ABSTRACT
This study investigated the assessment of management practices of privately owned commercial properties in Ibadan South East Local Government Area, Ibadan, Oyo State.
The study used survey research design which was highly structured, and data was collected by means of a structured questionnaire. The data was analyzed using statistical package for the social sciences, (SPSS) as the Pearson correlation was used in analyzing the data. The study make use of the descriptive analysis to achieve the mean, frequency distribution and percentage results of the responses from the instrument.
The study showed that, the physical characteristics of privately owned commercial property in the study area are as follows; toilet, walkway, car park, waste disposal, central electricity meter, individual electricity, common generating set, individual generating set and CCTV security. In addition, it was found that, the following are management practices of private properties in the study area, which are; in-house, outsourcing, hybrid and mixed are the management practices executed at the study area. In addition, the study revealed that following as the management practices method, which are; rent collection, client satisfaction, service delivery, waste management, response to complaint, tenant selection and repairs.
It is therefore concluded that, property managers should carry out the practice of property management at “arm’s length” transaction, integrity, transparency without bias or favouritism and responsibility. The study further recommended that; property managers should ensure that private commercial properties are in good physical condition and with the right facilities in order to ensure continuous demand of commercial properties in the area; property managers should ensure that the best approach to property management is adopted in order to ensure the sustainability of commercial properties; the management of commercial properties should be carried out on a routine basis so as to ensure that properties that need to be renovated or repaired are done to avoid sudden collapse; the management practice of private properties should be carried out professional in order to attract investors into the real estate industry.
CHAPTER ONE
1.1. Background of the Study
Property management is emerging as a managerial science today (Kyle & Baird, 2010). It transcends beyond the role of rent collector (Li, 2013). Managing property involves establishing goals, objectives and policies and implementation of strategies to achieve those goals and objectives. Singh (2000, 2002) posited that property management is an activity that seeks to control interests in property owner and particular purpose for which the property is held. Wong (2013) considers property management as the work carried out to manage and maintain the development including its facilities at the level that will retain or enhance the value of the development, create a safe, functional and conducive living environment for occupants, keep or restore every facility in efficient working order and in good state of repair, and project a good appearance or image for the development. Ismail (2015) regards property management responsibility as including all the necessary making to ensure the economic and physical vitality of property assets.
Property assets, that is, land and buildings are a key resource for all types of organizations, including local authorities and public sectors (Gilson, 2014). They are fundamental to existence of life. The property industry in Ibadan Metropolis has been confronted with pressure due to population growth and urbanization challenge, which triggered the rising needs for both residential and commercial properties. In the metropolis, lack of strategic approach to management, the limited recognition of the value of these assets by property users and operational decision makers, gradual shift in emphasis on quality and ethics have eroded the significance of property management. However, this has generated the influx of impostors. On the account of the significant contribution that property makes to ultimate success or failure of a business and recognition of strategic importance of property to a company’s financial structure, the need for efficient and ethical management is imperative (Nwuba, 2014). It is important to accept the fact that from both public and private perspectives, property can be considered as having financial contribution and effect upon annual financial statements, asset base and as well as in resale values in case of privatizations of any public entities, (Nwachukwu, 2014; Wuba, 2016). The sustainability of property assets as source of wealth creation requires effective and creative management- physical, financial, human, information and social management.
Property assets demand that they are professionally managed within the context of ethics, to ensure that asset value is maintained and preserved. Property market as a decision making unit (Robinson & Reed, 2012) operates within the realm of ethics and interaction of human behaviour. Ethics may be seen as the “science of conduct” it involves learning what is right and doing the right thing. Ethics are principles, policies and values that serve as operational guidelines for individuals and organizations for decisions concerning what is morally “right” and or “wrong” (Nwachukwu, 2014). However, property management is a network chain of personnel such as manager, private investors, public and corporate organization, prospective tenants, existing tenants and lawyers. The challenges in the work place, the diverse background of the employees, the impact of globalization and technology have all contributed in making the practice of management very difficult, (Gibson, 2014). Managers are increasingly finding out that in making business decisions, they select from alternatives that are neither wholly right nor wholly wrong, (Stephen et al., 2012). In such case, there is no clear moral compass to guide leaders through the complex dilemma of what is right or wrong in property management parlance.
When the cost of enforcement by the owner himself is higher than the cost of employing agency, property management agents may emerge as an institution for safeguarding the property right of the owner (Yiu et al., 2012). The contention is that property management is not simply the management of property, but the governance of the property rights. The property manager advises the client concerning the general client policy regarding cooperation and compensation and as to the best and appropriate choice of tenants for the building. He takes decision on the best terms of lease arrangement and appropriate terms of renewal. In addition to being aware of pending or enacted changes in the zoning ordinance that might affect the market value or use of property being managed, he should be informed as rapidly and thoroughly as feasible about laws, proposed legislation, government regulations, public policies and current market conditions, (Libecap, 2013).
