ADDIS ABABA UNIVERSITY

COLLEGE OF BUSINESS AND ECONOMICS

GRADUATE STUDIES PROGRAM
DEPARTMENT OF PROJECT MANAGEMENT

ASSESSMENT OF CRITICAL SUCCESS FACTORS IN REAL ESTATE

DEVELOPMENT PROJECTS IN ADDIS ABABA

BY: BETHLEHEM HAILU

ADVISOR: SOLOMON MARKOS (PHD)

RESEARCH PROJECT WORK

SUBMITTED TO ADDIS ABABA UNIVERSITY IN PARTIALFULFILLMENT OF THE

REQUIREMENTS FOR A MASTER DEGREE IN PROJECT MANAGEMENT

ADDIS ABABA UNIVERSITY, SCHOOL OF COMMERCE

ADDIS ABABA, ETHIOPIA
JULY, 2019
 Declaration Page

Declaration

I, the undersigned, hereby declare that the work contained in this thesis is my own original work
and that I have not previously in its entirety or in part submitted at any university for a degree.

Signature: ______________________________ Date: __________________

 Addis Ababa University
School of Graduate Studies

This is to Certify that the thesis prepared by Bethlehem Hailu entitled: ‘Assessment of Critical
Success Factors in Real Estate Development Projects in Addis Ababa’ submitted in partial
fulfillment of the requirements for the Degree of Master of Arts in Project Management complies
with the regulations of the University and meets the accepted standards with respect to originality
and quality.

Signed by the Examining Committee:

Examiner: __________________ Signature: __________________ Date: _______

Examiner: __________________ Signature: __________________ Date: _______
Advisor: ___________________ Signature: __________________ Date: _______

____________________________________________________________________
Chair of Department or Graduate Program Coordinator
 Abstract

There is a rapid growth in Real Estate industry in Ethiopia where many are using resources to
conduct a number of development projects. Many Real Estate companies (Project Sponsors) only
consider the financial aspects of the real estate development projects while many internal and
external factors affect their success. This research aims to contribute to the efficiency and
effectiveness of these companies in delivering real estate development projects. The objective of
the study is to identify and assess critical success factors in real estate development projects as
well as establish the relationship between CSFs and project success. A quantitative approach was
applied where conceptual model was adopted to assess 8 main critical success factors: Client
(Project Sponsor) Objectives, Client Core Competencies, Project Environment (Physical
Environment, Economic Environment, Socio-Political Environment, Industrial Relations), Project
Team Leaders Performance &Project Management Actions.. A total of 55 questionnaires were
filled by project managers, engineers and formans engaged in real estate development projects by
three real estates, Bole Beshale Project by Sunshine, Dodi 1 by Noah and Polilotus by Tsehay Real
Estate. Descriptive statistics and correlation was applied using SPSS to analyze and interpret
data. The major findings indicate that Client Objectives, Project Team Leaders Performance,
Project Management Actions, Client Core Competency, Economic environment and Physical
Environment are the most critical factors Moreover, a strong positive relationship was observed
between Project Management Actions, Project Team Leader Performance and Client Core
Competency. In conclusion, project success in Real Estate development can be achieved by
focusing on delivering on time and with high construction quality. Moreover, client’s (project
sponsor) involvement in project initiation and planning phase, placement of competent and skilled
project leaders and comprehensive project safety and quality management are critical to real
estate development project’s success.

Key Words: Critical Success Factors, Client Objectives, Client Core Competency, Project Team
Leaders Performance, Project Management Actions
 Acknowledgements

I would like to thank extend my gratitude for my advisor Dr. Solomon Markos for his
continuous and valuable guidance and support throughout the study. I am thankful to the real estate
companies for their consent and cooperation throughout the making of the research. I am
specifically thankful to Ato Tenadam, Ms. Hirut and Ato Sisay at the for assisting me in
distributing the questionnaires and collecting them from their respective real estates. From among
friends, I would like to thank Alem Shumuye and Yoseph Gizaw for their support.

Lastly, I would like to thank my family and friends that have been by my side to help me though
the challenges and celebrate through the accomplishments.
Table of Contents

List of Tables .............................................................................................................................................. iii

List of Figures ............................................................................................................................................. iv
CHAPTER ONE INTRODUCTION ...................................................................................................... 1
1.1. Background of the Study ............................................................................................................ 1
1.2. Statement of the Problem ........................................................................................................... 3
1.3. Basic Research Questions ........................................................................................................... 5
1.4. Objectives of the Study ............................................................................................................... 5
1.4.1. General Objective ............................................................................................................... 5
1.4.2. Specific objectives ............................................................................................................... 5
1.5. Significance of the Study ............................................................................................................ 5
1.6. Scope of the Study ....................................................................................................................... 6
1.7. Limitations of the Study ............................................................................................................. 7
1.8. Definition of Terms ..................................................................................................................... 7
1.9. Organization of the Research Report ........................................................................................ 8
CHAPTER TWO LITERATURE REVIEW ......................................................................................... 9
2.1. Project Definition ........................................................................................................................ 9
2.2. Project Management ................................................................................................................. 10
2.3. Project life cycle and Project Process Groups ........................................................................ 11
2.4. Project Management Process Groups ..................................................................................... 12
2.5. Project Management Organization and Team Roles ............................................................. 12
2.6. Project Management in Construction ..................................................................................... 14
2.7. Success in Project and Project Management .......................................................................... 19
2.8. Critical Success Factors in Projects......................................................................................... 21
2.9. Critical Success factors in Real Estate Development Projects .............................................. 24
2.10. Real Estate Development in Ethiopia .................................................................................. 27
2.11. Synthesis................................................................................................................................. 29
CHAPTER THREE RESEARCH METHODOLOGY ......................................................................... 32
3.1. Introduction ............................................................................................................................... 32
3.2. Research Paradigm, Approach and Design ............................................................................ 32
 3.2.1. Research Paradigm ........................................................................................................... 32
3.2.2. Research Design and Approach ....................................................................................... 32
3.3. Population and Sampling ......................................................................................................... 33
3.3.1. Sample Design ................................................................................................................... 34
3.4. Data Collection .......................................................................................................................... 34
3.5. Data Analysis and Interpretation ............................................................................................ 35
3.6. Scale Reliability and Validity ................................................................................................... 35
3.7. Ethical Consideration ............................................................................................................... 36
CHAPTER FOUR RESULTS AND DISCUSSION............................................................................. 38
4.1. Introduction ............................................................................................................................... 38
4.2. Characteristics of the Respondents ......................................................................................... 38
4.3. Descriptive analysis of Critical Success Factors ..................................................................... 39
4.3.1. Client Objectives ............................................................................................................... 40
4.3.2. Client Core Competencies ................................................................................................ 42
4.3.3. Physical Environment ....................................................................................................... 44
4.3.4. Economic Environment .................................................................................................... 46
4.3.5. Socio Political Environment ............................................................................................. 48
4.3.6. Industrial Relations........................................................................................................... 50
4.3.7. Project Team Leaders’ Performance .............................................................................. 52
4.3.8. Project Management Actions ........................................................................................... 55
4.3.9. Project Success Assessment .............................................................................................. 58
4.4. Relationship between Critical Success Factors and Project Success .................................... 60
CHAPTER FIVE CONCLUSION AND RECOMMENDATION .................................................... 64
5.1. Introduction ............................................................................................................................... 64
5.2. Conclusion ................................................................................................................................. 64
5.3. Recommendation....................................................................................................................... 67
References .............................................................................................................................................. 69
Appendix A .................................................................................................................................................. v
List of Tables

Table 4.1 General Characteristics of Respondents ..................................................39

Table 4.2 Client objectives ......................................................................................41

Table 4.3 Client Core Competencies .......................................................................42

Table 4.4 Physical Environment ..............................................................................46

Table 4.5 Economic Environment ...........................................................................48

Table 4.6 Socio political Environment ....................................................................49

Table 4.7 Industrial Relations Environment ............................................................51

Table 4. 8 Project Team Leader’s Performance ......................................................53

Table 4.9 Project Management Actions ...................................................................56

Table 4. 10 Ranking of Critical Success Factors .....................................................57

Table 4. 11 Project Success Assessment .................................................................59

Table 4. 12 Relationship between Critical Success Factors and Project Success ...60

iii
List of Figures

Figure 3.1 Conceptual framework of Critical Success Factors and Real Estate
Development Project ............................................................................................................... 31

iv
CHAPTER ONE INTRODUCTION

1.1. Background of the Study

Real estate development involves purchasing a tract of land, determining the marketing

of the project, developing the building program and design, obtaining the necessary public

approvals and financing, building the structure, then leasing, managing, and ultimately selling

it( Prathamesh, 2015). Real estate construction projects, similar to other projects are measured

based on project management performance. The iron triangle of cost, time and quality

constitute major part of success criteria in construction projects (Atkinson, 1999).

Real estate development has become one of the fastest growing sectors in Ethiopian

Economy. According to the World Bank report in 2018, the construction industry has

contributed 3.5 % to the overall Ethiopia’s GDP growth that registered 10.9% in 2017. The real

estate industry coupled with construction industry accounted for 14.9% of the GDP in the

2008/2009 fiscal year, real estate taking more than 60% of the share. There has been a rapid

growth in real estate investments in Ethiopia as evidenced by annual growth rate of 37% for

the years of 2004-2012 (Access Capital, 2009).

With Ethiopia’s economic growth rate, the rapidly changing real estate landscape in Addis

Ababa is one of the more visible aspects of the extended period of growth recently experienced

in Ethiopia (Access Capital, 2009). The residential real estate development in Addis Ababa

takes a big share in the industry. According to Addis Ababa Investment Agency, it has issued

over 200 real estate project licenses with annual growth of 22 % (Ethiopian Investment

Authority as cited by Tadesse, 2013). The observed increase in the scope and scale of real estate

activity has been driven by multiple factors. The factors include as overall economic growth,

rise in urban population, a long-standing backlog of unmet housing demand, the expansion of

1
city roads and infrastructure, tax and investment schemes, extended lease periods, and reduced

income tax incentives. (Access Capital, 2009).

Residential homes and neighborhoods built by real estate developer are now becoming

increasingly common ever since the first large scale development was initiated by the pioneer

in the industry, Ayat Real Estate (Access Capital, 2009). From among the many real estate

companies, Sunshine Real Estate, Tsehay Real Estate and Noah Real Estate are notable ones

that have a good reputation of project delivery.

Sunshine construction, under Sunshine Investment group was founded in 1984 with less

than 10 employees. Three decades later, it currently has 3000 employees with a project delivery

track record of 984 kilometers of road projects, 427 residential houses and 3254 apartments

(Sunshine Investment Group, 2018). Bole Beshale Real Estate Project is a major real estate

development project that plans to construct 1785 house and 308 apartment buildings in 10 years

with planned budget of 515,089,544 55 birr. The project commenced in October 2011 and plans

to be completed by March 2020 where April progress report indicates that 95.3 % of the work

is going according to project plan (Bole Beshale Report, 2019)

From among the new real estate companies, Tsehay Real Estate was established in

2011 by CGC Oversees construction (Ethiopia) and Mr. Qian Xiao. Polilotus International

center was developed over 30,000 m2 plot of land inclusive of high level business offices, resort

restaurants, shopping mall and 13 G+12 high quality level apartments with cost estimation of

3 billion birr. The residential G+13, that make up 70 % of the construction project, have been

completed where as the rest are under construction (Tsehay Realities, 2018).

Lastly, Noah Real Estate was established in 2013 where it has delivered 5 residential

and 4 commercial buildings with additional 7 projects underway in various sites of Addis

Ababa (Noah Real Estate, 2019). Dodi 1 Real Estate project that is developing 64 apartment

2
complexes on 1000 square meter. It commenced on December 2016 and plans to finish on

September 2019.

While some real estate companies have delivered their construction projects on budget,

schedule and quality that has satisfied their customers, there are others such as Access and O-

Logo Real Estates who have not delivered on their real estate construction project objectives

and are thus battling lawsuits from unsatisfied buyers. Real estate developers are the project

sponsors in which they play an important role in the project planning and execution of their

residential home development projects as well as the project teams that are authorized with the

projects to do so. The registered increased economic growth, shift of demographics from rural

to urban, and rise in income indicate a positive growth to be expected in the real estate

construction sector. However, between the periods of 1992-2006, the total number of real estate

developers licensed by Ethiopian Investment Authority, have reached 1,667 with total capital

of birr 31.9 billion of which 87% is under pre-implementation indicating how far it is behind

the country’s expectations (Eshete and Teshome, 2015). In Ethiopia, many real estate

developers are using many resources to conduct a number of real estate development projects

in which some have been observed to delay or completely fail at delivering according to plan.

This calls for the identification and assessment of critical success factors for the betterment of

the industry.

1.2. Statement of the Problem

The real estate development decisions generally consider only the financial aspects of

the projects where feasibility calculations are based on the net present value (NPV) of the

investments (Prathamesh, 2015). (Santankari and Jain, 2015) studied the success factors for

real estate construction projects in India context where the researcher used 8 construction

experts to identify and rank 23 success factors grouped into four clusters i.e. Financial,

3
customer, value added and operational. The researchers concluded that if they were to be

implemented to real estate construction projects, they would increase project performance.

In 2009, Kiros conducted a research on 8 selected real estates in Addis Ababa to

investigate the factors affecting real estate market in which the researcher concluded that

insufficient land supply, increased housing construction materials and high price as the most

notable ones. (Girma, 2007) conducted a study of assessing the factors that contributes to the

success of projects management in real estate development construction projects and adopted

7 critical success factors from reviewing literature. Organizational planning, project manager

goal commitment, project scope and work definition and control systems were found to be

present in the real estate development projects in Ethiopia. The researcher added that project

team motivation and goal orientation, project manager’s competency, safety precautions and

applied procedures and control systems had significant impact on the project management

success though most project managers were observed to have lacked those critical factors.

Various research studies have been made to identify and assess critical success factors.

They have been mainly focused from project manager’s perspective, limited to few experts,

and focused on external environment of the real estate industry. This research aimed to study

success factors from different perspectives of human related, project related and external

environment and assessing critical success factors in real estate development projects from the

perspective of project teams of three real estates deemed successful. It will view project

performance and success as a function of client objectives, client core competency, the project

environment (physical, economic, socio-political and industrial relations), project team

leadership and project management actions. As there is rapid growth in the real estate industry,

the research aims to contribute to the efficiency and effectiveness of these companies in

delivering their real estate development projects.

