OLASHORE CALLS FOR URGENT BANKING REFORMS TO GROW REAL ESTATE
MARKET
PRINCE OLASHORE IS DRIVING THE MARKETING OF THE EDUCATIONAL CITADEL
The Chief Executive Officer of Lead Capital Plc, and Chairman
Board of Trustees of Olashore International School Prince Abimbola Olashore,
has pointed out that to unlock opportunities in Nigeria's Real Estate market,
the financial sector has to be reformed, fair banking practices have to be
adopted and better supervision has to be focused on. This will
also stabilize prices in the long run and help to utilize the 17
million deficit in the real estate market which represents a huge
opportunity.
He stated this during a paper presentation on “Unlocking the
Opportunities in the Nigerian Residential Real Estate market: The Investor’s
Perspective” at a forum recently organized by Lekki Gardens Estate Investment
in Lagos.
According to him, the opportunities inherent in the sector lies in
the fact that there’s an increasing population growth in which more than 80% of
Nigerians live in settlements and demand for housing far exceeds the supply.
His words “Opportunities in the Real Estate Financing cannot be
seen from the Increasing population growth, rapid urbanization and the growth
of the middle class have spurred demand for real estate. With the level of
housing at only 2 dwelling units per thousand people compared to a rate of 8-10
dwelling units per thousand people as recommended by the United Nations.
Nigeria has a population growth rate of 3% and a rural-urban migration rate of
5% per annum. The rate of housing demand continues to exceed supply, presenting
ample opportunities for growth and development”.
Viewing the investment perspective of the Real Estate, he
portrayed Africa and the Emerging market as being field with opportunities for
healthy returns due to their increasing growth fundamentals, owing to the fact
that the Eurozone crisis have slowed down growth and weakened advanced
economies from their strong position as an investment destination, thus making
investors focus on promising markets, such as Africa, and the fact that
Africa’s cities are experiencing an influx of residents in search of work and
better standards of Living.
He confirmed that, “Africa’s growth presents investment
opportunities in key sectors given the sheer size of the market and the
continent’s potential. By 2030, more than 50% of Africans will be living in
cities. The key drivers in Africa Real Estate are political stability,
macro-economic reforms, rapid urbanization, and growing middle class."
Likewise, he sees the challenges inherent to be Land registrations, access to
finance, lack of infrastructure, importation of raw-materials, and
affordability.
He pointed out that more than 80% of the Nigerian population live
in settlements that are unplanned with poor living conditions, approximately
85% of the urban population live in rented accommodation - spending over 40% of
their income. Nigeria which has a population of about 170 million and vast oil
wealth continues to experience problems in meeting a housing deficit modestly
estimated at 14 to 16 million units, and Mortgage loans and advances stand at
0.5% to GDP in contrast to 30-40% in emerging economies and 60-80% in advanced
economies. Private developers will continue to be of strategic importance
The Forum had various Captains of the Industry speak on how
opportunities could be unlocked in the Real Estate sector through the banker’s
perspective, investor’s perspective, infrastructural banker’s perspective,
media perspective, pension manager’s perspective and Fund Manger’s perspective.
The Managing Director of FSDH Merchant Bank, Mr Rilwan
Belo-Osagie, who spoke from the Banker’s perspective on ‘Financing Real Estate
deals’ stated that one of the peculiarities in the industry is that there is a
large demand for housing in Nigeria and as such the Real Estate business is
growing fast. "The key issue in financing real estate is achieving
bankability, and dealing with weak value chains which ranges from property
registration and taxes, Infrastructures, high interest rates demand, and access
to long term finances. Unless we get more mortgages in Nigeria, developing
the residential real estate among other real estates will be
difficult."
While trying to unlock real estate opportunities from the media
perspective, the Publisher of Business Day Paper, Mr Frank Aigbogun reiterated
that more clarity is required on the part of those developing and buying houses,
in order to understand the dynamics of sector, what drives it, and how it is
compared with those abroad. According to him all these will aid reporting of
the sector better .
According to the MD/CEO Lekki Gardens, Mr Richard Nyong, the
opportunities inherent in the real estate sector is huge and real with the
biggest expense coming from families, which he also sees as the largest store
of value. To this end, he urged people who want to explore the opportunities in
the sector to have passion for business,have good fundamentals and capacity of
the business, know how to package products, fund and train people. "These
are the key success factors that have worked very well for us at Lekki Gardens.
We clearly saw the profit patterns in the opportunities and tried to see how we
could participate and have a share of it. We failed seven times but credibility
kept us. Do not do things because they are in vogue but because you are
provoked. Do not be afraid to lose, but lose a little and learn a lot”.
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