| dc.description.abstract | This study was set to investigate risk management and its effect on the performance of
commercial real estate entrepreneurial investments in Kenya. Objectives of the study
include determination of how technical risk management, financial/economic risk
management, market risk management, environmental risk management, political risk
management and operational risk management affect the performance of commercial real
estate entrepreneurial investments in Kenya. The study also sought to find the moderating
effect of the adoption of risk management procedure on the performance of commercial
real estate entrepreneurial investments. The research was based on and guided by four
theories of entrepreneurship and risk management, namely; Strategic Planning Theory,
Risk and Uncertainty-Bearing Theory, Enterprise Risk Management Theory and
Contingency Theory. The study adopted a descriptive survey design having a quantitative
approach. The target population for this study was 9,320 real estate entrepreneurs
comprised of 884, 95, 320 and 8,021 sourced from SoftKenya directory, Kenya
Developers Association, Estate Agent Registration Board and National Construction
Authority respectively having their registered offices in Nairobi, Nakuru, Kisumu and
Eldoret. A sample size of 384 participants was selected and using a stratified random
sampling procedure, participants that participated in the study were identified and later
served with online questionnaires using their emails. The collected data was analysed
descriptively and inferentially using frequency distribution – mean and standard
deviation, Chi-square, Pearson’s Correlation and multiple linear regression analysis with
the aid of the Statistical Package for Social Sciences (SPSS), version 20.0. The
significance of each risk factor within the categories was examined using Risk Significant
Index method. Out of 26 risk factors, inadequate site investigation, delayed payments to
construction teams, improper market feasibility study, corruption and bribery,
incomplete environmental analysis and extended voids/low uptake after completion were
found to be the most critical risk factors in each risk category. The study established that
technical risk management, financial/economic risk management, environmental risk
management and operational risk management significantly affected performance while
adoption of risk management procedure by the real estate entrepreneurs was found to
have a significant moderating effect on the performance of commercial real estate
entrepreneurial investments. Market risk management and political/legal risk
management were found not to significantly affect the performance. A small percentage
of the respondents use systematic risk management procedure while most of the
entrepreneurs depend on judgment, intuition and general experience obtained in the real
estate industry in managing their risks. This is attributed to lack of information on the
type of risks and their criticality on one side and lack of adequate knowledge on risk
management among the entrepreneurs. The study recommends concern authorities to
ensure that real estate entrepreneurs undertake adequate site investigation, adhere to
environmental requirements, and establish a one-stop-shop for document approvals in
each County to minimise bureaucracy and corruption. The government should enhance
policy issues that will help in increased adoption of risk management procedure and
increase knowledge on real estate entrepreneurial investments risks and management
amongst real estate entrepreneurs. The policy framework should include as a prerequisite
submission of a risk management plan and staff training in risk management in any
commercial real estate entrepreneurial investment approval.
Keywords: Entrepreneurship, risk management, risk factors, performance, commercial
real estate entrepreneurial investments. | en_US |
