Udo Okonjo, CEO Fine and Country WA, recently described the real estate sector as a mirror of the economy which directly reflects the economic status of the nation, however she noted there are pockets of opportunities for those who are willing to be creative and deal with real owner-occupier and investors demand rather than opportunistic oil leaks/corruption fuelled market . Below are some of the excerpts from her review titled: Pockets of Opportunities at the just concluded Real Estate Leaders Breakfast meeting held at the Radisson Hotel where she sought to provide some guidance to investors and stakeholders.
LOCATION.Real estate as we know it is changing. The concept of location needs a re-look. Prime locations such as Ikoyi, Banana Island, Victoria Island, and environs will remain attractive, however, we need a redefinition of the old real estate maxim. Location. Location. Location should be looked at in a developing economy in light of emerging locations especially new cities/locations which offer good infrastructure, or locations that have become more accessible as connectivity increases and redefines the value of certain locations.
It is important to note that there are still pockets of opportunities within prime locations at the very high end for investors who are interested and financially capable of building “legacy or trophy projects.” However, for the rest of the market, residential now needs to be ‘’re-designed to fit the present day reality’’. One of the trends is certainly towards apartment style versus large villa style housing. Market intelligence is increasingly pointing towards good value and convenience, which does not mean the same thing as low quality housing. Oakwood Residences on Cooper Road typifies this model of market intelligence- contemporary good value and good quality apartments in the prime Ikoyi suburb, which were offered at below N150M at launch, now 90% subscribed and nearing completion.
MILLENNIAL HOUSING. An important trend, which needs to be explored further as Millennials begin to come into the housing market, with more functional requirements in terms of unit sizes and facilities. This market is important for residential developers with opportunities to target first-time homeowners, buy to let investors and parents of the “boomerang generation” -those caught between staying at home out of financial convenience and fending for themselves. Their lifestyles are different and needs to be studied to adapt the right properties.
DIASPORA Investors. Diaspora investors are a huge source of foreign direct investments which can no longer be ignored. This is a market segment with unique requirements and for whom the real gap is a confidence crisis. Any attempt to tap into this market will require this confidence gap to be filled with both on a country economic and market level. The source of the properties, the standards and the process of engaging those in diaspora are critical factors.
LIFESTYLE GATED ESTATES. These are an emerging opportunity in residential and are specially favoured by the younger professionals and middle class families who value a sense of security, convenience, and community. The diaspora market is also keen on lifestyle communities as they largely mirror their lifestyle experiences overseas.
Other low hanging opportunities include Neighbourhood retail hubs, noting that Ikoyi, still a largely residential location, lacks a proper shopping centre, with Falomo Shopping Centre still in limbo. Hostel Accommodation for top universities, including the Pan Atlantic University/Lagos Business School and across the country were reviewed. The Federal Secretariat and the multiple abandoned properties in prime Ikoyi and environs was noted as opportunities to be reviewed creatively against the backdrop of the emerging entrepreneurial class of owner occupiers, who have real demand versus the opportunistic investors whose
The keynote speaker, Professor Pat Utomi, session focused on the four growth drivers’ framework; policy choice, institutions, human capital, and entrepreneurship.
A Real Estate Outlook Report for 2017 is also available at Fine and Country to investors and anyone looking to consider an investment.