4
 1.3. Basic Research Questions

1.3.1. What are the critical success factors of real estate development construction projects?

1.3.2. What is the relationship between critical success factors and project success?

1.4. Objectives of the Study

1.4.1. General Objective

The general objective of the study is to assess the critical success factors in real estate

development construction projects in Addis Ababa

1.4.2. Specific objectives

 To identify and assess the critical success factors for real estate

construction projects

 To determine the relationship between critical success factors and

project success

1.5. Significance of the Study

This research study will be based on a quantitative assessment in which it tends to have

applied significance. It will enable the selected real estate companies to identify and focus on

specific success factors that they have themselves evaluated. The results of this study is

expected to be a valuable knowledge for other real estate companies. More specifically, it will

assist real estate companies when designing real estate development plans, team selection, and

performance evaluation. The findings of this study may also be used as a source of information

for those who are interested in conducting similar research on identifying critical success

5
factors in similar sector in Ethiopia or elsewhere. Lastly, it is expected to enhance the

researcher’s knowledge in Project Management.

1.6. Scope of the Study

The scope of the study will be focused to assessing the critical success factors in real

estate development construction projects limited to three real estate companies located in Addis

Ababa City Administration. The structured questionnaires was adapted from a study by.

(Ramakrishna,N., Aswin Kumar, M., Vivek Kumar, D. and Arun Kumar ,G., 2012) on

“Determinants of the Success of Real Estate Projects: A Study of Select Firms in Hyderabad”

where they have identified 5 success factors; Client Objectives, Core Competency, Project

Environment (Physical, Economic, Socio-Political and Industrial Relations), Project Team

Leadership and Project Management Actions. The reason for the adaption of these success

factors is that it views project success as a function of the objectives and characteristics of the

client, the project environment, project team leadership characteristics and project management

actions which allows the researcher to explore for the big picture.

The research methodology will be a quantitative research design where data will be

collected in the form of questionnaires from the three real estate companies’ project teams. By

using quantitative approach together, the researcher gains an in depth understanding. The

sample population will be limited to the project teams (project managers, engineers and

formans) of the respective real estates. The study will not be inclusive of the real estates’

contractors and consultants in the development projects. In addition, it will be focused on three

real estate companies from many which might make it hard to generalize to the entire real estate

industry.

6
 1.7. Limitations of the Study

The researcher had few limitation with regard to the scope and content of the study as

well as time constraints. Due to time limitations, the study was only limited to three real estates

from among many in Addis Ababa for reasons of the unwillingness and request for animosity

by most real estate developers approached. In addition, the research is limited to the views of

project teams (project managers, engineers and formans) without linking those perceptions to

the respective projects.

1.8. Definition of Terms

Client - is defined as the person or firm responsible for commissioning and paying for the

design and construction of a facility (BPF, 1983)

Critical Success Factors – also known as key success factors, are defined as limited number

(usually 3-8) of characteristics, conditions or variables that have a direct and serious impact on

the effectiveness, efficiency and viability of an organization, program or project.(Business

Dictionary,2019)

Client objectives – are the construction goals set by the owners of the projects within the iron

triangle of cost, time and quality standards.

Client core competency- is attributes of the client’s knowledge of the project, pre-contract

design and documentation process, requirements of the finished building and the ability to

convey those in order to reduce level of errors and omissions that leader to variation and

disputes. (Ramakrishna et. al, 2012)

Economic Environment- refers to all the internal and external economic factors such as

inflation, liquidity

Industrial relations – refers to the employment relationship between employers and

employees, labor /trade unions, employer organizations and state. It includes the processes

7
through which these relationships are expressed (for instance, collective bargaining, workers

participation in decision making and dispute settlements) and the management of conflicts

between employers and workers when it arises (Wikipedia, 2019)

Physical Environment – refers to the part of human environment that includes purely physical

factors such as soil, climate, water (Merriam Webster, 2019)

Project Environment – is the surrounding in which a project is undertaken and it includes air,

water, land, natural resources, humans, and their interaction that is social, political and

economic both within and outside of the project boundaries(Kohli,2006).

Real Estate – is property consisting of land and buildings on it along with its natural resources

such as crops, minerals or water, immovable property of this nature; an interest vested in this,

an item of real property, more generally buildings or housing in general (Wikipedia,2019).

Real Estate Development Project – is a business process, encompassing activities that range

from the renovation and re-leasing if existing buildings to the purchase of raw land and the sale

of developed properties or parcels to others (Wikipedia, 2019).

1.9. Organization of the Research Report

The research is organized in five chapters. The first chapter will include background of

the study, statement of the problem, basic research questions, objectives of the study, definition

of terms, significance of the study, and delimitation/scope of the study. The second chapter will

include theoretical and empirical literature review about project management, construction,

real estate and factors affecting project success. Chapter three will give a detailed description

of the research design, participants, and sources of data, data collection and analysis methods

to be employed. The fourth chapter will summarize the data analyzed and present the

interpretation in light of the literature review. The last chapter will conclude, summarize and

make recommendation for further research based on results found from the research.

8
CHAPTER TWO LITERATURE REVIEW

2.1. Project Definition

Many definitions have been developed to explain the meaning of a project. (Kezner,

2000) defined project as any series of activities and tasks that has a specific objective to be

completed within certain specification, defined start and dates, funding limits and consumes

resources. Whereas (PMI, 2013) defines project a temporary endeavor undertaken to create a

unique product, service, or result. In addition, Project is defined as set of interrelated tasks to

be executed over a fixed period and other limitations (Business Dictionary, 2019).

In 2015, Epstein published seven characteristics that define a project

a. A simple definable purpose, end item or result defined in terms of cost, schedule and

performance requirements

b. Unique as it is one time activity requiring something different and never to be repeated

exactly the same way

c. Temporary activities with in a time frame and goal to be achieved

d. Cuts across organizational lines as it needs to draw from the skills and talents from multiple

professions and departments

e. Involves unfamiliarity as it differs from what’s previously done with its own new elements

of uncertainty and risk

f. Usually has something at stake as failure might jeopardize organization/firms or its goals

g. Process of working to achieve a goal where it passes through different project lifecycles

and with that, the organizational structure and resources expenditure build with each

succeeding phase; peak and then decline as the project nears completion

9
 PMI (2013) reiterates the temporary nature of projects indicates that a project has a

definite beginning and end where the end is reached when the project’s objectives have been

achieved or when the project is terminated because its objectives will not or cannot be met, or

when the need for the project no longer exists. The application of project management practices

is necessary to ensure the overall success of a project (Barker, 2014).

2.2. Project Management

Though the body of knowledge of project management was not yet known, the practice

of project management dates back to the building of the pyramids in Egypt in 2500 BC and

Great Wall of China in 208 BC. Historical data reveals that the workforce for this large project

was organized into groups i.e. soldiers, common people and criminals where they were ordered

to complete the project (Westland, 2018). The rules of project management began to take shape

across corporate America around the time of World War II, and by the 1950’s they were

guiding civil construction projects. In the 1960’s, Project Evaluation Review and Work Break

Down Structure were developed by the US Department of Defense as well as the international

Project Management Association and Project management institute were founded(Smart

sheet,)( Westland,2018)

Kezner (2000) stated that project management can mean different things to different

people as its concept is often misunderstood. Project Management is the art of creating the

illusion that any outcome is the result of series of pre-determined, deliberate acts when, and in

fact it was dumb luck. Project Management is the planning, organizing, directing and

controlling of company resources of relatively short term objective that has been established to

complete a specific goals and objectives. Furthermore, project management utilizes the

system’s approach to management by having functional personnel (the vertical hierarchy)

assigned to a specific project (the horizontal hierarchy). Project management knowledge draws

10
on ten areas i.e. integration, scope, time, cost, quality, procurement, human resources,

communications, risk management and stakeholder management. (PMI, 2019)

2.3. Project life cycle and Project Process Groups

A project life cycle is the series of phases that a project passes through from its initiation

to its closure. The phases are generally sequential, and their names and numbers are determined

by the management and control needs of the organization or organizations involved in the

project, the nature of the project itself, and its area of application. It should not be confused

with the Project Management Process Groups, because the processes in a Process Group consist

of activities that may be performed and recur within each phase of a project as well as for the

project as a whole (PMI, 2013).

A generic life cycle structure involves

 Starting the project

 Organizing and preparing

 Carrying out the project work, and

 Closing the project

Project life cycles can range from predictive or plan-driven approaches at one end to adaptive

or change-driven approaches at the other.

A Predictive Lifecycle – is when the product and deliverables are defined at the beginning of

the project and any changes to scope are carefully managed.

An Adaptive Lifecycle – is when the product is developed over multiple iterations and

detailed scope is defined for each iteration only as the iteration begins.

11
2.4. Project Management Process Groups

PMI (2013) indicates that project management processes ensure the effective flow of the

project throughout its life cycle. It encompass the tools and techniques involved in applying

the skills and capabilities.

PMI’s classification of the 5 project management process groups (2013)

A. Initiating Process Group- launches the process that can result in the authorization of a

new project

B. Planning Process Group- establishes the scope of the project, refine the objectives, and

define the course of action required to attain the objectives undertaken by the project

C. Executing Process Group- performed to complete the work defined in the project

management plan to satisfy the project specifications.

D. Monitoring and Controlling Process Group- required to track, review, and regulate the

progress and performance of the project.

E. Closing Process Group- performed to finalize all activities across all Process Groups to

formally close the project or phase.

2.5. Project Management Organization and Team Roles

A project organization is a structure that facilitates the coordination and implementation

of project activities. Its main reason is to create an environment that fosters interactions among

the team members with a minimum amount of disruptions, overlaps and conflict (PM4dev,

2016). Organizational structures range from functional to projectized, with a variety of matrix

structures in between (PMBOK, 2013).

A Functional Organization - is a hierarchy where each employee has one clear superior. Staff

members are grouped by specialty, such as production, marketing, engineering, and accounting

at the top level and specialties may be further subdivided into focused functional units, such as

12
mechanical and electrical engineering. Each department in a functional organization will do its

project work independently of other departments.

A Matrix organizations – is a blend of functional and projectized characteristics which can

be classified into weak, balanced, or strong depending on the relative level of power and

influence between functional and project managers. Weak matrix organizations maintain many

of the characteristics of a functional organization, and the role of the project manager is more

of a coordinator or expediter. Strong matrix organizations have many of the characteristics of

the projectized organization, and have full-time project managers with considerable authority

and full-time project administrative staff. The balanced matrix organization recognizes the

need for a project manager, where the project manager does not have the full authority over the

project and project funding.

A Project Organization - often have organizational units called departments, but they can

either report directly to the project manager or provide support services to the various projects.

Most of the organization’s resources are involved in project work, and project managers have

a great deal of independence and authority. Virtual collaboration techniques are often used to

accomplish the benefits of collocated teams.

The project team includes the project manager and the group of individuals who act

together in performing the work of the project to achieve its objectives. The structure and

characteristics of a project team can vary widely, but one constant is the project manager’s role

as the leader of the team, regardless of what authority the project manager may have over its

members (PMBOK, 2013). The project teams include roles such as

Project management staff - The members of the team who perform project management

activities such as scheduling, budgeting, reporting and control, communications, risk

management and administrative support.

13
Project staff- the members of the team who carry out the work of creating the project

deliverables.

Supporting experts - perform activities required to develop or execute the project

management plan. These can include such roles as contracting, financial management,

logistics, legal, safety, engineering, test, or quality control. Depending on the size of the project

and level of support required, supporting experts may be assigned to work full time or may just

participate on the team when their particular skills are required.

User or Customer Representatives - members of the organization who will accept the

deliverables or products of the project may be assigned to act as representatives or liaisons to

ensure proper coordination, advise on requirements, or validate the acceptability of the

project’s results.

Sellers – also called vendors, suppliers, or contractors, are external companies that enter into

a contractual agreement to provide components or services necessary for the project.

Business partner members - members of business partners’ organizations may be assigned as

members of the project team to ensure proper coordination.

2.6. Project Management in Construction

Construction project management requires the skills and expertise of a traditional

project manager but applied to the construction industry (Smart sheet, 2019). According to

Project Management Institute, project management is the art of directing and coordinating

human and material resources throughout the life of a project by using modern management

techniques to achieve predetermined objectives of scope, cost, time, quality and participating

objectives. By extending the definition, Construction Project Management often referred to as

CM, is a professional service that uses specific project management techniques to oversee the

planning, design, coordination and execution of construction project( Smart Sheet, 2019) )(

14
Sinnaps,2019). Similar to Project management, construction project management goes through

the five phases of initiation, planning, executing, monitoring and controlling and closure.

The Construction Extension to the Project Management Body of Knowledge (2000)

adds four knowledge areas i.e. project safety management, project environment management,

project financial management and project claim management to the project management

knowledge areas.

A. Project Safety Management – includes the process required to assure that the construction

`projects is executed with appropriate care to prevent accidents that cause or have the

potential to cause personal injury or property damage. Major process include

Safety planning- development of the approach to manage the various hazards to safety

inherent in the project.

Safety Plan Execution- carrying out the safety plan by carrying out the activities included

Administration and Reporting – maintenance of safety records and reporting safety

activities

B. Project Environmental Management – includes the processes required to ensure that the

impact of the project execution to the surrounding environment will remain within the

limits stated in the legal permits. Major processes include

Environmental planning- identifying what are the characteristics of the environment

surrounding the construction site and which environmental standards are relevant to the

project, and determining what impact the project will bring to the environment and how to

satisfy the identified environmental standards.

Environmental Assurance- evaluating the results of environmental management on a

regular basis to provide confidence that the project will satisfy the relevant environmental

standards.

15
 Environmental control – monitoring specific project results to determine if they comply

with relevant environmental standards and identifying ways to eliminate causes of

unsatisfactory performance.

C. Project Financial Management – includes the processes to acquire and manage the

financial resources for the project and is more concerned with the revenue source and

analyzing/ updating net cash flows for the construction project than is cost management.

The major process are

Financial planning- identifying key financial issues to be addressed and assigning project

roles, responsibilities, and reporting relationships

Financial control – monitoring key influences and taking corrective measures if negative

trends are recognized

Administration and Records – designing and maintaining a financial information storage

/retrieval database to enable financial control to proceed in smooth way.

