Identifying the risk factors in real estate construction projects: an analytical study to propose a control structure for decision-making

Abstract

Purpose Construction projects in the real estate sector are important for a nation’s economic growth. However, owing to several constraints and stereotypes, the construction industry is suffering from major capital losses. A review of recent literature revealed that risks occurring in real estate construction projects (RECPs) carried out in developing economies can be divided into four categories, i.e. financial risks, design risks, execution risks and sociopolitical risks. This study aims to identify the critical factors that lead to these risk categories and develop a control structure for RECPs. Design/methodology/approach A quantitative method, i.e. a questionnaire-based survey, was used for this study. Using a random sampling technique the questionnaire was distributed to selected, highly experienced project managers. To determine whether the factors identified as part of the literature review strongly influence the categories, the factor analysis of the observations was performed. Findings The observations made in this study lead to the identification of six critical risk causing factors, i.e. lack of efficient planning, execution constraints, external constraints, client-induced constraints, project constraints and partner experience. The observations indicated a lack of knowledge of project management, organizational culture and a claims redressal mechanism in RECPs. Also, this study recommends a blockchain-based control structure to control the occurrence of the risk causing factors identified. Originality/value This study recommends a blockchain-based control structure for controlling the risks occurring.