Factors Affecting the Growth of Real Estate Investment Companies in Kenya: a Case of Premier Realty Limited

FACTORS AFFECTING THE GROWTH OF REAL ESTATE INVESTMENT COMPANIES IN KENYA: A CASE OF PREMIER REALTY LIMITED

CATHERINE NKIROTE MBURUGU

UNITED STATES INTERNATIONAL UNIVERSITY- AFRICA

SUMMER, 2019 FACTORS AFFECTING THE GROWTH OF REAL ESTATE INVESTMENT COMPANIES IN KENYA: A CASE OF PREMIER REALTY LIMITED

CATHERINE NKIROTE MBURUGU

A Research Project Submitted to the Chandaria School of Business in partial fulfillment of the Requirement for the Degree of Master of Business Administration

UNITED STATES INTERNATIONAL UNIVERSITY

USIU-AFRICA

SUMMER 2019

STUDENT’S DECLARATION

I, the undersigned, declare that this is my original work and has not been submitted to any other institution, or university other than the United States International University – Africa in Nairobi for academic credit.

Signed: Date:

Catherine NkiroteMburugu (ID No: 610599)

This research project report has been presented for examination with my approval as the appointed supervisor.

Signed: Date:

Dr.Peter Kiriri.

Signed: Date:

Dean, Chandaria School of Business

All rights reserved. No part of this research project report may be photocopied, recorded or otherwise reproduced, stored in retrieval system or transmitted in any electronic or mechanical means without prior permission of USIU-A or the author

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LIST OF TABLES

Table 3.1: Population Distribution ...... 22 Table 3.2: Sample Size Distribution ...... 24 Table 4.1: Response Rate ...... 28 Table 4.2: Years of Dealing with Real Estate ...... 31 Table 4.3: Income per Month...... 32 Table 4.4: Customer related factors on Growth of Real Estate ...... 33 Table 4.5: Correlation Matrix between Customer related Factors and Growth of Real Estate ...... 34 Table 4.6: Model Summary for Effect of Customers related Factors and Growth of Real Estate ...... 35 Table 4.7: Regression Coefficient for Effect of Customers related Factors and Growth of Real Estate ...... 35 Table 4.8: Socio-demographic Factors related to the Growth of Real Estate ...... 37 Table 4.9: Correlation Matrix between Socio-demographic Factors and Growth of Real Estate ...... 38 Table 4.10: Model Summary for Effect of Customers related Factors and Growth of Real Estate ...... 38 Table 4.11: Regression Coefficient for Effect of Socio-demographic Factors and Growth of Real Estate ...... 39 Table 4.12: Managerial Factors/ Practices related to Growth of Real Estate ...... 40 Table 4.13: Correlation Matrix between Managerial Factors/ Practices and Growth of Real Estate ...... 41 Table 4.14: Model Summary for Effect of Customers related Factors and Growth of Real Estate ...... 42 Table 4.15: Regression Coefficient for Effect of Customers related Factors and Growth of Real Estate ...... 42 Table 4.16: Growth of Real Estate ...... 43 Table 4.17: Results of Regression of Independent Variables against Growth of Real Estate ...... 45

LIST OF FIGURES

Figure 4.1: Gender of the Respondents...... 29

Figure 4.2: Type of Customer ...... 29

Figure 4.3: Age of the Respondents ...... 30

Figure 4.4: Level of Education ...... 31

TABLE OF CONTENTS

STUDENT’S DECLARATION ...... ii COPYRIGHT ...... iii LIST OF TABLES ...... iv LIST OF FIGURES ...... v ABSTRACT ...... viii CHAPTER ONE ...... 1 1.0 INTRODUCTION ...... 1 1.1 Background of the Study ...... 1 1.2 Statement of the Problem ...... 5 1.3 General Objective ...... 6 1.4 Specific Objectives ...... 6 1.5 Significance of the Study ...... 6 1.6 Scope of the Study...... 7 1.7 Definition of Terms ...... 8 1.8 Chapter Summary ...... 8

CHAPTER TWO ...... 9 2.0 LITERATURE REVIEW ...... 9 2.1 Introduction ...... 9 2.2 Customer Related Factors on the Growth of Real Estate Companies ...... 9 2.3 Effect of Socio-demographic Factors on the Growth of Real Estate ...... 12 2.4 Effect of the Managerial Practices on the Growth of Real Estate Companies...... 16 2.5 Chapter Summary ...... 20

CHAPTER THREE ...... 21 3.0 RESEARCH METHODOLOGY ...... 21 3.1 Introduction ...... 21 3.2 Research Design ...... 21 3.3 Population and Sampling Design ...... 21 3.4 Data Collection Methods ...... 24 3.5 Research Procedure ...... 25 3.6 Data Analysis Methods ...... 27 3.7 Chapter Summary ...... 27

CHAPTER FOUR ...... 28 4.0 RESULTS AND FINDINGS ...... 28 4.1 Introduction ...... 28 4.2 Response Rate ...... 28 4.3 Demographic Information ...... 28 4.4 Customer related factors on Growth of Real Estate ...... 32 4.5 Socio-demographic Factors related to the Growth of Real Estate ...... 36 4.6 Managerial Factors/ Practices related to Growth of Real Estate ...... 40 4.7 Growth of Real Estate ...... 45

CHAPTER FIVE ...... 48 5.0 DISCUSSIONS, CONCLUSIONS AND RECOMMENDATIONS ...... 48 5.1 Introduction ...... 48 5.2 Summary ...... 48 5.3 Discussion of the Results ...... 50 5.4 Conclusions ...... 53 5.5 Recommendations ...... 55

REFERENCES ...... 57 APPENDICES ...... 62 APPENDIX I: LETTER OF INTRODUCTION ...... 62 APPENDIX II: QUESTIONNAIRE ...... 63 APPENDIX III: KREJCIE AND MORGAN (1970) GUIDE FOR SAMPLE SIZES ...... 70

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ABSTRACT

The general objective of this study was to examine the factors affecting the growth of real estate investment companies in Kenya a case of Premier Realty Limited. The study specifically established customer, socio-demographic factors and managerial factors/ practices that influence the growth of real estate at Premier Realty Limited.

The study used a descriptive survey design. In this study, the target population were customers who purchase land, customers on whose behalf the company manage their rentals and the customers in the form of agencies that is clients who want to sell their property. The target population was a customer base of 2700 respondents. The population was stratified into three categories with different characteristics i) Customers who purchase land –this is where the company buy large parcels of land sub divide and sell to clients and has a population of 2140 respondents ii) Rentals and Management- these are customers on whose behalf the company manage their rentals and has population of 472 respondents. Finally iii) Agency -customers in the form of agencies: this is where the company has clients who want to sell their property thus they bring the same to sell on their behalf and for a commission, their population is 88 respondents

In terms of sampling, the study first of all stratified the customers according to their categories of either customers who purchase land, customers on whose behalf the company manage their rentals and the customers in the form of agencies that is a clients who want to sell their property; then randomly sampled each member from the three categories so that each has equal chance of participation in the study.To obtain an appropriate sample for the respondents, Krejcie& Morgan (1970) sample size determination table was used to sample the 2700 customers of Premier Realty Limited according to each of the three stratum. The appropriate sample size for a population of 2700 was 336 respondents. Collection of data was from both primary and secondary sources.

Primary data was collected using questionnaire. A questionnaire was used for data collection because it offers considerable advantage in administration. A questionnaire was justified for use in this study as it enhanced collection of quantitative data. Furthermore, a questionnaire allowed for collection of data in a cost effective, easy and without the researchers influence on the findings. It was also used to collect both

viii quantitative and qualitative data while interview guide was used to collect qualitative data only. The questionnaires comprised of open and closed ended questions

The researcher did a pilot study to validate the questionnaire by identifying problems with the research design and give the researcher experience with participants, methodology and data collection. The pre-test questionnaire was sent to the respondent sample in the same setting and the same data collection and analysis techniques as was used in the final study. The participants answered the questionnaires and interviews while the researcher waited for same day collection. After data was obtained through questionnaires and interviews, they were edited and the questionnaire pre coded to make it easy for data entry. Quantitative data was categorized and entered into a computer spread sheet in a standard format to allow for computation of descriptive statistics. Thereafter the data was coded and analyzed with the use of a computer in Statistical Package for Social Sciences (SPSS) version 20 programs to produce frequencies, descriptive and inferential statistics.

In order to ensure that the instruments used are valid and reliable, the researcher exposed them to validity and reliability tests. The researcher discussed the validity of the instruments contents with the supervisor to ensure that the instrument questions are relevant for research questions, so that any ambiguity and inconsistency can be corrected. The researcher then personally administered the questionnaires and conducted interviews to the participants. The researcher explained the purpose, clarified points and motivated the respondents to answer questions carefully. The participants answered the questionnaires and interviews while the researcher waited for same day collection.In conclusion, the study revealed that there was high growth in residential construction, there was high growth in commercial construction and increased availability of properties in the market.

The study established that consumer confidence plays an important role in determining the real estate demand. This was revealed in the study that demands for houses depend on consumer confidence. In particular, it depends on people’s confidence about the future of the economy and housing market. The study therefore concurs that the process of getting a property from Premier Realty Limited was convenient and highly rated Premier Realty Limited compared to other players in the market due to customer confidence. Out of the many aspects that can influence a customer’s decision-making behavior, one of the major factors was gender. Men and women approach shopping with different motives, perspectives, rationales, and considerations. The study established that other socio-

ix demographic aspects like the size of family influenced the decision to invest in a property, the respondents were willing to purchase land in sub urban areas that are slightly out of town and they also agreed that age did not deter them from buying my first property. Socio-demographic factors overall have a significant influence of the environmental factors that affect the quality of residential housing.

Premier Realty Limited delivers on their promise due to better managerial practices which including robust communication mechanism. Premier Realty Limited offered complimentary services like valuation; survey and consultancy that support the end to end purchase process which is a clear indication of good management practices. The growth rate of real estate is affected by property prices that are high, customers the study confirms that the return on investment for the real estate industry is high. The mortgage interest rates may discourage the growth of the real estate industry; even though there is increase willingness by banks to lend money to client to purchase property. In conclusion, the study revealed that there was high growth in residential construction, there was high growth in commercial construction and increased availability of properties in the market.

The study recommended that the mortgage interest rates should be drastically lowered in order to speed the growth of the real estate industry. Make gender an integral part of property rights and economic development programs, and ensure meaningful involvement by women in project work planning and implementation from the beginning and throughout all components. County Government of Nairobi should formulate relevant environmental policy guidelines for residential areas such as zoning, pollution and development control laws in view of the fact that households pay more attention to the neighborhood characteristics and location characteristics influencing the quality of housing.

CHAPTER ONE

1.0 INTRODUCTION

1.1 Background of the Study

Construction industry plays a major role in developing and achieving the aims and objectives of a society. Their contribution to national development in developing economies has received wide attention by governments, investors and practitioners (Ofori, 2015). The construction sector is considered a crucial sector for strategic economic significance in developing countries due to the macroeconomic role it plays in fixed capital formation and linkages across sectors due to their significant achievement of national goals of infrastructural development, provision of shelter and job creation (Stasiak-Betlejewska & Potkany, 2015).

The real estate sector is quite diversified in terms of income, geography and types. The sector caters for all people including high, middle and low income earners. The real estate property types include retail, office, residential, industrial and special properties mainly found in urban areas. The real estate industry, much like any other industry, is continuously evolving. The key drivers for the real estate sector ranges from prospect for profitability to the changing face of space complimented by the uncertainty surrounding the sector.

Real estate comprises of land, building on it and other natural resources like minerals and crops and minerals which are immovable. Real estate investment entails different activities ranging from management, ownership, purchase, rental land or sale of real estate for profit (Okumu, 2017).

From a global perspective, the real estate growth in India stands out amongst the most comprehensively perceived areas. It is slated to develop at 30 percent throughout the following decade. The development of this area is well supplemented by the development of the professional workplace and the interest for office space just as urban and semi- urban housing demands (Kapila, 2014).

Sukulpat (2010) indicates that Risks in real estate development arise from Social, Technological, economic exchange rates, volatility of returns and levels of inflation Environmental and Political instability. Tharachai (2013) noted that property developers require innovations and creativity to improve performance. Innovations enable companies to have a competitive advantage over other companies. Through innovations, one is able 1 to increase cash flow, save time, decrease cost, improve quality and minimize uncertainty. The real estate is uniquebecause of different features which are not directly interchangeable. Due to this, identifying and locating properties to invest involves numerous works. Depending on knowledge of viable properties, the decision to purchase individual properties may be highly variable. Information distortion is widely spread in real estate markets due to many property brokers and agents. Despite transaction costs and risks involved, it provides opportunities to investors to obtain properties at bargain prices.

The situation is not different in sub Saharan Africa. In South Africa, Norbert (2014) estimates a real estate growth to the tune of US$ 180 billion by 2020. This alone contributes 5-6 percent of the nation's (GDP). Likewise, in this period, the market size of this segment is relied upon to increase at a compound yearly development rate of 11.2 percent. Retail, hospitality and commercial real estate are also growing significantly, providing the much-needed infrastructure for South Africa’s growing needs.Despite these immense returns in term of wealth accumulation, the real estate industry has consistently failed to realize the major role of bridging the housing gap due to different reasons.Some of this factors include different competing factors such as: rural to urban migration, the urge to own homes, the increased remittances from diaspora, increased foreign investments, increased infrastructure developments among others (Tharachai, 2013). These reasons have led to property prices in the urban areas especially in major cities such as Honkong, South Africa and Nairobi, have witnessed an upward trend.