D. Project Claim Management – is an important process in construction where it describes

the process required to eliminate or prevent construction claims from arising and for the

expeditions handling of claims when they do occur.

Major processes are

Claim identification – starts with sufficient knowledge of the scope and contract terms to

be aware when some activity appears to be a change in scope or terms requiring a contract

adjustment.

Claim quantification- is the quantification of a claim once a decision has been made once

an activity has been reviewed and decision is made that it’s worthy pursuing a claim.

16
 Claim prevention- is by executing a perfect, well scoped and risk allocated contract that is

well executed will very likely not produce any claims. Since perfection cannot be obtained,

most owners and contractors do their best towards that goal.

Claim resolution- justifiable disagreements may arise whether claim in question is a change

to the contract or not, or whether the claimed amount of compensation or time requested is

correct. The process begins with negotiation, perhaps at more than one level, before it moves

to mediation, arbitration, and litigation, depending on the remedies afforded by the contract.

Construction projects can be large or small depending on many factors. (Chen, et.al, 2014)

conducted a quantitative research on Optimal Project Organizational Structure for Construction

Management where the researchers concluded that due to the numerous working interfaces,

complicated networks and diversified team members of a large construction project,

coordination efficiency among members of the construction team is vital to the project’s

success. For a simple network or small organization, the organizational structure could be

decided based on experience or simple analysis and the impact of poor organization on the

execution of such a small project is limited. The researchers recommended that incorporation

of the Trend Model that clarifies the evaluation process and uses clear measures and variables

to determine the optimal organizational structure instead of intuition. In addition,

(Rowilson,1996) conducted a study on organizational structures for construction industry in

which impact of environment and technological sophistication considered factors that shape

project organizations. The researcher concluded that complex environments lead to greater

decentralization of authority, mainly by delegation. In the dimension of technology, complexity

led to a wider use of liaison devices on projects with a greater number of technical functional

specialists being used by projects.

A construction project manager combines the responsibilities of a traditional project

manager with the expertise of the construction industry (Wright, 2016) .There are number of

17
common project management challenges that a project manager is expected to work out in

order to keep construction on track. They are undefined goals, scope changes (creep),

inadequate skilled personnel, lack of accountability, improper risk management, ambiguous

contingency plans, poor communications, impossible deadlines, resource deprivation and lack

of stakeholder engagement (Wright,2016). (Auti and Skitmore, 2008) studied project

management in India where 150 participants comprising of architects, engineers, project

personnel and building surveyor. The results suggested that though the knowledge of project

management exist, barriers for its application was observed. A major difference was also

observed between the public and private sectors, with many of the respondents claiming that

project management is possible on a large scale in the private sector but not in the public sector.

The reason for the difference are government policies such as excessive bureaucracy, poor

execution of projects, compromises on quality and standards, personal interests, low

transparency and corruption.

(Ogunde et al., 2017) conducted a descriptive research to examine the challenges

confronting construction project management system in Nigeria involving fifty nine (59)

construction professionals. The result identified that passive participation from project

manager, lack of client involvement in making decisions, provision of substandard materials,

design error, lack of effective communication and poor treatment of workforce are challenges

hampering the use of construction project management. The study recommended that the

institutionalization of construction project management practice, compulsion of adequate

training and skill modification programs for construction professionals to aid the sustainability

of construction project management systems in Nigeria. (Tagesse,2017) assessed the

construction performance challenges in selected university building constructions in which

owners, contractors and consultants took part in the descriptive research. The results indicated

that the challenges were escalation of material prices, unavailability of resources, number of

18
disputes between owners and project parties, review of failures and solving them and quality

of equipment or machineries and raw materials.

2.7. Success in Project and Project Management

Project management cannot succeed unless the project manager is willing to employ

the system’s approach to project management by analyzing those variables that lead to success

or failure. There has been much discussion on the nature and definition of project success but

no consensus has emerged. (Bannerman, 2008). Since projects are temporary in nature, the

success of the project should be measured in terms of completing the project within the

constraints of scope, time, cost, quality, resources, and risk as approved between the project

managers and senior management (PMBOK, 2013). Kezner (2000) argued that one of the most

difficult task is predicting whether the project will be successful. While looking at time, cost

and performance might identify immediate contribution to profits but will not identify whether

the or not the project itself was managed successfully. Project Success is often measured by

the actions of three groups: the project manager and the team, the parent organizations and

consumer organizations as they can stimulate project success.

With extensive review of literature, Bannerman identifies three main streams that have

aimed to identify the factors of success. The first stream aims to identify the prescriptive lists

of critical success factors, failure factors or risk factors that project managers and governance

bodies should take into account to ensure a positive project outcome and yet provides no

explicit definition of project success. The second stream focuses on identifying other

contingency variables that might impact project outcomes or require specific management

intervention to mitigate any potential negative effects. They include project size, project type,

life cycle stage, project management complexity and strategic versus operational mindset. The

19
third stream, often considered with the two streams, has the main interest in defining the criteria

by which a project is judged to be success or failure.

Bannerman’s Multilevel Project Success Framework that can be considered as an

alternative approach to the problem of defining project success (2008).

Level 1- Process success – determination of success at this level considers the

appropriateness of processes used, their alignment with the project progress and their

integration and effectiveness in contributing to the project outcomes.

Level 2- Project Management Success- traditional criterion of project success

determined on closeout against key project design parameters (schedule, budget and

performance expectations) referring to project scope.

Level 3 – Product success – includes measures relating to the deliverables itself (such

as its match to specifications, requirements and quality expectations) and to the client

satisfaction (such as product acceptance, use and effectiveness)

Level 4- Business Success- accounted as accrual of positive net benefits to the

organizations from the project. Success derives from whether project met the goals and

objectives in the business plan, effectiveness and contribution of corporate governance to the

project as well as net unintended benefits or negative impacts that arose from the investment

Level 5- Strategic success – Organizational benefits are assessed by external

stakeholders such as investors, competitors, industry analysts or regulators. Success at this level

will derive from net improvements in industry position, business growth and development,

competitive advantage and /or strategic gain.

20
2.8. Critical Success Factors in Projects

Critical Success Factors (CSFs) also known as key success factors, are defined as

limited number (usually 3-8) of characteristics, conditions or variables that have a direct and

serious impact on the effectiveness, efficiency and viability of an organization, program or

project. Activities associated with CSF must be performed at the highest possible level of

excellences to achieve the intended overall objectives (Business Dictionary, 2019). Critical

success factor is a variable that can have significant impact that delivers measurable

improvements to the project success (Alias et.al, 2014).

(Davies, 2000) argued that in order to get a comprehensive answer of which factors are

critical to project success depends on answering three separate questions: ‘‘What factors lead

to project management success?’’, ‘‘What factors lead to a successful project?’’ and ‘‘What

factors lead to consistently successful projects?’’ In order to answer this questions, the

researcher drew on new empirical research from more than 70 large multi-national or national

organizations to answer each of this questions and to identify 12 factors that are critical to

project success.

The factors that are critical to project management success are those that correlate to on

time and on cost performance

F1- Adequacy of company-wide education on the concepts of risk management.

F2- Maturity of an organization’s processes for assigning ownership of risks

F3- Adequacy with which a visible risk register is maintained

F4- Adequacy of an up-to-date risk management plan

F5- Adequacy of documentation of organizational responsibilities on the project

F6- Keep project (or project stage duration) as far below 3 years as possible (1 year is better).

The factors that correlate to on-cost performance are:

F7- Allow changes to scope only through a mature scope change control process.

21
F8- Maintain the integrity of the performance measurement baseline

The factor that leads to project success

F9- The existence of an effective benefits delivery and management process that involves the

mutual co-operation of project management and line management functions.

The factor that leads to consistent corporate success are:

F10 – Portfolio and programme management practices that allow the enterprise to resource

fully a suite of projects that are thoughtfully and dynamically matched to the corporate strategy

and business objectives.

F11- A suite of project, programme and portfolio metrics that provides direct ‘‘line of sight’’

feedback on current project performance, and anticipated future success, so that project,

portfolio and corporate decisions can be aligned.

F12- An effective means of ‘‘learning from experience’’ on projects, that combines explicit

knowledge with tacit knowledge in a way that encourages people to learn and to embed that

learning into continuous improvement of project management processes and practices

(Spalek,2005) conducted a study on critical success factors in project management in

which 82 experts rated factors that have substantial influence on project success. The researcher

concluded that the most important factors are i.e. formal establishing the project manager,

project manager competencies, high authority of the project manager, clear and measurable

goal, formally establishing project team and top management support. The critical success

factors were rated to be the establishment of competent project manager with high authority,

clear project goal, experienced and competent team and top management. (Ofori, 2013) sought

to assess and project management practices and critical success factors for projects in Ghana

by conducting an exploratory research. Results indicated that the CSFs that contribute to the

success of a project include top management support, effective communication, clarity of

22
project purpose and goals, and stakeholder involvement. Documentation and dissemination of

critical success factors and best practices in project management will improve the quality of

project management in Ghana.

Critical Success factors vary by project types, life cycle phases, industries, nationalities,

individuals and organizations (Muller and Judgev, 2012). The literature review research

conducted by (Gheni et.al, 2017)identified factors related to the success of IT projects as

committed and motivated team, internal communications, goals and objectives, use of tools

and infrastructure, risk analysis, good estimation, skilled teams and lastly project monitoring

in descending order. (Esmaeili, Pellicer & Molenaar,2016) conducted research from reviewing

existing literature in which they identified upper management support, commitment,

constructability reviews, teamwork, communication, and building trusts as shared key elements

of success in most construction activities. The researchers added that previous studies ‘major

limitation lays in the emphasis on experts’ subjective prioritization of CSFs and the limited

number of empirical studies where it provides a vast opportunity to investigating CSFs and

casual relationship between CSFs and project success. In addition, (Alias et al, 2014) conducted

a survey to create a conceptual framework for CSFs in construction projects where Project

Management actions, project procedures, Human Related factors, project related factors and

External environment were identified as variables of project performance that in which directly

influences project success.

(Inayat,2001) conducted a research on finding critical success factors in different

construction projects by having international construction and project experts rate 53 factors in

which 20,12 and 20 were for schedule, budget and quality performance respectively. The

factors of capability of contractor key personnel, capability of consultant key personnel, level

of skill labor required, and site access limitation were seen to be commonly significant for all

the three objectives. Capability of client key personnel, recruitment and training procedures,

23
 and latent site conditions were commonly significant for schedule and budget performance.

Economics risks, adequacy of plans and specifications, pioneering status, project size, realistic

obligations, and level of modularization, construction control meetings, and schedule updates

were commonly significant for schedule and quality performance. The factor of functional plan

was commonly significant for budget and quality performance.

(Pakseresht & Asgari, 2012) studied Critical Success Factors in construction projects

of Pars Garma Company, one of the biggest construction companies in Iran with 500 million

development budget thus far. The research findings indicate that the CSFs in construction

projects have different priorities and weights but considering their importance, they are

respectively: Technical and economic assessment of the project required resources, experience

and executive records of project manager, project strategic planning, executive experiences of

contractor team about the project subject and project control system.

2.9. Critical Success factors in Real Estate Development Projects

(Investopedia, 2019) defines Real Estate as property made up of land and the building on it

as well as the natural resources of the land, including uncultivated flora and fauna, farmed

crops and livestock, water and minerals.

Real estate is classified into three categories

A. Residential Real Estate- includes undeveloped land, houses, condominiums and town houses.

The structures might be single-family or multi-family dwellings and maybe owner occupied or

rental properties

B. Commercial Real Estates includes nonresidential structures such as office building,

warehouses, and retail buildings. These buildings may be free standing or in shopping malls

24
C. Industrial Real Estate includes factories, business parks, mines and farms. These properties

are usually larger in size and locations. It may include access to transportation hubs such as rail

lines and harbors.

The act of manipulating, building on and/or designing and constructing new uses for

real estate is known as developing. Developers purchase lands and either create or renovate the

property, risking their resources and capital with expectation of investment reward.

(Investopedia, 2018)

Real Estate development model usually consists of two sections; Deal summary and

Cash Flow summary. The Deal summary includes all important assumptions including

schedule, property statistics, development costs, financing assumptions, all listed to calculate

the economics and profitability of the project. The cash flow model includes with revenue build

up, monthly expenses, financing and finally levered free cash flows, net present value (NPV)

and internal rate of return (IRR) of the project. (Corporate Finance institute, 2019)

The development and marketing of real estate, dates back to Europe in middle ages,

when European colonists came to the United States (Encyclopedia, 2019). When developers

invest in Real Estate Development, they consider many factors such as undeveloped property

prices, accessibility of developable land, special investment conditions, developed property

prices, tax and local payments, access to infrastructure, access to network, transport and

communication junctions, social environment, state of social structure, availability of services,

technical infrastructure state, fundamental characteristics of economic activity and competition

on the property sale and rent market.

Real Estate Project management is a growing Real Estate development projects have

their own CSFs. (Satankari & Jain, 2015) identified 23 success factors in real estate

25
construction that he grouped into 4 clusters i.e, Financial, Customer, Value Adding and

operational. After being rated by 7 International Project Management Experts, the researcher

concluded that there are interdependencies among the critical factors in which they were

employed into real estate project, they will increase project performance. Volker (2011)

evaluated 21 leading Dutch real estate renovation projects by interviewing client, consultant

and, architect and contractors to investigate success and fail factors in sustainable real estate

renovation projects. The results indicated that the ambition to attain sustainability was not pre-

defined but the ambition developed throughout the project, mainly because of the potential

sustainable reputation or the parties involved in the project. The composition, management

and collaboration of the construction team were found to be very important during the process.

(Ramakrishna et al, 2012) started investigating critical success factors in real estate

projects in Indian context though extensive review of prior research. In consultancy with

industry professionals, they identified and broadly classified the success factors as client

objectives, client core competency, project environment, project leader’s performance and

project management actions. Inclusive of client, consultant and contractors of 5 major real

estate development projects they explored their contribution to project success confined to

selected firms in Hyberdad. From among the factors, construction quality under client

objectives was emphasized as important factor attached to project success as observed from

high rankings and stronger association between consultant and contractor. Economic

Environment showed strong positive relationship because due to the down turn of the

construction industry and low investors’ confidence. Technical skills, motivational skills and

commitment towards projects under project team leadership and monitoring and updating

plans, implementation of effective safety plan and standardization of operating procedures

under project management actions showed positive relationship with project performance and

success.

