ENDLESS AMBITION

Nigeria 2016 | ECONOMY | VIP INTERVIEW

TBY talks Ibiene Ogolo, Chief Responsibility Officer of Eko Development Company, on the development of the Eko Atlantic Project and its impact.

Eko Atlantic is the continent's most significant development. What about it was attractive?

We saw Eko Atlantic as an ambitious project and that, for us, marked it as a grand opportunity. At the site Eko Atlantic now occupies, formerly known as Bar Beach, there was significant erosion over the years that, as recently as 2005, threatened all of Victoria Island. Eko Atlantic resulted as a solution to protect the shoreline of Victoria Island and also to create a city that would be well-planned as well as developed in accordance with 21st century best practices. Speaking from the perspective of investment, this project is a critical part of the transformation of Lagos, Nigeria, and Africa at large. As a result, Eko Development Company saw this as the perfect location to deploy our project, aptly named Azuri Peninsula.

Azuri Peninsula is positioned as a luxury, mixed-used residential development. It is intended to be an address with a specific layout that includes shops and community areas. What factors influenced your design?

What differentiates one real estate project from another is its functionality. For us, real estate is not just brick and mortar; it involves lives, sustainability, and its impact on the environment. We wanted to create a marina development better than any other, hence our choice of land within Eko Atlantic. We have taken time to ensure that our development meets different benchmarks, which included studies of other marina and destination developments such as Dubai, Los Angeles, Qatar, and so on, and considered the adaptability of those developments to our climate and culture.

“What differentiates one real estate project from another is its functionality."

How will the legal differences from the rest of Lagos State, such as a free trade zone (FTZ), benefit not only Azuri Peninsula, but also the rest of Eko Atlantic?

The FTZ, which is a federal government initiative, will give confidence to investors who want to live or transact business within Eko Atlantic. As a free trade zone, we will benefit from tax exemptions for materials that come into Eko Atlantic. We must bear in mind the impacts of these exemptions to the cost of construction as well as the finished product. From the perspective of a developer, that will give us reassurances that our projects will be competitive. If you take into account the cost of land and construction, one would expect our pricing to be exorbitant, but I can say that today the cost of our finished project will be competitive with costs in Victoria Island and Ikoyi in Lagos. The second consideration is that since Eko Atlantic City is governed by South Energyx, a municipality in its own right, and is exempt from the familiar day-to-day bureaucracy of Lagos State, and has its own streamlined system. The timeline of projects are shortened with the stamp of approval from the government. Confidence is constantly being built, and there is a steady stream of work at Eko Atlantic on a daily basis. It is set to be the first in-mind interface of cross border transactions, and a transparent means of building foreign confidence in Nigeria. It will be a point of capital and intellectual inflow that is tailored to private sector needs and one that matches its pace.

What stage is the Azuri Peninsula project currently at in terms of construction?

We are currently engaged with the piling stages of the development, which we began in January of 2015. We have, however, completed piling works for the first tower (Orun), 236 of them to be precise, and are at about 90% along with the second tower (Oban), with just 20 more piles outstanding as at June 2, 2015. In terms of timeline, we are very much on schedule and have begun making off-plan sales. By the end of 1Q2016, we will have finished the podium of the development.

After the election, what changes have you seen in regards to business and investment, and what has been the general effect on Eko Atlantic?

Around the time of elections there was considerable anxiety as with any election in Africa because of the transition from the incumbent party to the opposition. Thankfully, the process has been a smooth and successful one. After the election, the stock exchange went through the roof, which was tagged the “Buhari Boost" and that has helped the economy by reinstating confidence in the market. The international community has seen that Nigeria is not as volatile as was painted or as predicated by many to be. In the years ahead, I foresee stability and a further boost of confidence in Nigerian economy, which will translate to increased FDI inflows.

Would reform in the petroleum industry be a boon to Azuri Peninsula?

Most government initiatives will have some sort of impact either directly or indirectly. The Petroleum Industry Bill (PIB), when passed, will have a positive impact on the industry. Nigeria is an energy producing country. However, only 20 to 30% of our GDP is funded by oil. If oil prices go up, there will be more liquidity and access to cash. I do not see the PIB as the only government initiative that will be of importance to us. With the new government in place, I want to believe that there will be more prudence, more initiative toward economic development, and growth that will help deepen our capital and money markets and thus translate to better access to much-needed funding such as development grants, loans, and mortgages.

How will developments with Eko Atlantic affect real estate in Lagos?

Presently, various data shows that there is a deficit in residential and commercial buildings, which has resulted in the gap between supply and demand. When you do the math, and take into consideration the rapid growth of Lagos, oversupply will not be an issue but that of the ability to match quality developments with price to meet growing trends. This growth will continue as rural/urban migration continues and with increased influx of returnees from the diaspora. Many Nigerians in the diaspora want to return, but have questions about where they will live considering the lifestyle they have become accustomed to. It is worthy of note to mention that this gap is a great opportunity that Eko Atlantic City is designed to fill by ensuring that not only do they have planned districts but all developers produce quality products and ensure standards.

What are your expectations for the year to come?

For the year to come, I expect more economic stability and confidence in the market. The delivery date for Azuri Peninsula Phase I is 2018. We are currently on the drawing board for Phase II with smaller-sized apartments to cater to our clients.

© The Business Year - June 2015