In Seychelles foreign investors have bought real estate valued property space worth over US$ 2 billion. Responding to an increasingly well-informed consumer and keeping in mind the globalization of the business outlook, real estate developers have also shifted gears and accepted fresh challenges especially that of land scarcity. Real estate developers are struggling to meet the growing demand for housing and the need for managing multiple projects across cities in the country (Raman, 2013)

In Kenya which is East Africa’s biggest economy is growing at a rate of 2.7 per cent annually (Otieno, 2015. The real estate market is increasingly dominated by institutional investors with the property market recording significant growth of up to 25 per cent, including increases in commercial and residential real estate. The continued rise in demand for housing in Nairobi County has not gone unnoticed (Otieno, 2015). Increasing numbers of young households, rapid urbanization, growing middle class and rapid

2 increase in population, migration of people from the rural areas and industrialization has forced the government and realtors to rethink on ways to fulfil the demand for real estate properties (Kenya National Housing Survey, 2014). The report continues to say that investors, both foreign and local are eager to tap into this robust growth. To unlock this sector's potential, realtors and government planners are positioning themselves strategically too.According to Mark (2013) Property development is extremely risky, with many risks witnessed throughout the property development process however, it still remains a lucrative market.

For the past two decades, the Kenyan real estate market has grown exponentially as evidenced by its contribution to the country’s GDP which grew from 10.5% in 2000 to 12.6% in 2012 and 13.8% in 2016.Real estate investment plays crucial role in providing employment opportunities, offering shelter to households, enhancing income distribution and alleviating poverty. However, the real estate industry in Kenya continues to fail to fulfil this fundamental role due to a number of unique factors that affect investment in the sector.Real Estate investment comprises of diversified amount of wealth which can be attested to by huge number of real estate investors and agents. One of the key factors that influence the growth of real estate is the general strength of the economy. This is commonly estimated by financial pointers that are customer, economic and managerial related for example, the GDP, business information, manufacturing activities, interest rates, Government policies and so forth. Extensively, when the economy is slow, so is real estate (Otieno, 2015). The key drivers for the real estate sector ranges from prospect for profitability to the changing face of space complimented by the uncertainty surrounding the sector.

Some of the piece of evidence of investor confidence in the Kenyan real estate commercial property is Old Mutual Property’s recent investment in the Two Rivers Mall. The country real estate sector has also witnessed investments from the Delta Africa Property Fund, Retail Africa and Abland – all from South Africa. AVIC InternationalHolding Corporation of China is also expected to invest over US$ 200M in constructing their Africa Headquarters in Nairobi. The multi-user development has been reported to contain the highest office block in East Africa and will undoubtedly reshape Nairobi’s skyline. All these investments are attributed to the vibrant and ever growing real estate sector in Kenya especially in Nairobi County. The growth of Nairobi country then has led to the opening up of other towns that neighbour it. These are towns like

Kiambu, Thika, Ruiru, Machakos, Kitengela and Limuru. In addition devolution and decentralization of funding had also led to the growth of many other rural towns due to availability of resources as well as empowerment of the people. It is against the backdrop of these immense growthsthat this research has been undertaken to ascertain the factors affecting the growth or real estate companies in Kenya.

In Kenya, real estate attractiveness has been witnessed because many investors have diversified their savings. That is from the low-yield treasury bills to the huge profitable property market. Banks have boosted this attractiveness through introducing and actively marketing different mortgage products especially to property companies. David and Zhu (2014) observed that in lending for the purchase of land for development and existing buildings; banks finance construction projects; lend to non-bank and finance companies that may finance real estate; banks also lend to non-financial firms based on real estate collateral. According to Ripin (2015) Nairobi as a city has many commercialdevelopments with internationally acceptable design and construction standards. Roger (2015) noted that behind this impressive designs and architecture, also lies an enormous industry that has a vast potential to improve across all its constituent components: design, engineering, construction, day-to-day usage and maintenance. Ruitha (2011) notes slow delivery technologies for housing as a factor affecting real estate investment.

Premier Realty Limited (PRL) which is one of the leading real estate agents in Kenya was established in 2001 with the aim of changing the way real estate agents conduct their business in Kenya. The continuous excellence of the organisation in customer service and experience are and continue to be the key pillars that the organisation focuses on.In the past, clients interested in real estate often received inefficient and unreliable information. They did not take time to research and advertise hence the organisations gave clients adequate information to help make informed decisions about investing in the Real Estate.Today, the organisation prides itself in having a wide range of products well- tailored to meet the dynamic needs of its clients., the organisation offers Estate agency, Letting & Management of both residential and commercial properties, buying & selling of Land, Property Development & Project Management on to value added services like valuation, survey as well as consultancy (Premier Reality Source Book, 2017).

1.2 Statement of the Problem

The real estate investment has been on the growth path for over a decade now. The industry has seen massive investment and there are concerns that the trend may slow down (Salmin, 2018). The change is partly attributed to the variability of inflation rate. Although variability of interest rates is a prominent feature of the economy, interest rates change in response to a variety of economic events, such as changes in government policy, crises in domestic and international financial markets, and changes in the prospects for long-term economic growth and inflation. There is a more regular variability of interest rates associated with the business cycle, the expansions and contractions that the economy experiences over time (Mohan& Lewin, 2017). Lieser and Groh(2014) examined the determinants of commercial real estate investments using a set of panel data series for 47 countries from 2007 to 2009. The study explored how different environmental factors affect commercial real estate investment activity through. Their results showed that rapid urbanization, economic growth, and compelling demographics attract real estate investments. From the above studies little attention was paid on the extent to which managerial factors influenced the growth of real estate.

A study conducted by Huang and Ma (2015) on the influence of real estate investment and economic growth in China established that the effect of real estate investment on economic growth exceeded that of economic growth on real estate investment. More importantly, the study pointed out that buy in behaviour of customers played an integral role in fostering increase in real estate investment. Locally, a study was undertaken by Julius (2015) on the determinants of Residential Real Estate Prices in Nairobi. The researcher found out that customer buy in behaviour affected house prices. Kenyan real estate sector has been flourishing between the years 2000 to 2010. Both studies did not establish the extent to which customer focus and other socio-demographic factors influence the growth of real estate, the current study to filled this gap

Juma (2014) carried out a study which was geared at determining the effect of customer relationship management on real estate investment growth in Kenya. The research findings established that a strong positive relationship existed between customer management and real estate growth (Nzalu, 2012). The population in this study comprised of both public and private real estate investors. The findings pointed out customer relationship management as the leading contributor to real estate growth. Inflation was the second contributor followed by interest rates then lastly population. Jumbale, (2015)

5 also carried out a study to ascertain the relationship between house prices and real estate financing in Kenya. The objective of the study being: to examine the relationship between and real estate financing and house prices in Kenya. It was concluded that the changes in housing prices and long-term evolution of real estate financing are positively and significantly related

Studies undertaken both globally and locally show different aspects of real estate in relation to growth and investment. No comprehensive research has been done to ascertain the factors affecting the growth of real estate investment companies in Kenya. Therefore, in relation to this gap, this study specifically focused on the factors affecting the growth of real estate investment companies in Kenya.

1.3 General Objective

The general objective of this study was to examine the factors affecting the growth of real estate investment companies in Kenya a case of Premier Realty Limited.

1.4 Specific Objectives

1.4.1To establish customer related factors on growth of Real Estate at Premier Realty Limited

1.4.2 To determine the socio-demographic factors affecting the growth of real estate companies focusing on Premier Realty Limited in Kenya

1.4.3 To examine the managerial factors/ practices that influences the growth of real estate at Premier Realty Limited.

1.5 Significance of the Study

1.5.1 Realtors Management

This research study may be of great benefit to Premier Realty Limited and other realtors. The findings of this study may provide information on the influences of demand and supply of real estate property and provide information of how those factors can enhance real estate market growth. The findings of this study may also be used by the realtors and agents to ensure that it analyses factors affecting the growth real estate investment companies.

1.5.2 Academicians

The finding may be also of important to researchers and academicians to form a basis for further researches. Research organizations and scholars may be provided with background information if they will want to carry out further research in this area and related areas. The study may also facilitate individual researchers to identify gaps in the current research and carry out research in those areas.

1.5.3 Government

This research finding can benefit the national government as the study may provide information on the rate of growth of real estate industry and its effects on the housing needs of the citizens and this can be used in the formulation of policies related to demand and supply of real estate property. The study may help the government in addressing the perennial housing problem in different parts of the country under the big four agenda programme which includes affordable housing scheme.

1.6 Scope of the Study

The study was conducted in Premier Realty Limited located in Westlands. The population for this study was all the customers of Premier Realty Limited. The data was obtained from the Marketing Department. The aim was to draw respondents from the customer base of the organization.

The geographic segmentation was according to regions within Nairobi, that is, East, West, South, North and the Central Business District (CBD). However this study was conducted in Premier Realty Limited located in Westlands. The main reason for choosing this type of geographical segmentation was to explore the land buying behaviour of different consumers according to their location and thus socio-demographic status.

In terms of population, the study focused only on customers who purchase land, customers on whose behalf the company manage their rentals and the customers in the form of agencies that is clients who want to sell their property.

The study was conducted during the month of July 2018. One of the key limitations of the study was the unwillingness of the respondents to provide the required information. The study researcher assured the participants of confidentiality and anonymity to mitigate against non-willingness to participate.

1.7 Definition of Terms

1.7. 1 Real Estate Investment:

Real estate is the property, land, buildings, air rights above the land and underground rights below the land. The term real estate means real, or physical, property. “Real” comes from the Latin root res, or things. Others say it’s from the Latin word rex, meaning “royal,” since kings used to own all land in their kingdoms (Nzalu, 2012).

1.7.2 Customer Factor

Behavioral perspectives,insights on consumer purchase behavior and explanation drives consumers to purchasehousing like attitude, location living space and presence of public service (Kokli& Vida, 2009).

1.7.3 Socio-demographic Factors

These are factors that influence an investor in real estate particularly on societal, demography. These includes age, gender, location of the property and size of the household including income which affect the growth of real estate (Nithyamanohari & Ambika, 2014)

1.7.4 Managerial Factors.

This is the sum total of leadership and management issues including communication that may influence the growth of real 0estates (David & Zhu, 2014).

1.8 Chapter Summary

This chapter presents the background of the study and outlines the statement of the problem looking at the factors effecting the growth of real estate companies in Kenya a case of Premier Realty Limited. The problem of the study is also elaborated, and the research highlighted. The section also outlines the significance of the study, scope of the study and definition of the major terms that were used in the research. Chapter two tackles literature review for this research based on the research objectives for this study.Chapter three addresses the methodology through which the research will be carried out and it includes the research design, sampling design and techniques utilized and also the data collection methods, analysis and presentation that the researcher will use in carrying-out the study.

CHAPTER TWO

2.0 LITERATURE REVIEW

2.1 Introduction

This chapter reviews literature based on various aspects of factors affecting the growth of real estate investment companies. The purpose of literature review is to outline what has been done previously as far as the research problem being studied is concerned. The literature reviewed in this study is explored under three themes that is studied. This research draws materials from several sources which are related to the objectives of this specific study. The chapter finally presents the chapter summary.

2.2 Customer Related Factorson the Growth of Real Estate Companies

One of the main aims of each company’s development is to promote cooperation with its clients.Customer satisfaction is progressively observed as a conclusive factor in guaranteeing an organization's financial achievement.From Behavioral perspectives,experiences on purchaser buy conduct and clarification were given on what drives buyers to buy housing (Kokli& Vida, 2009). Therefore, customer behavioral research is one f the main method used to understand the driving forces of homebuyers. However, there is an impressive contention on the consolidation of data about customer mentalities, inclinations, and discernment into monetary models of housing and this interest is basic to any decrease of the enormous edge of unexplained difference in housing utilization conduct (DeLisle, 2012). The success of Real Estate marketing depends on properly analyzing the buying behavior of Real Estate customers. To think about the requirements of clients it is unavoidable to comprehend the elements and factors that stalwartly impact the clients to purchase an apartment.

2.2.1 Customer Attitude

Attitude can be regarded as the person’s favor or disfavor toward an action including purchase or renting of a house Al-Nahdiand Abu (2014),it can likewise be psychological inclination that is communicated by assessing a specific element with some level of support or not (Al-Nahdi, 2015). The way individuals respond to and are disposed towards, an objectcan also be used to mean attitude (Yusliza & Ramayah, 2011). Therefore, an individual who had faith in the results because of taking part in a constructive conduct will have and positive attitude of mind toward playing out that conduct, while an individual who had confidence in the results because of taking part in a 9 negative conduct will have a negative mentality toward playing out that conduct (Al- Nahdi & Abu, 2014). Attitude is one of the determinants that influence person's conduct and it impacts shopper aim to purchase durables (Gibler& Nelson, 2003). Studies demonstrated that the attitude of the buyer impacts the acquiring procedure of a specially designed pre-assembled house, in housing and furthermore that it has an orientation on customer aim to buy green in Toronto, Canada (Koklic & Vida, 2009; Numraktrakulet, al., 2012).

