•Details Of The 1 Day 2022 NBCC Economic Summit In LAGOS
There have been speculations about the real estate business in Nigeria growing well in 2022 by some practitioners and other individuals. But when the Nigerian-British Chamber of Commerce (NBBC) in conjunction with its real estate group held its 2022 economic summit titled ‘Nigerian Economic Outlook: Intersection with the Real Estate Sector’; the issue became clearer to everyone.
The event which held on Wednesday, February 2, 2022, in Lagos had experts like Mr Opeyemi Agbaje, the Founder/CEO RTC Advisory, Mrs Toke Benson-woyinka, The Special Adviser to Gov, Sanwo-Olu on Housing, Mr Hakeem Ogunniran, Chairman NBBC Construction and Real Estate Group and a few others. It was also a gathering that had financial experts like the MDs of Mortgage banks in attendance. The essence of the meeting was to dissect the opportunities inherent in the Nigerian Real Estate Sector viz-a-viz the current economic realities.
City People’s DAMILARE SALAMI 08155134152 was present at the summit alongside senior photojournalist, Abdulrasheed Sanni and in this report, he brings you salient points of view of different experts, read on.
WHY ARE WE HERE?
Bisi Adeyemi, NBCC president and chairman of the council, observed that the real estate sector had become a major contributor to the country’s economic growth this year.
“The major objective of this event is to examine the opportunities, challenges, and, indeed, the threats in the real estate sector in 2022. The sector showed positive GDP growth in 2021 and has been identified as one of the sectors to look out for this year. We have assembled distinguished subject matter experts that will ensure we all leave here better informed,” she assured.
OPEYEMI AGBAJE ON NIGERIA’S ECONOMIC REALITY
Speaking on the economic reality, Mr Opeyemi Agbaje revealed that the sector had been in recession since 2015 when the naira had an unprecedented fall but came out of recession in the post-2020 era. “Real estate and construction sectors have seen four quarters of recovery, and will provide critical opportunities for economic growth despite the cumulative effect of high inflationary trends and high-interest rates, however, he noted that the growth would depend on the right policies and improved security in the country.
Furthermore, Mr Agbaje opined that the African business act is like a double-edged sword for the Nigerian investor. It presents an opportunity for our firms to reach out across Africa, their businesses across financial services and the Nigerian business generally to begin to run across the continent. And the typical Nigerian firm whether it is in conventional services, construction or real estate development will probably be more sophisticated and have better capabilities than its equivalents in most other African countries and regions. But if we are wobbled down here and unable to grow here, unable to help and the government always has to help create infrastructures to assist Nigerian firms, then we will be recipients and not takers. So, South African firms, Morocco and Egyptian firms will always be ahead of us by grabbing the opportunities inherent.
“Reflecting on the real estate sector, I think the bigger opportunity is for our firms in the sector to begin to take opportunities across the continent. I think there will be a Nigerian real estate company that can take over the African market. With the knowledge they have, with the competence and challenges they face in the Nigerian environment, if they have to deal in Kenya or Tanzania I think they will be vastly more competitive than their contemporaries. Perhaps, there are ways we can form alliances across the continent like searching for ways to access finance in the South African market for example, and many more. So there are all of those possibilities that our firms can harness.
REGULATORY AND COMPLIANCE INTENSITY CAN POSITIVELY IMPACT THE SECTOR
The Chairman of the NBBC Real Estate and Construction Group, Mr Hakeem Oguniran speaking on the progress of the sector, revealed that the sector struggled for about four years but since Q4 2020 has entered growth territory and that has been sustained for four quarters. We think that sustenance is not an accident and I think that we should be able to build on the growth we have had in the past four quarters.
Explaining the trends to watch in the sector in 2022, he noted that regulatory and compliance intensity would rise on the back of the collapsed 21-storey building in Ikoyi in November 2021, adding that it would lead to the re-launch of the Certificate of Fitness For Purpose.
Oguniran noted further that the Magodo’s case that threw up a 12-year land judgment early this year might incentivise other judgment creditors. He pointed to other land cases like the unresolved Osapa London that has been on since 2013, and the multiple ongoing suits involving major landowning families in Ajah.
“There will be regulatory and compliance intensity, with heightened title uncertainty in high profile locations. However, technology can be expected to take centre stage in the sector this year, with extremely strong prospects for growth in comfort homes, led by demand from first-time homebuyers, millennials, young families, and empty nesters” he emphasised.
Oguniran, who is also the have CEO, Eximia Realty, observed that real estate thrives off the back of strong macroeconomic fundamentals, adding that the 25 percent homeownership rate in Nigeria reflects the challenging operating environment in the country.
Proffering more growth solutions for the sector, Mr Ogunniran emphasized on the importance of industrializing the sector and its processes. “When you industrialise the process, you are able to bring significant efficiencies and that will minimize your cost. You gain efficiencies on time as a project that you normally complete in 2 years will now take you about 6 months, so you are not bearing capital cost for like one and half years and the process helps to solve the issue of standardization, helps to roll out faster and helps to reduce cost. So, I do think that it is important that we move from building to manufacturing and industrializing the process. We need to commoditize housing, we need to be able to buy and sell housing the way we buy and sell all other products and that means that we have to streamline all the rules and regulations that currently impede the smooth transaction in the sector.
WE MUST CURB ALL FRAUDULENT TENDENCIES TO GAIN THE TRUST OF CUSTOMERS – TOKE BENSON-AWOYINKA
The Special Adviser to Governor Babajide Sanwo-Olu on Housing and head of the Lagos State Real Estate Regulatory Agency (LASRERA), Mrs Toke Benson-Awoyinka during her presentation explained the need to curb fraudulent practices and emphasised the state government’s commitment to sanitising the industry.
“This year is going to be different as Lagos is going to tackle fraudulent activities in the real estate sector this year. We will name and shame when the time comes because the returns on investment is unbelievable so there’s no reason to defraud people,’’ Benson-Awoyinka said.
She said the state would, in a few weeks, conclude the foreclosure clause in its mortgage law to build investors’ confidence and provide access to investments when there’s a default in the mortgage payment.
Mrs Benson-Awoyinka emphasised the need for individuals that want to buy land to do their due diligence and engage the services of a lawyer when purchasing properties to avoid cases of fraudulent land allocation.
“There’s no clear title of land in Lagos called ‘excision in process’ as this means such land has not been allocated. You must search at the land bureau to ensure that a property has a clean title before you begin any transaction to avoid being scammed,” she advised.