Empirical Investigation of the Determinants of Building Maintenance Expenditure in Nigerian Commercial Real Estate

Building maintenance expenditure in commercial real estate directly influences property value, tenant satisfaction, and investor returns, yet its determinants in the Nigerian market have not been empirically investigated using primary data. This study empirically investigated the determinants of annual building maintenance expenditure in commercial real estate properties (office buildings, shopping malls, and warehouses) in Lagos, Abuja, and Port Harcourt. Data were collected from facilities managers and property owners of 180 commercial properties through structured questionnaires. Annual maintenance expenditure per square metre was the dependent variable. Predictor variables included building age, building size, construction quality class, occupancy rate, tenure type, management type (in-house vs. outsourced), and property ownership structure. Multiple regression analysis with robust standard errors was employed. Results showed that building age was the strongest positive predictor of maintenance expenditure per square metre (beta = 0.43, p < 0.001), consistent with increasing maintenance requirements as buildings age. Construction quality class was a significant negative predictor (beta = -0.29, p < 0.01), reflecting lower maintenance needs in higher-quality buildings. Outsourced facilities management was associated with 22% higher maintenance expenditure than in-house management, reflecting more comprehensive scope. Properties with institutional investors recorded significantly higher maintenance expenditure than owner-managed properties (mean: 3,420 vs. 1,890 Naira/m2/year). The study provides the first empirical model of maintenance expenditure determinants for Nigerian commercial real estate, with implications for property valuation and asset management. Keywords: building maintenance, commercial real estate, expenditure determinants, facilities management, Nigeria