Developer tasks stakeholders on potentials in real estate sector

A housing estate in Lagos, Nigeria. Image source findnigeriaproperty

A housing estate in Lagos, Nigeria. Image source findnigeriaproperty

COMMITMENT from the government and all stakeholders will make more impacts on the real estate sector of the economy, which at the moment is performing far lower than its inherent potentials, capable of propelling the country’s Gross Domestic Product (GDP).

In a forecast of the real estate sector, the Managing Director, Propertygate Development and Investment Plc, Mr. Adetokunbo Ajayi, who spoke recently in Lagos during a chat with selected media organisations, noted that though the operating environment was still unfavourable, things, notwithstanding could turn around if governments at all levels rose to address all lingering factors.

The well being of the general economic environment will obviously impact the real estate sector. A troubled macro-economic environment is a threat to the subsector.

We are however optimistic there will be an improvement in the general economic environment if we are guided by vibes from the new government.”

The slowdown in the Nigerian economy is impacting on real estate in more ways than one, leading to subdued demand for assets and a steep rise in vacancy rate especially at the high end, but with investment friendly environment, potentials within the sector could be unearth for the nation’s good

But Ajayi added that he believes that with the huge need for real estate products and services, the subsector would get an edge over others. “We expect to see heightened competition, innovation and rigour among players in a bid to woo consumers with purchasing capacity.

Unfortunately, we may also see untoward practices from some operators who are bent to stay afloat if the inclement environment lingers.” Considering the state of the economy at the moment, the investment expert, said because the real estate industry in the country was still hugely untapped, and that affords opportunity for exponential growth.

He added that, though the subsector was still being affected by a number of factors, he held that the inclement environment could be changed government and all stakeholders came up with enough courage and commitment to change the trend.

In his assessment of the industry, Ajayi said currently, there were difficulties faced in both the industry and the general economic environment in the nation in 2014.

According to him, the trickledown effects of these challenges translated to a slowdown in demand for real estate products and services, which was felt by his organization and other industry players. “In addition, the run in from the last quarter of 2014 through to the recent elections and handover of government power threw sizeable uncertainty into the general environment.

However, our organization has continued to progress in spite of these challenges. Our targets during the period were not fully met, but we still had notable achievements indicative of the organization’s resilience and continued growth”, he added.

Ajayi listed a functional mortgage finance for buyers, a friendly interest rate on development and investment debt capital, provision of public infrastructure, particularly roads, functional urban planning and regulations, as some of the factors that could aid unearth untapped potentials of the real estate industry.

Others are robust enforcement, access to quality and affordable land for development, sound government policies and administration for conducive operating environment and capacity building for players in the development chain would lead to higher efficiency.

Justifying the place of advisory services for the real estate subsector, Ajayi said his company believes that knowledge is the key to making a successful real estate decision, whether it is a personal development for use or extensive and intricate real estate ventures.

Real estate, according to him, entails huge capital outlay, even for supposedly minor development. “We have painfully watched investors make costly decisions on real estate location, development, investment idea, implementation mode, financing structure among others.”

He added: “Through our advisory portfolio, we help our customers and this we do leveraging our domain expertise and wealth of experience.

We help them make informed choices and develop projects best suited to their needs including investment objectives. Our advisory services portfolio include generating sound and viable development and investment concepts; evaluation and analysis of existing development and investment proposals; designs and construction; development monitoring to manage pitfalls between conception and delivery.

We also give advisory support to lenders and institutional investors by helping them analyze real estate proposals before they commit their funds; property rehabilitation through re-conceptualizing the investment potentials of less efficient properties and putting them on the path to value and growth; and helping public and private sector institutions in building frameworks, policies and processes to address fundamental real estate issues. We are pleased to say that our clients are reporting tremendous benefits from these services.”

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