Determinants of Commercial Property Rental Growth in Minna, Nigeria

Abstract

Rent is the economic return to land resources. Key property market participants such as investors and developers often use rental value as an indicator to appraise the viability of their real estate development and investment schemes. On this basis, understanding the nature and basic features of rental movements provides a better comprehension of the dynamics of the commercial property market. This study examined the determinants of commercial property rental growth in Minna, Nigeria. Primary and secondary data were utilized for the study. Primary data obtained for the study include office rental levels and office space data in the study area for the period, 2001-2012. Secondary data obtained for the study are mainly macroeconomic variables in Nigeria for the period, 2001-2012. Appropriate statistical techniques were used for data analysis. The study revealed that real GDP growth and vacancy rate are the major determinants of rental growth in the office property market in the city as they account for about 83% of the variation in office property rents in the commercial property market in the city. Also, Rental index for office properties in Minna using 2001 as the base year indicates progressive upward movement in rental values of office properties in the city within the study period.