26
 (Gholipour et. al,2019) conducted a research on foreign investments in Australian

Residential properties in which the findings showed that foreign investments in existing houses

do not increase prices but however a 10 % increase in foreign investment for real estate

development decreases house prices by 1.95 %. In addition, the researcher concluded that real

estate investments have a positive impact on housing construction activities in the long run.

(Ansah et. al,2019) conducted a quantitative research on constraints on housing supply

in urban Ghana from the perspective of real estate developers where result showed that

developers consider supply problems be driven by institutional factors such as land tenure

arrangements, lengthy procedures in securing building permits and long processes of land

acquisition and registration in Ghana.

2.10. Real Estate Development in Ethiopia

"Real estate development is among the government's priorities and aims at meeting

nations' housing demands as well as giving a change for the society modern way of life,"

aceunated President Dr. Mulatu Teshome. Real estate and Construction are two of the 18

sectors in Ethiopia’s national income statistics in which they accounted 14.9 % of GDP in

2008/2009 with real estate and construction comprising 9.1 and 5.8 % respectively. During the

Derg Regime, large scale private housing construction by real estate developers were

forbidden. The introduction of private real estate development started in the 1990’s with large

scale developments such as Ayat Real Estate and Sunshine Construction. (Yusuf, 2009).

The history of real estate development in Ethiopia is related to urbanization and urban

land ownership (Berhanu, 2004). Based on the basis of land ownership, Ethiopia could be

categorized into three periods private land ownership Period (pre 1975), Public Ownership

(1975-93) and Public ownership with lease rights (post 1993). Private land ownership pre 1975

27
included landlords who wanted sell parcels of land for individuals who wanted to build houses.

Most developers were landlords where they lacked planning or the authority. Public land

ownership during the Derg regime showed that main developers were Government, parastatal

institutions and public associations. Public ownership of land post 1993 were characterized by

changes to laws of property development where it encouraged the private sector to have an

active role in the economy (Berhanu, 2004)

The residential real estate market in Addis Ababa is evolving into a varied mix of

extensive government-built condominiums (apparently for lower-income groups), mid-market

developments by housing cooperatives, and largely high-end homes built by real estate

developers and/or homeowner themselves (Mulugeta,2017). At present, residential homes and

neighborhoods built by real estate developers are now becoming more common (Tadesse,

2013). Dominant Real Estate developers are Sunshine Real Estate, Ayat Real Estate, Habitat

for flower Real Estate, Ropack International, Ambassador Real Estate, Trancon Real Estate,

Gift Real Estate, Enyi Real Estate, Country Club developers, Akasas Real Estate and Flintstone

homes are to name a few( Access Capital,2010).

(Mulugeta,2017) stated that housing is a significant issue in determining a country’s

development both in developing and developed states as well as in the urban and rural areas.

Among the motivating factors for foreign real estate investors in Ethiopia are availability of

cheap and young labor, excess demand of house due to rapid urbanization, increasing of per

capita income due to rapid economic growth and availability of raw materials especially land,

suitable business place in comparison to other African countries Among the challenges were

legal challenges such as no legally designed regulations in Ethiopia, institutional challenges

related to the institutional arrangement and support for investors, financial related challenges

i.e. access to finance and poor housing financial institution in the state and labor related

problems such as large number of unskilled labor that makes it difficult to get skilled

28
professionals as well as priority is not given. To sum up, priority of the real estate investment

is not highly encouraged by the government of Ethiopia. (Mulugeta 2017).

Gift Real Estate Plc Founder and Manager Gebreyes Igeta ‘the real estate sector has yet

not developed as expected’. The main reason, according to him, is associated with the fact that

real estate development is a recent phenomenon in Ethiopia. Besides, lack of experience,

knowledge and skill gaps, shortage of input and advanced technologies are also major

challenges of the sector. However, currently the sector is progressing better now than before

(Gebrezgabiher, year).’ A detailed review of policy amid at expanding the sector has been

forwarded for the Council of Ministers. Once it is approved by Parliament and executed, it

would solve the bottlenecks in the sector.’ Ayalnesh Workneh, Deputy Head of the Ministry of

Urban Development and Housing Public Relations Office.

2.11. Synthesis

Extensive review was conducted on conceptual, theoretical and empirical literature that

indicated potential success factors in construction and real estate development projects

specifically. The researcher has selected critical success factors from the published study i.e.

‘Determinants of the Success of Real Estate Projects: A Study of Select Firms in Hyderabad’

by (Ramakrishna N., Aswin Kumar,M., Vivek Kumar, D. and G. Arun Kumar,2012) . Five

major factors were identified i.e. client objectives, client core competency, project

environment, project team leaders performance and project management actions.

Client objectives often have impact on the project performance and the factors low

construction cost, high construction quality and quick construction time. Client’s competency

give an idea of the knowledge of the project, in pre-contract design and documentation process,

where the client should be fully conversant with the requirements of the finished building,

consequently reducing the level of errors and omissions leading to variations and disputes.

29
Project environment external influences on the construction process. Broadly they may be

grouped as physical, economic, socio-political and industrial relations. The project team is a

combination of diverse groups that fulfill the necessary design, detailing and construction

function whose performance depends on the skills and experience of project team leaders i.e.

project manager, design team leader and construction team leader. The project management

actions is primarily a system concerned with decision making for planning and controlling

organizational objectives inclusive of choosing an overall strategy, setting specific objectives,

designing structures and processes, selecting people, delegating responsibility, evaluating

results and initiating changes. The ‘iron triangle’ of project that is time, cost and quality are

the adopted success criteria to measure the success level of real estate construction projects and

are used as dependent variables. In addition, the construction project being real estate

development, the perception of the end users, i.e. buyers of the developed residential properties

were included as success measures in the form of buyer satisfaction, current occupancy by the

buyer and future purchase from the same real estate.

30
 Conceptual Framework

Independent Variables Dependent Variable

Client Objectives

Client Competencies

Physical Environment

Economic Environment
Real Estate
Development
Socio-political Project Success
Environment

Industrial Relations

Project Leaders’
Performance

Project Management
Actions

Figure 2.1 Conceptual framework of Critical Success Factors and Real Estate
Development Project
Adopted from: Ramakrishna N., Aswin Kumar,M., Vivek Kumar, D. and G. Arun Kumar (2012)
Determinants of the Success of Real Estate Projects: A Study of Select Firms in Hyderabad

31
CHAPTER THREE RESEARCH METHODOLOGY
3.1. Introduction

This chapter presents the research paradigm, approach, design and methods used for

the purpose of the assessment of critical success factors in real estate development projects.

The target population includes project teams of three real estate in Addis Ababa City

Administration. Three real estates, i.e. Sunshine, Noah and Tsehay real estate were selected for

the purpose of the study where as their real estate development teams took part in the qualitative

assessment. The project team includes project managers, engineers, office and foremans.

3.2. Research Paradigm, Approach and Design

3.2.1. Research Paradigm

According to (Crotty, 2003), an epistemological assumption is a way of understanding

and explaining how we know what we know (In this respect, this study employs the interpretive

paradigm which, according to (Cohen, Manion and Keith, 2007), seeks to understand the

subjective world of human experience. The study begins with individuals and sets out to

understand their interpretations of the world around them. As such members of project teams

in respective real estate projects are the ones who make sense of their reality, the researcher

only holds the task of analyzing the views of participants. Furthermore, the study also positions

itself within the constructivist ontological assumption which is a philosophical standpoint that

holds the belief that what is to be studied is a social construction instead of an objective reality.

3.2.2. Research Design and Approach

The research was conducted to assess the critical success factors in real estate

development construction projects in Addis Ababa. The research design was descriptive as it

intended to generate evidence to a field that has not been well studied before in the context of

32
Ethiopia. The research approach was of a quantitative approach. The researcher intended to

identify and adapt success factors from the published study in by (Ramakrishna N., Aswin

Kumar,M., Vivek Kumar, D. and G. Arun Kumar,2012) on “Determinants of the Success of

Real Estate Projects: A Study of Select Firms in Hyderabad” in which it was incorporated to

the questionnaire. The study was conducted on three real estate development projects Bole

Beshale, Dodi 1 and Polilotus international undertaken by Sunshine, Noah and Tsehay Real

Estates.

3.3. Population and Sampling

The real estate development companies were selected based on convenient sampling.

The target population was inclusive of real estate development project teams of the selected

real estate’s development projects that have been completed or on closing real phase stratified

based on their respective projects i.e. Bole Beshale from Sunshine Real Estate, Polilotus

International Center from Tsehay Real Estate and Dodi 1 from Noah Real estate. The project

team of the respective projects was inclusive of project managers, engineers (Site engineers,

finishing engineers and office engineers) and foremen. Convenience sampling was used to

select the sample elements. Within that scope and project document collected from the real

estates, the size of target population for Bole Beshale, Polilotus International and Noah Dodi

project teams will be 26, 22 and 24 respectively. By using Yamane formula, the sample size

will for each strata i.e. Sunshine, Noah and Tsehay is 24, 21 and 22 respectively.

Where n = The sample size

N= The size of the population

e= the error of 5 percentage point

where n= the sample size N1=26 N2=22 N3 =24

33
Type of Target population Sampling Method Sample size

Primary Data

collection

Structured 72 Convenience 64

Questionnaires Sunshine(Bole Beshale Real Estate Sampling Sunshine- 24

Development) – 26 Noah- 21

Noah( Dodi 1) – 22 Tsehay- 22

Tsehay(Polilotus International)- 24

3.3.1. Sample Design

Stratified sampling was applied to select the three real estate as well as classify the

target population into three based on the real estate company they are employed namely

Sunshine, Noah and Tsehay. The target population included project team members of Bole

Beshale Real Estate Project, Polilotus International Center and Noah Dodi 1 projects from

Sunshine, Tsehay and Noah respectively. The sampling design was of non-probability where

convenience sampling technique was employed for the selection of respondents. The project

team members were inclusive of project managers, engineers, and foremen. The target

population for Sunshine, Noah and Tsehay was 26, 22,and 24 respectively.

3.4. Data Collection

The data was collected in the form of structured questionnaires. The structured

questionnaires were adapted from the study published in 2012 by (Ramakrishna et. al,2012) on

“Determinants of the Success of Real Estate Projects: A Study of Select Firms in Hyderabad”

where they identified 5 success factors; Client Objectives, Client Core Competency, The

34
Project Environment, The Project Team leadership and The Managerial Actions. Due to the

diverse and broad nature of project environment, the project environment was further classified

into independent variables i.e. physical environment, economic environment, Socio-political

and Industrial relations. These has resulted in overall 8 independent variables. The

questionnaire was prepared and distributed in Amharic, English and Chinese. The

questionnaires were distributed to all the Project Managers, Engineers and Formans of the

respective real estates on May 18-22. They were filled in and returned from May 27-June12.

An oral consent to conduct this data collection was provided to the researcher from the real

estates in reply to the letter of assistance from Addis Ababa University.

3.5. Data Analysis and Interpretation

Data obtained from the closed question questionnaires is described in (Bryman, 2012)

as Pre-coded questions because such questions removes the need for the application of a coding

frame to the question after it has been answered. This is because the range of answers has been

predetermined and a numerical code have been pre-assigned to each possible answer. This is

particularly appropriate in multiple-indicator (or multiple-item) measures of concepts, like

Likert scales which produce strictly speaking ordinal variables. Subsequently, spearman’s test

of correlation was utilized for the analysis of pairs of ordinal variables on top of tables of

frequency. To this end, IBM SPSS was used as a data analysis software.

3.6. Scale Reliability and Validity

The internal validity of the data was measured using Cronbach’s alpha test which

resulted in a significance level of above 0.70 except for the success factor physical environment

that resulted in 0.624. According to Westergaard et al. (1989), Cronbach’s alpha level 0.70, is

‘a satisfactory level’; consequently, the measure of alpha for this study thus shows a satisfies

the level of internal reliability. Moreover, with regards to validity concerns it should be noted

35
that measurement/construct validity is closely related to reliability (Bryman, 2012); hence,

since the internal reliability of the data is high, measurement/construct validity of the study is

high.

Independent variables Cronbach Alpha

Client Objectives .719

Client Core Competency .715

Physical Environment .624

Economic Environment .736

Socio-political Environment .750

Industrial Relations .703

Project Leaders Performance .769

Project Management Actions .771

3.7. Ethical Consideration

The researcher has given due emphasis to a wide range of ethical consideration. Verbal

consent was obtained for each person who filled out questionnaires. Moreover, the

confidentiality of the information obtained was explicitly explained to each respondent and the

data was treated as such with the utmost regard to the issue of secrecy. All questionnaires were

scanned and kept in a password protected personal computer. In addition, no names of the

people who participated in the study were obtained to keep anonymity of the participants. The

raw data entered into analysis software is also kept in a password protected personal computer.

36
 The real estate companies that took part in this study also gave verbal consent to have

their identities and projects to be public information in this study via an administration

personnel. With regards to the use of sources and literature, all institutions and people whose

work and publications have been used in this study were given recognition and credit by in text

citation and in referencing as per the Harvard style.

37
CHAPTER FOUR RESULTS AND DISCUSSION

4.1. Introduction

This chapter is dedicated to the data analysis and interpretations of the results emanating

from the data collected using structured questionnaires from project teams belonging to Bole

Beshale Real Estate Development of Sunshine Real Estate, Dodi1 Site of Noah Real Estate and

Polilotus International of Tsehay Real Estate. A total of 64 questionnaires were given out to all

the project teams from May 18-22, 2019 and 55 were returned by May 29-June 12, 2019 which

makes the response rate 85.93 %.

4.2. Characteristics of the Respondents

The respondents that took part in this research were 14 project managers 18, engineers

and 23 foremen that are engaged in their respective projects at Sunshine, Noah and Tsehay

Real estates. From among the respondents, 50.9 % and 45.5 % were male and female

respectively which indicates a balance between the compositions of both genders. The age

wise distribution of the sample is dominated by the age range of 26-33 which is 47.3 %

followed by 18-25 with 25.5 % of the population which indicates a young generation of

professionals. The remaining respondents were from the age of 42-49 which made up 16.4 %

where as the age range 34-41 constituted 10.9 %. Education level distribution indicate that 41.3

% of the respondents are undergraduate degree holders followed by vocational diploma holders

that constitute 34.5 %. Graduate degree holders are 11 where as post graduate degree holders

were 2. The composition of the respondents by company of employment indicate that 36.4 %

,30.9 % and 32.7 % were engaged in real estate development projects at Sunshine, Noah and

Tsehay Real Estate respectively.

