INTRODUCTION AND BACKGROUND

Introduction

Sustainable development has become increasingly urgent worldwide as human activities put growing pressure on the environment and natural resources. The concept of sustainable development emphasizes meeting the needs of the present without compromising the ability of future generations to meet their own needs (Falkenbach et al., 2020). Within efforts undertaken by the global community to achieve more sustainable development, the property and construction sector has an especially crucial role (Lorenz & Lützkendorf, 2018). The built environment accounts for 24% to 40% of total energy use in OECD countries, 30% of raw materials, and 30% to 40% of solid waste generation (Lampropoulos et al., 2020). Thus, property and construction represent the largest contributor to environmental degradation and global impairment of human well-being.

Despite this outsized impact, actors within real estate markets have been slow to respond to the sustainability imperative (Lorenz & Lützkendorf, 2018). In particular, valuers and analysts have yet to integrate sustainability factors into property assessment and pricing fully. Addae-Dapaah et al. (2019) argue that progress toward sustainable development in the property sector depends significantly on incorporating sustainability into property valuation theory and practice. Unless valuers systematically account for sustainability attributes when determining property values, real estate investors and developers will lack incentives to invest in green design and construction. Robinson and McAllister (2015) indicate that properly pricing environmental externalities can shape consumer behavior and environmental improvement.

Nigeria faces immense sustainability challenges due to rapid urbanization, climate change, and energy poverty (Aghimien et al., 2018). At the same time, the country’s adoption of green building design and renewable energy remains limited. As Africa’s largest economy and most populous nation, Nigeria’s real estate sector has expanded rapidly amidst massive unmet housing demand in cities like Abuja (Oladokun & Shiyanbola, 2021). Understanding whether and how the sustainability of residential properties affects their values can support the mainstreaming of green buildings in Nigerian urban development. The findings also have implications for catalyzing policy reforms and investments towards sustainable cities in Nigeria.

Background

A growing body of evidence from developed property markets in the U.S. and Europe demonstrates financial benefits to sustainable real estate investments. Studies have found positive relationships between energy efficiency, green certifications, and sale prices of residential properties (Walls et al., 2017; Fuerst et al., 2016). However, little needs to be done on how sustainability attributes affect property values in emerging real estate markets such as Nigeria.

Nigeria is Africa’s largest economy and most populous nation. Its property sector has expanded rapidly amidst a massive and growing housing deficit, especially in megacities like Lagos and the capital, Abuja (Oladokun & Shiyanbola, 2021). Abuja is the focus of this study due to its unique history, composition, and development patterns. As the first purpose-built capital in modern Africa, Abuja was designed to be a model of urban sustainability. Its master plan emphasized green spaces and strategic zoning to prevent congestion (Ahmed et al., 2019). An analysis by Adeyeri et al. (2017) found increases in vegetative cover across Abuja from 1986 to 2020 due to the preservation of open areas during development. Abuja also stands out for its socioeconomic makeup. As the capital, it has grown rapidly and has a higher concentration of wealthy residents (Obiadi et al., 2019). In Abuja, expatriates and skilled workers in government, finance, oil/gas, and diplomacy also cluster (Obiadi et al., 2019). This elite population may be more receptive to global sustainability concepts and willing to pay for green housing. By examining Abuja, this study can reveal sustainability perceptions among Nigeria’s emerging middle and upper classes. Their preferences help shape markets and incentives for sustainable property development. The findings also affect investments and policies to advance green urbanization nationally.

While research on valuing sustainability has expanded worldwide, only some studies have addressed the Nigerian context. Evaluating Nigerian valuers’ treatment of green features is essential to mainstreaming sustainability in the country’s real estate sector. In the global movement toward sustainable development, it is critical that Nigerian valuers, like their international peers, learn to account for sustainability in property as