Building the future of real estate in Nigeria

Nigeria, the world’s most populous black nation and Africa’s largest economy, by GDP size, is one of the emerging economies in Sub-Saharan Africa with burgeoning real estate markets that present numbers and fundamentals which investors find not only compelling, but also assuring.

With a growing population of over 170 million and a housing demand-supply gap estimated at 17 million units, the value of investment opportunities in this country’s real estate market is only a matter of conjecture, though experts approximate this value to $360 billion and estimate its average growth rate at 10 percent over the next few years.

It is estimated that 51 percent of Nigerians live in rented accommodation and 40 percent of them pay between N20,000 and N100,000 as rent yearly while 80 percent of the population lives in rented apartments compared to 20 and 25 percent in Ghana and South Africa respectively.

When therefore, analysts  gather to talk about  the future of this market,  observations, suggestions, projections  and attention are usually drawn to the almost limitless investment opportunities which this market holds out to savvy investors and this, of course, was the driving objective of the Refined Investors Series (RIS) conference in Lagos recently.

Described as a ‘real estate thought leadership initiative’, RIS is a collaborative effort between Fine and Country and Institute of Real Estate Excellence (IREE) targeted at astute investors, economic influencers, industry leaders, real estate developers, and stakeholders who are interested in exploring, understanding and unlocking the opportunities that abound in this market.

Fine and Country International West Africa, a high end real estate marketing and advisory firm, sees the series, which is aimed to provide accurate and current insight to investors at the emerging urban class, as part of their functions as a real estate marketing and advisory firm.

Also aimed  to build a definite roadmap for the real estate market through innovative ideas that come from those who open their minds to possibilities, RIS is out looking for influencers who proffer solutions to the challenges in the market because, expectedly, there are environmental and political constraints to creating  empires in Nigerian real estate market.

In building the future of Nigeria’s real estate, the need for restructuring of urban cities, building empires and skyscrapers, and visioning  cannot be over-emphasised given that the society is not just changing, but also growing  in size with bespoke sophistication that challenges both design and construction.

Though, in the opinion of Udo Maryanne Okonjo, Fine and Country’s Vice Chair/CEO who was the big brain behind the conference, “building empires of the future is synonymous with building empires of the mind which, in turn, involves creating ideas that drive investment and developments in the market”.

Okonjo believes that building real estate of the future also involves increasing competitiveness in the market and, to make this happen, she says there should be improved access to finance with long term repayment terms and for the mid-income market, the newly launched Nigerian Mortgage Refinance Company (NMRC) should aid in this process by offering better long term and reduced financing options that will trigger market growth.

“For the higher end market, what  are required are  innovative building technologies along with creative designs that are market-driven and that contribute to enhanced lifestyle whether in commercial or residential spaces”, she submitted.

The structure of the Nigerian urban cities call for a dramatic action that would align them to the future of this highly dynamic market that requires quality living and convenient lifestyle, hence making case for new urbanism, not just as a concept but a practical, livable environment.

“The present structure of our urban cities in which the master lives and works in the city centre while his driver or office assistant commutes long distance from the outskirt of the city is healthy”, says Jim Ovia, the Founder and Chairman of Zenith Bank Plc, pointing out that at high end developments like Eko Atlantic City there should be skyscrapers of 20-40 floors comprising one and two-bedroom apartments for  the low class citizens.

The answer to this challenge is however being provided through ‘new urbanism’ which Yinka Ogunsulire, MD, Orange Island, defines as “creating new urban communities within our existing cities to cater for the growing population and the emerging class”.

In the Nigeria’s major cities of Abuja, Lagos and Port Harcourt, such new urban communities are coming up and these are part of the ways the country is building the future of its real estate. In Abuja, there is The Centenary City—a 1,300-hectare master-planned community in the capital territory envisaged as a spectacular city hub and the largest of its kind in Africa, described as a fitting tribute to the Nigeria.

The Centenary City is home to the Abuja Address +Resorts which is a  multifunctional development that offers a complete cosmopolitan lifestyle to its residents, as well as serves as a hub for the wider community, the Centenary City as a smart, inter-connected urban centre that draws on innovative technologies and  holds promise for a central business district, a financial centre, a museum and cultural centre to promote African and global arts, world-class hotels, business and technology parks, residential districts, an 18-hole golf course, and leisure facilities.

In Port Harcourt is the $2 billion Rainbow  City while Lagos has Eko Atlantic City, Orange Island and the upcoming Gracefield Island. Characteristic of new urbanism, these new communities, which are at various stages of development, are planned to be built from scratch on the edges of the Lagos metropolises; they have some level of government involvement; are  privately managed/self governing;  and have  improved professionalism in delivery and marketing.

It is still a matter of debate whether these new communities are truly urban future or utopian fantasies, because critics say these developments will only serve a tiny elite, exacerbating an already deep divide between the haves and have-nots.

But Ogunsulire  says the new communities have become necessary because, in Africa generally, rapid population growth has overtaken good planning, land use management and the provision of engineering services, adding that such communities are developed to channel growth out of the city centres.

“In many cases, the only way to relieve the congestion in the core city is by developing multi-nodal cities where all movement and development is not focused around a single urban node; to serve this purpose, the new neighbourhoods must be integrated environments that not only provide residential opportunities but also employment, business, social, educational and recreational opportunities”, she says.

Eko Atlantic City, the new urban community rising on the ashes of the Lagos Bar Beach, is a massive development  aimed to decongest Victoria Island in Lagos by providing home for 600,000 residents with about 150,000 others commuting to work in the city every day. It is a 21st century city modeled after Dubai and will offer opportunities for commerce, residence and leisure.

This market has very promising future and this is being aided by quite a number of astute investors who, according to Nnenna Obiejesi, the Executive Director, Nestoil Limited, are driven by uncompromising vision to deliver real value as demonstrated in the quality of the Nestoil Towers.

Nestoil Towers, Civic Towers, Centre Heights, The Heritage Place, The Wings, Waves and the recently unveiled 25-floor residential tower—LorenzoBySujimoto—are all iconic developments that Obiejesi believes are products of visioning by men and women who have opened their minds to possibilities.

CHUKA UROKO