As investors continue to adopt a ‘wait and see approach’ with the general elections, stakeholders have advanced the need for governments to develop long-term incentives for operators in real estate sector. They noted that since the industry is systemic and crucial to economic growth, whatever happens in the political environment would impact its activities.
To avert crisis, the expert said the federal and state governments must recognise the critical role of real estate sector in the economy by providing long-term incentives that will cover the entire ecosystem, drive growth and create jobs.
They spoke at the real estate outlook 2023 entitled: ‘Pitching your tent post-2023 elections’ organised by Nigerian-British Chamber of Commerce in partnership with International Real Estate Federation (FIABCI-Nigeria) in Lagos.
Lead speaker, Dr. Biodun Adedipe, said the performance of real estate serves as an indicator of what to expect in the economy. He said whenever there is trouble in real estate sector, it will reflect on the economy as real estate sector creates value on its own for others.
Adedipe, who is the Founder/Chief Consultant B. Adedipe Associates Limited said with indices showing that the economy will grow by 3.32 per cent this year, combined with parameters such as having largest youthful population, which is the sixth largest in the world, rapid urbanisation, and deepen internet penetration, “anyone selling real estate products must adopt end-to-end digitisation in their entire process.”
Partner/Managing Director, Alitheia, Olajumoke Akinwunmi, highlighted four ways in tackling deficit in affordable housing. These include: permanent source of funding to increase stock, planning permit/title system that expedites affordable housing projects, timely delivery of housing and pricing. She said there was also need to create sustainable sources of finance for debt and investment capital that recognises low-risk attributes of affordable housing as an asset.
President of FIABCI-Nigeria, Gladstone Opara, explained that the forum was to explore collaboration with organisations, governments and global agencies for impactful synergy on how to survive unpredictable business environment caused by socio-economic and political situations. However, he expressed optimism for a better economy.
“Although there will be a lull in the economy, we need to encourage practitioners to stay calm. Whenever there is general election, there is always fear. No matter what is happening, there is a lot of potential in the industry,” he said.
On retail sector, founder/Chief Executive Officer, Estate Intel, Dolapo Omidire, said the sector has been affected by foreign exchange challenges, which further impacted ability to restock by players, adding that retail sector is the worst performing sector in real estate.
“Developers have lost confidence in that space, occupiers are struggling to pay rent, big retail players have exited Nigeria, while developers are moving towards something more scalable,” he said.
Omidire said: “Because of the poor state of the economy, I don’t expect that there will be much demand for retail over the next one or two years. There will be a need for policy to achieve change.”
On prospects for the office sector, Senior Partner/Chief Executive Officer, Knight Frank Nigeria, Mr. Frank Okosun, said most expansion plans post general election would be kept on hold due to poor performance of the sector and economy. Vacancy rate, he said will continue to rise due to delay in tenants renewing rents and possible downsizing by firms.
However, he hopes that with Nigeria’s growing population, there will be continued interest in student housing, establishment of data centres and healthcare facilities. He also said there would be expansion of investment in technology and adoption of hybrid-work model.
On his part, founder/Chief Executive Officer, Octo5 Holdings Limited, Mr. Babajide Odusolu, he make a case for middle-income housing development that offers housing within N6 to N30 million in city such as Lagos. He advocated a shift toward vertical housing/multiple unit living and special interest in defining where market opportunities are in real estate market.
The Chief Executive Officer, Sonedis Logistics, Dr. Solomon Aigbavboa, advised operators to take advantage of opportunities in the logistics/warehousing sector, adding that there are huge deficit in the segment especially, for Fast-Moving Consumer Goods (FMCG), agro-products and pharmaceutical logistics. He noted that growth in e-commerce drives demand for warehousing.
Also speaking, the Special Adviser to Lagos State Governor on Housing, Mrs. Toke Benson-Awoyinka, harped on proper physical planning to avert flooding and other environmental issues, which real estate investors are prone to in Lagos State.
She noted that the attempt to oversee activities in the sector was for planning purposes and not to tax operators.
According to her, the government is poised to create an enabling environment for operators by ensuring accountability, boosting confidence through data gathering, digitising activities and training of artisans.
– The Guardian