Social Dimensions of Climate Vulnerability: How Flood Risk Shapes Commercial Real Estate Investment in Urban Environments

Flooding poses a significant threat to commercial real estate investment, disrupting business operations, escalating maintenance costs, and heightening investment uncertainty, particularly in coastal and low-lying urban environments. This study examines the social dimensions of climate vulnerability by investigating how flood risk shapes stakeholders’ decisions to invest in commercial properties within flood-prone urban areas, with a focus on Lekki Phase 1, Lagos, Nigeria. A quantitative survey design was adopted. Data were collected from 87 commercial property investors through a structured questionnaire (FIIFRZQ) measured on a four-point Likert-type scale. The instrument demonstrated acceptable overall internal consistency (Cronbach’s α = 0.72), with subscale α values ranging from 0.62 to 0.81. Multiple regression analysis was used to assess the joint and individual contributions of seven factor categories (environmental, legal, economic, neighbourhood, structural, locational and behavioural) to investors’ willingness to invest in commercial property that is at risk of flooding. The seven predictors collectively explained 61.2% of the variance in investment willingness (R2 = 0.612; F(7, 79) = 17.91; p < 0.001). Five factors, namely legal, environmental, structural, economic, and locational, were statistically significant contributors to investment willingness, while neighbourhood and behavioural factors were not. Johnson’s relative weights analysis confirmed legal and environmental considerations as the dominant drivers. The findings illuminate the interplay between climate vulnerability and investor behaviour in urban real estate markets, with actionable implications for policymakers, real estate practitioners, and investors navigating decision-making in flood-exposed urban environments.