Lessons as Sujimoto relives economic recession impact on real estate, developers

After what was, in relative terms, a boom in the real estate sector within the period spanning 2014 to 2015, the succeeding years, 2016 and 2017, were a major turning point for players in that sector. Many of them, particularly developers, got their fingers burnt by a crippling recession.

With the drastic fall in oil price at the international oil market, oil companies were forced to contract operations and rethink their housing needs; the galloping inflation eroded household and organisations’ income, while import  activities collapsed due to high exchange rate at the foreign exchange market.

All these combined to not only constrict construction activities and reduce demand , but also collapsed the property market, leading to near-zero demand, supply glut, high vacancy rate, rent default, loan cancellation, project revaluation and downward review of project sizes.

For Sujimoto Construction Limited, a frontline developer playing at the high end market, it was a period of sober reflection, one during which the company was compelled to think outside the box and to consider strange and near-impossible options.

Sijibomi Ogundele, the company’s MD/CEO, has a harrowing but inspiring experience to share which, it is hoped, will serve as a lesson on courage and doggedness in a challenging economy such as Nigeria’s.

“I had dreamt and developed the biggest project in my life with $90 million to build the tallest residential building in Sub-Saharan Africa. I invested all my money, time and passion into something I believed in”, Ogundele recalled in a statement obtained by BusinessDay at the weekend.

The statement reads in part: Unfortunately for me, the economy was very bad and things became very rough. I had to let go the best people around me. There’s a way that life tries to snatch your dream away from you and suddenly everything you are doing looks incompetent.

Some people told me that real estate is a difficult sector so it would be best for me to leave my passion and do something else. I visited my old-time friend’s water factory in Abeokuta and thought about venturing into the pure-water business.

I even went back to Ijebu Igbo and visited some farms because it seemed agriculture and farming had become the new ‘oil’. Some people began convincing me to leave everything and deviate into something I knew nothing about (agriculture and farming).

I even tried to sell everything I owned to move to New York City. I spoke to a successful Nigerian actor who had moved to Atlanta because of the steep recession. He said life was easier there, things were stable and I could access credit through a flexible banking system.

I was confused and devastated, but I kept the words of Napoléon Hills book on replay in my head. I remembered that my present situation should not determine my destination.

I told myself that running away wasn’t the definition of the Motomatics Philosophy I had created. The Sujimoto I know and advocated wasn’t a runaway loser, neither was it lack of focus kind of personality or company.

I developed courage and refocused my life. I revisited my options and created Guilliano, the son of Lorenzo, the grandson of Cosimo the Medici. I conceptualised, planned and executed the project, even though I didn’t have all the money. In less than six months, though I am still not where I want to be, I am thankful to the almighty that I am not where I used to be.

It’s been the most inspiring, most difficult and most challenging time for me. But now, I am thankful I didn’t give up, run off or lose hope.

CHUKA UROKO