NatanelFlorens in aggressive push for increased affordability in housing market
Determined to see more ‘homeless’ Nigerians brought on to the property ladder, NatanelFlorens, a relatively new real estate firm in Nigeria with disruptive intervention in the housing market, says it is unrelenting in pushing the frontiers of housing affordability in the country.
A premier alternative asset investment company with focus on real estate services, NatanelFlorens came into the Nigerian property market a couple of years ago on a mission to transform the property landscape with its innovative and affordable solution known as Rent-to-Own, an initiative it has used efficiently to impact positively on the housing market.
As a housing solution, rent-to-own which enables tenants to own homes in which they live through a flexible and authentic arrangement that allows them to pay their rent over a period of 10 years; it also allows potential house owners rent houses in an area with a rent regime that is within the margin in that area, and own the houses after paying rents for 10 years.
For reasons of unrealistic house prices and low supply relative to demand, home-ownership level in Nigeria is very low. Oguche Agudah, chief investment officer/executive director at NatanelFlorens, estimates housing penetration in the country at 10 percent, meaning that 90 percent of the country’s over 170 million population lives in rented accommodation. And this is against 80 percent penetration in South Africa and close to 50 percent in Ghana.
“What we have brought to the market is a solution that eases the processes of homeownership. Many people cannot buy houses, but they can rent. As a housing solution, Rent-to-Own enables home seekers to own homes through a flexible arrangement of paying normal rent over a period of 10 years and at the end of the period own the home they have been paying rent for”, Agudah explained at a press conference in Lagos recently.
With this solution, the company has been able to stimulate the market and create demand where there was none before. The market demand is such that so many people are now on the queue, wanting to key into this initiative. But challenges remain.
Available housing stock is grossly inadequate which is why, Agudah said, they are targeting 50 developers that can supply 5,000 housing each annually to give a total of 250,000 units to respond to existing demand in the immediate term. “We are planning to sign an agreement with the Real Estate Development Association of Nigeria (REDAN) to jerk up the supply end of the value chain”, he revealed.
He added that they were also working with many reputable developers including the UACN Property Development Company (UPDC) with a view to increasing housing stock available for the initiative, pointing out, however, that some developers are impatient with the system.
“They need to be patient; some of them think that they are tying their funds down by renting their houses instead of outright sale; they need to understand that the process is still evolving and developing; it needs to be efficient”, Agudah said, adding that part of their challenges is that understanding of the initiative is still low. “We need to create a lot more awareness and work towards making the market efficient”, he noted.
He disclosed that measures have been put in place to guard against default in rent payment, saying there is already an insurance policy aimed to protect both the client and the customer. “If somebody loses his source of income such as job loss or business misfortune and he has done, say, 15 out of his 20 year period, he can sell the property to another buyer who will be paying to complete the remaining five years”, he assured.
CHUKA UROKO