Private governance of property rights, traditionally referred to as property management, is the art of nurturing investment in real estate towards a profitable end, (Lia, 2006). Its main concern is to preserve an investment in real estate and enhance the achievement of the owners’ objective, (Scarret, 2015). In other words, effective property management can enhance the income yielding potentials of property and make real estate a profitable option for local and foreign investors who might be considering real estate as an attractive investment venture, (Yiu et al, 2012). Where this is missing, private property rights could be said to be ineffectively governed. An inefficient property management is a demonstration of wrong private governance of property rights.
In sum, inefficient property rights governance (property management) could prevent the realization of the investors’ investment objectives, (Yiu et al, 2012). In turn, the negative impact on real estate investment can cause client dissatisfaction and loss of income. A rational investor will however be mindful of likely occurrences that might inhibit the achievement of its stated objectives, (Gibson, 2014). To property managers, understanding the factors that might prevent efficient property rights governance will be of interest. This will enable practitioners to develop pro-active measures for avoiding property problems and enhance efficient service delivery, (Libecap, 2013).
Against this background, the purpose of this paper is to examine the management practices of privately owned commercial properties in Ibadan South East Local Government Area, Ibadan.
1.2. Problem Statement
In Nigeria business practices, the most common unethical business practices are: outright bribery unfair practices in pricing, price discrimination, dishonest advertising, price collusion by competitors, unfair and prejudice in hiring, cheating of customers, unfair credit practices, overselling, collusion by competitors and dishonesty in making and keeping to contracts (Nwachukwu, 2014).
Quite a number of studies have examined the problems of commercial property management practice (Han and Lin, 2011; Lai, 2005; Yiu, et al, 2012 and Blackwell, 2010). However, most of the empirical studies have been limited to the specific aspect of the practice of property management and carried out in advanced countries with dissimilar cultural and socioeconomic climate from African countries like Nigeria. Examples include Li (2000), Chin and Poh (2003) and Andrew et al., (2012). A number of these studies focused on examining the principles and practice of property management (Lia, 2006). Touch Ross (2013) and Institute of Real Estate Management (1991) provided a general direction and development guidelines for property management information system. In a similar study, Han and Liu (2011) examined the use of computers in Singapore property management companies. Blackwell (2010) investigated the relationship of geographical indicators (GIs) with real property valuation and management.
Based on the above, this study will seek to examine the management practices of privately owned commercial property in Ibadan South East Local Government Area, Ibadan.
1.3. Research Questions
Based on the research objectives above, the following research questions will be posed.
- What are the physical characteristics of privately owned commercial property in Ibadan South East Local Government, Ibadan?
- Are there any management practices of private properties in Ibadan South East Local Government Area, Ibadan?
To what extent is the perception of the public on management practices of private commercial property in Ibadan South East Local Government Area, Ibadan?
1.4. Aim of Objectives
The aim of this study is to examine the management practices of privately owned commercial properties in Ibadan South East Local Government Area, Ibadan. The specific objectives are to:
- examine the physical characteristics of privately owned commercial property in Ibadan South East local Government
- investigate the management practice of private properties in the study area
- find out the perception of public on management practices of private commercial property in the study area
1.5. Significance of the Study
This study is significant as it will enable privately owned commercial properties owner understand the concept of management practices and how best it can be used to effectively managed commercial properties.
Furthermore, this study is of significance to the private agencies in care of estate management in order to take decisive measures in improving the necessary services for property owners.
In addition, the results of the study are also expected to contribute to closing the gap in literature with respect to understanding management practices of privately owned commercial properties.
Lastly, the study will serve as a point of reference to other researchers who might want to carry out study in relation to this field.
1.6. Scope of the Study
This study will examine the management practices of privately owned commercial properties in Ibadan South East Local Government Area, Ibadan, Oyo State, Nigeria will be studied. The Ibadan South East Local Government privately owned commercial properties will be selected by the researcher for the study in order to find out the effectiveness of management practices on private properties. The results found at Ibadan south east local government will enable us to generalize the result across all parts of Nigeria.
1.7. Definition of Terms
Management Practice: refers to the working methods and innovations that managers use to improve the effectiveness of work systems.
Morphology: refers to the study of the forms of things
Ethics: are principles, policies and values that serve as operational guidelines for individuals and organizations for decisions concerning what is morally “right” and or “wrong”
Property Management: is an activity that seeks to control interests in property owner and particular purpose for which the property is held
Management: is seen as a process demanding the performance of a specific function
