‘We will stand by the professionalism we are known for all over the world’

After 250 years of ‘Forward Thinking’ in residential sales and lettings, commercial leasing and investment in the UK and 38 years in UAE, Cluttons opened office in Nigeria early this year. In this interview, EREJUWA GBADEBO, Cluttons Nigeria CEO, speaks on Nigerian real estate market and how the company has been getting on in this entirely different and challenging business environment. She speaks with CHUKA UROKO. Excerpts

Nigerian real estate sector has been quite active in the last four to five years with many local and foreign investors playing big in the sector. What do you think is the attraction for these investors?

Nigeria is the largest economy in Africa, a fact that is now formally accepted. This has translated into high business and retail activities which, in turn, have impacted on the demand for real estate assets— commercial, industrial, retail, hospitality and residential.

When you look at the demographics, Nigeria has over 160 million people expected to expand to 400 million by 2050; it has a relatively young population compared to others and has a high percentage of ‘working age’ population.  This has fuelled demand.

There is supply gap in the real estate sector. With increased demand for real estate assets, it was obvious that supply could not match demand. This presented an opportunity for foreign and local investors/ developers, especially as the yields of 7-8 percent on commercial property is higher than the 4-5 percent yields obtainable in other more mature real estate markets.

There has been improvement in power which largely came about by the privatization of parts of the power industry and this has translated to an improved and improving operating environment.

High urbanisation and an increasing middle class have seen 48 percent of Nigerians living in cities and as the second largest banking system in Africa after South Africa, and with currently only about 40 percent of adults using the banking system, the scope for financial deepening is high.

In addition, the GDP has increased over time from circa US$169bn in 2010 to US$514bn in 2014, all of which has fuelled activity in the real estate market. Records show that the contribution to GDP from construction was from circa NGN369,000 million in 2010 to NGN750,000 million in 2015 (National Bureau of Statistics).

The commercial segment of the market seems to be more active than the residential. In what ways does this impact on you as a service provider?

The commercial segment of the market is generally accepted as comprising office, retail and industrial developments.  These segments are more active as they are direct products of an expanding / growing economy.  In this regard therefore, demand for residential properties, in a sense, is a derived demand.

As a service provider, Cluttons has to be aware of the effects that different drivers, threats, dynamics and legislation will have on different segments of commercial real estate in order that we can provide an informed (and therefore a valuable) service to our different clients. As a business, we also need to understand the concerns of the different stakeholders in the different segments of commercial real estate in order that we can adequately represent their interest(s).

Your company is relatively new in the Nigerian market. Looking back to when you opened for business, what would you say are the main attractions as well as the headache in this market?

We were registered in January 2015 and, since then, we have been steadily building our brand. The main attractions have been servicing those clients that know our brand in the UK and UAE.  In this regard, we have had easy wins as they understand the standards of our service delivery and that has served to cushion somewhat our entry into the market.

The drawback to being a new entrant is the same thing for every business – the tough operating business environment.  That said, as all the members of staff are vastly experienced in this market, we plan to take this head-on and make it work for us, especially as we know we will make a positive difference in the market.

Your company back in the UK is a highly reputable one with a track record for excellent service delivery. How do you cope in an entirely different and challenging Nigerian environment?

Cluttons is 250 years old in the UK and 38 years old in the UAE with a reputation in both markets of being an excellent brand.  One of the grandsons of the founding partner, John Cluttons, was a joint founder and the first president of the Surveyors’ Association (later the Royal Institution of Chartered Surveyors), (RICS).  This is why we are sticklers for providing a professional service and why we have sustained our quality service over the years.

In Nigeria, we do not plan to do anything different; we fully intend to continue to project this excellent brand. Even as we recognise that the operating environment is different, we will stand by what we are known for all over the world- professional service delivery to the highest standards possible.