‘Real estate investments create opportunities for economic gains’

Kalu Chudi is the chairman of AFPING, an investment property group. Alex Adefarasin is a co-founder and CEO of Arkbridge Integrated Limited, a real estate developer. In this interview with Josephine Okojie, they talked about the country’s real estate sector and investment opportunities in the Lekki property market that investors can take advantage of.

What is cracking the silent Lekki investment forum all about?

Kalu: The cracking Lekki investment forum is to introduce investments opportunity to people in Lekki and its environs. The Lekki market is one that is highly competitive. It is a property you buy and get returns over and over again. It is not just about buying a house but giving an opportunity for people to rise from the level they are currently and begin to make momentum over time. Our aim is to give opportunity to people so that they can take advantage of a market that is lucrative which will not be there forever. These are information you don’t find online.

Why the focus on Lekki property market and not any other property market in the state?

Kalu: When we looked at statistics and facts in terms of apartment rental, apartment sales, duplex sales, duplex rental and land sales, Lekki happens to be between number one and three among these categories. The wealth of Lagos is moving to particular region called Lekki and 70 percent of the state wealth will be generated from the area. Lekki has potential of the free trade zone, deep sea port, international airport and the fourth mainland bridge even if it has been suspended. These are intentions that can make the area to generate huge revenue to the state. By our estimated calculation Lekki can generate about N7 trillion yearly to Lagos, which is almost this year’s national budget. It is appropriate for people to put their funds where the market is probably pushing to and position themselves for the opportunities.

How affordable are these property for an average Nigerian?

Adefarasin: The Lekki market is a unique market. The Lekki peninsula started from the Victoria extension to Ibeju Lekki right now and it’s going to be hitting the border of Epe area. There was a time in Lekki phase one when properties were very affordable but what we have now is the secondary market a lot of people that missed out of the that opportunity which was over a decade ago.  Now there is an opportunity for people to position themselves for properties after Abraham Adesanya. The cost of lands in these areas is cheaper now and very affordable which an average Nigerian can take advantage of.

Kalu: Most of the activities for corporate businesses are around the Island and more people are moving towards that end thus increasing the demand in those areas. Real estate developers are now more creative and create houses that can be affordable to Nigerians. Every smart investor must position themselves to invest not because they want to live in Lekki or I like Lekki but because of the demand pressure which will always a guarantee cash flow from investing in such places.

Nigeria is in recession and there is low purchasing power. Why would you advice people to invest now?

Kalu: The best time to invest is when people are not investing. Recession is the best time to invest because prices of most properties are dropping. Despite recession Nigerians still pay rents. People will always make money when there is recession especially in the real estate sector. People who do not have sufficient funds can pull resources together and invests in property to generate cash flows.

Adefarasin: At the moment the country is coming out from recession. What drive the real estate are the tangible and not the intangible because it is based on demand. There is always a supply to meet the demand as long as the supply is innovative enough. What everybody should know is that recession or no recession, a smart investor would always position themselves to benefit from the opportunity when others are not looking at those areas and wait when people start looking at the areas to rent or sell. Property market is dropping because of volatility in foreign exchange.  Nigeria real estate had moved beyond our naira denominated market to where people now look at the exchange rate for pounds and dollars to fix their prices. Most of the people affected are people in the prime luxurious market of real estate. But the properties that are naira dominated in the sub market of real estate have always been consistent.

How can people who do not have money to buy out-rightly invest in this opportunity?

Kalu: An investor is different from a speculator. Investing means looking for returns on an investment while speculator is buying for his or her personal consumption. So investors that do not have all the money can leverage on others to pull resources together and invest and also share the risks.

What class of investors is the initiative targeting?

Kalu: We are looking at first time investors that would take the opportunity of investing in the market. Investment it is not about the fund but the deal and transaction. There is currently a deal right now that Arkbridge is bringing to investors that ensure that in case there is any negligence from the developer the investors would get back their money. The deal is that juicy. A lot of us have been rigged out of existing deals because we always believe it’s for the rich. Everybody can participate in this deal in whatever capacity they can.

What impact would this investment have on the real estate sector?

Adefarasin: The impact is massive because people have opportunity to make economic gains for themselves. What has always being obtainable is that developers go to the banks and ask for investors to come to and invest thereby making the banks richer and not the people. This initiative has provided a platform for people to take advantage of this opportunity by signing up on the Arkbridge website. The opportunities are not always going to be available, so now is the right time to invest.

A lot of real estate developers have investment opportunities in the sector, what makes this different?

Kalu: Currently, Mansard Insurance is working with us to ensure that people’s investments are secured. Secondly, the company is not borrowing to develop projects but leveraging on investment which makes it sustainable. It implies that the company does not have so much interest on profit before selling property which makes it easier for people to buy properties. Currently where we are privileged to develop we are selling for 4 million were others are selling for N9 million and the property already has a single title. This will give people more opportunity to earn money and with that we can address recession in the country. Recession goes when people starts earning money. So the more people earn and make more the quicker it is for the country to come out of recession.

What economic incentive and regulatory framework should the federal government be considering this period to bridge the gap in the country’s housing deficit?

Kalu: The real estate sector is growing and the private sector is on the driving seat. There is need for a synergy between the government and the private sector. We need a lot of govt support not just to regulate but to create a framework that checkmates the sector.

How can the government bridge the gap in the country’s housing deficit?

Kalu: Nigeria’s housing deficit is massive. We are talking about 17million housing deficit here. It is a very big problem but for an investor it is a massive opportunity. It is the private sector that will solve the housing deficit in Nigeria. All the government should do is to partner with developers to invest in developing more housing units across the country. The developers and the investors have to come together and create a platform in which the government can come in as a partner with them. This is what is happening in the free trade zone in Lekki where the government owns 40 percent of the investments. Also, developers need to make their projects investment friendly so that investors can invest in without being afraid of losing their investments. People need to start seeing our housing deficit as an opportunity so that we can make huge investments to bridge the gap.