined by the market’s internal and external forces within which most property decisions are made. The yields from real property are arrived at by both internal and external factors such as gross domestic product, inflation, exchange rate and interest rate.
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