38
Table 4.1 General Characteristics of Respondents

General characteristics Frequency Percentile

Male 28 50.9%

Gender Female 25 45.5%

18-25 14 25.5%

26-33 26 47.3%

Age 34-41 6 10.9%

42-49 9 16.4 %

Education level Vocational Training 19 34.5%

Undergraduate 23 41.3%

degree

Graduate Degree 11 20%

Post graduate degree 2 3.6%

Project managers 14 25.5%

Engineers 18 32.7%

Job positions Forman 23 41.8%

Sunshine Real Estate 20 36.4%

Company of Employment Noah Real Estate 17 30.9%

Tsehay Real Estate 18 32.7%

Source – Own Survey (2019)

4.3. Descriptive analysis of Critical Success Factors

A series of questions were presented for the respondents to rate critical success factors

they considered to be important for the successful completion of real estate construction

projects. Those factors were client objectives, client core competencies, physical environment,

39
economic environment, socio-political environment, industrial relation, project team leader’s

performance and project management actions. The respondents uses Likert scale to rate critical

success factors importance

1= very low 2= low 3=average 4= high 5= very high

And rate their respective project success as

1= strongly disagree 2= disagree 3=neutral 4= agree 5= strongly agree

A ratio from the difference of 1-5 was used to discuss the degree of central tendency. Adopted

from (Chilesh, N and G.J Kikwasi, 2014)

1-1.80 (Very low) 1.80 – 2.60 (Low) 2.60 – 3.40 (Average) 3.40 – 4.20 (High)

4.20 – 5 (Very High)

4.3.1. Client Objectives

All the critical factors presented for the respondents were picked as important for the

success of construction projects in the real estate companies in this study. From among these

client objectives specifically, quick construction time is the most critical success factor with 80

% of the respondents ranking as high and above on a Likert scale with a high content mean of

4.20 whereas (Ramakrishna et. al, 2012) studied the determinant success factors in Real Estate

projects in India where they found that construction quality was the most critical factor. High

construction quality on the other hand was picked as the second most important critical factor

in client objectives with a 87.2% of the respondents rating it as high and above on a Likert

scale, with high mean value of 4.09. Low construction cost was given somewhat average

emphasis by the respondents as an important factor for project success with 52.1%, 27.3% and

20% of the respondents responding from high and above, average and low and below rating

with an average mean value of 3.49 and highest standard deviation of 1.200. The overall mean

of the client objectives indicates 3.9 average with .63080 standard deviation, lowest than that

off all separately.

40
 Table 4.2 Client objectives

Factors Very low Low Average High Very high Mean Std.D

Fr PCT Fr PCT Fr PCT Fr PCT Fr PCT

Low construction 4 7.3% 7 12.7% 15 27.3% 16 29.1 13 23.6% 3.49 1.200

cost %

Quick - - 3 5.5% 8 14.5% 19 34.5 25 45.5% 4.20 .890

construction time %

High construction 3 5.5% 1 1.8% 3 5.5% 29 52.7 19 34.5% 4.09 .986

quality %

Overall Mean Std. Deviation

Client Objectives 3.9273 .63080

Source – Own Survey (2019)

The purpose of project management is to develop and implement plans to achieve a

specific scope driven by the project objectives that is subjected to client organizational

strategies. According to the respondents, quick construction time is the most critical success

factor for project success from followed by high construction quality and low construction cost

respectively. This indicates that real estate investment is highly time sensitive which shows

buyers tend to make purchase decision based on delivery time and construction quality.

Moreover, high construction quality is of a high significance to buyers in the same fashion

delivery on agreed upon time. The clients setting their objectives accordingly contributes

highly to project success in real estate development projects (Kezner, 2000) argued that project

success is often measured by the actions of three groups: the project manager and the team, the

parent organizations and consumer organizations as they can stimulate project success.

CONSIG CWG emphasis that cost is an important consideration but however cost does not

41
 take into account other factors. Cost does not focus on the ways in which quality can enhance

profit beyond reducing waste. The impacts of poor quality in construction has adverse

consequences that might indirectly affect profits such as increased cost, reduced health and

safety, loss of reputation and more management time.

4.3.2. Client Core Competencies

All the critical success factors defining client core competencies were rated as average

to very high importance to the projects’ success by more than 85 % of the respondents. From

among these factors, the ability of clients to make authoritative decisions scored was rated as

the most important with 48.8 % and 45.5% of the respondents rating as above high and average

respectively with highest mean score of 3.66. Following, the ability to contribute ideas to the

design process was rated by 51.9 % as high and above importance and 33.3 % of the

respondents ranking it with average importance to project success. The mean 3.59, indicated

that it leans towards high importance. The ability of clients to define the roles of participating

organizations was rated by 48.5% of the respondents as high and above with 3.53 mean where

the average response leans towards high significance towards project success. The ability to

effectively brief design teams was ranked as average and above by 87% of the respondents

where the average score indicate a 3.47. The overall mean of the responses is 3.5 indicating

high importance of client core competencies to project success.

42
Table 4. 3 Client core competencies

Factors Very low Low Average High Very high Mean Std. D

Fr PCT Fr PCT Fr PCT Fr PCT Fr PCT

Ability to effectively - - 7 12.7 23 41.8% 17 30.9% 8 14.5% 3.47 .900

brief design teams %

Ability to quickly - - 1 1.8% 25 45.5% 18 32.5% 9 16.4% 3.66 .786

make authoritative

decisions

Ability to effectively 6 10.9 19 34.5% 25 45.5% 5 9.1% .813

define the roles of

participating
3.53
organizations(Consu

ltants and

Contractors)

Ability to contribute 1 1.9 7 13 18 33.3 15 27.8 13 24.1 3.59 1.055

ideas to the design

process

43
 Overall Std. Deviation

Mean

Client Core Competencies 3.5697 .68112

Source – Own Survey (2019)

The results clearly indicate the importance of client involvement and competency in the

project management of real estate development projects. The descriptive research undertaken

by Ogunde et al. (2017, p.1) to examine the challenges confronting construction project

management system in Nigeria involving fifty nine (59) construction professionals showed that

the lack of client involvement in making decisions were major part of the problem.

Bannerman(2008) Multilevel Project Success Framework indicates level 3 which is product

success includes measures relating to the deliverables itself (such as its match to specifications,

requirements and quality expectations) and to the client satisfaction (such as product

acceptance, use and effectiveness). Indeed, if that success to be achieved, it’s critical that the

client’s ability to clearly state their ideas and of objectives, divide and distribute roles and

responsibilities as they see fit and make authoritative decisions when necessary.

4.3.3. Physical Environment

The project environment was classified as physical, economic, socio-political and

industrial environments. Due to the broad and diverse nature of the project environment, each

sub classification was treated as an independent variable. The sub classification in physical

environment presented for the respondents were geographical locations, weather conditions,

water supply, soil type and access to infrastructure where more than 75% of the respondents

rated them as having average to very high importance to project success. Evidently, the

percentage of the respondents that rated these factors very high and above are less than those

that rated them as average importance.

44
 From among these critical success factors, 47.75 of the respondents emphasized that

access to infrastructure as the most critical for real estate development project performance

with above high rating, high mean of 3.59 and with the least standard deviation of .804. The

results agree with (Access Capital, 2009) report that the observed increase in the scope and

scale of real estate activity in Addis Ababa has been driven by multiple factors. The factors

include as overall economic growth, rise in urban population, a long-standing backlog of unmet

housing demand, the expansion of city roads and infrastructure, tax and investment schemes,

extended lease periods, and reduced income tax incentives.

The type of soil where construction takes place was rated high and above by 37.2%

whilst 52.9 % found it average. The mean, 3.47, indicates it average and above importance

following access to infrastructure. The average mean of the responses regarding water supply

to real estate development site was 3.36 where 40 % & 40% of the respondents implied of its

average and high and above importance. The geographical location of the development was

rated as high and above by 40 % and 41.8 % of the respondents emphasizes on its average

importance where the mean,3.18 indicate the same values. Lastly, the weather condition in

which the development is taking place was ranked as the least critical with 3.18 mean and

standard deviation of 1.107. The overall mean i.e, 3.3309 indicates that it has average

importance to project success. The physical environment in which real estate development is

undertaken is quite important. The natural surroundings as well as constructed one influences

the setting in which project teams supposed to implement the project plan.

45
Table 4.4 Physical environment

Factors Very low Low Average High Very high Mean Std.D

Physical FR PCT FR PCT FR PCT FR PCT FR PCT

Environment

Geographical location 7 12.7% 3 5.5% 25 41.8 17 30.9 5 9.1% 3.18 1.107

% %

Weather conditions 4 7.3% 9 16.4 24 43.6. 13 23.6 5 9.1% 3.11 1.031

% % %

Water supply 2 3.6% 9 16.4 22 40% 11 20% 11 20% 3.36 1.095

Soil type - - 5 9.8% 27 52.9 9 17.6 10 19.6 3.47 .924

% % %

Access to - - 2 3.9% 25 49% 16 31.4 8 15.75 3.59 .804

infrastructure % %

Overall Std. Deviation

Mean

Physical Environment 3.3309 .74396

Valid N (listwise)

Source- Own Survey (2019)

4.3.4. Economic Environment

Economic environment is further sub classified to access to quality resources,

availability of funds, and economic stand of a nation, inflation, financial liquidity and labor

availability. Labor availability was rated as the most important factor with 71% of the

46
participants rating as high to very high importance with highest mean of 3.81. It is then

followed by inflation where 96.2 % of the respondents ranked it as average and above

importance to the success of a project. The access to quality resources the real estate

development has with 63.7 % rating it as above high on Likert scale and 3.65 average mean of

the responses. The availability of funds was rated as above high by 56.7 % of the respondents

where the average mean is 3.60. Economic stand of a nation was rated as low, average, high

and very high by 20%, 39.2%, 26.4% and 13.2 % respectively making the mean 3.32. The

financial liquidity of the client company was rated as the least critical factor with 3.22 mean

and 38.9 % of the respondents as rating it high and above importance whilst 14.8 % rated it as

low and below on the Likert scale.

Tagesse(2017, p. 117) assessed the construction project performance challenges in

selected university buildings in which the results indicated that the challenges were escalation

of material prices, unavailability of resources, number of disputes between owners and project

parties, review of failures and solving them and quality of equipment or machineries and raw

materials. The result of the study indicates that the availability of labor is quite important as

real estate development is labor intensive and requires many skilled and unskilled labor to build

the properties. In addition, gaining access to quality resources means developing real estate

properties that are of higher quality. This complements the results of the study that it’s quite

critical that a project’s access quality resources determines partly its success, especially in real

estate industry. The financial liquidity rated by the respondents confirm to the fact that most

real estate companies operate on loans and reinvestment of sales revenue to new real estate

development projects. Though the availability of funds that cover the costs of real estate

developments projects is highly critical, the liquidity of the firm is not as so.

47
Table 4.5 Economic Environment

Economic Average High Very Mean Std.

Environment Very Low Low High D

FR PCT FR PCT FR PCT FR PCT FR PCT

Access to quality - 6 10.9 13 23.6 25 45.5 10 18.2 3.65 1.022

% % % %
resources

Availability of funds - - 9 16.4 15 27.3 20 36.4 11 20% 3.60 .993

% % %

Economic stand of a - 11 20% 21 39.2 14 26.4 7 13.2 3.32 .956

% % %
nation

Inflation 1 1.9 1 1.9% 20 38.5 20 38.5 10 19.2 3.71 .871

% % % %

Financial liquidity 4 7.4 4 7.4% 25 46.3 33. 33.3 3 5.6 3.22 .945

% % 3 % %

Labor availability - - 3 5.8% 10 19.2 20 38.5 17 32.5 3.87 1.172

% % %

Overall Std. Deviation

Mean

Economic Environment 3.5691 .60895

Valid N (listwise)

Source – Own Survey (2019)

4.3.5. Socio Political Environment

Socio- political environment is further classified to political stability, occupational and

safety act, government expenditure on construction and demographic change. All four factors

were rated as high and above importance by less than 50 % of the respondents. Occupational

48
health and safety act was rated as high importance and above and average by 47. 2% and 37.7%

respectively, making it an average critical factor by 3.4 average. The political stability of a

nation was given high and above importance by 33.9 whilst 47. 2% found the critical success

factor as average, making it second in line with average mean of 3.13. Demographic change in

age, sex and religion was rated by 34.8 as high and above, 34.8 average and 30.4 as low and

below, resulting in a mean of 3. Lastly, government expenditure on construction was rated as

low and below importance by 43.4 % of the respondents whilst 32.1 found it average resulting

in 2.64 mean, making it the least critical. The overall mean of socio-political factor as a whole

indicates its average importance compared to others with 3.0 mean.

These indicates that government spending on infrastructure and other public entities

has more of low importance than anything else. The participant responses regarding

demographic change seems to be conflicted between low, average and high importance with

average of 3. Political stability is an important factor for real estate development as any

instability stagnates the economy because individuals would rather stay financially liquid rather

than invest in any fixed assets. Evidently, the Occupational and Safety act that has been around

since 1940s have seldom been implemented and yet the respondents have given it an average

importance.

Table 4.6 Socio political environment

Socio Political Very low Low Average High Very High Mean Std. D

Environment

FR PCT FR PCT FR PCT FR PCT FR PCT

Political Stability 4 7.5% 5 9.4% 25 47.2 13 24.5% 5 9.4% 3.13 1.093

49
 Occupational Health 4 7.5% 4 7.5% 20 37.7 17 32.1% 8 15.1 3.40 1.080

and Safety Act % %

Government 12 22.6 11 20.8 17 32.1 10 18.9% 3 5.7% 2.64 1.194

Expenditure on % % %

construction

Demographic 7 15.2 7 15.2 16 34.8 11 23.9% 5 10.9 3.00 1.211

change % % % %

Mean Std. Deviation

Socio Political 3.0236 .83691

Environment

Valid N (listwise)

Source – Own Survey (2019)

4.3.6. Industrial Relations

Industrial relations is sub classified to institutional factor, organizational structure of

labor force, social and diversity of labor force and placement of conflict management.

