The Relevance of Viability Appraisal in the Property Development Process: A Case Study of Residential Property Development Projects in Minna.

Abstract

Property development is a process which involves more than the mere carrying out of building construction works. Viability appraisal is part of the property development process and is concerned with the worthwhileness of a proposed property development scheme, project or decision. In the Nigerian construction industry, viability appraisal is yet to be fully integrated into the development process. This has resulted in the ignorant investment of funds by private and public developers into property development schemes which are economically and financially unviable, ab initio. This paper examines the relevance of viability appraisal in the property development process. The paper is based on data obtained from some recently completed property development projects in Minna urban. Analysis of data to determine the viability of the developments, based on the Net Development Value as the viability yardstick revealed that some of the property developments already completed are unviable. The paper argues that viability appraisal is very relevant as a property development process, particularly, before the commencement of any proposed property development project. The paper advocates for mandatory viability appraisal in the National Construction Policy and concludes that such initiative would curb the current wastage of scarce financial resources by private and public investors in property development projects already infested with economic losses and undesirability.