Property and economic development
share symbolic relationship. For developing countries, property business should
form a major part of economic development and an alternative or income.
Starting in the 1960s as part of the
emerging field of law and economics, economists and legal scholars began to
study the property rights enjoyed by tenants under various estates being
carried out by property development agencies.
Development process required skills
of many professionals which has made the process tedious and cumbersome for an
average development agency.
Property development remains a viable
and profitable venture hence, the need for Government to put certain measures
in place so as to reduce the problems and difficulties development agencies
face and also to meet the growing housing needs of the masses.
Property sector as remained one of
the least exploited sectors which has the capacity to yield a huge source of
income for the government just like it is in the United Arab emirates [Dubai]
and China presently.
TABLE OF CONTENT
Table of content
Statement of the research problem
scope and limitations of the study
Significance of the study
of data collection
1.11.1 Source of Data
1.11.2 Tools of data analysis
of data collection
1.11.1 Organization of the study
and data collection
of the study
for gathering the data
of the instruments used
of data analysis
for the validation of hypothesis
procedures in hypothesis testing
to be analysed
analysis and interpretation of data
The Genesis of the Property
Development Agency can be traced to back into a form of control in the
planning, allocation and usage based on nature, norms and customs of the people
vis-a-vis Customary Law. In modem times Nigeria planning laws are tools of environmental
designing. Planning and development are partly English received Laws and local
Housing generally has not ranked high
on the scale of priorities for social spending and state governments have
tended to rely upon local authorities to meet the problem. Efforts at providing
low-cost rural housing have been minimal, despite the creation of the Federal
Mortgage Bank of Nigeria in 1977, and shantytowns and slums are common in urban
areas. Overcrowding in urban housing is a serious problem. It has been
estimated that about 85% of the urban population live in single rooms, often
with eight to twelve persons per room. Living conditions are poor.
Bolanle Bamgbose & Associates is a
real estate development company based in Lagos, Nigeria, with principal
business activities in property development trading; property investment and
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estate products in office, retail and leisure development. In addition,
provides cutting edge advisory solutions to complex areas of real estate
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our sphere of provision.
The Government has failed in meeting the needs of the
people has far as housing is concerned which made them source for partnership
with developing agency in reducing the hardship of the populace especially in the Urban areas.
Bolanle Bamgbose & Associates one the renowned Property Lawyer in the
Country and Lagos State most especially has taken up the challenge of meeting
the need of the urban centre in building affordable homes such project embarked
upon by this Law firm cum Property developer is Oke-Alo Estate in Gbagada
Area of Lagos State although her role was totally limited to providing land for
the owners to develop such would not have being possible without the vision a
Pharmacist called Chief E.O. Ashamu (late) who at the time in the 70s bought an
expanse to develop for the masses.
Purchasing unused land for potential
development is sometimes called Speculative Development. Subdivision of land is the principal
mechanism by which communities are developed. Technically, subdivisions
describe the legal and physical steps a developer must take to convert raw land
into developed land. Subdivision is a vital part of a community's growth,
determining its appearance, the mix of its infrastructure, including roads,
drainage systems, water, sewage and public utilities.
In general, land development is the
riskiest but most profitable technique as it is so dependent on the public
sector for approvals and infrastructure and because it involves a long
investment period with no positive cash flow.
After subdivision is complete, the
developer usually markets the land to a home builder or other end user; for
such uses as a warehouse or shopping center. In any case, use of Spatial
Intelligence tools mitigate the risk of these developers by modeling the
population trends and demographic make-up of sort of customers a home builder
or retailer would like to have surrounding their new locations.
A development team can be put
together in one of several ways. At one extreme, a large company might include
many services, from architecture to engineering. At the other end of the
spectrum, a development company might consist of one principal and a few staff
who hire or contract with other companies and professionals for each service as
Assembling a team of professionals to
address the environmental, economic, physical and political issues inherent in a complex development
project is critical. A developer's success depends on the ability to coordinate
the completion of a series of interrelated activities efficiently and at the
The development process requires
skills of many professionals: architects, landscape architects, civil engineers
and site planners to address project design; market consultants to determine
demand and a project's economics; attorneys to handle agreements and government
approvals; environmental consultants and soils engineers to analyze a site's
physical limitations and environmental impacts; surveyors and title companies
to provide legal descriptions of a property; and lenders to provide financing.
Land use, land valuation, and the
determination of the incomes of landowners, are among the oldest questions in
economic theory. Land is an essential input (factor of production) for
agriculture, and agriculture is by far the most important economic activity in
pre-industrial societies. With the advent of industrialization, important new
uses for land emerge, as sites for factories, warehouses, offices, and urban
agglomerations. Also, the value of real property taking the form of man-made structures and machinery
increases relative to the value of land alone. The concept of real property
eventually comes to encompass effectively all forms of tangible fixed capital.
