…Says building collapse scaring investors, task govt on stiffer policies
As Nigerians yell for prudent governance which translates into improved welfare, Professionals in the real estate sector value chain have maintained that sound policies, real investment and Political Will in the sector could be a roadmap towards economic recovery, growth and sustenance.
At a Breakfast session put together by Nigerian-American Chamber of Commerce (NACC) over the weekend with the theme: ‘Nigeria Economic Outlook 2022- Implications for the Real Estate Sector,’ in Lagos, they affirmed that there are prospects for the real estate industry to thrive in 2022 and beyond, only if the government would make Investments and come up with clear cut policies to address the challenges the sector is facing.
According to them, incessant house collapse and non- sanction on culpable persons/groups was not only a dent on the image of every Professionals in the real estate/ construction value chain, but such unfortunate incidents which claims the Life of so many people, scares investors and redirects them to saner climes where standards operating procedures are Paramount and uphold.
Delivering a keynote address, the President / chairman of the Council of Nigerian Institution of Estate Surveyors & Valuers, Emmanuel Okas Wike, said, the Real estate connects to the overall economy from one or two perspectives; which reflects the overall condition of the economy.
According to him, the real estate business follows the economic circle and it was the way the economy was patterned that real estate latches on. Though their projections might slightly vary, saying that, “With the World Bank and CBN’s positive forecast economic growth for Nigeria in 2022, the Housing shortage in Nigeria provides incentives for development, hence the huge opportunities in the real sense of it.
“As Estate Surveyor and Valuer, I am certain that there will be an uptrend in real estate investment and development with assurances of high return on investment as well as increase in real estate investment and moderate growth in 2022.
“Before this time, we have observed that the sector is witnessing an emerging market characterized with investment in residential, hospitality and commercial properties, with private developers playing key roles. In other words, the real estate sector has seen increased investment interest with individual and institutional investors rising and deploying capital into the sector despite the slowdown in the economy.
“Real estate market in Nigeria is filled with lots of opportunities for profitability. It’s a reliable route to revamp the economy and it can drive growth and job creation if harnessed with the right enabling environment by the different levels of governments. It would play an integral part in the nation’s economy as it is in the United States of America where real estate business and investment provides a source of revenue for millions of people, provides housing for families and greatest source of wealth and savings for many Americans, creates jobs and spaces for retail, offices and manufacturing and contributes about 20% to GDP, unlike here where it contributes a ridiculous amount of about 5% to GDP,”
He bemoaned the challenges the sector is facing, saying: “Critical challenges are the land tenure system, regulation around land use, ease of securing or transferring land title, physical planning laws and its enforcement, and these are fundamental in protecting values invested in real estate. The Land Use Act should be reviewed to make it more relevant and in tune with the needs and aspirations of Nigerians, today, the Act is a damper to real estate investment and development.
“Tied closely to this is the provision of infrastructure that support the land use and population densities. Government should concentrate more on provision of infrastructure, ease the burden on property developers and ensure a more cost effective and affordable home Development.
“There is no business that does not require real estate and there is no human being that does not require real estate. So the sector is very key, with huge potentials and opportunities, but we need the economy to be properly focused and properly managed by policy makers and the government so that all sectors, particularly the real estate can thrive, with the Estate Surveyors and Valuers and other stakeholders taking the lead,” he added.
In her address, the president of NACC, Dame Adebola Williams, said 2022 was expected to be activity packed politically in view of the upcoming elections 2023. Thus, the Naira would continue to be volatile in view of observed double-digit inflationary rates and there were some uncertainties surrounding possible changes in fuel prices in an effort to fully liberalise the sector, which are most likely to impact on costs associated, not just with the real estate sector, but almost all sectors in general, hence the need for government to be proactive, cautious and show farsightedness.
On his part, the Chief Executive officer, northcourt Ltd, Tayo Odunsi, asserted that it was expected in 2022 to witness a decreasing headline inflation, more government spending, lots of project announcements & some commencements. According to him, indirect real estate issuances such as REITs, REICOs, bond issuances etc. will be prevalent, while there would be significant growth in Proptech based on raises done in 2021 and more to come in 2022. “These offerings will further stimulate the market and ease operational efficiency. Hospitality segment will continue to experience growth as the nation has demonstrated penchant for hospitality offerings.
“Retail will experience more international operator exits, but more international retail brands with local partners/franchisees will enter. A good number of offices will be converted to mixed-use or purely for retail, hospitality, healthcare or residential. Residential real estate and land prices are projected to remain resident even as WFH or hybrid work styles remain prevalent. Demand for gated communities to continue to rise, especially in the event of rising insecurity, and as the elections approach,”
On his part, the Chief Executive officer of Economic Associates, Ayo Teriba, implored the government to focus on what he called, “TWO Home Truths”
His words: “Dynamics of the Global ecosystem is becoming a crucible that exposes continents, countries, states. sectors, companies, and individuals to a variety of melting -points more clarity on all the themes of the evolving global terrain would be useful. timeliness and intensity of adaptive responses to various exposures to the global crucible will determine whether the ultimate outcomes are transformative or disruptive more clarity on how to convert threats into wins would be helpful,”
Pix Caption: L-R
Sola Obadimu (Director General, NACC); Tobi Adama (CEO Alphacrux Limited); Dr. Violet Abdulkadir (Trade Mission Commitee Chairman, NACC); Emmanuel Efuntayo (Vice President, NACC); Dame Adebola Williams (NACC, National President); Busola Boyle (Director, Versa Research); Tayo Odunsi (CEO Northcourt Limited); Esv. Chief Emma Wike (Presidemt of NIESV); Dr. Ayo Teriba (CEO, Economic Associates); Joseph Ebata (Chairman of C’ttee, Property, Construction & Infrastructure, NACC)
Source : The Sun