M.O KOMOLAFE

This study assesses the risks associated with direct commercial real estate (CRE) investment in Benin City, Nigeria, focusing on Egor, Ikpoba Okha, and Oredo Local Government Areas. As the Nigerian real estate market matures, understanding the complexities and inherent risks in CRE becomes crucial for informed investment decisions. The research adopts a pragmatic philosophy, utilizing a mixed-methods approach that integrates qualitative and quantitative techniques. Data was collected through structured questionnaires, interviews, and document analysis, targeting key stakeholders including real estate investors, certified agents, property developers, financial analysts, and other built environment professionals. Findings reveal that market risks—such as fluctuating demand and interest rates—are primary concerns, followed by economic risks (inflation, exchange rate fluctuations), environmental risks (flooding, erosion), legal risks (land disputes, zoning laws), social risks (tenant defaults, security concerns), and political risks. The study also identifies the prevalent risk assessment techniques applied by investors, including scenario analysis, brainstorming, Delphi techniques, decision tree analysis, and advanced methods like Monte Carlo simulations and Bayesian statistics. Risk management strategies commonly employed include diversification of investment portfolios, engaging legal and financial experts, conducting due diligence, purchasing insurance policies, and adopting flexible lease agreements. The study further highlights challenges such as inconsistent government policies, lack of reliable data, and infrastructural deficits that hinder effective risk management. Despite these limitations, the study recommends adopting advanced risk assessment tools, improving legal frameworks, fostering public-private partnerships, and leveraging technology 9 such as machine learning and blockchain to enhance transparency and risk prediction. These measures aim to create a more resilient commercial real estate market in Benin City, ultimately attracting local and foreign investors while promoting sustainable urban development. This research contributes to the growing body of knowledge on CRE investment risks in emerging markets and offers valuable insights for policymakers, investors, and industry professionals seeking to navigate the complex landscape of Nigeria’s real estate sector.

This study assesses the risks associated with direct commercial real estate (CRE) investment in Benin City, Nigeria, focusing on Egor, Ikpoba Okha, and Oredo Local Government Areas. As the Nigerian real estate market matures, understanding the complexities and inherent risks in CRE becomes crucial for informed investment decisions. The research adopts a pragmatic philosophy, utilizing a mixed-methods approach that integrates qualitative and quantitative techniques. Data was collected through structured questionnaires, interviews, and document analysis, targeting key stakeholders including real estate investors, certified agents, property developers, financial analysts, and other built environment professionals. Findings reveal that market risks—such as fluctuating demand and interest rates—are primary concerns, followed by economic risks (inflation, exchange rate fluctuations), environmental risks (flooding, erosion), legal risks (land disputes, zoning laws), social risks (tenant defaults, security concerns), and political risks. The study also identifies the prevalent risk assessment techniques applied by investors, including scenario analysis, brainstorming, Delphi techniques, decision tree analysis, and advanced methods like Monte Carlo simulations and Bayesian statistics. Risk management strategies commonly employed include diversification of investment portfolios, engaging legal and financial experts, conducting due diligence, purchasing insurance policies, and adopting flexible lease agreements. The study further highlights challenges such as inconsistent government policies, lack of reliable data, and infrastructural deficits that hinder effective risk management. Despite these limitations, the study recommends adopting advanced risk assessment tools, improving legal frameworks, fostering public-private partnerships, and leveraging technology such as machine learning and blockchain to enhance transparency and risk prediction. These measures aim to create a more resilient commercial real estate market in Benin City, ultimately attracting local and foreign investors while promoting sustainable urban development. This research contributes to the growing body of knowledge on CRE investment risks in emerging markets and offers valuable insights for policymakers, investors, and industry professionals seeking to navigate the complex landscape of Nigeria’s real estate sector.