PROJECT FEASIBILITY STUDY COMPONENTS AND PERFORMANCE OF REAL ESTATE PROJECTS IN NAIROBI CITY COUNTY, KENYA

Abstract

Feasibility study is a study that is done to determine options and whether the preferred or optimum option for a particular project can achieve the desired objectives given the likely resources available. The feasibility study is one of the critical activities that are done at the first stage, the conceptualization phase of the project cycle. Construction projects in Nairobi City County do not always achieve their set goals. The projects have demonstrated delayed completion time, cost overrun, and poor quality, thus leading to building collapse, high cost of maintenance, disappointed clients, and even un-useful buildings. The general objective of the study was to examine the influence of project feasibility study components on performance real estate projects in Nairobi City County, Kenya. The study's specific objectives were to examine the influence of; market feasibility and operational feasibility on project performance. The study was guided by relation marketing theory and decision theory. This study adopted a descriptive research design. The study targeted 55 property developers and 165 project managers, that is three from each property developer’s firm. Census was used since the target population for the property managers is accessible and easily manageable. Questionnaires were used to collect data. A pilot test was conducted with 17 project managers representing 10% of the sample size. The study used face, content and construct validity. Questionnaire reliability was tested using Cronbach’s Alpha. Data was analyzed using descriptive and inferential statistics with the help of SPSS Version 28. The descriptive statistics included frequency, percentage, and mean. Inferential statistics on the other hand included regression and correlation analysis. Findings were tabulated. Findings show that; there is a strong significant relationship between market feasibility and project performance and a positive significant relationship between operational feasibility and project performance. The recommendations; the real estate firms should use data based on demand, supply, rental, and vacancy rates levels in Kenya to decide on the most suitable investment area and the project managers should intensify their efforts in research on project location since some locations may change based on environmental factors.

Key Words: Project Feasibility, Real Estate Projects, Market Feasibility, Operational Feasibility, Project Performance