CHAPTER ONE
INTRODUCTION
1.1
Background to the Study
Transportation and property are important in physical and economic
development of towns and cities all over the world. Property and land values
tend to increase in areas with expanding transportation networks, and increase
less rapidly in areas without such improvements. Rapid and continued rise in
housing and land prices are expected in cities with transportation improvements
and rapid economic and population growth (Goldberg, 1970).
Man, nations, regions and the world would be severely limited in
development without transportation, which is a key factor for physical and
economic growth (Oyesiku, 2002). Transportation systems and land use are
interdependent. Indeed findings of earlier studies indicate compelling and
consistent connections amongst them (Ewing and Cervero, 2001; Polzin, 2004).
According to Bailey, Mokhtarian, and Littlel (2008), transportation route is
part of distinct development pattern or road network and mostly described by
regular street patterns as an indispensable factor of human existence,
development and civilization. The route network coupled with increased
transport investment result in changed levels of accessibility reflected
through Cost Benefit Analysis, savings in travel time, and other benefits.
These benefits are noticeable in increased catchment areas for services and
facilities like shops, schools, offices, banks, and leisure activities.
Road networks are observed in terms of its components of
accessibility, connectivity, traffic density, level of service, compactness,
and density of particular roads. Level of service is a measure by which the
quality of service on transportation devices or infrastructure is determined,
and it is a holistic approach considering several factors regarded as measures
of traffic density and congestion rather than overall speed of the journey
(Mannering, Walter, and Scott, 2004).
Access to major roads provides relative advantages consequent upon
which commercial users locate to enjoy the advantages. Modern businesses,
industries, trades and general activities depend on transport and transport
infrastructure, with movement of goods and services from place to place
becoming vital and inseparable aspects of global and urban economic survival.
Developments of various transportation modes have become pivotal to physical
and economic developments. Such modes include human porterage, railways,
ropeways and cableways, pipelines, inland waterways, sea, air, and roads (Said
and Shah, 2008).
According to Oyesiku (2002), urbanization in Nigeria has a long
history in its growth and development. Extensive development being a feature of
the 19th and 20th centuries, with concentration of
economic and administrative decision-making in Lagos, Ibadan, Kaduna, Jos, and
Enugu, and high degree of specialization and larger population associated with
greater specialization of goods and services. Wyatt (1997) states that urban
areas have tendency to develop at nodal points in transport network and places
with good road network will possess relative advantage over locations having
poor network. Urban locations with such relative advantage are found where
different transport routes converge with high degree of compactness,
connectivity, density, length and accessibility exhibited within the intra- and
inter- urban road networks.
Ikeja is a typical example in the history of growth and development
of cities in Nigeria. The city became capital of Lagos State in 1976 with
improved road networks developed to cater for increase in concentration of
pedestrian and vehicular movements. Similarly, commercial activities like
banking, retail/wholesale businesses, and professional services congregated to
take advantage of nearness to seat of governance. Concentration of activities
attracted consumers and ancillary service providers. This partly caused
increase in demand for commercial space and its concomitant effects on
commercial property values along arterial roads in the metropolis.
The
present position concerning commercial properties in Ikeja is that majority are
located along arterial roads that deliver much of the vehicular and pedestrian
movements. There have been increases in rental values along the individual
arterial roads although not at equal rates. It is against this background that
this research analyzed the arterial roads, determined the levels of
accessibility, connectivity, traffic density of the individual arterial roads,
examined the pattern of commercial property values and the relationship between
the explanatory variables of the road network in Ikej a Nigeria.
1.2 Statement of the Research Problem
The relationship between transportation and urban property values
has been the focus of many studies (for example, Dewees, 1976; Damm et al,
1980; Wolf, 1992; Singh, 2005). Some of the earlier studies returned positive
relationship between transport and property values while others showed negative
relationship. For instance, in a study on the relationship between rail travel
cost and residential property values, a replacement of streetcar with subway
increased site rent at a location that is perpendicular to the facility within
a one-third mile walk to the station (Dewees, 1976); and there was positive
influence of permanent transportation improvements on land values (Wolf, 1992).
It was established that there was statistically significant relationship
between distance of a parcel of land to the nearest Metro station and land
price (Damm, Lerner-Lam, and Young, 1980), while there was evidence that
residential property prices decrease immediately around the transport
investment or station value uplift through changes in land values (Singh,
2005).