2.2.2 Increasing affordability of Customers

Willingness to acquire a property depends mainly on the income of the buyer. In India, affordability of consumers has risen exponentially since the shift from socialism to capitalist economy (Magazine, 2017). This is due to entry of foreign companies which have created more jobs. The affordability has continuously been on an upward trend, creating more demand for housing and commercial property, particularly in cities. In rural areas, however, the demand has not seen the same trend as affordability here has not changed much over the past two decades.

Abelson and Chung (2005) found that price and affordability of houses is one of the factors that affect Australian real estate purchaser’s decisions. In addition, a survey conducted by Opoku and Abdul-Muhmin (2010) sought to examine the housing preferences of low-income consumers in Saudi Arabia, with specific emphasis on their preferences for alternative dwelling types and tenure options, factors influencing their housing decisions, and how these vary across socio-demographic sub-segments of this population segment. Using data collected through a structured self-administered survey in the major urban areas of the country, the study found that majority of respondents prefer the small house to duplex or apartment, and despite their limited incomes the majority prefer buying over renting; the study also found that living space to be one of the most important factors Saudi real estate purchasers used to consider when purchasing real estate. There was a strong relationship between tenure preferences and dwelling type, with respondents who prefer the small house or duplex overwhelmingly opting for the buying option, whilst respondents who choose apartments prefer the rental option. On importance of housing attributes, a factor analysis of 35 housing attributes included in the study produced 10 factors, of which financial considerations, private living space, and aesthetic aspects of the house rank as the top 3 important factors in the low-income consumers' housing decisions.

According to Abu Bakar (2014) population growth and ageing will lead to several real estate subsectors emerging. While office, industrial, retail and residential will remain the main sectors, affordable housing, agriculture, healthcare and retirement will become significant subsectors in their own right. So, shifting demographic trends are likely to create a huge need for new and different real estate by 2020 and beyond. Residential real estate will become more specialised, with local and cultural differences influencing exactly how this evolves. For instance, city apartments for young professionals may be smaller, without kitchens or car parks; there’s likely to be a range of retirement accommodation for the elderly; and families in some emerging economies might well live in gated communities outside the city centres

2.2.3 Availability of property and property prices

Valuation of a property increases with a drop in the availability of properties in a particular area and vice versa (Money Control, 2017). For instance, Central Chennai is one of the most valued parts of the city due to its prime location. There is lack of properties available for sale in this location, and thus, demand is high in spite of its steep prices. Alternatively, when number of units for sale at a location is high and price is high, the demand is low. Given its high population, India is currently suffering from shortage of housing (Ameer & Suchitra, 2016).

Carnoske et al (2010) sought to establish factors that influence real estate development, sale, and perceived demand for activity-friendly communities. A sample of realtors from the National Association of Realtors (n = 4950) and developers from the National Association of Home Builders (n = 162) were surveyed in early 2009 to assess factors influencing homebuyers’ decisions; incentives and barriers to developing TNDs; effects of depressed housing market conditions and financing on sales; trends in buying; and energy considerations (eg, green building).The findings revealed that Realtors real estate believed that homebuyers continue to rank prices, safety and school quality higher than TND amenities.

2.2.4 Customer’s confidence

Consumer confidence plays an important role in determining the real estate demand. When a consumer shows willingness in taking a risk by investing in a property, it shows their confidence in the investment (Han & Kim, 2010). Both investor and business confidence can impact real estate prices, especially in a property market like Dubai where

11 foreign investment has always dominated the sector. Customer confidence is important to keep the market going upwards. Business confidence results in more job creation and hiring that spikes the demand for residential units.Demand for houses depends on consumer confidence. In particular, it depends on people’s confidence about the future of the economy and housing market. If people expect prices to rise, demand will rise so people can gain from rising wealth. In a boom, demand for houses rises faster than incomes as seen in the graph above.

Owusu, Badu and Mensa (2015) investigated into factors that real estate customers consider in selecting their estate agents in Kumasi Metropolis, Ghana for the purpose of creating better customer satisfaction in real estate agency market. The data collection instrument adopted for this study was self-administered questionnaires. The study sample consisted of two hundred and three (203) real estate consumers in Kumasi metropolis. A survey of 203 real estate consumers revealed the factors influencing the selection of real estate agents in the study area. The study found out that real estate consumers are mostly concern about agent’s reputation when deciding on the choice of whom to handle their probably single largest investment which builds customer confidence on the houses. The study also found that 75 representing 37% of the study population employs the services of real estate agents in order to maximize returns on their investment.

2.3 Effect of Socio-demographic Factorson the Growth of Real Estate

These are factors that influence an investor in real estate particularly on societal, demography. These include age, gender, location of the property and size of the household including income which affect the growth of real estate (Nithyamanohari & Ambika, 2014).

2.3.1 Demographic Shift of Customers

Demographics are factors that describe the composition of a population such as their income, migration, population growth and gender. This is one of the big factors having a direct influence on the real estate market. Population growth combined with improved economic performance can lead to an increased demand, which leads to a boom in the real estate market. Demographic shifts will affect demand for real estate fundamentally. The burgeoning middle-class urban populations in Asia, Africa and South America will need far more housing. Meanwhile, the advanced economies’ ageing populations will

12 demand specialist types of real estate, while their requirements for family homes will moderate (Shanu, 2015).Cities will attract the young middle classes, especially in emerging markets. As intense competition for space increases urban density, apartments are likely to shrink. Developers will need to become more innovative about how they use space. The advanced economies’ ageing population will limit house price rises. The Bank for International Settlements’ analysis of advanced economies estimates that the US will suffer pricing deflation averaging about 80 basis points per annum in real prices over the next 40 years, with the impact greater still in continental Europe and Japan.

Ombongi (2014) sought to establishdemographics, housing search, asymmetric information and housing decisions amongst apartment households in Nairobi County. The study sought to determine the mediating effect of housing search on the influence of demographics on housing decisions amongst households. Descriptive cross-sectional design (also called sample survey) was adopted for the study. The target population of the study was all apartment households in Nairobi County who bought their apartments two years preceding the data collection exercise. The respondent for the study was the owner of the apartment house who was taken to be the representative of the household. Using cluster sampling, a sample of 226 households was contacted-199 responded. The study adopted the positivist research philosophy and a descriptive cross-sectional design. SPSS was used to analyze data using factor analysis, cross tabulation, multiple regression analysis (standard) and hierarchical regression analysis. The research instrument was delivered using the „drop-and-pick-later‟ technique. The researcher engaged a research assistant to assist in the data collection upon being adequately trained for the exercise. Study found that demographics overall had a significant influence on choice of neighbourhood and choice of location of house; marital status was the sole factor with a significant influence on source of financing; housing search and asymmetric information had a mediating and moderating influence but their influence was not statistically significant; the joint influence of demographics, housing search and asymmetric information on the 4 housing decisions was greater than the influence of demographics (singly) on all the 4 housing decisions.

2.3.2 Gender Difference in Property Investment

In Mauritius, Bibi-Maryam and Vikneswaran (2016) carried a research to find differences in working women and men in their decision to make an investment in properties in Mauritius, with an objective to find whether gender differences exist in investment decision making. The literature review elaborated on the three variables which contribute to investment decision making have been chosen, namely, risk tolerance, financial literacy and types of investment in properties. The methodology consisted of the planning process in which the research collected data through questionnaires among the working class of Mauritians in the capital city Port Louis, to analyze those data and finally to test the data. The independent samples t-test was chosen as the test of difference to prove the hypotheses of the research. The results obtained revealed that there is a significant difference between gender and risk tolerance while there was no significant difference between gender and financial literacy and also types of property investment. The findings of the research were helpful in finding out possible causes which generated such results.

Chun (2018) examined whether a person’s gender influences his or her real estate trading sentiments. Previous studies have suggested that risk aversion, loss aversion, and expectations of probabilities can affect trading sentiments. Thus, this study inferred that a person’s gender can inform these three factors and thus lead to differences in real estate trading preferences between genders. More noticeable expectation adjustment behavior was observed in men than in women. However, no significant expectation errors were observed in both genders. Moreover, this study observed that gender differences in risk aversion were affected by the fear index, whereas gender differences in loss aversion were affected by unemployment rates. Stock market rallies affected only men’s perceptions toward real estate value. Overall, a more noticeable optimism was observed in men, who were significantly influenced by house price changes.

2.3.3 Age and Property Investment

In Kenya, most empirical investigations have dwelt on demographic characteristics, housing regulations and environmental factors influencing household mobility. Beguy et al. (2010) used longitudinal data in measuring migration flows (household mobility) and demographic trends as a key determinant of mobility in Korogocho and Viwandani settlements of Nairobi between years 2003 to 2007. The study found that gender and age had a strong influence on mobility; the presence of basic amenities like electricity

14 reduced chances of migration; mobility/migration was high among early adults especially between ages 20 to 24; gender was a factor explaining mobility since women were more mobile than men. Beguyet al. (2010) further indicate that educational attainment, marital status, characteristics of a house and ethnic groupings are key factors explaining mobility amongst low income households. The study attributed housing formation to ethnic affiliation (tribe) by finding that about 64% of the residents who owned houses in Nairobi were from the kikuyu community. The study further found that those who were in marital unions were less likely to migrate, mobility within Korogocho and Viwandani settlements was highly attributed to notice of demolition, educational levels, insecurity concerns and marital status.

2.3.4 Size of family/Incomes and Property Investment

Makachia (2010) investigated transformation of housing in formal housing in the rental housing and owner-occupied housing in Kaloleni and Buruburu Estates of Nairobi, Kenya. He found that economic and social factors explained transformation of residential housing in the two estates. The study concentrated on dweller initiated transformations associated with strategies adopted in the design of housing and inherent failures and successes. Insecurity, physical space, amenities, transportation system, size, type and location of house, economic factors, age of household head, size of household, income, occupation and tribal affiliation were key social and economic factors affecting housing transformation within the two estates (Makachia, 2010). Imwati (2010) used cluster sampling in studying planning and the role of demographics in the peri-urban settlement of Mlolongo Township, Nairobi and found that indeed, demographics did influence settlements in Mlolongo. The study focused on the slums and shanties especially the low incomes, unemployed and those living in poor conditions and found that the informal settlements varied in demographics, size, social and ethnic composition with income being the key determinant of housing decisions amongst most households.

2.3.5 Location, Amenities and Property Investment

Oundo (2011) investigated the commercial urban forms in Nairobi with special interest on the impact of location decisions on performance of commercial real estate markets. He found that choice of commercial location decisions were influenced by service charges, easy access to clients/customers, transportation system, rent and other economic factors. Nairobi contributes more than half of Kenya’s GDP and the city has a dispersed urban

15 form. Most commercial centres in Nairobi are located closer to residential neighborhoods (especially Upper hill and Westlands) and hence, accessibility, location and neighborhood characteristics were key consideration for commercial housing decisions. The study found that decisions on location of commercial housing in Nairobi were highly explained by increase in population, easy access to customers, transportation system, supply of utilities, sewerage system, street lighting, quality of building, space for business expansion, rent and service charges (occupational costs), economic growth, the physical state of the inner city and a firm’s individual location decision. The inner city of Nairobi suffers from poor environmental conditions, high rate of crime, inadequate schools, poor housing, traffic congestion amongst others. Clustering of commercial urban units was actually explained by time factor and cost of travel (Oundo, 2011).

The review of local and foreign empirical literature presents several knowledge gaps. Firstly, the studies conceptualize demographic characteristics as factors influencing the likelihood of home ownership but very few studies conceptualize demographics and predictors of real estate investment decisions. In addition, the cited empirical evidence present contradictions on which demographics precisely explain home ownership and real estate investment decisions: the studies also fail to explain whether demographics have a significant influence on housing decision choices. Secondly, most of the reviewed studies on housing market information tend to focus more on search for market information and tests of information efficiency of housing markets as opposed to asymmetric information and how the latter influences housing decisions.

2.4 Effect of the Managerial Practices on the Growth of Real Estate Companies.

Demand for housing in Kenya is increasing and so is home ownership. The prevailing demand and supply conditions however point to the fast that the growth in home ownership is constrained by the preferences in both modality of acquisition, funding options and risks associated to housing development (Centre for Research on Financial Markets & Policy, 2015).Real estate management escapes the thoughtful attention of most senior managers. It often falls within the realm of their responsibilities and of course, they use it in their daily operation but many managers do not appreciate its potential impact on company performance. So they delegate real estate to specialists, who operate on a deal-by-deal basis and consider their decisions as administrative and technical tasks. However, some companies have recognized that by managing real estate

16 as a business function, they can cut costs significantly and, at the same time, increase productivity.

2.4.1 Risk Management and Growth of Real Estate

Emilia (2009) notes that credit risk which is a type of risk faced by financial intermediaries. He noted that the providers of housing loans encounter three types of risks namely, production, management and income risks. Since this risk carries the potential of wiping out enough of a financiers capital to force it into bankruptcy, managing this kind of risk has always been one of the predominant challenges in running a financial intermediaries Broll, et al, (2002). Banks play a crucial role in the financing of real estate through mortgage financing. In lending for the purchase of land for development and existing buildings; banks finance construction projects; lend to non-bank and finance companies that may finance real estate; banks also lend to non-financial firms based on real estate collateral (David & Zhu, 2004).

