EXAMINATION OF EFFECTS OF WRONG PROPERTY VALUATION METHODS ON PERFORMANCE OF NIGERIAN REAL ESTATE INVESTMENT TRUSTS

EXAMINATION OF EFFECTS OF WRONG PROPERTY VALUATION METHODS ON PERFORMANCE OF NIGERIAN REAL ESTATE INVESTMENT TRUSTS

Author by Dr. Uchenna Ebi

Journal/Publisher: Journal Of Land Management And Appraisa

Volume/Edition: 3

Language: English

Pages: 82 - 85

Abstract

Investment Trust (REIT), which raise funds through  issuance ofsecurities to various investors. The funds  are used mostly 10 acquire income-yielding  .properties. The investors receive periodic  distribution ofthese incomes and also participate in  capital appreciation that may arise. To acquire these  properties, valuation advice is sought from retained  estate valuers. who mostly use traditional methods of  valuation for the appraisal. This gives rise to  variances in values obtained, thus causing. delays  and sometimes termination of transactions. that  would have enhanced the level of profitability of the  REITs. The researchers seek to examine the effects of  the use ofthese traditional methods on performance  of Nigerian REITs and provide an alternative means  of appraising through contemporary methods.  Relevant data collected through questionnaire were  analysed through ANOVA tool and SPSS 20.0.  Analysis showed that use of traditional valuation  methods are the most probable cause of variances in  values obtained by REITs valuers. These variances  may delay or terminate transactions and adversely  affect the efficient operations of REIT.<; and their  profitability. Use of contemporary methods of  assessment will close the gaps in values and improve  therefore, the level of efficient. operations and  profitability of REITs in Nigeria.


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