A Comparative Analysis of Residential and Retail Commercial Property Investments Performance in Ilorin, Nigeria

Abstract

The paper examines the performance of real estate investments in Ilorin, Nigeria. It conducts a comparative analysis of the performance of residential and retail commercial property investments within the period of year 2000 and 2011; focusing on average return, risk adjusted return, income growth and capital appreciation. The results showed that retail commercial property investments performed better than residential property investments with a mean annual return of 14.2% as against 11.8%. In addition, commercial property investments performed better in terms of risk adjusted return with sharp index of 1.11 as against 0.55 for residential property investments. In terms of income and capital growth, the performance of commercial property investments was also higher during the period of measurement. The study concluded that while both residential and commercial property investments performed well with positive mean returns and risk adjusted returns, commercial property outperformed residential property investments.

Keywords: Property Investment, Performance Analysis, Real Estate, Investment Decision, Nigeria