Nigerian real estate sector to grow by 10% annually

Contrary to pre- vailing eco- nomic head- winds across sectors of the economy, experts project that the Nigerian real estate sector will experience a gradual growth.

Adekunle Oyinloye, managing direc- tor, The Infrastructure Bank (TIB), says the real estate sector is projected to grow by 10 percent annually in the next 10 years.

Oyinloye said this while delivering a paper on “The Infrastructure Banker’s Perspective – International Funding for Real Estate,” at a business forum in Lagos, and therefore called on stakeholders to tap the huge opportunities that would abound with the progres- sive growth.

He identified the resi- dential real estate segment of the real estate market as the sub-sector with massive inherent untapped potential by quoting the National Bureau of Statistics (NBS) as saying that “Nigeria real estate market was valued at approximately N1.4 tril- lion in 2011 and has risen to N6.5 trillion in 2015.’’

The sub-sector’s contri- bution to Gross Domestic Product (GDP) was 7.7 per- cent in 2012 and later rose to 11 percent in 2014, he said.

According to him, growth in population, burgeoning middle-class economic ex- pansion, building hospitality industry, among others, are catalysts for further growth in the real sector.

He said 80 percent of the adult population was living in rented apartments in Ni- geria compared with Ghana and South Africa, which had between 20 percent and 25 percent, respectively.

Oyinloye said 50 percent of Nigerians were either homeless or were living in inadequate shelter, say- ing his bank was already working on modalities that would provide solutions to the challenges in the resi- dential real estate market in Nigeria.

TIB was collaborating with local and international financing and funding com- munities on the bankability process in getting funds of the right makeup best suit- ed for real estate projects, he disclosed.

The Nigeria Mortgage Re- finance Company (NMRC), a Public Private Partnership (PPP), would help make it easier for the working low- to middle-income earn- ers to purchase homes, he said, maintaining that the package was structured to revamp mortgage financ- ing and home ownership among the low- to medium- income class in Nigeria.

The new PENCOM Act 2014 allowed pension funds administrators to invest in certain real estate vehicles such as mortgage backed securities and Real Estate Investment Funds (REITs), the bank boss said, and commended the board and management of Lekki Gardens for its innovative delivery and marketing strategy, aimed at provid- ing affordable houses to the middle-income segment of the Nigerian society.

“Lekki Gardens has demonstrated that with an effective and efficient delivery mechanism, pric- ing for houses which has hitherto been the Achilles heels of developers – can be made affordable, even in high brow areas such as Ikoyi and Lekki.”

“Lekki Gardens is again blazing the trail with this epic workshop, which is hoped to identify with each stakeholder’s value propo- sition with a view to creating more value for the resi- dential real estate market and capturing same for all concerned parties.”