INFLATION HEDGING CHARACTERISTICS OF REAL ESTATE HOSTEL INVESTMENT IN NIGERIA

Purpose: This study examines the inflation hedging capability of hostel investments around the Federal University of Technology Akure (FUTA), south gate, Akure. The study sought to undertake the economic analysis of inflation hedging of the return generated from hostel investment in Federal University of Technology Akure, South gate. Design/methodology/approach: The study area is characterised with purely private hostel developments. The target population for the study comprises of the registered Estate Surveying and valuation firms in Akure. The survey questionnaire was administered on the twenty-five practicing registered Estate Surveying and Valuation firms in the study areas; out of this, fifteen were retrieved and used for analysis. The secondary data on inflation required for the study were obtained from the records of the Nigerian Bureau of Statistics (NBS) and the Central Bank of Nigeria (CBN). The data were analyzed descriptively through sample mean, and standard deviation, and inferentially through Ordinary Least Square Regression analysis. Phillip Perron unit root test used to test the stationarity of the data shows the data sets were a combination of a different order of integrations. Findings: The result of the inflation hedging capability indicates that hostel investment is not an all-time hedge against inflation as it is traditionally perceived to be, there are instances where they provided a perverse hedge or partial hedge against inflation. It is expected that the findings in this study will guide investors that desire to invest in hostel. The study recommends that the Nigerian government should put relevant policies in place that will bring down the inflation rate to a single digit and also maintain a single-digit inflation rate to check volatility. Originality/value: The study is the first to examine the inflation hedging capability of hostel real estate investment in an African emerging real estate market. This makes the study unique in nature.