FACTORS AFFECTING THE MARKET PRICE OF COMMERCIAL REAL ESTATES IN NAIROBI. A CASE STUDY OF HURUMA ESTATE

Abstract

Purpose: The study sought to determine the factors affecting the market price of commercial real estates in Nairobi. A case study of Huruma estateMethodology: This study employed descriptive survey design. The target population comprised of both managerial rand non-managerial employees in the real estate agencies. The real estate agencies registered by Kenya Property Developers Association (KPDA) and operating in Huruma area are 69 in number. The study sample comprised of 30% of all real estate firms registered by Kenya Property Developers Association (KPDA) in the region. Therefore, the sample size is 21 firms. The use of census survey was employed for statistical research, population count or business marketing purposes. Primary information was gathered by use of a Likert scale questionnaireResults: The result displays results of responses regarding the first variable which was rent as determinant of market price of commercial real estate. This finding was supported by an overall responses mean of 3.94 which means that more respondents were agreeing with the statements on this objective in the questionnaire. The responses were also spread from the mean at a 0.779 standard deviation. The second objective was to establish the effect of transport infrastructure on the market price of commercial real estate. The findings show that most of the respondents agreed with most of the statements as support by a mean score of 3.89. The responses were also spread from the mean at a 1.045 standard deviation. The third objective was to establish the effect of security on the market price of commercial real estate. The findings show that most of the respondents agreed with most of the statements as support by a mean score of 3.80. The responses were also spread from the mean at a 1.102 standard deviation. The last objective was to establish the effect of social amenities on the market price of commercial real estate. The findings show that most of the respondents agreed with most of the statements as support by a mean score of 3.77. The responses were also spread from the mean at a 1.056 standard deviation.Unique contribution to theory, practice and policy: The study recommends that investors should invest in a way to ensure fair rent on the tenants so that the worth of such property value is not compromised by their rental charges ensuring the tenants enjoy and experience satisfaction. Adequate transport infrastructure should be ensured in making investment decisions by investors as proper infrastructure increases property value. Security and social amenities should be improved and where necessary increased for such measures are a positive contributor to commercial real property value.Keywords: Market Price, Rent, Transport Infrastructure, Real Estate, Social Amenities, Security