Risk Management Practices and Performance of Real Estate Construction Projects in Nakuru County, Kenya
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Date
2023-11
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Stratford Peer Reviewed Journals and Book Publishing
Abstract
Real estate development performance in Nakuru Countycontinuously deteriorates, as evidenced by rising vacancy rates in outdated office buildings, restrained consumer spending due to the difficult economic climate, and competition from unofficial retail spaces in some submarkets. The study aimed at finding out how risk managementpractices influence the performanceofreal estate construction projects in Nakuru County.The research determinedhow technical risk management practices, financial risk management practices,market risk managementpractices and operational risk managementpracticesaffect the performance of real estate construction projects inNakuru County. This research useda mixed-method studydesign with a population target of 45 ongoing and 25 completed real estate projectsin Nakuru County. Usingstratified simple sampling technique, asample size of 25 ongoing and 15 completed real estate projects were selected. Thestudy was affixedon strategic planning theory, Decision theory and risk/uncertainty bearing theory. The researcher used questionnaires to obtain data and suggestionsfrom the respondents. Apilot study to assess the research instruments' accuracy and dependabilitywas conducted in Nairobi County.The research utilized Cronbach's alpha to calculate the reliability coefficient of the questionnaires.Cronbachvalue greater than 0.7 wasconsidered reliable.The gathered data was cleaned, coded, and accuracy checked for ease of analysis, and then subjected to descriptive analysis involving the calculation of mean, frequency distribution, and standard deviation.Using Pearson correlation analysis, the relationship between the dependent and independent variables was evaluated.Regression analysis was done using the analysis of variance technique (ANOVA).The study found that technical, operational, market, and financial risk management practices each had positive and substantial impacts, indicated by regression coefficients of 0.451, 0.313, 0.531, and 0.273, respectively. Further, the study established that these practices are crucial in managing various risks effectively, demonstrating their significant role in overall risk management strategies..Constructedfromthe study findings, thisstudy recommends thatthe Kenyan governmentshould review all of the approvals that real estate developers need,formulate policies that regulate the construction sector by ensuringthat real estate developers demonstrate their creditworthiness on their expected investments before granting any licenses.In addition, realestate developers should be encouraged to take advantage of staff empowerment through professional bodies that equips managers through risk managementcourses. Lastly, future studies conducted should concentrate on other risk variables not included in this study including legal and environmental risk management practices.
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Citation
ISACK, H. H. (2023). RISK MANAGEMENT PRACTICES AND PERFORMANCE OF REAL ESTATE CONSTRUCTION PROJECTS IN NAKURU COUNTY, KENYA (Doctoral dissertation, KENYATTA UNIVERSITY).