The urban areas all over the world offer a number of advantages in
terms of concentration of people followed by demand for commercial properties
and transportation. Ikeja is a classical example of a city that has developed
rapidly since 1976 when it became the Lagos State capital. Construction of
roads increased substantially with the opening up of residential precincts that
also benefitted from increasing demand for lettable spaces in commercial properties.
Many private companies, retail stores, commercial banks aggregate in the
metropolis to take advantage of opportunities afforded by locations near the
seat of governance thus attracting complimentary services. This led to high
concentration of vehicular and pedestrian movements especially along the access
roads.
The roads exhibit a number of nodes and linkages to form networks of
both arterial and minor routes along which commercial properties locate.
Commercial users displaced residential users, causing sites to be at highest
and best uses with concomitant increases in the values of commercial
properties. Accessibility within the road network is affected by the compact
nature of various routes that sometimes impede volume of traffic. The road network
is made up of nodal points and links that determine the degree of connectivity
and accessibility in the network.
A number of factors affect values of properties. These factors may
be intrinsic or extrinsic. The extrinsic factors include increase in demand for
lettable space, location, condition of adjoining properties, nearness to park
and leisure, local and national economic conditions. External factors are due
to natural characteristics of the property which affect the city where the
property is located. Intrinsic factors arise from within the nature of the
property itself and relate to the physical attributes, including size of room,
state of repair, decoration, and facilities. Other attributes that increase or
decrease the amount that users are willing and able to pay in an open market
transaction include physical characteristics of the structure, change in taste
and demand, effect of adjacent activities, economic activities, inflation, and
changes in legislation. The demand for commercial properties itself is affected
by changes in population, planning and development schemes, legislation, and
availability of good road networks (Hendon, 1971; William, Davies, and Johnson,
1980; Richmond, 1982; Millington, 1982; Olayiwola, Adeleye and Oduwaye, 2006).
Earlier theorists (Burgess, 1925; Hoyt, 1939; Harris and Ullman,
1951; Lean and Goodall, 1977) generally believe that sites adjacent to main
transport routes have relative advantages over those located some distance
away, and other sites located at route intersections possess relative advantage
with greater advantages belonging to sites located at focus of transport
system. These advantages are determined in relation to accessibility, which has
different characteristics in relation to individual sites thus differentiating
between sites in terms of accessibility advantages.
Many of the aforementioned studies emphasized the effects of the
factors on values of properties generally with little consideration given to
road network pattern and its effects on values of commercial properties.
Possible relationships between road networks, location attribute, demand and
supply, and accessibility and commercial property values have therefore
elicited the interest of the researcher in this direction. The relationship
cannot be determined without due consideration given to the explanatory
variables on one hand and commercial property values on the other. The use of
roads leads to a study of urban areas in relation to land uses, especially
commercial properties. It is against this background that this study was
conceived.
1.3
Research Questions
The
foregoing has elicited a number of questions in terms of road network analysis
and values of commercial properties in Ikeja, Nigeria to which answers are to
be proffered. The relationship between arterial road network and commercial
property values cannot be determined without due consideration given to
variables that make up the network, especially those that relate to arterial
roads and other explanatory variables and values of commercial properties. Some
pertinent questions to enable the study attain its stated objectives are as
follows:
1.
What is the pattern of arterial roads in Ikej
a?
2.
What are the spatial pattern and trend of
commercial property values in the study
area?
3.
What are the relationships between commercial
property values and arterial road network in the presence or absence of other
explanatory variables?
4.
What are the individual contributions of the
explanatory variables to variability in commercial property values?
5.
What are the models to explain and predict the
relationship between the explanatory variables and commercial property values?
1.4
Aim and Objectives of the Research
The aim of this research is to analyze
the network of arterial
roads and other
explanatory variables and commercial
property values in Ikeja, while the
specific
objectives are to:
a.
Analyze the arterial road
network pattern in the study area;
b.
Examine the spatial pattern and
trend of demand, supply and values of commercial properties in the study area;
c.
Determine the relationships
between commercial property values and road network, in the presence or absence
of other variables, in the study area;
d.
Determine the contributions of
individual explanatory variables to variability in commercial property values
in the study area;
e.
Derive models for predicting
variability in commercial property values in relation to the explanatory
variables.
1.5
Research Hypotheses
Consequently, the following hypotheses were postulated:
1.
There is no significant relationship between
commercial property values and independent explanatory variables in the study
area.
2.