With the rise of extractive industries, real property comes to encompass
natural capital. With the rise of tourism and leisure, real property comes to
include scenic and other amenity values.
Starting in the 1960s, as part of the
emerging field of law and economics, economists and legal scholars began to
study the property rights enjoyed by tenants under the various estates, and the
economic benefits and costs of the various estates. This resulted in a much
improved understanding of the:
rights enjoyed by tenants under the various estates. These include the right
o Decide how a piece of real property
o Exclude others from enjoying the
o Transfer (alienate) some or all of
these rights to others on mutually agreeable terms;
and consequences of transaction costs when changing and transferring estates.
The rate of urbanization in Nigeria
has witnessed tremendous increase in the last two decades. Census in the early
fifties showed that there were about 56 cities in the country and about 10.6% of
the total population lived in these cities. Given the expected increase in
urban population, the magnitude of the housing problem in the country is
enormous. According to the National Rolling Plan (NRP) the national housing
requirement is between 500,000 and 600,000 units
considering the prevailing occupancy ratio of between three and four persons
per room. If this estimated annual requirement was to be provided at an average
of N500, 000 per unit the costs would be enormous and indeed unrealisable. The cost
of providing housing alone would be between N250 Trillion and N300 Trillion
(excluding the cost of infrastructural development). This is the macro
perspective of the housing problem. This is to say that the Government and
Mortgage Institutions will need this much as capital base to effectively tackle
the housing situation. On the micro level, it has been observed that house
ownership is one of the first priorities for most households and it represents
the largest single investment tor most (between 50% and 70% of the household income). This observation
becomes very significant when it is realized that per capital income in Nigeria
has been on decline (currently N3, 000) as well as the real income of the
average Nigerian. The rapid up-swing in the prices of building materials in the
last five years has further reduced the affordabilities for most Nigerian.
Relating annual requirements for housing with the Gross Domestic Product of
N82.53 billion and N85.82 billion estimates for 1989, and over 88 billion in
1991 as well as per capital income N3,000, financing becomes a major factor of
the property development especially long term funding. One may perhaps be
tempted to ask why emphasis is being placed on housing. Firstly of all man's
basic needs, arguably, constitutes and indeed poses the greatest challenge.
Secondly, a vigorous and buoyant real property [housing] sector is an
indication of a strong programme of national investment and is indeed the
foundation of and first step to future economic growth and social development.
The inability of the Government of Nigeria or a constant neglect by higher
authority paved away for property development agency like Bolan1e Bamgbose & Associates to
take up the challenge of providing affordable homes for the masses and to
exploit the profitability of the
business of property development in Nigeria, At 30% and above, the rate of
returns on real estate investments in the Nigerian cities of Abuja, Lagos, and
Port- Harcourt is -much higher than
the rate of returns from stock market investments in the US or Europe which is
about 12%and also higher than returns on unleveraged property investments in
the US which is about 18% which shows the prospect of property business if some
certain measures are put in place by the Authority to properly reduce the
difficulties developers face such availability of funds, the review of the Laws
that govern land ownership in Nigeria for example according to the land use of
act of 1978 there is no freehold land ownership in Nigeria. The highest form of
ownership is a 99-year leasehold for which you get a certificate of occupancy
(CoO). Land is vested in the state and governors are the ones who issue these
certificates and even the process of this Certificate of Occupancy is so
tedious especially in Lagos State that it takes an average of 6-8 months which
means if developer took loan to acquire a property for example before he could
do anything at all, he has obtain this CoO which will serve as key to getting
approval for the property he wants to build be it for residential or commercial
purpose What is Property Development? Is the carrying out any building,
engineering, mining or other operation in, on, over or under any land or the
making of any environmentally significant change in the use of any land
demolition of building including the felling of trees and placing trees
standing erections used for display
of advert on the land and the expression to develop with its grammatical
variations shall be construed accordingly. Land can be defined as the various
non-human natural resources found on the earth. Nigeria has an overall Land Use
Policy embedded in Land Use Act and prior to the Land use Act in 1978, the
existing system was through Land Tenure system. The word tenure is derived from
a Latin word "Tenere" meaning to 'to hold' a landed property.
