Africa has a growing housing crisis. The continent has a 56 million housing unit shortfall, a 1.18 billion population predicted to double by 2050, and a 3.5 percent urbanization rate per annum, adjudged as the fastest in the world. Analysts estimate the continent requires 4 million housing units per annum to fix the gap.
These statistics reflect decades of housing delivery programs that delivered sub-optimal results and the magnitude of the challenge that lies ahead if the trend is allowed to continue. They also underscore the urgent need for a fundamental shift towards more effective and innovative measures. Given the compounding nature of the problem, it simply cannot be business as usual. Governments and private sector players in the built environment must embrace inherently primed measures to deliver broader impact and consequently bend the curve in the nearest future.
One such solution lies in the widescale adoption of green buildings. This global trend emphasizes buildings whose design, construction, and operation have minimum to zero adverse environmental effects. They use energy and water more efficiently and are a higher-value, lower-risk asset than standard structures. Evidence shows green buildings decrease operational costs by up to 37 percent, achieve higher sale premiums of up to 31 percent and faster sales times, and have higher rental income. Due to the global shift of finance towards sustainable investments, green buildings are becoming a more attractive destination for international funding.
Therefore, green buildings present forward-looking African real estate developers and institutional investors the opportunity to forge a more sustainable and impactful path towards fixing the continent’s housing crisis. This includes the unique ability to unlock innovative housing finance sources that are key to fixing the housing supply deficit and building sustainable business portfolios in line with the global drive towards a climate-smart, zero carbon economy that is not only good for the environment, but also good for business.
The good news is that the green building movement is gaining traction in several African markets, including South Africa, Kenya, Ghana and Nigeria. Several market players have recognized the business opportunities that it portends and are already mapping out “green” niches in key construction sectors from residential accommodation, premium office buildings to student housing. This is good for Africa.
Alpha Mead: Building Green is Good Business
A good example is Alpha Mead Development Company, forward-looking, and innovative real estate firm with operations in Nigeria and several other African countries. A leading pioneer of green buildings, Alpha Mead recognizes sustainable buildings business and ethical opportunities. This includes a viable path to achieving its corporate vision to be a market leader/standard-setter in the design and delivery of resource-efficient residences to its broad range of clientele and the historic chance to attain its ethical ideals as an environmentally responsible business entity.
Alpha Mead’s green building push in the residential housing segment is most evident in Lagos, Nigeria’s bustling economic, industrial, and commercial capital. In Lagos, 60–65 percent of business professionals are tenants due to the high home prices and the lack of affordable mortgage products, according to Residential Auctions Company, a real estate research company in Nigeria.
With an estimated population of 23 million inhabitants, a housing deficit of about 2.5 million units, and an upwardly mobile middle class with an eye for luxury living, the state provides the perfect mix for attaining Alpha Mead’s sustainability housing goals.
Alpha Mead’s signature green residential project in Lagos is the Lekki Pearl Estate (https://edgebuildings.com/project-studies/lekki-pearl-estate). The estate, located on the fastest growing real estate corridor in West Africa, Lekki-Epe, adjacent Lagos Business School, comprises 112 flats, contemporary terrace units, and semi-detached apartments. The residences target the mid-to-high-end segment of the Lagos market. Lekki Pearl Estate has bedrooms with outdoor terraces, spacious and well-ventilated living spaces designed to house families.
EDGE Certification as Key to Differentiation
To tap the business benefits of green building, properly communicate the value of green buildings to its clients and stakeholders, as well as ascertain the actual cost and benefits of going green, Alpha Mead has put EDGE, a green building certification standard developed by IFC, a member of the World Bank Group, at the core of its green residence portfolio. EDGE helps portfolio owners to assess and certify all their buildings in a cost- and resource-effective manner.
To receive EDGE Certification, a building must reach a minimum of 20 percent energy, water and embodied construction materials efficiency. This is done through the free EDGE App, which allows developers to map out different scenarios for the transition to resource efficiency for their building. EDGE allows developers to prepare a roadmap with efficiency measures they need to take and an initial assessment of the incremental cost and return on investment for each measure to reach resource efficiency.
EDGE certification has proven helpful for developers looking to access finance. It allows them to aggregate their assets and look at a sustainable portfolio investment strategy. As more investors look at green-certified real estate to channel green finance and support the transition to a net-zero economy, EDGE certification will continue to grow for green buildings.
Before now, investors interested in investing in green building struggled to identify projects and understand their green credentials. EDGE has changed the market landscape by presenting the data to investors in a format that they can understand – with quantifiable data – the environmental impact of their investments. This includes percentage improvements over a local baseline and carbon emissions savings.
