Propertygate in collaborative investment strategy, veers into office development
As part of strategies for expansion in the Nigerian real estate sector, Propertygate Development & Investment plc, a new generation residential property development firm, says it is set to commence a collaborative arrangement to enable it develop choice properties for investment.
The firm explained that the move was aimed at growing public confidence and participation in real estate investment, adding that the barrier of huge capital outlay ordinarily required for such investment would be addressed by the new initiative.
Disclosing this at the company’s 5th Annual General Meeting in Lagos, Adetokunbo Ajayi, the company’s managing director/CEO, stated that the company would also expand its assets in the real estate market with construction of a new office development in Lagos which, he believes, would take off by year end.
On its future outlook, Ajayi disclosed that the company intended to acquire quality sites for the development of market-inspired real estate products, saying that this was essential for profitability and sustainability.
Ajayi who was optimistic of a buoyant 2014 stated that the prevailing uncertainties in the capital market had placed real estate as the likely destination for savvy investors. “Recently, the forecast of the capital market has not been too brilliant; so that translates into a positive outlook for the real estate sector, because owners of capital will be looking for an outlet for their funds and real estate looks to be one of the beneficiaries,” he said.
The company recorded an impressive performance in its key financial results as growth of 75 percent, 168 percent and 40 percent was achieved in areas of gross revenue, profit after tax and shareholders’ fund, respectively, maintaining zero debt for its operation throughout the period.
These successes accomplished in the outgoing year were not without challenges such as lack of access to quality sites for development of residential and commercial schemes, over 20 percent interest rate demanded for the purchase of real estate products, complexity of balancing rising land value with resistance to upward movement in prices of real estate products, amongst others.
“The lack of mortgage facility to purchase a host of real estate products was also a major challenge,” he said, adding, “the need for real estate products is very huge, but unfortunately those who should acquire these products lack the required funds, so they depend on borrowing, but when the funds are not forthcoming, the implication becomes they lack the wherewithal to buy your product and as a developer you become unable to churn out more,” he said.
ODINAKA MBONU