2.4.2 Management/ Leadership Style and Real Estate Growth

Leadership can prove to be an extremely vital tool when trying to motivate others, especially when creativity is lacking. In developed countries, the grave consequences of the neglect of CRE have been documented. Sharp (2013) challenged the practice of inactive management of Real Estate management. Real estate managers have historically struggled to provide managerial service in an environment in which cost management was a main focus. Little attention was given to the assets of the company, which take huge capital to procure and the decision to procure them is always taken at the topmost level of the organisation, often at the board level and also as a strategic decision. It is thus of concern that not much attention is paid to Real Estate management practices: suggesting that Real Estate management has been neglected in corporate management (Ilsjan, 2007).Real estate business management and leadership go hand-in-hand. The ability to innovate new ideas is equally as important as the ability to manage them. The enigma, however, is that not every manager qualifies as a great leader. An effective leader not only produces the vision for their business the recipe for success, if you will but the actions needed to accomplish it. Rather than control people, true leadership aims to guide, energize and excite those around them.

Existing literature has, however, brought to the limelight that Real Estates (RE) is being undermanaged. For instance, RICS (2002) reported that UK business throws away £18

17 billion a year through inefficient use of RE, which could have improved gross trading profits by up to 13% and contributed to economic development. HWA (2003) found great loss of the value contribution of RE due to the fact that many companies have little ideas of their RE costs and the extent to which their assets could be used to increase productivity and contribute to economic growth. This is in spite of the fact that no corporate body or organisation can function without RE since it is RE that provides space for its operations.

2.4.3 Management Attitude and its influence on the growth of RE

Attitude is the person’s favor or disfavour toward an action (Al-Nahdi et al., 2009). While attitude, according to Yusliza and Ramayah (2011) attitude is defined as the way individuals respond to and are disposed towards, an object.AL-Nahdi et al (2015) sought to establish factors affecting the real estate market in Saudi Arabia. The study investigated the factors influencing Saudi Arabians (Saudis) to purchase real estate. The study examined the effect of attitude, subjective norm, perceived behaviour control, and finance on the intention to purchase real estate. A total of 450 questionnaires were distributed to respondents in Jeddah. Based on 322 questionnaires collected, the results showed that there is a positively significant relationship between attitude, subjective norm and finance toward the intention to purchase real estate, while perceived behaviour control had no effect on the customers' intention to purchase real estate.

On the other hand, Kamal et al (2016) carried an investigation of market factors that affect customers’ buying attitude towards apartment buying in Bangladesh. The study investigated market factors that have been changing the attitude of Real Estate buyers in Bangladesh and ultimately creating the opportunities for Real Estate developers and marketers. The study also examined relationships among the market factors and buying attitude, customers’ buying attitude on buying intention. Total twenty-four (24) attributes was taken into consideration in designing questionnaire for the study. A questionnaire survey method was used with 200 respondents and response rate of 76.5 percent. Initially an exploratory factor analysis had been directed using SPSS (version 21). The study explored four market factors where cultural changes, land problem, urbanization and population pressures and finally raising prices level of building materials acted as antecedents of customers’ buying attitude and created opportunities for the industry.It was found that land problem, urbanization and population pressures have created opportunities for Real Estate industry that have significant impact on customers’ buying

18 attitude except the cultural changes and raising price level. It was also found that buying intention is strongly influenced by buying attitude of the customers.This current study will however establish the influence of attitude of management towards the growth of real estates in Kenya.

2.4.4 Communications and its Influence the Growth of RE

Communication informs and persuades, motivates and encourages and even comforts. Communication also spawns productivity and business growth. Research consistently shows a link between happy, positive employees and high morale and productivity. A good communication plan can increase the success and the potential earnings of a real estate company. The process of creating the plan will help the company to focus on critical factors including what sets the business apart from other real estate firms (Herrick & Gardiner, 2014).Real estate is a people business and the way one communicates has a big impact on success of professionals. Real estate professionals’ help people buy and sell their homes, and attitude and communication skills can make that a good experience or a forgettable one for everyone. Research by Shirina (2017) reveals that 97% of employees surveyed believe that poor communication as a result of inadequate business language skills can create misunderstanding. A staggering 83% of employees report that poor business language skills have resulted in a negative impact on sales, profitability and efficiency of operations in their organisations. Communication is at the centre of real estate in that a vendor wants to hear feedback and results, but maybe not every time you receive an enquiry (Shirina, 2017). Buyers and investors are interested in new property listings, so note their criteria and alert them using their preferred medium when a suitable property comes up, they’ll appreciate your attention to detail (Herrick & Gardiner, 2014).

2.4.5 Public Relation Management and the Growth of RE companies

Onamade and Adejugbe, (2014) opines that a good public relations practice today is an important tool in Real Estate marketing which is often ignored in the hurry to search for business. A real estate PR programme can give Real Estate organizations much more exposure than the traditional advertising in media, and at much less a cost in today1s high cost media marketplace. Public Relations can strengthen the Real Estate marketing and promotion programme with credibility and a targeted exposure and often for a fraction of the cost Real estate PR takes time and effort, but it works, and the lasting results are well worth the effort. The value of a PR programme depends on the professionalism and

19 thoroughness of the analysis and thinking that precedes the execution! Providing this backup requires a high calibre of understanding of the organization, the situation and the marketplace factors or reality. This therefore seeks to establish examine the extent to which public relation management influence the growth of real estate companies influence the growth of real estate in Kenya, particularly Premier Realty Limited.

2.5 Chapter Summary

From the reviewed empirical literature it is evident that there is no empirical study of key effects of economic factors on performance of real estate market in Kenya. The current study sought to determine the key socio-demographic factors that affect real estate market in Kenya and premier reality limited in particular. This may contribute to other studies by ascertaining if the selected variables including gender, location, age and other socio- demographics in Kenya. The literature also reviews about effects of customer related factors on growth of real estate. Literature also focuses on effects of managerial practices on the growth of real estate which is actually a relatively new research area with huge potentials. Researchers on the real estate market, which has drawn little attention hitherto, are limited in studying real estate performance. Chapter three follows with an elaboration of the research techniques that was applied including research design and methodology.

CHAPTER THREE

3.0 RESEARCH METHODOLOGY

3.1 Introduction

This chapter discusses the research methodology used to achieve the objectives of the study. It described the research design, population and sampling design, data collection methods, research procedures and data analysis of the study.

3.2 Research Design

A research design is the overall plan and strategy that informs the key decisions that are adopted in research (Bryman &Bell, 2015). The study used a descriptive survey design Descriptive survey design involves obtaining pertinent and precise information concerning the current status of phenomena and wherever possible draw valid general conclusions from the facts discovered. It also involves posing a series of questions to willing participants and summarizing their responses with statistical indexes and then drawing inferences about a particular population from the responses of the sample (Creswell, 2009). Descriptive survey was justified and appropriate as it allows the researcher to describe, explain and examine facts, trends and patterns that will emerge from the study (Saunders et al., 2016). A descriptive study is undertaken in order to ascertain and be able to describe the characteristics of the variables of interest in a situation (Sekaran & Bougie, 2013). The design enabled the researcher to determine how the independent variables (Customer related factors, Economic and Managerial factors) will affect the dependent variable (Growth of real Estate).

On the other hand, a survey strategy, which is usually associated with the deductive approach was also used since it is the most frequently used to answer who, what, where, how much and how many questions. Surveys often allow for the collection of a large amount of data from a sizeable population in a highly economical way. Often obtained by using a questionnaire administered to a sample, these data are standardized, allowing easy comparison.

3.3 Population and Sampling Design

3.3.1 Population

Population is defined as the entire group of individuals’ events or objects having common observable characteristics (Best & Khan, 2011). Population also refers to all the members

21 of a group to which research findings can be generalized and provide an accurate record of the sampling framework from which the sample is to be drawn (Saunders, Lewis & Thornhill, 2016). In this study, the target population was customers who purchase land, customers on whose behalf the company manage their rentals and the customers in the form of agencies that is clients who want to sell their property. The target population was a customer base of 2700 respondents. The population was stratified into three categories with different characteristics i) Customers who purchase land –this is where the company buy large parcels of land sub divide and sell to our clients and has a population of 2140 respondents ii) Rentals and Management- these are customers on whose behalf the company manage their rentals and has population of 472 respondents. Finally iii) Agency -customers in the form of agencies: this is where the company has clients who want to sell their property thus they bring the same to sell on their behalf and for a commission, their population is 88 respondents. Table 3.1 shows the population strata and matrix.

Table 3.1: Population Distribution

Population Strata Population size Percentage Customers who purchase land 2140 79.3 Customers on whose behalf the company 472 17.4 manage their rentals Customers in the form of agencies 88 3.3 Total 2700 100

3.3.2 Sampling Design

A sample is a representative group of the entire population. Sampling is the process of selecting a sufficient number of elements from the population, so that a study of the sample and an understanding of its properties or characteristics would make it possible for us to generalize such properties or characteristics to the population elements (Sekaran & Bougie, 2013). The design therefore maps out the procedure to be followed to draw the study’s sample.

3.3.2.1 Sampling Frame

Sampling frame is defined as the name of all items of an element from which the sample is essentially drawn and is closely connected to the population (Kothari & Garg, 2014). A sampling frame is a master list used to define a researcher's population of interest. It gives

22 a complete list of all the members of the population to be studied (Saunders et al., 2016). It guides the process of grouping units to the frame, to establish the sample size and allocate the sample to the categories in the sampling frame and final section of the sample (Mugenda, 2012). The list could be of institutions, individuals, geographical areas, or other units (Brown & Churchill, 2014). The sampling frame for this study was customers who purchase land, customers on whose behalf the company manage their rentals and customers in the form of agencies that customers on whose behalf the company sell properties for a commission. The sampling frame of this study came from Premier Realty Limited customer and transaction records.

3.3.2.2 Sampling Technique

According to Cooper and Schindler (2014) a sampling technique is the method of selecting elements from the population that represent the population. It is a process of selecting a number of individuals or objects from a population such that the selected group contains elements of the characteristics found in the entire group (Mugenda, 2012). In the study, stratified and simple random sampling was used to select the respondents from the three categories of customers. This type (Stratified) of sampling is used when the researcher wants to highlight specific subgroups within the population (Vogt, Gardner & Haeffele, 2012). Stratified sampling is also a technique that recognizes the variations or sub-groups in the population. When sub-populations vary considerably, it is advantageous to sample each subpopulation (stratum) independently. Then other sampling technique can be applied within each stratum. The study first of all stratified the customers according their categories of either customers who purchase land, customers on whose behalf the company manage their rentals and the customers in the form of agencies that is a clients who want to sell their property; then randomly sampled each member from the three categories so that each had equal chance of participation in the study.

3.3.2.3 Sample Size

A sample size is a representative group drawn from the entire population and a researcher makes inferences on the whole population by use of the sample (Saunders et al., 2016). A sample size also refers to the number of items to be selected from the universe to constitute a sample. The sample size is an important feature of any empirical study in which the goal is to make inferences about a population from a sample. This study utilized Krejcie& Morgan (1970) sample size table to come up with an adequate sample

23 size. The sample size table allows the researcher to determine the sample size for a given population with 95% certainty. To obtain an appropriate sample for the respondents, Krejcie & Morgan (1970) sample size determination table will be used to sample the 2700 customers of Premier Realty Limited according to each of the three stratum (Appendix III). Krejcie and Morgan (1970) formula used to determine the sample size proportionately according to each stratum population:

S= X2NP (1-P)______

d2 (N-l) + X2P (1-P)

Where

S= Required Sample Size.

N= Number of Customers of Premier Realty Limited Ltd.

P= Population proportion of individual that yield maximum possible sample size (Assumed to be 0.5).

d= Degree of accuracy as reflected by amount of error to be tolerated (taken as 0.05).

X2=Table value of chi-square for one degree of freedom taken as 3.841 for 0.95.

According to Krejcie and Morgan (1970) (Appendix III) sample size determination table, the appropriate sample size will be 336 as shown in Table 3.1.

Table 3.2 Sample Size Distribution

Population Strata Population size Sample Size Percentage Customers who purchase land 2140 266 79.2 Customers on whose behalf the 472 59 17.5 company manage their rentals Customers in the form of agencies 88 11 3.3 Total 2700 336 100

3.4 Data Collection Methods

Data collection is the precise and systematic collection of information that is relevant to the purpose, objectives of the study. According to Mugenda and Mugenda (2003), data collection is defined as the collection of information from a list of respondents in order to

24 draw a conclusion. Collection of data was from both primary and secondary sources. Primary data collection involves going to the field and getting specific information with regards to the objectives of the study. Secondary data collection involves getting information from already existing sources (Sekaran & Bougie, 2013). Primary data was collected using questionnaire. A questionnaire was used for data collection because it offers considerable advantage in administration. A questionnaire is justified for use in this study as it enhanced collection of quantitative data. Furthermore, a questionnaire allowed for collection of data in a cost effective, easy and without the researchers influence on the findings. It was also used to collect both quantitative and qualitative data while interview guide was used to collect qualitative data only. The questionnaires comprised of open and closed ended questions. Section A sought information on the demographic information regarding gender, age, academic qualification and years of experience.

Section B sought information regarding other items laid in the research objectives. The second part of the questionnaire (section B) had questions to reflect the three research objectives and it used a Likert scale. Respondents recorded the factors that influence them most by indicating their agreement with each statement on a 1-5 Likert scale from the strongly agree (1) to the strongly disagree (5). The Likert scale is chosen because it allowed the researcher to perform statistical operations on the data collected from the respondents (Sekaran & Bougie, 2010).

