EFFECT OF REINVESTMENT EARNING ON PERFORMANCE OF REAL ESTATE DEVELOPMENT PROJECTS IN KILIMANI, WESTLANDS SUB COUNTY, NAIROBI COUNTY, KENYA

Project Management

The performance of real estate projects has been dropping significantly in the recent past with most of the buildings remaining delayed for years. This is despite the recorded increase in foreign direct investment and most recently the focus by the government on housing as one of the big-four agendas. It is on this background that the study seeks to answer the question; what is the influence of Reinvestment Earning on the performance of real estate development projects? The study was anchored by arbitrage pricing theory. Descriptive research design was used while the target population was the real estate companies in Kilimani area, Nairobi County. There are forty-eighty registered real estate companies in this area. The units of observation were the directors, finance officers and investment managers from the forty-eight companies. This made a total of one hundred and forty-four respondents. Purposive sampling method was employed where the company directors, finance officers and investment managers were purposively picked. The data was collected using structured questionnaires and analyzed through descriptive and inferential statistical analysis techniques. The study obtained a response rate of 81.3% which was considered adequate for analysis. The findings revealed that reinvested earnings significantly and positively influenced the performance of real estate development projects in Kilimani area, Westlands Sub-County. Government policy was also found to significantly moderate the relationship between reinvested earnings and performance of the real estate development projects. The study concluded that through reinvested earnings, the real estate development projects performed better. It is therefore recommended that the real estate development companies through their management embrace FDIs through reinvested earnings so as to steer the performance of their development projects.

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