Land Use Act Decree 1978
The Land Use Act was instrumental to
the activities of property developers which saw a tremendous turnaround in the
early 90s. Planning and control of land space dated back into medieval period
as customary norms and ways of life of the people. Nigeria has a form of control in Planning,
allocation, usage and development of land historically based on nature, norm
and customs of the people vis-a-vis Customary Law. In modern times Nigeria
planning laws are tools of environmental designing, planning and development
are partly English received laws and local legislation. The Land Use Act 1978 An
Act to vest all land comprised in the territory of each state (except] land
vested in the Federal Government or its agencies solely in the Governor of the
State, who would hold such land in trust for the people and would henceforth be
responsible for allocation of land in all Urban areas to individuals resident
in the State and to Organisations for residential, agricultural, commercial and
other purposes while similar powers with respect to non-urban areas are
conferred on Local Governments. (29th March 1978).
Looking into the activities of
property development agency in Nigeria will never be complete without a
complete perusal of the Laws that grants the use of Land to them for
Between Investment and Development
Developers are known to take
advantage of the difference in tax treatment between "investment" and
"development" property. When a property is held as an investment,
most costs associated with the property are deductable when incurred unlike
development property which is subject to capitalisation. In several economies,
there is also a preferential tax rate of gains on the sale of investment
property can be sold on an installment basis, allowing the gain to be
recognized as the payments are collected.
Problems of Property Development
Agency in Nigeria
Acquisition and Compensation of land
STATEMENT OF THE RESEARCH PROBLEM
The following problems will be looked
into and possible
reasons found to them.
Lack of adequate funds to carry out
huge project that will be economically useful to the Government.
that govern the use of land in Nigeria
numbers of expert in the field.
Evaluate the economic impact of
property developers' activities in Nigeria.
The problems of Property Development
Creating solution to Housing problems
What is the contribution of property
development agency in providing affordable housing in Nigeria?
The Economic impact on the economy
What are prospect of property
development in Nigeria?
Some assumptions will be made that will later put to test
to, check for their validity or authenticity of the research hypothesis
The Hypothesis to be tested is
of property development bank is not vital in making funds available to property
of property development bank is vital' in making funds readily available to developers.
In carrying out this study, necessary
data will be collected from the following sources:
and online write ups.
Library texts which will include
published and unpublished literature on becoming the biggest property
In this study, the researcher will
use descriptive method; this entailed the combined procedures of preliminary
SCOPE AND LIMITATIONS OF THE STUDY
The activities of property
development Agency in Nigeria, the history of property development, problems
and prospects of property,
business and economic impact of property investment in Nigeria.
Limitations of the study are
inaccessibility of primary data and material, the study is limited to the
activity of just one property development agency that is not has big as Wale
Babalakin & Co and other big property developer in the business.
SIGNIFICANCE OF THE STUDY
The study shall serve as an
inspiration to other potential students, individuals, organisations,
institutions, firms and Government agencies as it will contribute to practical
life, knowledge, advancement, stabilization and development of property sector
in Nigeria as a tool to economic growth and development.
1.11 METHOD OF DATA COLLECTION
The Methods to be used in this
research work will be estimated using the ordinary least square regression
Secondary data which are sourced from
Journal, Bulletin, textbooks
Primary Data from the internet and
personal interview of staff of Bolanle Bamgbose & Associates.
OF DATA ANALYSIS
Tools of analysis will be data
sourced from secondary sources and analysed using simple regression method.
1.10 METHOD OF DATA COLLECTION
The method used in collecting data is
personal interview of Staff of the organization and questionnaire to few
property developers to ascertain the contribution of property development
agency to economy and their role in providing affordable homes and challenges
faced in their bid to do all these and make profit.
OF THE STUDY
CHAPTER TWO: This Chapter deals with the literature review, which was
aimed at equipping the researcher with a good understanding of the subject
matter before the primary research.
CHAPTER THREE: This chapter deals with the methods and procedure adopted
for the research and will consist of:
Descriptive, Behaviors, Attitude,
Selection of numbers or units
Simple percentage, percentage
frequency, Tables, Chi-square
CHAPTER FOUR: In this chapter data will be presented, analyzed, interpreted
and tested with a set of null and alternative hypothesis
CHAPTER FIVE:' This chapter is the last chapter of this study. It will
deal with the summary of findings, conclusion, discoveries/findings,
limitations and recommendations.
Property and economic development
share a symbolic relationship, for developing counties property business should
form a major part of economic development and an alternative source of income.
There is a need for property development agency to improve on the use of
which is the key to the future; the time to lay the foundation is now.
The first lesson is that the secret of success lies in being
focused on selected major ideas; do them right and keep doing them right.
Spotting areas where the rate of
return on property investment are high and keeping the invest risk minimized to
a zero level if possible.
There is no need to reinvent the
wheel in several aspects of what is required to move the society forward, it only
requires careful adaptation and adoption. Wale Babalakin & Co plugged into
the property business/market and created, institutions that ensured sustained
Institutions - the way the property
sector is organized, including its rules, laws and enforcement processes