3.5 Research Procedure

According to Kombo and Tromp (2013) data collection is important in research, because it allows for dissemination of accurate information and development of meaningful programmes. Before the actual study, a pilot study was conducted on few respondents by the researcher. A pilot study is a pre-test of the questionnaire on a small number of people conducted to refine methodology before it is used in earnest. The purpose of the pilot study was to validate the questionnaire by identifying problems with the research design and give the researcher experience with participants, methodology and data collection. The pre-test questionnaire was sent to the respondent sample in the same setting and the same data collection and analysis techniques as was used in the final study. During the pilot, the researcher dealt with questions that required clarification and rewording (Walliman, 2011).

To ensure reliability, the researcher carried out a pilot test on 7 staff from Premier Realty Limited. The data from the pilot test was analyzed using Cronbach's alpha (α) which determines the internal consistency of the research instrument, a coefficient value of above 0.7 implies that the research instrument is reliable thus appropriate for use in this study. According to Babbie (2004) a pilot study can comprise of between 4-10 members of the target population whose response will be used to improve on the data collection instrument. According to Bryman and Bell (2007), a pilot test helps to test the reliability and validity of data collection instruments. The researcher collated the responses and improvements suggested on the questionnaire.

The researcher then personally administered the questionnaires and conducted interviews to the participants. The researcher explained the purpose, clarified points and motivated the respondents to answer questions carefully. The participants answered the questionnaires and interviews while the researcher waited for same day collection. The essence of collecting the questionnaires on the same day was to avoid loss of the questionnaires through misplacement or forgetfulness. The researcher collected data from customers through both emails and link on phone found at the Premier Realty Limited customer data base. The researcher administered the instruments through a drop and picks later method so as to minimize the level of interruption in the target respondent’s daily schedules. The researcher then made follow up calls to remind the respondents to fill and return so as to ensure a high response rate.

The participants who were unwilling to share information and the questions were encouraged not to evoke desired responses. To deal with limitations the researcher applied informed consent, confidentiality, anonymity and courtesy to get and select participants who were willing to participate in the study (Walliman, 2011). Before each questionnaire was administered, the researcher explained to the respondents the significance of the research study and the importance of the respondents’ data.

3.6 Data Analysis Methods

Data analysis is a process of bringing order, structure and meaning to the collected data. Data was evaluated for usefulness, centrality and to test emergent understandings (Sekaran & Bougie, 2013). After data is obtained through questionnaires and interviews, they were edited and the questionnaire coded to make it easy for data entry. Quantitative data was categorized and entered into a computer spread sheet in a standard format to allow for computation of descriptive statistics. Thereafter the data was coded and analyzed with the use of a computer in Statistical Package for Social Sciences (SPSS) version 20 programs to produce frequencies, descriptive statistics in form of mean, frequencies and percentages from the data analysis for each variable and inferential statistics in the form of regression. Results of the study were then presented in tables and figures. Qualitative data derived from interview guide was transcribed and grouped topics into meaningful segments or themes

3.7 Chapter Summary

This chapter presents a logical sequence on how the study was carried out in order to answer the research objectives highlighted in chapter one of this study. It has shown the appropriate research design, identified the population of study and the data collection tools, the research procedures and data analysis method. Most importantly, it has outlined the sampling techniques that were used along with the data analysis methods. The next chapter documents the results and findings of the study.

CHAPTER FOUR

4.0 RESULTS AND FINDINGS

4.1 Introduction

This chapter presents the analyzed results and findings of the study on the research questions concerning the data collected from the respondents on factors affecting the growth of real estate investment companies in Kenya and Premier Realty Limited in particular. The first section covers the response rate. The second section is about the background information, which presents demographic presentation of the respondents. The other section deals with the objective questions as answered and the final section will discuss the summary of the whole chapter.

4.2 Response Rate

A response rate is the absolute number of respondents or people took an interest in an research study and it is displayed as rate. Response from the sampling frame for this study were customers who purchase land, customers on whose behalf the company manage their rentals and customers in the form of agencies that customers on whose behalf the company sell properties for a commission. The sampling frame of this study came from Premier Realty Limited customer data base and transaction records. The questionnaires were distributed to 336customer respondents reacting to factors affecting the growth of real estate investment companies in Kenya. Out of this 316 duly responded while 20 did not making a response rate of 94.0% and Table 4.1 presents the reaction rate of the study. From the study, 94.0% of the respondents took part in the study while 6.0% did not respond. The research, thusly, infers that the reaction rate was a great idea to be utilized.

Table 4.1 Response Rate

Response Frequency Percentage Respondent 316 94.0 Did not Respond 20 6.0 Total 336 100

4.3 Demographic Information

In terms socio-demographic information, the study sought to establish the gender, type of customer, age, level of education, number of years they had dealt with Premier Realty

Limited and their income. Figure 4.1 demonstrates the outcome of the gender of the respondents. From the figure, it showed that 63.3% of the respondents were male while 36.7% were female. The findings suggest that the male dominated the property and real estate business.

4.3.1 Gender

The respondents were asked to state their gender and Figure 4.1 presents the findings.

80 70 63.3% 60 50 40 36.7% 30 20 10 0 Male Female

Figure 4.1: Gender of the Respondents

4.3.2 Type of Customer

The respondents were asked to state the type of customer they were and Figure 4.2 presents the findings. Figure 4.2 shows that majority 79.0% were customers who had purchased land from Premier Reality Limited, 17.4% were those customers on whose behalf the company manage their rentals and 3.6% of the respondents were customers in the form of agencies.

90 79.0% 80 70 60 50 40 30 17.4% 20 10 3.6% 0 Customers who Customers on whose Customers in the form of Purchased Land behalf the Co. Manage Agencies

Figure 4.2: Type of Customer

4.3.3 Age of the Respondents

Age of the respondent is a significant factor of study in a population. It helps in planning and making policies since certain behavioral characteristics are attributed to certain age sets and groups. The respondents were asked to state their age and Figure 4.3 presents the findings. As shown from the findings, majority 47.5% of the investors in real estate were aged 31-40 years followed by 25.3% aged 21-30 years and 19.0% were 41-50 years old. This therefore implies that young people aged between 21 to 40 years have in one way or the other invested in the property assets, a majority of them being men. This trend is attributed to the growing population of young people who are forward-looking, armed with investments plans and who are money hungry.

50 47.5% 45 40 35 30 25.3% 25 19.0% 20 15 10 7.6% 5 0.6% 0 Below 20 Years 21-30 Years 31-40 Years 41-50 Years 51-60

Figure 4.3: Age of the Respondents

4.3.4 Level of Education

The respondents were asked to state their level of education and Figure 4.2 presents the findings. As shown in Figure 4.4, majority 120 (38.0%) of the respondents had middle college level of education, followed by 90 (28.5%) with bachelor degree level of education and 80 (25.3%) with secondary school level of education. The study further revealed that 14 (4.4%) had post graduate degree level of education and 10 (3.2%) with primary school level while only 2 (0.6%) had no education. The finding implies those majorities had secondary school level of education and above and therefore were

30 competent enough to answer to issues related to factors affecting the growth of real estate investment companies in Kenya.

40 38.0%

30 28.5% 25.3% 25

10 4.4% 5 3.2% 0.6% 0 No Primary Secondary Middle Bachelor Post Education Level Level College Degree Graduate

Figure 4.4: Level of Education

4.3.5 Years of Dealing with Real Estate

The respondents were asked to state the number of years they had dealt with Premier Realty Limited, the respondents stated as presented in Table 4.2.At the point when requested to demonstrate to what extent they had dealt with premier Realty Company, Table 4.2 demonstrates that 40.0% showed they had dealt with it for over 15 years. Twenty two point eight percent 22.8% for between 11 years and 15 years, (20.0%) had dealt with it less than 5 years. The findings further revealed that 17.2% had dealt with this company for 5-10 years.

Table 4.2: Years of Dealing with Real Estate

Years Frequency Percentage Less than 5 Years 63 20.0 5-10 Years 54 17.2 11-15 Years 72 22.8 Above 15 Years 127 40.0 Total 316 100

4.3.6 Income per Month

In this segment, the respondents were approached to state their income and Table 4.2 presents the findings. As presented in Table 4.2 above, majority 31.6% had an average income of 301,000-400,000 followed by 29.4% who were earning between 101,000- 200,000. The study further revealed that 20.0% earned 201,000- 300,000 and 15.8% earned below 200,000 while just 3.2% earned above 400,000 Kenya Shillings respectively. This therefore implies that the amount of income one has can dictate the buying power and therefore can influence the extent to which one can invest in real estates.

Table 4.3: Income per Month

Income Frequency Percentage Below 100,000 50 15.8 101,000-200,000 91 29.4 201,000-300,000 63 20.0 301,000-400,000 100 31.6 Above 400,000 10 3.2 Total 316 100

4.4 Customer related factors on Growth of Real Estate

Objective one of the study sought to establish the extent to which customer related factors influence the growth of Real Estate at Premier Realty Limited.

4.4.1 Customer Attitude The respondents were asked to state the extent to which customer related factors influenced the growth of Premier Realty Limited which is a real estate company. They indicated their agreement with each statement on a 1-5 Likert scale from the strongly disagree (1) to the strongly agree (5). The findings were as presented in Table 4.4. From the findings the respondents stated that they will again buy a second property from Premier Realty Limited with a mean of 4.42, those who said the company was accessible was at a mean of 4.41 and SD of 1.16.

Table 4.4: Customer Attitude Statement SD D Neither A S A Mean Std A or D Deviat I will again buy a 4.2% 3.5% 3.5% 53.0% 35.3% 4.42 1.34 second property from Premier Realty Limited Premier Realty Limited 6.6% 3.2% 2.0% 55.3% 32.9% 4.41 1.16 management are accessible

4.4.2 Increasing Affordability As presented in Table 4.5, the respondents indicated that The study also revealed that customers at a scale of a mean of 4.18 and SD of 1.33 of would recommend Premier Realty Limited to friend, customers agreed at a scale 4.20 and SD1.16 that they had benefited from their instalment payment plan however those who preferred to buy property in cash were at a lower scale of 1.50 and SD of 1.67. Table 4.5: Increasing Affordability Statement SD D Neither A S A Mean Std A or D Deviat I would recommend 6.8% 3.9% 5.5% 58.4% 25.3% 4.18 1.33 Premier Realty Limited to a friend I have benefited from 4.7% 4.7% 6.7% 40.3% 43.6% 4.20 1.16 their installment payment plan I prefer to buy my 36.4% 32.2% 0.6% 17.7% 12.9% 1.50 1.67 property cash

4.4.3 Availability and Property Price The respondents were asked to state the extent of their agreement in terms of availability and property prices. Table 4.6 indicated that, customers agreed that the process of getting a property from Premier Realty Limited was convenient with a mean of 4.20 and a SD of 1.18 and those who agreed that the prices of the properties offered by Premier Realty Limited are affordable were at mean scale of 3.10 and SD of 1.17 while customers also

33 agreed that information was readily available at Premier Realty Limited with a mean of 4.5 and SD of 1.18. Table 4.6: Availability and Property prices Statement SD D Neither A S A Mean Std A or D Deviat The process of getting a 5.4% 6.4% 4.2% 44.7% 39.3% 4.20 1.18 property from Premier Realty Limited is convenient The prices of the 22.2% 12.3% 3.5% 39.6% 22.2% 3.10 1.17 properties offered by Premier Realty Limited are affordable Information is readily 3.8% 3.2% 3.2% 34.2% 55.7% 4.50 1.18 available at Premier Realty Limited

4.4.4 Customer Confidence In terms of customer confidence, it was agreed that the process of getting property from Premier Realty was convenient (Mean 4.20, SD 1.18), those who highly rated Premier Realty Limited compared to other players in the market were with a mean of 3.33 and SD of 1.67. It was also established that customers who agreed that Premier Realty Limited offered good service were with a mean of 3.24 and SD of 1.35 and. it was also established by customers that staff at Premiere Realty Limited understood their products with a mean of 3.67 and SD of 1.19 as shown Table 4.7 Table 4.7: Customer Confidence Statement SD D Neither A S A Mean Std A or D Deviat The process of getting a 5.4% 6.4% 4.2% 44.7% 39.3% 4.20 1.18 property from Premier Realty Limited is convenient I highly rate Premier 21.6% 11.1% 0.7% 32.8% 33.8% 3.33 1.67 Realty Limited compared to other players in the market Premier Realty Limited 15.9% 17.5% 1.6% 41.4% 23.6% 3.25 1.35 offer good service Staff at Premiere Realty 5.4% 5.4% 15.8% 41.8% 31.6% 3.67 1.19 Limited understand their products

4.4.5 Inferential Statistics

4.4.5.1 Correlation Matrix between Customers related Factors and Growth of Real Estate

Table 4.8 shows that relationship between customers related factors and growth of real estate had a correlation coefficient of 0.618 and an alpha value of 0.001. This therefore shows that the relationship between the two variables had statistical significance and was not just by chance. This is because the alpha value was below 0.05 for it to have statistical significance.

