Hope for investors as FM professionals tackle post-recession real estate market challenges
Expectations are high for both investors and consumers of real estate products as facilities management (FM) professionals and other stakeholders in different parts of Nigeria gather tomorrow to tackle the post recession challenges faced by the real estate market.
It is hoped that the outcomes from that coming together will reposition the market and proffer solutions for existing problems that are still holding it down and marking fresh investment unattractive.
The real estate market was one of the worst hit sectors during the 15-month period of economic recession which lasted from Q1 2016 to Q2 2017. The sector saw its growth potential dim as it the market was defined by low demand, widening vacancy rates, increasing case of rent service charge defaults and slowdown in construction activities.
Though these market characteristics are gradually fading away owing to improving macroeconomic indices, it is also pertinent to note that the market is still struggling to recover from the lull. What this means is that investors are also struggling to remain in business in the midst of uncertainty in the market over a gradual, fragile and vulnerable recovery in the economy.
A Q1, 2018 report by International Real Estate Partners (IREP) Nigeria raises the fear that rents in commercial properties such as Grade-A office space could lightly fall below the current average of $700 per square metre, as the market anticipates the arrival of 37,000 square metre in Victoria Island and Ikoyi, while demand for this class of office space is not growing at the same pace.
These market realities are some of the things that agitate the minds of investors and FM operators whose businesses revolve around the performance of the real estate sector.
These operators believe that for the market to receive a new lease of life, the FM industry has a role to play in enabling the positive experience garnered by stakeholders during the crippling recession.
“But how will FM aid employee productivity and business profitability? How will it help landlords attract the right tenants and retain them? How will it improve the experience in the healthcare space and rescue our nation from the challenges of medical tourism? queried Femi Akintunde, GMD, Alpha Mead Group at a press conference in Lagos.
When the practitioners gather for an FM Round Table promoted by Alpha Mead, answers will also be provided on how FM will deliver stronger return on investment to private real estate investors and developers, and how they can improve collaboration between private and public sector to leverage global standards of living and working through provision and management of quality public space and infrastructure
The increasing interests in the public-private partnership (PPP) model by both states and the federal government will be given attention and the aim is to optimize performance of existing national infrastructure assets and explore strategies to build new ones in response to the infrastructure deficit.