Placement of conflict management system was rated as an average success factor and yet with

average importance indicator mean of 3.37. Placement of conflict management system is

among critical success factors because it allows project manage to set goals, solve problems

and settle personality differences which in return will have a positive impact in the completion

of a project within time and budget. In following, social and cultural diversity was given high

and above importance by 27. % of the respondents whilst 51.1 % found it average. Institutional

factor such as government policy and labor legislation was found to be average importance

indicated by 3.08 average mean with the lowest standard deviation of .796. (Mulugeta,2017)

emphasized that from among the challenges that foreign real estate investors faced were legal

50
challenges such as no legally designed regulations and institutional arrangement and support

for investors. To sum up, priority of the real estate investment is not highly encouraged by the

government of Ethiopia Lastly, organizational structure of the labor force of a nation was rated

below average indicated by the average mean of 2.98. The overall mean of the industrial

relations factor indicates that it is slightly more critical than socio-political environment with

average mean of 3.1503.

Table 4.7 Industrial Relations Environment

Industrial Very low Low Average High Very high Mean St.

Relations D
Environment

FR PC FR PCT FR PCT FR PCT FR PCT

Institutional - - 11 21.6% 28 54.9% 9 17.6% 3 5.9% 3.08 .796

factor(governme

nt policy & labor

legislation)

Organizational 4 7.8 6 11.8% 30 58.8% 9 17.6% 2 3.9% 2.98 .883

structure of labor %

force

Social and - - 10 21.3% 24 51.1% 8 17% 5 10.6 3.17 .892

cultural diversity %

Placement of 3 5.9 5 9.8% 20 39.2% 16 31.4% 7 13.7 3.37 1.03

8
conflict % %

management

51
 Overall Mean Std. Deviation

Industrial 3.1503 .66438

Relations

Source – Own Survey (2019)

4.3.7. Project Team Leaders’ Performance

The project team leaders’ performance is further classified to effective design team

leader, effectiveness of construction team leader and measures of project team leader’s

performance. The character of an effective design team leader who is highly experienced

professional that keeps the top management constantly informed of the wellbeing and progress

of the project was rated as the most critical factor with an average mean of 3.96 and 68. 1%

giving it high and above importance. Following the rank is the project manager’s commitment

to time, cost and quality objectives with average mean of 3.90. The experience and capabilities

were rated by 83.1 % of the respondents as average and above critical factor which resulted in

3.84 average mean. The effectiveness of construction team leader that results in high

construction performance which results in high time performance. The majority of the

respondents, 93.6% to be exact, supported the fact that it has very high to average importance

to high project performance on Likert scale and the average mean confirming with 3.81 value

followed by Motivating skills with 3.80 mean value.

Moreover, more than 90 % of the respondents agreed that technical, organizational,

coordinating, and motivating skills have average to very high importance to project success

with 98. %, 96%, 98.1% and 96.1 % of the respondents respectively. Technical, planning,

coordinating and organizing skills were somewhat rated to have equivalent importance with

average mean of 3.78. A resourceful and knowledgeable professional team leader that ensures

52
 the clients requirements brief is thorough, properly implemented and monitored and the project

leader’s working relationship with others resulted with the average mean value of the

respondents that is 3.69 and 3.65. Though the early and continued involvement was rated by

54% of the respondents as high and above importance, the average mean indicate that it’s the

least critical with 3.58 value.

The analysis of the data collected clearly indicated that a design team leader that

communicates with top management of progress matched with an effective construction team

leader had a huge impact on the completion of the real estate development project on schedule

where it will in return satisfy buyers whose homes have been delivered on time. The project

leader’s experiences and capabilities acquired over time, had an impact on its leadership skill

that to the efficiency and effectiveness of project teams. The commitment to cost, time and

quality objectives by project leaders led to team members to work accordingly to achieve

project success.

Table 4. 8 Project Team Leader’s Performance

Factors Very low Low Average High Very High Mea Std

n D

FR PCT FR PCT FR PCT FR PCT FR PCT

Effective Design team - - 4 7.8 19 37.3 17 33% 11 20 3.69 .905

leader % % %

Effectiveness of 1 2.1 2 3.6 11 23.4 24 51.1 9 19 3.81 .876

construction team leader

Project leaders commitment 1 2% 17 33.3 18 35.3 29. 3.90 .900

to project objectives 4 .

53
Technical skills 1 2% 21 38.2 16 31.4 13 25. 3.78 .901

% % 5%

Planning skills 3 5.9% 17 30.9 19 37.3 12 23. 3.78 .879

% % 5%

Organizing skills 2 3.9% 22 43.1 15 29.4 12 23. 3.78 .874

5 % 5%

Coordinating skills 1 2% 21 41.2 16 31.4 13 25. 3.78 .901

% % 5%

Motivating skills 2 3.6% 20 36.4 15 29.4 14 27. 3.80 .895

% % 5%

Early and continued 4 8% 16 32% 22 40% 7 14 3.58 .971

involvement %

Experience and capabilities 4 8% 16 29.1 22 40% 7 14 3.84 .946

% %

Adaptabilities to changes in 5 9.8% 16 31.4 23 45.1 7 13. 3.63 .848

the project plan % 7

Support by the parent 6 11.8 18 35.3 19 37.3 8 15. 3.59 .900

company % % % 7%

Working relationships with 2 3.9% 19 37.3 25 49% 5 9.8 3.65 .716

others % %

Overall Mean Std. Deviation

Project team leader 3.7462 .65311

performance

Source – Own Survey (2019)

54
4.3.8. Project Management Actions

Several sub classifications were made to the critical success factor of Project

Management actions. From among the many, holding regular meeting was rated as the most

critical by 69.8 % of the respondents with 3.82 average mean value of the responses followed

by development of good reporting system with 3.81 mean. Controlling the project progress was

ranked by 64.1 % of the respondents as high and above critical factor for success resulting in

3.79 mean value. Implementing an effective quality assurance program was rated as high and

above by 49% of the respondents and computing the mean responses resulted in 3.75.

Implementation of an effective safety program and placement of standard procedures were

rated as high and above importance by 49% and 59.4% by the respondents respectively, and in

addition, the computation of their respective means resulted in similar yet slight difference of

3.68 and 3.65 respectively. Planning and installing communications system was rated as having

above high importance by more than 50% of the respondents whereas 32.1% of the respondents

rated as average. In accordance, the average mean resulted in 3.62 with high deviation of 1.023.

Developing appropriate organizational structure was rated by 41 % of the respondents with

high and above importance to project success. The mean of those responses resulted 3.58.

Lastly, According to the respondents, Monitoring and updating plans was rated as high and

above by 47.2 % while 34% rated as average where the mean value turned out to be 3.58,

making it the least critical factor in this category according to the respondents

55
 Table 4.9 Project Management Actions

Factors Very Low Low Average High Very High

FR PCT FR PCT FR PCT FR PCT FR PCT Mean Std.D

Planning and 8 15% 17 32.1% 15 28.3% 13 24.5% 3.62 1.023

installing

communication

system

Monitoring and 10 18.9 18 34% 15 28.3% 10 18.9% 3.47 1.012

updating plans %

Developing 5 9.4 21 39.6% 18 34% 9 17% 3.58 .887

appropriate %

organizational

structure

Controlling 1 1.9% 4 7.5 14 26.7% 20 37.7% 14 26.4% 3.79 .988

project %

progress

Implementing 2 3.8 25 47.2 14 26.4 12 22.6% 3.68 .872

an effective %

safety program

Development 4 7.5 19 35.8% 13 24.5% 17 32.1% 3.81 .982

of good %

reporting

system

Implementation 1 1.9 21 39.6% 21 39.6% 10 18.9% 3.75 .782

of effective %

quality

56
assurance

program

Holding of 2 3.8 14 26.4% 23 43.4% 14 19.2% 3.92 .829

regular %

meetings

Development 3 5.8% 1 1.9 17 32.7% 21 40.4% 10 19.2% 3.65 1.008

of standard %

procedures

Mean Std. Deviation

Managerial actions 3.7124 .74710

Valid N (listwise)

Source: Own Survey (2019)

Table 4. 10 Ranking of Critical Success factors according to respondents

Critical success factors Ranking according to Standard Deviation

mean

Client Objectives 3.9273 .63080

Project Team Leaders Performance 3.7462 .65311

Managerial Actions 3.7124 .74710

Client Core Competency 3.5697 .68112

Economic Environment 3.5691 .60895

Physical Environment 3.3309 .74396

Industrial Relations Environment 3.1503 .66438

Socio-Political Environment 3.0236 .83691

Source: Own Survey (2019)

57
4.3.9. Project Success Assessment

The project success assessment was made by the respondents perception of the

project success measured by its completion within the planned cost, time and quality standards.

In addition, it was measured by the real estate success indicators which are buyer satisfaction,

current use of property and future plans of another purchase by buyer .From among the

indicators, 80.4% of the respondents agreed that current owners of real estate company will

make future plans to buy another with the highest mean of 4.27 and lowest standard deviation

.676. Following, the majority of the respondents, 87.8 %, responded that it’s their perception

that the buyers of the real estate developments are satisfied with their purchase with an overall

mean of 4.14. From among the respondents, 80 % agreed that their real estate development

project was completed on time resulting in 4.04 mean value where as 85.7 % agreed that the

developed properties were completed within or higher quality than predetermined, resulting in

the average response to 4.02. When asked if the buyer of the residential properties were using

this properties, 71.5% of the respondents agreed to that notion with average mean of the

response resulting in 4.00. Lastly, the 61.4% of the respondents agreed that the project is or

being completed within or below budget. The overall mean for project success indicators

resulted in 4.0399 where it indicates high agreeability that according to the perception of

respondents, their project is a success.

58
 Table 4. 11 Project Success Assessment
Factors Strongly Disagree Neutral Agree Strongly

disagree agree

FR PCT FR PCT FR PCT FR PCT FR PCT Mean Std

The project was 0 3 5.9% 7 13.7 26 51% 15 29.4 4.04 .82

completed on time or - % % 4

earlier

The project was 3 6.4% 15 31.9 26 55.3 3 6.1% 3.62 .70

completed within or % % 9

below budget

The project was 2 4.1% 1 2% 4 8.2 29 59.2 13 26.5 4.02 .90

completed within or % % % 1

higher quality

The buyer was satisfied 3 6.1% 3 6.1 27 55.1 16 32.7 4.14 .79

% % % 1

The buyer is using the 14 28.6 21 42.9 14 28.6 4.00 .76

property % % % 4

The buyer will come for 6 12.5 23 47.9 19 39.6 4.27 .67

future purchase % % % 6

Mean Std. Deviation

Project Success 4.0399 .59120

Indicators

59
4.4. Relationship between Critical Success Factors and Project Success

This table lists the correlation of the critical success factors with project success on

descending manner. According to the respondents, Project Management Actions, Project Team

Leader Performance and Client Core Competency has indicated a positive strong correlation

with project success.

Table 4. 12 Relationship between Critical Success Factors and Project Success

Critical Success Factors Correlation coefficient with Project

Success

Project Management Actions .742

Project Team Leader Performance .662

Client Core Competency .549

Client Objectives .439

Economic Environment .197

Industrial Relations .128

Physical Environment .122

Socio-Political -.083

Source - Own Survey (2019)

Project Management Actions have the highest positive correlation with project success

with correlation coefficient of 0.742 which agrees with available literature. From among the

sub variables, holding regular meetings, developing an effective reporting system and

controlling project progress, are to name a few of the strong factors that contributed to the high

mean of the responses. Project team leader’s performance indicates a strong positive correlation

with project success with .662 correlation coefficient. A major contributor to this variable is

effectiveness of design team leader that keeps top management briefed in project progress as

60
well as the project manager’s commitment to cost, time and quality objectives. In real estate

development, design team consists of architects and engineers that develop conceptual and

detailed design that ensures the property design will for its purpose. They are responsible for

taking a client’s idea and bringing it to life using their professional skills. The effectiveness of

design team leaders has indicated its importance to project success, especially to the quality of

the development. .(Abdulsamad & Chileshe, 2009) emphasized that the success and failure of

any project depends on many factors but project leaders are considered to be key contributors

to the success of a project as well as guide to the team members to achieve the client

satisfaction( cost, time and quality). In addition, effective construction manager is highly

critical that can manage construction time according to schedule. In addition, the project leaders

experience and capabilities matched with technical, planning, coordinating and organizing

skills has resulted in the strong correlation with project success. The other independent variable

is client core competency where it established strong positive correlation with project success

with an aggregate correlation coefficient value of .543. Of the components incorporated in main

independent variable, ability to make authoritative decisions contributed the highest mean

followed by ability to contribute ideas to the design process, ability to define the roles of

participating organizations and ability to brief the design teams respectively. This is added to

the emphasis that client involvement and ability to articulate their objectives as well as decision

making power is quite relevant to the project success.

Client Objectives and project success are positively correlated with .439 aggregate

correlation coefficient. Client objectives include; quick construction time, high construction

quality and low construction cost of which quick construction time was emphasized by the

respondents as the most important component of client objective as discussed above. This

shows that according to respondents’ perception, the client objectives are highly critical to the

success of a real estate development project. However, the aggregate mean correlation

61
coefficient indicates a moderate level of strength between project success and client objective.

It is well established that the cost, quality and time constitute major part of success criteria of

construction projects that are commonly known as “iron triangle‟ (Atkinson, 1999). (Coll,

2002) emphasized that the factors that affect a project's success are very consistent and some

of them include knowledge, preparation, organization, leadership, teamwork, timeliness and

effective conclusion. Each one of these factors is equally critical to the successful outcome of

any worthy undertaking, and all should be taken very seriously. However, this study has

concluded that factors vary in importance.

Real estate development project take place in the mist of various project environment.

The results indicated that project environment is given less emphasis as a critical factor though

it has resulted in positive relationship. From among the variables, Economic environment is

the other main independent variable that has positive yet weak correlation with correlation

coefficient of .197. From the sub classification, labor availability, availability of quality

resources and availability of funds are main contributors to its criticality. Industrial Relations

resulted in a positive weak correlation with project success with .128 correlation coefficient.

The components of Industrial relations average to low mean contributed to its average

importance and weak correlation. Physical environment indicated positive yet weak correlation

with project success with correlation coefficient value for 0.122. The access to infrastructure

is the main contributor to the aggregate mean value of physical environment. Real estate

development is for the purpose of developing and selling to potential buyers where the

development of infrastructure and proximity of geographical location will be part of the

promotion. The water supply is an important factor for construction and for the buyers that will

inhabit the project output of residential property. Evidently, the socio political factor indicated

a slightly negative yet weak correlation with project success with -.083 correlation value. In

62
the evaluation of its criticality, the respondents viewed this particular factor as average to low

importance to success of projects.