Alpha Mead designed and delivered the Lekki Pearl Estate with remarkably advanced resource efficiencies using the EDGE certification system. The residences record 40 percent energy savings owing to use of features such as reduced window-to-wall ratio, ceiling fans, energy-saving lighting and 30 percent reduced water consumption through use of dual-flush water closets, low-flow showerheads and faucets for kitchen sinks and washbasins. They also incorporate in-situ reinforced concrete slabs for the floor, aluminum sheets on timber rafters for roof construction and in-situ reinforced internal and external walls. This enabled them to achieve EDGE Advanced Certification, the first of such in Nigeria. Despite the premium prices for its residences, occupants are happy to live there because they enjoy lower utility bills and the comfort that green solutions make it all worth it.
Alpha Mead Development Company is a subsidiary of a conglomerate, Alpha Mead Group, with several different business portfolios beyond the real estate infrastructure development arm that oversees the Lekki Pearl Estate. These include facilities management, healthcare management services and property management. At the top of Alpha Mead Group is Femi Akintunde, the Group Managing Director. An accomplished engineer and business management professional with a strong entrepreneurial drive, Femi understands the strategic value an EDGE Certified residential portfolio offers the company’s owners and clients.
“We pride ourselves in delivering high-quality professional services while ensuring minimum total life cycle cost of the asset to the owner. Green building is not just fashionable; it is good business,” says Akintunde. “Since we learned about EDGE, we see it as a compass to excellence for all our projects. When we ventured into real estate development, we wanted to create functional, safe, secure, and comfortable communities for our customers without destroying the environment. We will always put the environment and sustainability on an equal pedestal as profit.” says Alpha Mead’s Group Managing Director, Femi Akintunde
Damola Akindolire, the Managing Director/Chief Executive Officer of Alpha Mead Development Company, the real estate portfolio of the group shares in the company’s vision, aptly captured by Femi Akintunde. For him, EDGE helps them to optimize housing design, quantify utility savings as a critical marketing tool for the Lekki Pearl estate.
“We are creating a more sustainable living environment for families,” Akindolire says. “We let our customers know that the cost of repair over the project’s lifecycle is significantly lower. The house costs 25 percent less in terms of maintenance, putting money right back into their pockets. In terms of our material standards, we are 39 percent above the bar, in terms of our water usage, we are 22 percent above the bar, in terms of energy efficiency use, we are 10 percent above the standards, that means we are creating a more sustainable environment for families. We use multi-layer pipes, which means no leakages, flat rooftops to carry solar panels that would save energy. Our houses are designed to save money from the get-go. That’s the whole idea of Lekki Pearl Estate.”
Since Alpha Mead commissioned the Lekki Pearl Estate almost two years ago, it has received a speedy offtake due to an innovative marketing campaign tied to its resource efficiencies and utility savings. Though priced at a premium, the estate has recorded a 100% percent offtake with the phase two subscription getting to over 30 percent in the past 6 months.
Tenants have reported experiencing good satisfaction levels with the spacious living spaces, good ventilation, and a cozy natural environment.
Victor Uduak is a resident and owner of one of the 4-bedroom terraces at Lekki Pearl. He considers his investment at the estate as one of the best decisions of his life. He has seen a significant drop in utility costs as a result of the energy efficiencies of his home. “Investing in Lekki Pearl is one of the best decisions for myself. Our monthly power token of NGN30,000 in our former apartment has now dropped to between NGN18,000 and N22,000, and the spacious rooms give the kids more room to play.”
Another resident, Chioma Eziokwu, an international worker, who owns a 3-bedroom apartment at the estate says she living at Lekki Pearl has made it easier for her to adjust to the Covid-19 imposed remote working structure. She enjoys consistent solar power and spends a lot less on electricity than she did at her former place of residence. “The pandemic disrupted our lives like never before and as an international tech worker, I have had to make some adjustments with the way I operate. Full remote working has been embraced and the fact that I stay home all day I get to set up a full home office and spend more on power. Fortunately, the power bill has been significantly less than that of my colleagues.”
For Adekunle Adelakun, an owner of a 4-bedroom semi-detached unit at Lekki Pearl said: “Having a family of five automatically means that we consume a lot of water. However, our experience has been surprisingly different at Lekki Pearl. We moved in as soon as the estate was commissioned and I can count on one hand, the number of times we have been out of water.”
An Exemplary Approach
Faster offtake and happy tenant experiences such as those from Victor and Adekunle validate Alpha Mead’s conviction that building green and making a profit are not mutually exclusive. Innovative property developers that care for the environment can achieve both goals with the right tools such as EDGE.
With a vast residential housing deficit in Africa and Nigeria, a fast-rising middle class with an eye for luxury and quality living, Alpha Mead’s drive to build green and leverage the efficiencies that EDGE is profitable and environmentally responsible. Indeed, it is the way to go for African developers as they partner government to tackle the continent’s housing crisis. This innovative approach will help unlock needed capital from international finance institutions to help fix the problem while re-imagining the future of Nigeria’s real estate along a sustainable path.
Chieshe is a housing policy and green buildings analyst based in Abuja