Approaches to Minimizing Labour Costs Impacts on Real Estate Investments: A case for South-East Nigeria

Introduction: In the South-East of Nigeria, investors/ managers in real estate investing face diverse challenges which ought to be considered at the feasibility studies of the development project through to its completion, letting and management phases. The core target of these development and maintenance management activities is to minimize the development/maintenance costs to sustain the real estate in a manner as to generate reasonable returns. Labour costs variations is an inevitable item in real estate investing that defines the possible trend in rental value decisions, as well as determination of returns therefrom. Its supply and options therefore needs more insight to guide the direction of decision making/giving depending on the nature of labour involvement.Aim: This paper aims to demonstrate the application of labour constant model in weighing and selecting most satisfactory labour cost options during development stage and investment management stage in typical real estate investments within the South-East region of Nigeria.Methodology: This study takes experimentally exploratory approach to demonstrate the applicability of the Labour Constant model for purposes of labour cost minimization in real estate investments at development and operational stages. The operational conditions considered in the study are constrained to experiences obtainable within the study area (i.e. South-East States of Nigeria). Some raw data were sourced through interviews granted by sampled contractors within the study area.Findings: Sustainable real estate investment demands prompt but wise decisions especially in selecting between options on labour costs which can is better handled using labour costs model experimented in this study for better decision-making.Implications: This study has economic implications pertaining to cost minimization during development or operational stages on a real estate investment. The outcome of this study has strong implications to cost handling in relation to investment returns from commercial real estates. However the need for further exploration and expansion of this study is essential.Originality: The study is a nascent development which tends to explain how analysts and property/facility managers could more confidently guide real estate investors in making decisions regarding labour costs in managing real estate development projects or management.