Table 0.8: Correlation Matrix between Customer related Factors and Growth of Real Estate Growth of Real Customers related Estate Factors Growth of Real Estate Pearson 1 .618** Correlation Sig. (2 Tailed) . .001 N 316 316 Customers related Factors Pearson .618** 1 Correlation Sig. (2 Tailed) .001 . N 315 316 ** Correlation is significant at the 0.05 level (2-tailed).

4.4.5.2 Model Summary for Effect of Customers related Factors and Growth of Real Estate

Table 4.9 presents the regression model results for the relationship between customer related factors and growth of real estate. The results show that customer related factors accounted for a 37.2 % on the growth of Premier Realty Real Estate Limited.

Table 4.9: Model Summary for Effect of Customers related Factors and Growth of Real Estate

Model R R Square Adjusted R Std. Error of the Square Estimate 1 .618 .382 .372 0.38167

4.4.5.3 Regression Coefficient for Effect of Customers related Factors and Growth of Real Estate

Table 4.10 presents the regression results for the relationship between customer related factors and its effect on growth of real estate. The results show that customers related factors had a positive and significant effect on growth of real estate and for every single unit increase in customers related factors; there would be a 37.2% effect on growth of real estate.

Table 4.10: Regression Coefficient for Effect of Customers related Factors and Growth of Real Estate

Model Unstandardized Standardized t Sig. Coefficients Coefficients B Std. Error Beta 1 (Constant) 2.679 .278 9.610 .000 Effect of Customers .372 .145 .618 1.459 .000

4.5 Socio-demographic Factors related to the Growth of Real Estate The second objective of the study was to establish the extent to which socio- demographic factors were related to the growth of real estate at Premier Realty Limited in Kenya. 4.5.1 Demographic Shift The respondents were asked to state the extent to which they agreed with various statements of demographic shift on a likert scale of 1 – 5, where: 1 = strongly disagree, and 5 = strongly agree. The findings of the study revealed that incomes of individuals influence property investment decisions with a mean of (4.45, SD 1.19). As shown in Table 4.11 from the findings, the respondents indicated that they would like to buy property near their friends or colleagues (mean 4.31, SD 1.17). Table 4.11: Demographic Shift

Statement SD D Neither A S A Mean Std A or D Deviat My incomes influences my 2.9% 2.6% 5.5% 61.6% 27.4% 4.45 1.19 property investment decisions I would like to buy property 8.5% 4.6% 0.7% 45.9% 40.3% 4.31 1.17 near my friends or colleagues

4.5.2 Gender Difference Table 4.12 shows that the respondents indicated that gender influenced decision to invest in property (mean 4.34, SD 1.22). Out of the many aspects that can influence a customer’s decision-making behavior, one of the major factors is gender. Men and women approach shopping with different motives, perspectives, rationales, and considerations. Gaining an understanding of how gender differences influence purchase decisions and recognizing gender-specific tendencies (not stereotypes) is important for any business that sells to people – and wants to do so more effectively. More noticeable expectation adjustment behavior was observed in men than in women. Table 4.12: Gender Difference

Statement SD D Neither A S A Mean Std A or D Deviat Gender influences decision 3.3% 1.6% 8.2% 32.8% 54.0% 4.34 1.22 to invest in property

4.5.3 Age and Property Investment Another aspect of demography was age and the respondents agreed that age did not deter them from buying my first property (4.25, SD 1.33) as shown in Table 4.13. Table 4.13: Age and Property Investment

Statement SD D Neither A S A Mean Std A or D Deviat My age did not deter me 5.1% 5.7% 4.1% 45.7% 39.3% 4.25 1.33 from buying my first property

4.5.4 Size of Family and Property Investment The respondents informed this study that the size of family also influenced decision to invest in a property with a mean of (4.43, SD 1.22). The study also established that the family participates in the decision making to invest in a property (2.82, 1.55) as shown in Table 4.14.

Table 4.14: Size of Family and Property Investment

Statement SD D Neither A S A Mean Std A or D Deviat The size of my family 2.0% 2.7% 6.8% 42.6% 45.9% 4.43 1.22 influences my decision to invest in a property My family participate in the 24.4% 15.2% 3.8% 23.8% 32.7% 2.82 1.55 property buying decision

4.5.5 Location, Amenities and Property Investment The findings were as presented in Table 4.15. Customers agreed that location of a property influences buying decision with a mean of 4.42 and SD of 1.17, they also agreed that presence of social amenities like roads, electricity and water influences buying decision with a mean of 4.60 and SD of 1.23. The respondents also agreed that they were willing to purchase land in sub urban areas that are slightly out of town (3.43, SD 1.11), the respondents were also willing to purchase a house in the urban setup only (mean 3.20, SD 1.67). Table 4.15: Location, Amenities and Property Investment

Statement SD D Neither A S A Mean Std A or D Deviat Location of a property 3.5% 5.3% 2.8% 52.8% 35.6% 4.42 1.17 influences my buying decision Presence of social amenities 4.2%) 1.9% 1.9% 54.2% 37.7% 4.60 1.23 like roads, electricity and water influences my buying decision I am willing to purchase a 17.1% 15.8% 3.2% 31.6% 32.3% 3.20 1.67 house in the urban setup only I am willing to purchase land 12.9% 17.7% 0.6% 32.2% 36.4% 3.43 1.11 in sub urban areas that are slightly out of town

4.5.6 Inferential Statistics 4.5.6.1 Correlation Matrix between Socio-demographic Factors and Growth of Real Estate

Table 4.16 shows that relationship between socio-demographic factors and growth of real estate had a correlation coefficient of 0.720 and an alpha value of 0.000. This therefore shows that the relationship between the two variables had statistical significance and was not just by chance. This is because the alpha value was below 0.05 for it to have statistical significance.

Table 0.16: Correlation Matrix between Socio-demographic Factors and Growth of Real Estate

Growth of Socio- Real Estate demographic Factors Growth of Real Estate Pearson 1 .720** Correlation Sig. (2 Tailed) . .001 N 316 310 Socio-demographic Factors Pearson .720** 1 Correlation Sig. (2 Tailed) .001 . N 310 316 ** Correlation is significant at the 0.05 level (2-tailed).

4.5.6.2 Model Summary for Effect of Socio-demographic Factors and Growth of Real Estate

Table 4.17 presents the regression model results for the relationship between Socio- demographic factors and growth of real estate. The results show that Socio- demographic factors accounted for a 50.9% on the growth of Premier Realty Real Estate Limited.

Table 4.17: Model Summary for Effect of Customers related Factors and Growth of Real Estate

Model R R Square Adjusted R Std. Error of the Square Estimate 1 .720 .518 .509 0.4216

4.5.6.3 Regression Coefficient for Effect of Socio-demographic Factorsand Growth of Real Estate

Table 4.18 presents the regression results for the relationship between Socio- demographic factors and its effect on growth of real estate. The results show that Socio- demographic factors had a positive and significant effect on growth of real estate and for every single unit increase in Socio-demographic factors; there would be a 50.9% effect on growth of real estate.

Table 4.18: Regression Coefficient for Effect of Socio-demographic Factors and Growth of Real Estate Model Unstandardized Standardized t Sig. Coefficients Coefficients B Std. Beta Error 1 (Constant) 2.785 .227 9.772 .000 Socio- .509 .147 .720 1.447 .000 demographic Factors

4.6 Managerial Factors/ Practices related to Growth of Real Estate The third objective of the study sought to establish the extent to which managerial factors/ practices factors were related to the growth of real estate at Premier Realty Limited in Kenya.

4.6.1 Risk Management and Growth The respondents were asked to state the extent to which they agreed with on a likert scale of 1 – 5, where: 1 = strongly disagree, 2 = disagree, 3 = neither agree nor disagree, 4 = agree and 5 = strongly agree. The findings were as presented in Table 4.19. From the study customers agreed that Premier Realty Limited deliver on their promise (mean 3.22, SD 1.27), they also agreed that Premier Realty Limited offered complimentary services like valuation; survey and consultancy that support the end to end purchase process (mean 3.95, SD 1.16). The study further revealed that Premier Realty Limited tailored flexible solutions to meet customer needs (mean 3.82, 1.26) as shown in Table 4.19.

Table 4.19: Risk Management and Growth

Statement SA D Neither A SD Mean Std agree or Devia disagree Premier Realty 8.6 % 11.1% 15.8% 31.6% 32.7% 3.22 1.27 Limited deliver on their promise Offers 3.2% 2.2% 15.9% 45.5% 33.1% 3.95 1.16 complimentary services like valuation, survey and consultancy that support the end to end purchase process Has tailor flexible 15.1% 7.9% 0.7% 39.3% 37.0% 3.82 1.26 solutions to meet my needs

4.6.2 Management/Leadership Style and Growth The findings showed that Premier Realty Limited was committed to offering quality service to its customers (mean 4.25, SD 1.12), The attitude of managers influences the extent to which customers invested in property with them (Mean 3.44, SD 1.14), Working hours are convenient (Mean 3.33, SD 1.18), wide range of products (Mean 3.64, SD 1.11) and prompt information on new product (Mean 2.90, SD 1.78) as shown in Table 4.20 Table 4.20: Management/Leadership Style and Growth

Statement SA D Neither A SD Mean Std agree or Devia disagree Committed to 5.1% 5.7% 4.2% 45.7% 39.3% 4.25 1.12 offering quality service to its customers Working hours are 14.6% 16.2% 2.6% 33.4% 33.1% 3.33 1.18 convenient Has a wide range of 7.8% 15.6% 3.9% 35.7% 37.0% 3.64 1.11 products always kept 23.6% 15.0% 3.5% 24.2% 33.8% 2.90 1.78 informed Limited

4.6.3 Management Attitude and Growth As shown in Table 4.21, the study was informed that Premier Realty Limited deliver on their promise (Mean 3.22, SD 1.27), committed to offering quality service to its customers (Mean 4.25, SD 1.12) and The attitude of managers (Mean 3.44, SD 1.14). Table 4.21: Management Attitude and Growth

Statement SA D Neither A SD Mean Std agree or Devia disagree Premier Realty 8.6 % 11.1% 15.8% 31.6% 32.7% 3.22 1.27 Limited deliver on their promise Committed to 5.1% 5.7% 4.2% 45.7% 39.3% 4.25 1.12 offering quality service to its customers The attitude of 12.9% 17.7% 0.6% 32.3% 36.5% 3.44 1.14 managers

4.6.4 Communication and Growth In terms of communication mechanism as an attribute of managerial practices, the study revealed that the company used effective communication channels to reach them (Mean 4.35, SD 1.26), had a wide range of products (Mean 3.64, SD 1.11) and always kept customers informed of the new product offering by Premier Realty Limited (Mean 2.90, SD 1.78) as shown in Table 4.22 Table 4.22: Communication and Growth

Statement SA D Neither A SD Mean Std agree or Devia disagree Use effective 3.3% 1.6% 8.2% 32.8% 54.1% 4.35 1.26 communication channels to reach me Has a wide range of 7.8% 15.6% 3.9% 35.7% 37.0% 3.64 1.11 products I am always kept 23.6% 15.0% 3.5% 24.2% 33.8% 2.90 1.78 informed of the new product offering by Premier Realty Limited

4.6.5 Public Relations and Growth

In terms of public relation, the customers informed this study that the company was one of the leading Real Estate Companies in the industry (mean 3.52, SD 1.46), and that Premier Realty Limited had tailor flexible solutions to meet my needs (Mean 3.82 SD 1.26). This information provided this study on the best areas to invest in property purchase. Has tailor flexible solutions to meet my needs as shown in Table 4.23

Table 4.23: Public Relations and Growth

Statement SA D Neither A SD Mean Std agree or Devia disagree

Is one of the leading 13.2% 9.9% 6.6% 33.0% 37.3% 3.52 1.46 Real Estate Companies in the industry

Has tailor flexible 15.1% 7.9% 0.7% 39.3% 37.0% 3.82 1.26 solutions to meet my needs

4.6.6 Inferential Statistics

4.6.6.1 Correlation Matrix between Managerial Factors/ Practices and Growth of Real Estate

Table 4.24 shows that relationship between managerial factors/ practices and growth of real estate had a correlation coefficient of 0.815and an alpha value of 0.003. This therefore shows that the relationship between the two variables had statistical significance and was not just by chance. This is because the alpha value was below 0.05 for it to have statistical significance.

Table 0.24: Correlation Matrix between Managerial Factors/ Practices and Growth of Real Estate

Growth of Managerial Real Estate Factors/ Practices Growth of Real Estate Pearson 1 .815** Correlation Sig. (2 Tailed) . .003 N 315 310 Managerial Factors/ Pearson .815** 1 Practices Correlation Sig. (2 Tailed) .003 . N 310 315 ** Correlation is significant at the 0.05 level (2-tailed).

4.6.6.2 Model Summary for Effect of Managerial Factors/ Practices and Growth of Real Estate

Table 4.25 presents the regression model results for the relationship between managerial factors/ practices and growth of real estate. The results show that managerial factors/ practices factors accounted for a 65.4% on the growth of Premier Realty Real Estate Limited.

Table 4.25: Model Summary for Effect of Customers related Factors and Growth of Real Estate

Model R R Square Adjusted R Std. Error of the Square Estimate 1 .815 .664 .654 0.5212

4.6.6.3 Regression Coefficient for Effect of Managerial Factors/ Practices and Growth of Real Estate

Table 4.25 presents the regression results for the relationship between managerial factors/ practices and its effect on growth of real estate. The results show that managerial factors/ practices had a positive and significant effect on growth of real estate and for every single unit increase in managerial factors/ practices; there would be a 65.4% effect on growth of real estate.

