Issues affecting real estate investment were, again, brought to the fore by stakeholders recently with a resolution to rethink business strategies for the growth of the sector. DAYO AYEYEMI reports
Leaders in real estate sector are not taking anything for granted as they have all agreed to rethink their business strategies for growth.
This, according the experts, will allow them to adapt to the dynamic changes within their operating environment.
Converging on Lagos for the annual Ruth Obih – led Real Estate Unite (REU), the practitioners, comprising developers, investment bankers, pension administrators, lawyers, architects, estate surveyors, policy makers and a host of others, agreed that the industry needed to adapt to many things, taking into account the geopolitical, economic, societal and technological challenges.
They noted that real estate sector had the capacity to transform African economy if the right things are done.
Welcoming the guests, Chief Executive, 3Ivest, Mrs Ruth Obih-Obuah, noted that the recent economic downturn had caused real estate sector in Africa to fall below the projected 2.6 per cent regional growth.
According to her, economic indicator, has, however, showed that Nigeria is gradually coming out of recession.
Ruth-Obuah explained that balancing short-term indicators with long-term structural change would reinstate investor confidence in the sector.
This, she said, was paramount to the success and continued growth recovery process of the sector, as driven by the government reforms and policies.
The occasion presented opportunities for residential, commercial, healthcare and hospitality sectors of Africa’s real estate market to unite, network and discuss issues affecting their industry.
In his speech, a lecturer at the Lagos Business School, Dr. Doyin Salami, expressed worries about the conflicting figures on the nation’s housing deficit, warning that absence of accurate data could worsen the accommodation crisis.
There had never been an agreement on figures about the nation’s housing deficit apart from United Nations’ estimate of 17 million.
Many housing professionals believe that the figure is over-bloated.
Salami, who is a member of Monetary Policy Committee (MPC), said there was need for the Federal Government and the private sector to rise to the challenge by going beyond narrow view of what Nigeria is, but on what the nation is up to.
According to him, there is need to address the issue of lack of data /information about the sector rather than basing it on speculation.
He warned that if the nation failed to overcome the problem of data, it meant that size of opportunities in the real estate sector would continue to be based on speculation.
According to Salami, challenges of data in the real estate sector include the overall size of financing, cost of financing and the nature of financing.
To grow the sector, the renowned economist urged the government to find a pathway to lowering interest rates, adding that it must open the space for private sector to drive the process.
Another speaker, Chairman, Mixta Africa, South Africa, Mr. Deji Alli, mentioned that the problem of affordable housing was due to the narrow focus of private sector and government policy problems.
He said there was no common solution to housing problem, urging the government and private sector to collaborate by focusing on provision of social housing.
“We need to look at society problem and use pension funds to solve it,” he said.
One of the investment bankers at the forum, Kyuri Bukar, noted that the issue of long-term fund for real estate investment needed to be resolved.
According to him, issues surrounding Real Estate Investment Trust (REIT) has not been properly structured, pointing out that this has made the scheme unattractive to the market.
“The underlines should be balanced/structured every year to attract investors,” he said.
He noted that there was no uptake and that demand for REIT was low, calling for efficient tax structure and regulations.
Chief Executive Officer, Dunn Loren Merrifield Group, Mr. Sonnie Ayere, noted that a growing volume of capital was being targeted at sub-Sahara Africa’s real estate investment and development.
Other speakers talked about how to explore the stock exchange, pension funds and regulations in stimulating the Nigeria’s real estate market..
Managing Director, Mixta Africa, Kola Ashiru-Balogun, noted that Pension Fund Administrators (PFAs) were not comfortable with real estate market, saying that they found it easy to invest in treasury bill, which would give them quick yields.
Managing Director, FMDQ OTC Securities Exchange, Bola Onadele, said it was not expected that real estate would depend entirely on money market, but that it could start by igniting assets by short –term.
“Banks do not have the liquidity to finance real estate. To get the pool, era of commercial paper must come back to the financial market,” he said.
Government must open the space of real estate for the private sector to drive the process.
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