There are no differences in individual
contributions of explanatory variables to variability in commercial property
values in the study area.
1.6
Justification and Rationale for the Research
It is trite amongst earlier studies on accessibility in relation to
property values that profitability and utility are determined by accessibility.
The greater the accessibility of a location the greater the comparative
advantage, and the greater the comparative advantages the greater the demand
for property at the location. Lean and Goodall (1977), for instance, stated
that urban areas naturally develop at nodal points in the transport network and
those locations with good transport access to other areas have relative
advantage over locations with poorer transport facilities and that urban
locations having such relative advantages are likely to be where transport
routes converge. Similarly, Estate Surveyors/Valuers and Planners believe that
accessibility has great impacts on property values, with properties along major
roads and at nodal points having greater values (Ogunsanya, 1986; Oduwaye,
2004; Omoogun, 2006). However, accessibility discussed in these studies was
based on intuition without empirical basis to justify what relative
accessibility advantages the locations have.
This study borrows techniques found useful in other fields like
operational research, geography, transportation and urban planning to explain
and analyze road network for purpose of determining the relative accessibility
of each of the arterial roads. It is believed that the techniques used in these
fields can be extended to studies in estate management, thereby making
cross-fertilization of research ideas across various fields possible. In this
regard, this research has become relevant in determining the relationship
between arterial road network and values of commercial properties in Ikej a.
In addition, it is essential to establish a technique that may be
useful for determining relative accessibility of locations in the network of
arterial roads. Even when relative advantages are determined, there is need to
develop models that will be useful for predicting commercial property values in
Nigeria. The model may become tool for professional Estate Surveyors and
Valuers to change their practice of using intuition to determine relative
accessibility of locations in a road network. Similarly, there is the need to
predict the supply of, demand for, and fair market values of commercial
properties by developers, Estate Surveyors and Valuers, and feasibility and
viability appraisers in present day’s risks and uncertainty in property
development. This has underscored the importance of this study.
Based on complexity of commercial, industrial, real estate
activities and degree of urbanization exemplified by the study area, deductions
and findings from the study may be applicable to other cities in Nigeria. The
study will also arouse the interest of researchers in estate surveying and
valuation particularly along transportation valuation, an aspect that probably
has not been explored in Nigeria.
A review
of literature showed that studies on Nigerian intra-urban road network using
the graph-theoretic concept to determine accessibility effects on commercial
property values are scanty, available ones were on USA and U.K. This study will
therefore contribute to empirical studies on intra-urban road network and its
influence on commercial property values in Ikeja, Nigeria.
1.7 Scope of the Study
Roads may be classified as international, inter-city or intra-city.
International and inter-city roads are usually major or arterial roads, while
intra-city roads are routes within a city and may be minor or major (arterial).
The study focused on arterial roads in the intra-urban network of Ikeja. There
are ninety roads in Ikeja out which thirty- seven are arterial. From the
thirty-seven arterial roads in the study area, only twenty traverse the
commercial axes while others serve institutional, industrial, and residential
neighbourhoods. This study therefore covered all major roads serving the
commercial axis and inner areas of Ikeja to the exclusion of inter-city roads
such as Lagos/Abeokuta Expressway, Oworonsoki/Apapa Expressway, Ikorodu Road,
and Lagos/Ibadan Expressway that form rings around the study area.
Preliminary study revealed that there are five types of commercial
properties in the study area. These are retail shop premises, banking spaces,
office properties, warehouses, and non-specific commercial properties. In
respect of this research, focus was on offices, shops, banking spaces and other
types of commercial users along the arterial routes to the exclusion of
residential, industrial, and non-specific type of commercial properties.
Due to the magnitude, terrain and complex nature of Lagos State
roads, the study was limited to Ikeja intra-city roads. Ikeja is the
predominant component of Ikeja Local Government, which itself is one of four
zones identified within the larger Lagos metropolis. The four zones (Lagos
Island, Apapa, Lagos Mainland, and Ikeja) represent commercial hubs of Lagos
metropolis, which as revealed by preliminary observation, shows activity areas
where employment, commercial, transportation terminals, and other businesses
are concentrated (Oni, 2008).
Road network analysis was carried out to determine the levels of
accessibility and connectivity of nodal points as well as road and traffic
densities in the hope of predicting commercial property values along each
arterial road. In doing so, only the arterial roads identified as commercial
axes in the study area were the focus of the research to the exclusion of
secondary connector roads, while the relationship between arterial roads and
commercial properties in the study area were examined.