To sum up, the research have identified critical success factors according to the

perception of the real estate project teams. The results have emphasized the client’s objectives

and competencies and project management actions as critical rather than the project

environment and socio political factor. The human related factors and actions that combines

realistic goals, competency and systematic approach to project management have indeed

conveyed its importance to the success of a project.

63
CHAPTER FIVE CONCLUSION AND RECOMMENDATION

5.1. Introduction

The objective of the study was to find and assess critical success factors in real estate

construction projects and their impact on successful completion of projects. In this final

chapter, the conclusions and recommendations are presented.

5.2. Conclusion

The study was conducted to study critical success factors in real estate development

projects. The study was conducted in three selected real estate development projects Bole

Beshale Project of Sunshine Real Estate, Dodi 1 for Noah Real estate and Polilotus and Tsehaye

real estate. The research objectives were to identify critical success factors and their

relationship with project success. The study was conducted by collecting data through

questionnaires to project managers, engineers and foremen of the three real estate companies.

8 critical success factors identified were included in the questionnaires in a Likert scale format

adopting it from (Ramakrishna et.al,2012) on “Determinants of the Success of Real Estate

Projects: A Study of Select Firms in Hyderabad”. These critical factors are identified as Client

Objectives, Client Core Competency, Physical Environment, Economic Environment,

Industrial Relations, Socio-Political Environment, Project Team Leader’s Performance and

Managerial Actions. By utilizing the aforementioned critical factors and employing descriptive

analysis and correlation studies, the study has responded to the research questions provided.

As confirmed from the sample taken for the analysis, six out of the eight were found to

be critical success factors in the context of real estate development projects in Addis Ababa i.e.

client objectives, client core competency, project team leaders performance, project

management actions, economic environment and physical environment. From the critical

success factors, project management actions, project team leader’s performance and client core

64
competency were found to have a strong positive relationship with real estate development

project success.

The most critical factor is client objectives especially quick construction time followed

by high construction quality. Various real estate development projects are undertaken to

achieve directly or indirectly organizational strategic plan and business value. The objective of

real estate development is to build residential properties for the purpose of selling them to

specific market segment. Given the objective, customers (buyers)’s have high influence and

interest where their requirements are given priority in devising business objectives. As part of

the overall project objective and organizational strategy, real estate developers being the project

sponsors( clients) emphasis on delivering properties on time with high quality to gain

competitive advantage.

Evidently, another critical success factor is the client core competency which has

positive strong relationship with project success. The involvement and competency of the real

estate developers during the initiation and planning phase creates a shared understanding of

success criteria and improves deliverable acceptance and buyer satisfaction. In addition, it will

result in less scope creep and design changes. Moreover, their ability to define the roles of the

external stakeholders i.e. contractors and consultants decreases the chances of conflict arising

in which all in all allows for the project to be executed with minimum problems arising.

The project manager in collaboration with project teams, directs the performance of the

planned project activities and manages the various technical and organizational interfaces that

exist within the project which is highly critical to project success. The results indicated the

leadership ability of the project manager, design team leader and construction team leader is

critical to ensure project performance matches expectations. Moreover, experienced and

capable project leaders are necessary to identify, build, maintain, lead and inspire project teams

to achieve high performance and project objectives. Necessary skills to possess by these team

65
leaders have been identified as of planning, organizing, coordinating, motivating and technical

skills.

In order to achieve project success, project management actions was found to be critical

contributor and resulted in the strongest positive correlation. Primarily, safety management,

quality management and communication management were given higher emphasis as to

contribution to project performance. Holding regular meeting, developing appropriate

communication system, and development of good reporting system results in an approach to

communicate most effectively and efficiently with stakeholders. Regular meetings serve as

critical factor for project success as they are held primarily to share information and

communicate with other team members about progress and collaboration. Monitoring and

Controlling project progress, entails to setting standards, measure performance, compare

performance to standards, determining the reasons for deviation if any and take corrective

actions as need. It is one of the phases of project management that ensures the project’s success

if done in a correct manner.

The project environment comprises of physical, economic, socio political and industrial

relations. From among the economic factors, the availability of labor and was emphasized as a

key factors in real estate development project success. It’s a quite expected result as the project

team of construction project is a mix of individuals from different background with specific

knowledge or skill necessary to carry out the project. Following, access to quality materials is

emphasized as critical factor. The key to reliable construction is reliable techniques,

technologies but most of building materials used including cement, reinforcement, concrete,

bricks, tiles, etc and in real estate, the finishing materials are source of competition where

developers tend to optimize the combination of functionality and attractiveness. Market

conditions such as the rise in the cost of input materials was considered as critical success factor

though it is contradictory to the recently experienced inflation of construction materials such

66
as reebar stagnated the construction materials in beginning of 2018. Socio-political and

industrial factors were given average importance while the sub factors of political climate,

institutional factors and organizational structures are conditions that influence, enhance or

constrain projects according to project management body of knowledge.

In conclusion, the results indicate human related factors involving project sponsors and

project team leaders were found to be critical to the success of real estate projects. These factors

affect the success of a project though their degree of influence might vary. Success in real estate

development projects will be achieved with clear objectives centered on buyer’s requirements,

competent project sponsors and project leaders and installation of project management systems.

5.3. Recommendation

The research has identified and rated critical success factors using the perception of

project teams employed at three real estate’s i.e. Sunshine, Noah and Tsehay Real Estate.

Project stakeholders and governance framework is necessary for the project sponsors (Real

Estate developers) and project leaders in order to align real estate development projects with

business strategy and to make decisions that satisfy buyers needs and expectations with regard

to delivery on time and of high quality. In addition, Real Estate developers should involve

themselves in the project initiation and planning phase where all aspects of scope, time, cost,

quality, communications, human resources, risks, procurements and stakeholder engagement

is being analyzed. In order to achieve project success, project leaders should attain proper

training in project team development that requires diverse skills. With regards to the critical

success factors, though project environment is considered critical, the components apart show

average to low importance to project success. Project Risk management should be strengthened

by giving special to market conditions, political stability and government policy changes. The

researcher suggests further research in this area of the relationship between two variables i.e.

project management actions and project team leaders performance with real estate development

67
projects success in particular because the participants of the study who are company personnel

might have over emphasized the importance of their managerial and leadership role as a critical

factor for a real estate development project and viewed project management as average or low

contributor. Furthermore, the researcher suggests further research in the areas of further

assessing the critical factors in this study in relation to project success preferably each one by

one, such as why market condition such rise in input materials is a critical success factor and

to explore why socio-political issues have a negative relationship with project success.

68
References
Access Capital (2010). Sector report-Real Estate. [online] pp 3-12 Available at:
https://www.ethioconstruction.net/sites/default/files/Law/Files/Sector%20Report--
Real%20Estate.pdf [Accessed 10 May.2019]

Alias, Z, Yusof, K. and Aris, N.M.(2014). Determining Critical Success Factors of Project
Management Practice: A conceptual framework. In: Conference on Quality of Life. [online] pp
61-69 Sabah: Publisher of the Proceedings. Available at:
https://www.sciencedirect.com/science/article/pii/S1877042814054834 [Accessed 21 May
2019]

Ansah, A.O., Soyeh, K.W., & Asabere, P.K (2019). Developer constraints on housing supply
in urban Ghana, International journal of housing Markets and Analysis, [online] Volume 12
(1), pp 59-73.Available at https://doi.org/10.1108/IJHMA-07-2018-0052 [Accessed 21 May
2019]

Aqubamichael, K. (2009).Factors Affecting Real Estate Market: the case of Addis Ababa City.
M.A. Thesis, Addis Ababa University [online] Available at:
http://etd.aau.edu.et/bitstream/handle/123456789/3909/Kiros%20Aqubamicheal.pdf?sequenc
e=1&isAllowed=y

Atkinson, R. (1999).Project management: cost, time and quality, two best guesses and a
phenomenon, it’s time to accept other success criteria. International Journal of Project
Management, [online] Volume 179(6), pp 337-342. Available at:
https://notendur.hi.is/vio1/Project_management_Cost_time_and_quality.pdf [Accessed at 22
April 2019]

Auti, A. and Skitmore, M. (2008). Construction Project Management in India. International

Journal of Construction Management,[online] Volume 8 (2). pp. 65-77. Available at:
https://www.researchgate.net/publication/27478264_Construction_Project_Management_in_I
ndia [Accessed: 29 May. 2019].

69
Bannerman, P.L. (2008).Defining Project success; a multilevel framework. In: Project
Management Institute Research Conference: Defining the Future of Project Management.
[online] Warsaw. Project Management Institute. Available at
https://www.pmi.org/learning/library/defining-project-success-multilevel-framework-7096
[Accessed 21 May 2019]

Barker, S. (2014). Brilliant Project Management. 3rd Edition. San Francisco: Trans-Atlantic
Publications

Berhanu, W. (2004). Real Estate Developments and the housing supply issue in Ethiopia-Case
Studies from Addis Ababa. Zede Journal of the Ethiopian Engineers and Architects, [online]
Volume 21 pp 1-27.Available at: https://www.ajol.info/index.php/zj/article/view/123831
[Accessed at 29 May 2019]

Bryman, A. (2012). Social Research Methods. 4th Edition. Oxford: Oxford University Press.
Pp 65-79

Business Dictionary, (2019). Definition of Project.[online] Available at:

http://www.businessdictionary.com/definition/project.html [Accessed 14 May. 2019]

Chen, J. (2019). Real Estate Definition. [Online] Investopedia. Available at:

https://www.investopedia.com/terms/r/realestate.asp [Accessed 09 May. 2019].

Cheng, M.Y, Cheng-We, S. and Horng-Yuh, Y. (2003). Optimal Organizational Structure for
Construction Management, Journal of Construction Engineering and Management, [online] pp.
145-161 Available at:

https://www.researchgate.net/publication/245283350_Optimal_Project_Organizational_Struc
ture_for_Construction_Management [Accessed at 29 May 2019].

Chilesh, N &G.J Kikwasi (2014). Risk Assessment and Management practices within Tanzania
Construction Industry: Implementation barriers and advocated solutions. International Journal
of Construction Management. Volume 14(4) pp. 239-254

Cohen, L., Manion, L., & Keith, M. (2007). Research Methods in Education. New York:
Routledge.

70
Construction Extension to A Guide to the Project Management Body of Knowledge (2000).
Pennsylvania: Project Management Institute Inc. [online]. Available at
https://www.works.gov.bh/English/ourstrategy/Project%20Management/Documents/Other%
20PM%20Resources/ConstructionExtension.pdf [Accessed at 19 May 2019]

Consig CWG (2019). Why should quality be important to the construction industry.[online]
Design Buildings. Available at:

https://www.designbuildings.co.uk/wiki/Why_should_quality_be_important_to_the_construc
tion_industry%3FCreating_Excellence [Accessed 18 June. 2019].

Corporate Finance Institute (2019). Real estate Development model: Deal Summary and Cash
Flow Model. [online] Available at: https://corporatefinanaceindtitute.com Accessed at [21
May. 2019].

Crotty, M. (2003). The Foundations of Social Research: Meaning and Perspective in the
Research Process. 3rd Edition. London: Sage Publications pp-33-45

Epstien. S. (2015). The Seven Key Characteristics of Project.[online] Linkedin. Available at:
https://www.linkedin.com/pulse/seven-key-characteristics-project-stanley-epstein/ [Accessed
19 May.2019]

Esmaeili, B., Pellicer, E. and Molenaar, R.(2014).Critical Success Factors for Construction
Projects. In: 18th International Congress on Project Management and Engineering. [online]
Alcañiz: pp – 458-491 Available at:

https://www.researchgate.net/publication/300122510_Critical_Success_Factors_For_Constru
ction_Projects [Accessed 19 May 2019]

Eshete, Z.S and Teshome, K.W (2015).Performance, Challenges and Prospects of Real Estate
Financing in Addis Ababa: Micro and Macro Economic implications. American journal of
Economics, Finance and Management, [online] Volume 1, pp 1-9. Available at
http://files.aiscience.org/journal/article/pdf/70200001.pdf [Accessed 29 May. 2019].

Gebrezgabiher, H (2018). Ethiopia: Real Estate Sector Demands More Developers. All Africa,
[online] Available at:https://allafrica.com/stories/201706281036.html [Accessed 19 May
2019]

71
Gheni,A., Y., Jusoh, Y., Jabar, M.A. and Ali, N.M. (2017). The Critical Success Factors for IT
Projects. Journal of Telecommunication, Electronic and Computer Engineering, [online]
Volume 9(3), p.3 http://journal.utem.edu.my/index.php/jtec/article/view/2865 [Accessed 19
May 2019]

Gholipour, HF., Lean, H.H., Tajaddini, R., & Pham, A.K,(2019). Foreign Investments in
Australia Residential Properties: House prices and Growth of Housing Construction Sector.
International Journal of Housing Markets and Analysis,[online] Volume 12 (2), pp 166-180
Available at: https://www.emeraldinsight.com/doi/abs/10.1108/IJHMA-05-2018-0030
[Accessed 19 May. 2019].

Inayat, A. (2001), Critical Success Factors for Different Organizations in Construction

Projects. M.A. Thesis, Kansas State University Available at:
http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.1025.3393&rep=rep1&type=pdf
[Accessed 21 May. 2019]

Investopedia, (2018).Challenges in Real Estate Development.[online] Available at:

https://www.investopedia.com/ask/answers/100214/what-are-some-challenges-real-estate-
development.asp [ Accessed 09 May. 2019].

Kalkidan Tadesse, (2013). Real Estate Marketing in Ethiopia; Opportunities and Challenges.
Unpublished Master’s Thesis, Addis Ababa University
Kelley, J., and De Graaf, N. D. (1997).National Context, Parental Socialization, and Religious
Belief: Results from 15 Nations. American Sociological Review.[online] Volume 62, pp. 639
– 59. Available at:

https://www.unil.ch/files/live/sites/issr/files/shared/De_Graaf_15_Nations_Kopie.pdf
[Accessed at 19 May 2019]

Kezner, H. (2000). Project Management: A Systematic Approach to Planning, Scheduling and

Controlling. Delhi: CBS Publishers & Distributors

Klimczak, K (2010). Determinants of Real Estate Development. Economics and sociology.

