Keywords
Viability study
Real estate investment
Valuation techniques
Oyo State
IRR
NPV
Risk analysis
Abstract
This study evaluates the usability, frequency, and reliability of feasibility and viability appraisal techniques in commercial real estate projects, with particular reference to the experiences of Estate Surveyors and Valuers practicing in Oyo State, Nigeria. The research targeted all thirty-four (34) Estate Surveying and Valuation firms registered with the Estate Surveyors and Valuers Registration Board of Nigeria (ESVARBON) operating within Ibadan, from which thirty (30) valid responses were obtained and analyzed using descriptive statistics. The study explored the frequency of instructions received for feasibility appraisals, the usage patterns of various appraisal techniques, the perceived reliability of these methods, and the awareness and applicability of modern appraisal tools such as Monte Carlo Simulation, Risk-Adjusted NPV, and Certainty Equivalent. Findings revealed that Internal Rate of Return (IRR) and Net Present Value (NPV) are the most frequently used and most reliable techniques, while advanced tools like Risk-Adjusted NPV and Monte Carlo Simulation remain underutilized due to lack of understanding and technical expertise. The study also observed limited adoption of modern tools owing to inadequate data infrastructure, low professional capacity in financial modeling, and regulatory gaps. Nonetheless, the respondents acknowledged the significance of feasibility and viability appraisals in mitigating risk and guiding sound investment decisions in the commercial real estate market. The study recommends the incorporation of modern appraisal tools through capacity building, the establishment of a centralized real estate data repository, regulatory reforms mandating feasibility studies for major projects, and improved collaboration with financial institutions. Overall, enhancing the technical competence and regulatory support for feasibility and viability studies can strengthen the investment climate and promote sustainable commercial real estate development in Oyo State.
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