Many
factors have dictated the choice of Ikeja. First, it is the capital of Lagos
State of Nigeria and a socially heterogeneous city with variety of local, state
and federal government roads. Second, the property market in the study area is
well developed and it is possible to identify and analyze variations.
Comprehensive data are available on commercial property values in Ikeja, which
is one of the few cities in Nigeria offering opportunity for comprehensive
survey of its commercial properties, with enlightened occupiers of commercial
premises thereby making data collection possible. Third, a number of property
magazines are in circulation in the city where professional Estate Surveyors
and Valuers advertise commercial properties available for sale or letting. This
makes the property market very active and up-to-date with stakeholders,
prospective tenants, property owners, and investors versatile and knowledgeable
about the goings-on in the market. Fourth, judging from what is applicable in
Nigeria, the Ikeja road network is one of the most complex in terms of
linkages, human and vehicular movements with availability of computerized and
up- to-date data and satellite images of the road network.
1.8
Limitations of the Study
The study focused on analysis of arterial roads and commercial
property values in Ikeja. It did not attempt to investigate the structural
stability of the arterial road network or assess the methods and accuracy of
methods adopted by respondents in fixing the values of commercial properties in
the study area. It simply analyzed accessibility, connectivity, arterial road
network, distance to most central place in the study area, demand and supply of
commercial properties in relation to commercial property values in the study
area. Graph theoretic technique was used to analyze the arterial road network
while opinions of Estate Surveyors and Valuers practicing in the study area
were relied upon. The accuracy, or otherwise, of such opinions although not in
doubt was not investigated.
Some challenges were encountered during the study. By virtue of the
busy nature of Estate Surveying and Valuation practitioners and “carefulness”
of occupiers of the sampled commercial properties, there was considerable
reluctance on their parts to volunteer information. Some of the respondents,
especially Estate Surveyors and Valuers, delayed in completing the
questionnaires and it took personal influence of the researcher (as their
colleague) and assistance of the Lagos State Branch Chairman of the Nigerian
Institution of Estate Surveyors and Valuers to obtain their eventual impressive
responses. In addition, the researcher took time to allay the fears of
Occupiers by educating them about the essence of the research, that it would in
no way expose them to imposition of levies or charges or any liability to the
Lagos State Government.
The populations of commercial properties and occupiers in the study
area were indeterminate. The study population was too large and there was no
census available to ascertain them thereby making determination of their number
somewhat tasking. The researcher however found a way out of the challenge by
using a form of sampling based on estimated population of occupiers and
adopting direct observation of the sampled properties to determine the average
number of occupiers. These limitations however neither affected the quality of
data collected nor the conclusions drawn from it.
The various opinions of Estate Surveyors and Valuers were relied
upon, in some cases, to the exclusion of those of occupiers especially in
respect of questions that required a form of professional opinion. This was
consequent upon the findings from the pilot tests earlier conducted which
showed that the occupiers found such questions too technical. Hence, questions
like rating of the roads in the study area in terms of accessibility, supply
and demand of commercial properties were subsequently limited to the Estate
Surveyors and Valuers.
1.9 The Study Area
Ikeja city is a large component of the Lagos metropolis. Lagos
itself is the largest city in Nigeria, located at 6°34’60”N, 3°19’59”E along
the West African coast and was the capital city of the country before it was
replaced with Abuja on 12th December, 1991. However, Lagos remains
the commercial nerve centre of Nigeria. The city is a typical example in the
history of growth and development of urban areas in Nigeria. The Western Region
administered the city along with Agege, Mushin, Ikorodu, Epe, and Badagry until
Lagos State took off as an administrative entity, and in 1976 Ikeja replaced
Lagos Island as the capital of Lagos State; consequently, more roads were
constructed.
In the
general context, Lagos State is made up of twenty local government council
areas out of which sixteen form the metropolitan Lagos and Ikeja Local
Government area is one of them. Ikeja is both the administrative capital and
Headquarters of Ikeja Local Government Council Area of Lagos State. Ikeja Local
Government Council Area is located in the north-central part sharing boundaries
with Ifako-Ijaiye, Agege, and Alimosho Local Government Council Areas in the
western perimeter; Kosofe, and Mushin Local Government Council Areas in the
eastern side, while Oshodi-Isolo Local Government Council Area forms the
boundary in the southern part and Ogun State in the north as shown in Fig. 1.1