Assessment of Structural Deterioration and its Effect on Property Valuation of Commercial Facilities in Anambra State, Nigeria

Abstract

Structural deterioration is a major physical and economic risk to commercial real estate because visible and hidden defects can increase maintenance obligations, shorten effective economic life, reduce lettability and weaken buyers' and lenders' perceptions of risk. This study assessed the nature and severity of structural deterioration in commercial facilities in Anambra State, Nigeria, and examined its effect on property valuation. A quantitative cross-sectional design was adopted, combining a structured questionnaire administered to 120 property and built-environment professionals with inspection and valuation records for 36 commercial facilities in Awka, Onitsha and Nnewi. A five-point deterioration assessment scale was used to classify cracking, dampness, corrosion, concrete spalling, settlement indicators, roof distress and envelope deterioration. Valuation effects were examined through condition-adjusted comparable evidence and a depreciated replacement-cost cross-check. Results indicate that 85.0% of respondents agreed that structural condition affects market value. Mean valuation discounts were 8.7% for moderate deterioration and 21.6% for severe deterioration. Regression analysis showed a significant negative relationship between deterioration severity and property value (β = −0.61, p < 0.001). The results indicate that deterioration is associated with lower value through repair liability, remaining-life concerns and weaker rental attractiveness; professional perceptions also identify reduced investor confidence as a relevant risk mechanism. The study recommends that building condition be explicitly documented and reflected in inspection, comparable selection, depreciation analysis and valuation reporting.