Table 4.25: Regression Coefficient for Effect of Customers related Factors and Growth of Real Estate

Model Unstandardized Standardized t Sig. Coefficients Coefficients B Std. Beta Error 1 (Constant) 2.785 .227 9.915 .000 Managerial factors/ .654 .147 .720 1.418 .000 practices

4.7 Growth of Real Estate

The main dependent variable was economic growth of Premier Realty Limited. The respondents were asked to state the extent to which they agreed with on a likert scale of 1 – 5, where: 1 = strongly disagree, 2 = disagree, 3 = neither agree nor disagree, 4 = agree and 5 = strongly agree on various aspects regarding economic growth of property industry.

4.7.1 Descriptive Statistics

The findings were as presented in Table 4.26. The findings in table 4.26 confirms shows that property prices are high with a mean 4.20 and SD 1.67, the customers indicated that the return on investment for the real estate industry was high (mean 3.93, SD 1.16). Interestingly respondents disagreed that the mortgage interest rates encourage the growth of the real estate industry (mean 1.85, SD 1.27), the study was informed that there was increase willingness by banks to lend money to client to purchase property (mean 3.23, SD 1.52).

The findings of this study indicated that there was high growth in residential construction (mean 3.73, SD 1.09), there was high growth in commercial construction (mean 3.84, SD 1.13) and increased availability of properties in the market (mean 4.17 SD 1.29). It was also interesting to note that the customers strongly agreed that actually there was an increase in property sales (mean 4.10, SD 1.34), the customers also agreed that there was an increase in the rental prices in residential areas (mean 3.88, SD 1.45) and finally the customers agreed that there has been an increase in the interest of home ownership (mean 3.86, SD 1.34) and all these are indicators of economic growth.

Table 4.26: Growth of Real Estate

Statement SD D Neutral A SA Mean STD Devia Property Prices are high 6.8% 6.4% 2.9% 48.2% 35.7% 4.20 1.67 The return on investment 9.6% 10.9% 0.9% 61.1% 17.5% 3.93 1.16 for the real estate industry is high The Mortgage interest 31.3% 25.3% 6.3% 22.1% 14.9% 1.85 1.27 rates encourages the growth of the real estate industry There is increase 15.9% 13.0% 6.5% 32.5% 32.1% 3.23 1.52 willingness by banks to lend money to client to purchase property There is high growth in 9.3% 9.6% 6.4% 35.4% 39.2% 3.73 1.09 residential construction There is high growth in 7.7% 9.0% 6.4% 36.3% 40.5% 3.84 1.13 commercial construction There is increased 6.7% 7.8% 2.0% 47.6% 35.8% 4.17 1.29 availability of properties in the market There is an increase in 3.9% 8.9% 5.3% 43.1% 38.8% 4.10 1.34 property sales There is an increase in the 6.2% 11.1% 2.9% 44.6% 32.9% 3.88 1.45 rental prices in residential areas There has been an 10.1% 8.4% 4.4% 40.7% 36.4% 3.86 1.34 increase in the interest of home ownership

4.7.2Regression Analysis

Multiple regression analysis described by the model below was used to make inferences between the independent variables and the dependent variable. The study used the regression model Y = β0+β1X2+β2X2. + β3X3+β4X4.

The study regressed components of variables including customer related factors, socio- demographic factors and managerial factors/ practices that may affect growth of real estate at Premier Realty Limited in Kenya. The growth of real estate was the dependent variables while customer related factors, socio-demographic factors and managerial factors/ practices were the independent variables. The study used the regression model:

Y = β0+β1X2+β2X2.+ β3X3+β4X4.

Where Y = Dependent Variable = Growth of Real Estate

β0+β1 = coefficients of the independent variables (customer related, socio- demographic and managerial factors/ practices).

To achieve this, a multiple linear regression was done on the following indicators and Table 4.16 presents the findings. a Dependent Variable: Growth of Real Estate

Y= Dependent Variable= Growth of Real Estate

The established combined multiple linear regression equation becomes:

Y = 2.778 = 0.236 X1 + 0.251 X2 +0. 421 X3 + beta

Table 4.27 shows that independent variables like customer related factors influenced the growth of real Estates by 23.6%, socio-demographic factors by 25.1% and managerial practices by 42.1% as they had positive coefficients. This implies that the variables with positive coefficients were directly affecting the growth of Premier Realty Limited. This therefore means that the mentioned factors influenced the growth of the Company by 90.8%, the rest 9.2% could be as a result of other reasons.

Table 0.27: Results of Regression of Independent Variables against Growth of Real Estate

Coefficients (a)

Mode Unstandardized Standardized t Sig. l Coefficients Coefficients B Std. Error Beta 1 (Constant) 2.778 .278 9.610 .000 Customer related factors .236 .145 .085 1.459 .002 Socio-demographic factors .251 .524 .056 .952 .001 Managerial factors/Practices .421 .267 .280 5.105 .000

CHAPTER FIVE 5.0 DISCUSSIONS, CONCLUSIONS AND RECOMMENDATIONS 5.1 Introduction This chapter presents discussion, conclusions and recommendations of the study. It gives a summary of the study, which includes the objectives, methodology and findings. It also discusses the major findings of the study looking at the specific objectives and comparing findings of other studies and scholars. In addition, the chapter presents the conclusions of the study based on the objectives and recommendations for the study and further studies. 5.2 Summary

In terms of sampling, the study first of all stratified the customers according to their categories of either customers who purchase land, customers on whose behalf the company manage their rentals and the customers in the form of agencies that is a clients who want to sell their property; then randomly sampled each member from the three categories so that each has equal chance of participation in the study. To obtain an appropriate sample for the respondents, Krejcie& Morgan (1970) sample size determination table was used to sample the 2700 customers of Premier Realty Limited according to each of the three stratum. The appropriate sample size for a population of 2700 was 336 respondents. Collection of data was from both primary and secondary

48 sources. Primary data was collected using questionnaire. A questionnaire was used for data collection because it offers considerable advantage in administration. A questionnaire was justified for use in this study as it enhanced collection of quantitative data. Furthermore, a questionnaire allowed for collection of data in a cost effective, easy and without the researchers influence on the findings. It was also used to collect both quantitative and qualitative data while interview guide was used to collect qualitative data only. The questionnaires comprised of open and closed ended questions

Objective one of the study sought to establish the extent to which customer related factors influence the growth of Real Estate at Premier Realty Limited. In summary, the respondents stated that they will again buy a second property from Premier Realty Limited; they indicated that the company was accessible. The study also revealed that customers would recommend Premier Realty Limited to friend; the customers agreed that they had benefited from their instalment payment plan however there were those who preferred to buy property in cash. Customers agreed that the process of getting a property from Premier Realty Limited was convenient and highly rated Premier Realty Limited compared to other players in the market. It was established that customers who agreed that Premier Realty Limited offered good service and that the prices of the properties offered by Premier Realty Limited were affordable. Customers agreed that information was readily available at Premier Realty Limited, it was also established by customers that staff at Premiere Realty Limited understood their products.

The second objective of the study was to establish the extent to which socio- demographic factors were related to the growth of real estate at Premier Realty Limited in Kenya. Customers agreed that location of a property influences buying decision; they also agreed that presence of social amenities like roads, electricity and water influences buying decision. The findings of the study also revealed that incomes of individuals influence property investment decisions. the respondents informed this study that the size of family also influences decision to invest in a property. The study also established that the size of family influence the decision to invest in a property, the respondents were willing to purchase land in sub urban areas that are slightly out of town and they also agreed that age did not deter them from buying my first property. From the findings, the respondents indicated that they would like to buy property near their friends or colleagues; they also indicated that gender influence decision to invest in property, the

49 respondents were also willing to purchase a house in the urban setup only and that customers indicated that their families participated in the property buying decision.

The third objective of the study sought to establish the extent to which managerial factors/ practices factors were related to the growth of real estate at Premier Realty Limited in Kenya. From the study customers agreed that Premier Realty Limited deliver on their promise, they also agreed that Premier Realty Limited offered complimentary services like valuation; survey and consultancy that support the end to end purchase process. The study was informed that Premier Realty Limited was committed to offering quality service to its customers, the customer respondent also confirmed that Premier Realty Limited used effective communication channels to reach them and it was reported that the attitude of managers in Premier Realty Limited influenced the extent to which customers invested in property with them. The study further revealed that Premier Realty Limited tailored flexible solutions to meet customer needs, working hours are convenient, that the company was one of the leading Real Estate Companies in the industry. In summary the Company had wide range of products and that Premier Realty Limited always kept its customers informed of the new product.

The main dependent variable was economic growth of Premier Realty Limited. The findings confirmed that property prices were high, customers also indicated that the return on investment for the real estate industry was high. Interestingly respondents disagreed that the mortgage interest rates encourage the growth of the real estate industry, the study was informed that there was increase willingness by banks to lend money to client to purchase property. The findings of this study indicated that there was high growth in residential construction, there was high growth in commercial construction and increased availability of properties in the market. It was also interesting to note that the customers strongly agreed that actually there was an increase in property sales, the customers also agreed that there was an increase in the rental prices in residential areas and finally the customers agreed that there has been an increase in the interest of home ownership and all these are indicators of economic growth.

5.3 Discussion of the Results 5.3.1 Customer related factors on Growth of Real Estate The respondents stated that they will again buy a second property from Premier Realty Limited; they indicated that the company was accessible. The study also revealed that customers would recommend Premier Realty Limited to friend; the customers agreed that

50 they had benefited from their installment payment plan however there were those who preferred to buy property in cash. Customers agreed that the process of getting a property from Premier Realty Limited was convenient and highly rated Premier Realty Limited compared to other players in the market. This concurs with Kokli and Vida (2009) who indicated that customer satisfaction is a conclusive factor in guaranteeing an organization's financial achievement including buying conduct of housing. DeLisle (2012) agrees that customer mentalities, inclinations, and discernment into monetary models of housing and this interest is basic to any decrease of the enormous edge of unexplained difference in housing utilization conduct.

The study revealed that customers would recommend Premier Realty Limited to friend. It was established that customers who agreed that Premier Realty Limited offered good service and that the prices of the properties offered by Premier Realty Limited were affordable. Customers agreed that information was readily available at Premier Realty Limited, it was also established by customers that staff at Premiere Realty Limited understood their products. Yusliza and Ramayah (2011) also indicated that the way individuals respond to and are disposed towards, an object can also be used to mean attitude and this can guide the customer as to whether to inform a friend or not. From this study, the customers benefited from their installment payment plan however those who preferred to buy property in cash. As Magazine (2017) rightly puts it, willingness to acquire a property depends mainly on the income of the buyer. It confirms Abelson and Chung (2005) who found that price and affordability of houses is one of the factors that affect real estate purchaser’s decisions. Han & Kim, (2010) agrees that consumer confidence plays an important role in determining the real estate demand.

5.3.2 Socio-demographic Factors related to the Growth of Real Estate

Customers agreed that location of a property influences buying decision; they also agreed that presence of social amenities like roads, electricity and water influences buying decision. This confirms Shanu, (2015) who found out that socio-demographic factors which include income, migration, population growth and gender had a direct influence on the real estate market. Customers agreed that location of a property influences buying decision; they also agreed that presence of social amenities like roads, electricity and water influences buying decision. The findings of the study also revealed that incomes of

51 individuals influence property investment decisions. the respondents informed this study that the size of family also influences decision to invest in a property. The study also established that the size of family influence the decision to invest in a property, the respondents were willing to purchase land in sub urban areas that are slightly out of town and they also agreed that age did not deter them from buying my first property. The findings of the study also revealed that incomes of individuals influence property investment decisions. Abu Bakar (2014) agrees that population growth and ageing leads to several real estate subsectors emerging. The respondents informed this study that the size of family also influences decision to invest in a property.

From the findings, the respondents indicated that they would like to buy property near their friends or colleagues; they also indicated that gender influence decision to invest in property, the respondents were also willing to purchase a house in the urban setup only and that customers indicated that their families participated in the property buying decision. Carnoske et al (2010) also indicated that size of family and income influence the decision to invest in a property. The respondents were willing to purchase land in sub urban areas that are slightly out of town and they also agreed that age did not deter them from buying my first property. Bibi-Maryam and Vikneswaran (2016) revealed that there is a significant difference between gender and risk tolerance while there was no significant difference between gender and financial literacy and also types of property investment. In Kenya Ombongi (2014) concurs that that demographics overall had a significant influence on choice of neighbourhood and choice of location of house; marital status was the sole factor with a significant influence on source of financing.

5.3.3 Managerial Factors/ Practices related to Growth of Real Estate The prevailing demand and supply conditions however point to the fast that the growth in home ownership is constrained by the preferences in both modality of acquisition, funding options and risks associated to housing development. From the study customers agreed that Premier Realty Limited deliver on their promise, they also agreed that Premier Realty Limited offered complimentary services like valuation; survey and consultancy that support the end to end purchase process. This confirms Sharp (2013) who indicated that leadership is extremely vital tool when trying to motivate others, especially when creativity is lacking in order to deliver on the promise. Premier Realty Limited was committed to offering quality service to its customers, the customer respondent also

52 confirmed that Premier Realty Limited used effective communication channels to reach them and it was reported that the attitude of managers in Premier Realty Limited influenced the extent to which customers invested in property with them.