Recent Issues in Economic Development.[online] Volume 3(2). pp. 58-66 Available at;

72
https://www.economics-sociology.eu/files/07%5b7%5d.pdf [Accessed at 19 May. 2019]

Kohli(2006), Project Management handbook. Tata McGraw- Hill Education, New York

Girma, M. (2007). Investigating Success Factors for Real Estate Development Construction
Projects in Addis Ababa. M.A. Thesis, Saint Mary University Available at:
http://repository.smuc.edu.et/handle/123456789/3234 Accessed [18 May 2019]

Muller& Judgev, (2012). Critical Success factors in Projects: Pinto, Slevin and Prescott- the
ludation of Project Success. International Journal of Managing Projects in Business. Volume
5(4), pp. 757-775. Available at:

https://www.emeraldinsight.com/doi/abs/10.1108/17538371211269040 Accessed at 12 May.

2019]

Mulugeta, S. (2017).Challenges and Prospects of Foreign Real Estate Investors in Ethiopia.

International Journal of Science and Research, [online] Volume 6(12), pp 182-184 Available
at https://www.ijsr.net/archive/v6i12/ART20178629.pdf [Accessed 19 May. 2019]

Noah Real Estate (2019). Company Profile. [online]. Available at:

http://noahrealestateplc.com/about-us [Accessed 26 April. 2019].

Ofori, D. F. (2013). Project Management Practices and Critical Success Factors: A Developing
Country Perspective. International Journal of Business and Management; [online] Volume
8(21) Available at;

http://www.ccsenet.org/journal/index.php/ijbm/article/download/28062/18280[Accessed at
26 May. 2019]

Ogunde, A.O., Olaolu, O., Afolabi A., Owolabi, J., Ojelabi, R. (2017). Challenges Confronting
Construction Project Management System for Sustainable Construction in Developing
Countries: Professionals Perspectives (A Case Study of Nigeria). Journal of Building
Performance, [online] Volume 8 (1). Available at
http://spaj.ukm.my/jsb/index.php/jbp/article/view/207 [Accessed 29 May. 2019].

73
Pakseresht, A. and Gholamreza, A. (2012).Determining the Critical Success Factors in
Construction Projects: AHP Approach. Interdisciplinary Journal of Contemporary Research in
Business, [online].Volume 4(8), p. 391, Available at https://journal-
archieves26.webs.com/383-393.pdfAccessed at 27 May. 2019].

Prathamesh, P. S and Jain, S. S. (2015). Study of Success Factors for Real Estate
Construction Projects. International Research Journal of Engineering and Technology, [online]
Volume 02(4), p. 804-808. Available at https://www.irjet.net/archives/V2/i4/Irjet-v2i4138.pdf
Accessed [15 Apr 2019].

PMI (2019). What is Project Management?.[online] Available at:

http://www.pmi.org/about/learn-more-about-pmi [Accessed 21 April.2019].

Project Management for Development (2016). Project Management Organizational Structure

[online].Available at:

https://www.pm4dev.com/resources/free-e-books/3-the-project-management-organizational-
structures/file.html [Accessed 28 May.2016).

Ramakrishna, N. Aswin Kumar,M., Vivek Kumar, D. and Arun Kumar,G.(2012).

Determinants of the Success of Real Estate Projects: A Study of Select Firms in Hyderabad.
NICMAR Journal of Construction Management, [online] Volume 117(2 &3), pp 38-52.
Available at:
https://www.researchgate.net/publication/234013623_Determinants_of_the_success_of_real_
estate_projects_A_study_of_select_firms_in_Hyderabad [Accessed 20 April. 2019].

Rowilson. S. (1996).Organizational structures in Construction industry. Journal of

Construction Engineering and Economics, [online] Volume 14(3) pp. 199-212 Available at:

https://www.researchgate.net/publication/24077196_Organizational_structures_in_the_constr
uction_industry [Accessed: 28 May 2019]

Satankari P.P and Jain S. S. (2015). A Study of Success factors in Real Estate Construction
Projects. International Research Journal of Engineering and Technology, [online] Volume
02(04).pp – Available at: https://www.irjet.net/archives/V2/i4/Irjet-v2i4138.pdf [Accessed at
28 May. 2019]

74
Spalek, S. (2005).Critical Success Factors in Project Management: To fail or not to fail, that is
the question! In: Project Management Institute Global congress 2005-EMEA.[online]
Edinburgh: Project Management Institute. Available at
https://www.pmi.org/learning/library/critical-success-factors-project-management-7568
[Accessed 19 May. 2019]

Sinnaps (2019).Construction Project Management. ][online]Available at:

https://www.sinnaps.com/en/project-management-blog/construction-project-management
[Accessed 14 April.2019].

Sunshine Construction. (2018). Company Profile. Sunshine Investment Group. Available at:
http://www.sunshineinvestmentgroup.com [Accessed 26 April.2019].

Tashakkori, A & Creswell, J (2007) Editorial: The New Era of Mixed Methods. Journal of
Mixed Methods Research, [online] Volume 1, pp. 3-7. Available at:
https://journals.sagepub.com/doi/pdf/10.1177/2345678906293042 [Accessed at 29 May
2019]

Tagesse, A (2017). Assessment of Construction Performance Challenges in Selected

University Building Construction Projects, M.A, Thesis, Addis Ababa University, Available at
http://etd.aau.edu.et/bitstream/handle/123456789/5437/Biyadglign%20Tagesse.pdf?sequence
=1&isAllowed=y [Accessed at 29 May. 2019]

Tsehay Real Estate (2018). Company profile.[online] Tsehay Realities. Available at:
http://www.tsehayrealities.com [Accessed 26 April. 2019]

Westergaard, J., Noble, I., and Walker, A. (1989). After Redundancy: The Experience of
Economic Insecurity. Cambridge: Polity

Westland, J. (2018). History of Project Management. [online] Project Manager. Available at:
http;//www.projectmanager.com/blog [Accessed 24 May.2019]

75
Wright, S. (2016). Project Management Challenges in the Construction Industry.[online]
Project Management. Available at: https://project-management.com/project-management-
challenges-in-the-construction-industry/ [Accessed: 29 May. 2019]

Yusuf ,B, Tefera, S. and Zerihun, A.(2009).Land Lease Policy in Addis Ababa. Addis Ababa
Chamber Of Commerce and Sectoral Association Private Sector Development Hub

76
Appendix A
Questionnaires for Real Estate Development Project Teams’
Dear Respondents,
The researcher is conducting this study for the purpose of the partial fulfillment of the
requirement for the subject of Master’s in Project management with research title ” Assessment
of Critical Success Factors in Real Estate Construction Projects in Addis Ababa City
Administration”. The objective of the study is to identify success factors as well as to what
extent those factors influence project success. The questionnaire is for the purpose of academic
research in which the confidentiality of all respondents shall be respected. Thank you in
advance
Instruction
The questionnaire will have two sections.
1. Section 1: will use 5 independent variables to rate their influence on project
success.

1.1.Client objectives
1.2.Client Competency Measures
1.3.Project Environment
1.4.Project Team Leadership
1.5.Managerial Action
2. Section 2: Measure of Project success with the iron triangle of cost, time and
quality

In answering the questions,

 There is no need to write a name
 The responses will be recorded on a Rensis Likert Scale that has been adopted in which rating

1- Very Low, 2 – Low 3- Average 4- High 5- Very High

1- Strongly Disagree 2- disagree 3- Neutral 4- Agree 5- Strongly Agree
In rating the importance of each factors to project success

 Put x on the boxes to answer the questions on Likert Scale

 Please respond honestly to the best of your abilities

v
1. General Information
1.1. Gender
Male Female
1.2. Age

18-25 26-33 34-41 42-49 50-57 58<

1.3. Education Level

Elementary level complete High School Diploma

Vocational Training Undergraduate (Bachelor’s Degree)

Graduate (Master’s degree) Post Graduate (Ph.D.) and above

1.4. Job Position

Project Manager Engineer Forman

Admin

For specific job description____________

2. Section I

Company of employment -_____________________

These are the identified success factors for real estate construction projects to assess in the context of
Addis Ababa City Administration. Please answer by rating their contribution to project success using
the 5 Likert scale.

vi
Factors Very Low Average High Very
Low High

2.1. Client Objectives

Low Construction Cost

Quick Construction time

High Construction Quality

2.2. Client Core Competencies

Ability to effectively brief design teams

Ability to quickly make authoritative decisions

Ability to effectively define the roles of participating

organizations( Consultant and Contractor)
Ability to contribute ideas to design process

2.3. Project Environment

2.3.1. Physical Environment

Geographical location

Weather patterns

Water supply

Soil type

Access to infrastructure

2.3.2. Economic Environment

Access to quality resources

Availability of Funds

Economic stand of a nation

Inflation

Financial Liquidity

vii
Labor Availability

2.3.3. Socio-political Environment

Political stability

Occupational Health and Safety Act

Government Expenditure on construction

Demographic Change

2.3.4. Industrial Relations Environment

Institutional factor(Government policy and labor

legislations )
Organizational Structure of labor force

Social and cultural diversity(religion, ethnic groups,

culture and customs) of labor force
Placement of Conflict Management

2.4. Project Team Leaders Performance

2.4.1. Effectiveness of design team leader

A resourceful and knowledgeable professional team

ensuring that the client's requirement brief is thorough,
properly implemented and monitored
Highly experienced professionals keeping the top
management constantly informed of the well-being and
progress of the project
2.4.2. Effectiveness of construction team leader
High construction team performance results in high
construction time performance and low construction
team performance results in low construction time
performance
2.4.3. Measures of Project Team Performance

Project leaders commitment to cost, time and quality

objectives
Technical skills of the project team leaders

Planning skills of project team leaders

Organizing skills of the project team leaders

Coordinating skills of the project team leader

Motivating skills of the project team leaders

viii
 Project team leaders' early and continued involvement
in the project
Project team leaders' experience and capabilities

Project team leaders' adaptability to changes in the

project plan
Support by project team leaders' parent company

Project team leaders' working relationship with others

2.5. Management Actions

Planning and installing Communication system

Monitoring and updating plans

Developing an appropriate organizational structure

Controlling project progress

Implementing an effective safety program

Development of good reporting system

Implementation of effective quality assurance program

Holding of regular meetings

Development of standard procedures

Section II - Project Success Assessment

Factors Strongly Disagree Neutral Agree Strongly
Disagree Agree
Project Success
The project was completed on time or earlier
The project was completed within or below
budget
The project was completed in with in or above to
the quality standard
The buyer was satisfied
The buyer is using the property
The buyer will comeback for future purchase

Thank you for your cooperation

ix
 房地产开发项目团队调查问卷

亲爱的受访者，

研究人员正在进行这项研究，目的是部分满足硕士学位项目管理的要求，研究题
目为“亚的斯亚贝巴市政府房地产建设项目关键成功因素的评估”。该研究的目的是确
定成功因素以及这些因素对项目成功的影响程度。调查问卷用于学术研究，其中应尊
重所有答复者的机密性。

指令

问卷将分为两部分。

1.第1部分：将使用5个自变量来评估它们对项目成功的影响。

1.1客户目标

1.2客户能力措施

1.3项目环境

1.4项目团队领导

1.5管理行动

2.第2节：以成本，时间和质量三角形衡量项目成功与否。

在回答问题时，

 没有必要写一个名字
 响应将以Rensis Likert量表记录，该等级已被采用

1-非常低， 2-低 3-平均 4-高 5-非常高

1-非常不同意2-不同意 3-中立 4-同意 5-非常同意

评估每个因素对项目成功的重要性

 将x放在方框上以回答李克特量表上的问题

 请诚实地回应您的最佳能力

x
 1.一般信息

1.1性别

男 女

1.2年龄

18-25 26-33 34-41 42-49 50-57 58<

1.3教育水平

初级 高中毕业证

职业培训 本科（学士学位）

研究生（硕士学位） 研究生（博士）及以上

1.4工作职位

专案经理 工程师 福曼 管理员

数据收集器 工料测量师 电工

具体职位描述____________________________________

2.第一节

就业公司 - _____________________________________

这些是在亚的斯亚贝巴市政府的背景下评估房地产建设项目的成功因素。请使用5李克

特量表对项目成功的评级贡献回答。

因素 非常低 低 平均 高 很高

2.1.建设成本低

快速施工

高施工质量

2.2客户核心能力

xi
能够有效地向设计团队简要介绍

能够快速做出权威决策

能够有效地确定参与组织的角色（顾问和承包商）

能够为设计过程贡献想法

2.3。项目环境

2.3.1物理环境

地理位置

天气模式

供水

土壤类型

访问基础设施

2.3.2。经济环境

获得优质资源

资金的可用性

一个国家的经济立场

通货膨胀

财务流动性

劳务供应

2.3.3社会政治环境

政治稳定

职业健康与安全法

政府建设支出

人口变化

xii
2.3.4劳资关系环境

制度因素（政府政策和劳动立法）

劳动力的组织结构

劳动力的社会和文化多样性（宗教，种族，文化和习俗）

安置冲突管理

2.4项目团队领导表现

2.4.1设计团队负责人的有效性

资源和知识渊博的专业团队确保客户的要求简明透彻，正

确实施和监控

经验丰富的专业人员让高层管理人员随时了解项目的福祉

和进展情况

2.4.2施工组长的有效性

高施工团队性能导致高施工时间性能和低施工团队性

能导致低施工时间性能
2.4.3项目团队绩效的衡量标准

项目负责人致力于成本，时间和质量目标

项目负责人的技术技能

项目团队领导的规划技巧

组织项目团队领导的技能

协调项目团队领导的技能

激励项目团队领导的技能

项目团队领导早期并继续参与该项目

项目令领导者对项目计划变更的适应性

xiii
由项目团队领导的母公司提供支持

项目令领导者与其他人的工作关系

2.5管理行动

规划和安装通信系统

监控和更新计划

建立适当的组织结构

控制项目进度

实施有效的安全计划

制定良好的报告制度

实施有效的质量保证计划

举行定期会议

制定标准程序

整体管理行动

因素 非常 不同意 中性 同意 非常同意

不同意

项目成功

该项目已按时或更早完成

该项目在预算内或低于预算完
成

该项目已达到或超过质量标准

该项目只有很小的变化

买家很满意

b买家id使用属性

xiv
买家将在未来购买时复出

整体而言，该项目取得了成功

谢谢您的合作！

xv