The Relationship Between Sustainable Property Development and Investor Profitability in Kano State
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- NGN 5000
Background of the Study
Sustainable property development has gained significant attention in recent years, with its emphasis on minimizing environmental impact while enhancing social and economic outcomes. It focuses on using eco-friendly building materials, energy-efficient technologies, and sustainable construction practices to promote long-term ecological balance (Agyemang et al., 2024). Sustainable development in the real estate sector involves addressing climate change concerns, conserving resources, and enhancing the overall quality of life for communities, while also ensuring profitability for investors (Okoye & Ugwu, 2023). In Kano State, one of Nigeria’s rapidly growing urban areas, real estate developers are increasingly exploring the integration of sustainability in property development to address urbanization challenges such as overcrowding, infrastructure inadequacies, and environmental degradation (Tariq et al., 2023).
The relationship between sustainable property development and investor profitability is complex, as investors are traditionally concerned with immediate financial returns. However, there is a growing realization that sustainable developments can lead to increased long-term profitability through energy cost savings, higher property value, and increased demand for green buildings (Adamu & Bawa, 2025). Kano State, with its expanding urban population, offers a unique context to study this relationship, particularly as government policies and investor awareness of sustainability issues continue to evolve. Furthermore, property developers in the region must navigate a competitive market while balancing environmental concerns with profitability, which raises questions about the financial viability of such ventures in the short and long term.
Research has shown that investors who prioritize sustainable property development can benefit from improved tenant satisfaction, reduced operational costs, and access to government incentives (Akinmoladun & Fadare, 2024). However, there is limited empirical data on the specific impact of these developments on investor profitability in Kano State. This study aims to fill this gap, providing insights into how sustainable property development impacts the profitability of real estate investors in this region.
Statement of the Problem
The construction industry in Kano State is experiencing rapid growth, driven by urbanization and increasing demand for residential and commercial properties. Despite the potential benefits of sustainable property development, there is a lack of comprehensive research into its relationship with investor profitability within the state. While globally, sustainable building practices are linked to long-term financial gains, in Kano State, investors face significant barriers, including high upfront costs, limited access to green building materials, and insufficient government policies to support sustainability (Ojo et al., 2023). Consequently, many developers are skeptical about the profitability of sustainable real estate projects, preferring traditional building methods.
The profitability of sustainable developments is further complicated by issues such as fluctuating market conditions, which may affect rental yields and property values. Additionally, there is limited local data on the returns investors can expect from sustainable developments in Kano, making it challenging to formulate effective investment strategies. Therefore, understanding the specific dynamics between sustainable property development and investor profitability in this region is critical. The study will investigate how the implementation of sustainability measures influences financial returns, addressing the gap in knowledge and offering practical insights for developers and investors in Kano State.
Objectives of the Study
1. To examine the relationship between sustainable property development and investor profitability in Kano State.
2. To assess the impact of sustainable construction practices on property values and rental yields in Kano State.
3. To explore the challenges and opportunities faced by investors in sustainable property development in Kano State.
Research Questions
1. How does sustainable property development affect investor profitability in Kano State?
2. What are the key factors that influence property values and rental yields in sustainable developments in Kano State?
3. What challenges do investors face when investing in sustainable property development in Kano State?
Research Hypotheses
1. There is a significant positive relationship between sustainable property development and investor profitability in Kano State.
2. Sustainable property developments lead to higher property values and rental yields in Kano State compared to traditional developments.
3. Investors face significant barriers that hinder the profitability of sustainable property development in Kano State.
Scope and Limitations of the Study
This study will focus on the relationship between sustainable property development and investor profitability in Kano State, Nigeria, examining both residential and commercial real estate developments. The study will be limited to properties that have incorporated sustainable features such as energy-efficient technologies, eco-friendly materials, and green building certifications. The research will be limited by factors such as the availability of data on investor profitability and potential biases in self-reported financial outcomes by developers. Additionally, the study will not cover other regions of Nigeria, limiting the generalizability of the findings.
Definitions of Terms
• Sustainable Property Development: Real estate development that incorporates eco-friendly construction methods, renewable energy sources, and sustainable materials to minimize environmental impact and reduce operating costs (Ogunjimi et al., 2024).
• Investor Profitability: The financial return generated from property investments, including rental yields, capital appreciation, and other investment-related income (Tariq et al., 2023).
• Green Building Certification: A system of certification for buildings that meet specific environmental standards, such as the Leadership in Energy and Environmental Design (LEED) certification (Banjoko & Durojaiye, 2023).