The study was informed that Premier Realty Limited was committed to offering quality service to its customers, the customer respondent also confirmed that Premier Realty Limited used effective communication channels to reach them and it was reported that the attitude of managers in Premier Realty Limited influenced the extent to which customers invested in property with them. The study further revealed that Premier Realty Limited tailored flexible solutions to meet customer needs, working hours are convenient, that the company was one of the leading Real Estate Companies in the industry. Kamal et al (2016) concurs that attitude of both sellers and buyers in very important in property business. They confirmed that buying intention is strongly influenced by buying attitude of the customers. On the other hand, Herrick and Gardiner 2014) noted that communication as an aspect of managerial practices informs and persuades, motivates and encourages and even comforts. Communication also spawns productivity and business growth. A good communication plan can increase the success and the potential earnings of a real estate company. 5.4 Conclusions 5.4.1 Customer related factors on Growth of Real Estate The study concludes that one of the main aims of each company’s development is to promote cooperation with its clients. Customer satisfaction is progressively observed as a conclusive factor in guaranteeing an organization's financial achievement. Thereforeit is imperative that employees at PR understand their products and this established that this was done by gauging the confidence levels of their sales team through the responses from the customers. Consumer confidence plays an important role in determining the real estate demand. When a consumer shows willingness in taking a risk by investing in a property, it shows their confidence in the investment. This was revealed in the study where customers would recommend Premier Realty Limited to friend thus an opportunity to use referral and the next marketing options. Customer confidence is important to keep the market going upwards. Business confidence results in more job creation and hiring that spikes the demand for residential units. Demand for houses depends on consumer confidence. In particular, it depends on people’s confidence about the future of the economy and housing market. The study therefore concurs that the process of getting a

53 property from Premier Realty Limited was convenient and highly rated Premier Realty Limited compared to other players in the market due to customer confidence.

5.4.2 Socio-demographic Factors related to the Growth of Real Estate

Out of the many aspects that can influence a customer’s decision-making behavior, one of the major factors was gender. Men and women approach shopping with different motives, perspectives, rationales, and considerations. Gaining an understanding of how gender differences influence purchase decisions and recognizing gender-specific tendencies(not stereotypes!) is important for any business that sells to people – and wants to do so more effectively. More noticeable expectation adjustment behavior was observed in men than in women. The study established that other socio-demographic aspects like the size of family influenced the decision to invest in a property, the respondents were willing to purchase land in sub urban areas that are slightly out of town and they also agreed that age did not deter them from buying my first property. Socio-demographic factors overall have a significant influence of the environmental factors that affect the quality of residential housing. This is based on the findings of the study that demographics in deed explain choice of the social setting where a household chooses to buy an apartment house (neighborhood) and location related considerations such as amenities, good road network and availability of public utilities.

5.4.3 Managerial Factors/ Practices related to Growth of Real Estate This study concludes that indeed Premier Realty Limited deliver on their promise due to better managerial practices which including robust communication mechanism. Premier Realty Limited offered complimentary services like valuation; survey and consultancy that support the end to end purchase process which is a clear indication of good management practices. In conclusion, Premier Realty Limited was committed to offering quality service to its customers, the customer respondent also confirmed that Premier Realty Limited used effective communication channels to reach them and it was reported that the attitude of managers in Premier Realty Limited influenced the extent to which customers invested in property with them.

5.4.4 Growth of Real Estate

The growth rate of real estate is affected by property prices that are high, customers the study confirms that the return on investment for the real estate industry is high. The

54 mortgage interest rates may discourage the growth of the real estate industry; even though there is increase willingness by banks to lend money to client to purchase property. In conclusion, the study revealed that there was high growth in residential construction, there was high growth in commercial construction and increased availability of properties in the market.

5.5 Recommendations 5.5.1 Suggestions for Improvement Based on the study findings, the following recommendations are made: 5.5.1 Customer related factors on Growth of Real Estate The growth rate of real estate is affected by property prices that are high, customers the study confirms that the return on investment for the real estate industry is high. The mortgage interest rates should be drastically lowered in order to speed the growth of the real estate industry.

5.5.2 Socio-demographic Factors related to the Growth of Real Estate

Make gender an integral part of property rights and economic development programs, and ensure meaningful involvement by women in project work planning and implementation from the beginning and throughout all components. Since socio-demographic characteristics overall were found to have more significant influence on choice of neighborhood and choice of location and size of house, the relevant housing, infrastructure and development control departments within then national government and the County Government of Nairobi should formulate relevant environmental policy guidelines for residential areas such as zoning, pollution and development control laws in view of the fact that households pay more attention to the neighborhood characteristics and location characteristics influencing the quality of housing.

5.5.3 Managerial Factors/ Practices related to Growth of Real Estate From the research it is evident that the pool of new customers sits with the already existing customers. Considering the fast that many customers were willing to refer a new client to the business, and then Premier Realty Limited should leverage on this and get new customers who in turn would impact on the growth of the business. Considering that many of the respondents were happy to invest in the sub urban areas, the business should

55 explore more projects in this location that would meet this client’s needs. Premier realty limited could consider seeking different funding methods for the clients so as to enable them buy property. This was because the majority of the clients said that mortgages were expensive. 5.5.2 Recommendations for Further Research

This research provides other considerations, not due to its limitations, but to the richness of the information found.

i. This study was carried out at Premier Realty Limited in Nairobi County; a similar study should be carried in the Counties to establish the similarities and difference in trend regarding factors affecting the growth of real estate investment companies in Kenya. ii. This study forced on one real estate company; a similar study could be carried out across several real estate companies to establish if the trend is the same.

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APPENDICES

APPENDIX I: LETTER OF INTRODUCTION

Catherine NkiroteMburugu

Mobile No: 0722720091

Email: [email protected]

4th February2019

Dear Sir, Madam

RE: REQUEST TO PARTICIPATE IN A RESEARCH STUDY

I am Catherine Mburugu, a post graduate student at USIU-Africa. I am carrying out survey entitled: “FACTORS AFFECTING THE GROWTH OF REAL ESTATE INVESTMENT COMPANIES IN KENYA: A CASE OF PREMIER REALTY LIMITED”. To complete the study, I will need to collect relevant information from you. I am therefore requesting permission to collect and use your information which will be achieved by using the accompanying questionnaire. Kindly note that any information you give will be treated with confidentiality and at no instance will it be used for any other purpose other than this study. Your assistance will be highly appreciated.

Yours truly,

Catherine NkiroteMburugu.

APPENDIX II: QUESTIONNAIRE

This questionnaire has statements regarding the FACTORS AFFECTING THE GROWTH OF REAL ESTATE INVESTMENT COMPANIES IN KENYA: A CASE OF PREMIER REALTY LIMITED. Kindly take few minutes to complete the questionnaire as guided. Your responses will be handled confidentially and ethically.

Thank you for agreeing to participate in this academic study.

SECTION A: GENERAL /DEMOGRAPHIC DATA

1. Indicate your Gender Male [ ] Female [ ]

2. State the type of customer you are a. Customer who purchase land [ ] b. Customer on whose behalf the company manage their rentals [ ] c. Customers in the form of agencies [ ]

3. Indicate the age group that best describes your age bracket

Age (Years) Below 20 21-30 31-40 41-50 51-60 Above 60 Years Years Years Years Years Years Response

4. Your education level

Level of No Primary Secondary Middle Bachelors Post Education Education Level Level Colleges Degree Graduate

Response

5. How long have you dealt with Premier Realty Limited

Period in Below 1 1-5 Years 6-10 11-15 Above 15 (Years) year Years Years Years

Response

6. What is your average income per month?

Period in Below Kshs. Kshs. Kshs. Kshs. Above (Years) Kshs. 100,001 200,001 300,001- 400,001- Kshs.500,001 100,000 – -300,000 400,000 500,000 200,000 Response

SECTION B: Customer Related Factors on Growth of Real Estate Please indicate by ticking the appropriate box the extent to which you agree or disagree with each of the statements below regarding customer related factors on growth of real estate. The following scale is applied for all statements on a scale of 1 – 5, where: 1 = strongly disagree, 2 = disagree, 3 = neither agree nor disagree, 4 = agree and 5 = strongly agree. Please indicate with (√) the extent to which you agree that the following:

Statement Strongly Disagree Neither Agree Strongly disagree agree or agree disagree

1 I willagain buy a second property from Premier Realty Limited

2 Premier Realty Limited management are accessible

3 I would recommend Premier Realty Limited to a friend

4 I have benefited from their installment payment plan

5 I prefer to buy my property cash

6 The process of getting a property from Premier Realty Limited is convenient

7 I highly rate Premier

Realty Limited compared to other players in the market

8 Premier Realty Limited offer good service

9 The prices of the properties offered by Premier Realty Limited are affordable

10 Information is readily available at Premier Realty Limited

11 Staff at Premiere Realty Limited understand their products

In your opinion what are the other customer related factors that influence the growth of real estate?

SECTION C: Socio-demographic Factors Affecting the Growth of Real Estate Please indicate by circling the appropriate box the extent to which you agree or disagree with each of the statements below regarding socio-demographic factors affecting growth of real estate. The following scale is applied for all statements on a scale of 1 – 5, where: 1 = strongly disagree, 2 = disagree, 3 = neither agree nor disagree, 4 = agree and 5 = strongly agree. Please indicate with (√) the extent to which you agree that the following:

Statement Strongly Disagree Neither Agree Strongly disagree agree or agree disagree 1 Location of a property influences my buying decision 2 Presence of social amenities like roads, electricity and water influences my buying decision 3 My incomesinfluencesmy property investment decisions 4 The size of my family influences my decision to invest in a property 5 I am willing to purchase land in sub urban areas that are slightly out of town 6 My age did not deter me from buying my first property 7 I would like to buy property near my friends or colleagues 8 Gender influences decision to invest in property 9 I am willing to purchase a house in the urban setup only 10 My family participate in the property buying decision

In your opinion what are the other socio-demographic factors that influence the growth of real estate?

SECTION D: Managerial Factors/ Practices Please indicate by circling the appropriate box the extent to which you agree or disagree with each of the statements below regarding management practices/ factors affecting growth of real estate. The following scale is applied for all statements on a scale of 1 – 5, where: 1 = strongly disagree, 2 = disagree, 3 = neither agree nor disagree, 4 = agree and 5 = strongly agree. Please indicate with (√) the extent to which you agree that the following: Statement Strongly Disagree Neither Agree Strongly disagree agree or agree disagree 1 Premier Realty Limited deliver on their promise 2 Premier Realty Limited offers complimentary services like valuation, survey and consultancy that support the end to end purchase process 3 Premier Realty Limited are committed to offering quality service to its customers 4 Premier Realty Limited use effective communication channels to reach me 5 The attitude of managers in Premier Realty Limited influences the extent

to which I invest in property with them 6 Premier Realty Limitedtailorflexible solutions to meet my needs 7 Premier Realty Limited working hours are convenient 8 Premier Realty Limited is one of the leading Real Estate Companies in the industry 9 Premier Realty Limited has a wide range of products 10 I am always kept informed of the new product offering by Premier Realty Limited

In your opinion what are the managerial practices/ factors that influence the growth of real estate?

SECTION E: Growth of Real Estate Please indicate by circling the appropriate box the extent to which you agree or disagree with each of the statements below regarding growth of PRL estate. The following scale is applied for all statements on a scale of 1 – 5, where: 1 = strongly disagree, 2 = disagree, 3 = neither agree nor disagree, 4 = agree and 5 = strongly agree. Please indicate with (√) the extent to which you agree that the following:

Statement Strongly Disagree Neither Agree Strongly disagree agree or agree disagree 1 The Property Prices are high 2 The return on investment for the real estate industry is high 3 The Mortgage interest rates encourages the growth of the real estate industry 4 There is increase willingness by banks to lend money to client to purchase property 5 There is high growth in residential construction 6 There is high growth in commercial construction 7 There is increased availability of properties in the market 8 There is an increase in property sales 9 There is an increase in the rental prices in residential areas 10 There has been an increase in the interest of home ownership

THANK YOU

APPENDIX III: KREJCIE AND MORGAN (1970) GUIDE FOR SAMPLE SIZES

N S N S N S N S N S 10 10 100 80 280 162 800 260 2800 338 15 14 110 86 290 165 850 265 3000 341 20 19 120 92 300 169 900 269 3500 346 25 24 130 97 320 175 950 274 4000 351 30 28 140 103 340 181 1000 278 4500 354 35 32 150 108 360 186 1100 285 5000 357 40 36 160 113 380 191 1200 291 6000 361 45 40 170 118 400 196 1300 297 7000 364 50 44 180 123 420 201 1400 302 8000 367 55 48 190 127 440 205 1500 306 9000 368 60 52 200 132 460 210 1600 310 10000 370 65 56 210 136 480 214 1700 313 15000 375 70 59 220 140 500 217 1800 317 20000 377 75 63 230 144 550 226 1900 320 30000 379 80 66 240 148 600 234 2000 322 40000 380 85 70 250 152 650 242 2200 327 50000 381 90 73 260 155 700 248 2400 331 75000 382 95 76 270 159 750 254 2600 335 100000 384

N = Population Size

S = Sample Size