NOT SO SECRET GARDEN

Nigeria 2016 | REAL ESTATE & CONSTRUCTION | INTERVIEW

TBY talks to Richard Nyong, Managing Director & CEO of Lekki Gardens, on the company's competitive advantages, and the medium-term forecast for the real estate sector.

Richard Nyong
BIOGRAPHY
Richard Nyong is a graduate of Economics from University of Port Harcourt, Nigeria and holds a Doctorate (Honoris Causa) in real estate from the European American University in Ghana. He has over a decade’s experience in the African real estate industry commencing from consulting and advisory to land sales, and finally property development, sales, and management under Lekki Gardens Estate Limited, a brand he established in 2011 which he plans to take public within the next few years. He is a philanthropist and sponsor of several community and social developmental initiatives including the provision of employment to approximately 10,000 people across his various projects in Nigeria and of infrastructure, power, and water to the neighboring communities adjoining his various projects and developments.

What makes Lekki Gardens different from the rest of the sector?

It starts with our intimate understanding of the needs of the clients who invest in real estate. From the onset, it was not about construction technique, land use, pricing or innovative designs, but about helping people get the best results with their real estate investing. We first started to look at real estate as an investment vehicle for people to build wealth in 2008, when we were teaching people to invest their funds in real estate. We started buying large parcels of land in the suburbs and creating serviced plots for people to buy and build their homes themselves. We did that for almost two years from late 2009 until about mid 2011. The land use problem in Lagos makes it difficult for people to build houses and so we started to see cases where we would sell land and people would not be able to construct their homes. They could not get approvals easily in these areas due to traditional land and villages land use practices that hampered development. We decided to undertake a project in 2011 to help in this regard and we came up with Lekki Gardens Phase I in Lekki, Lagos with 350 houses and a project value of about $20 million. The concept was to make housing affordable, provide a great location and make it as comfortable as possible for the clients to pay over a period of time. And with the success of that small project of 350 units, we started our housing project in Lekki, Lagos. We thought it would take us three years to market, develop, and complete the project; however, it was sold out within four months and we completed it in another seven months. That changed the dynamics for everyone. To date, we have delivered about 6,000 home units with commitments to deliver another 12,000 within the next year. We have about 57 projects currently underway across Nigeria in four states; Lagos, Abuja, Port Harcourt, and Ogun states. Out of those 57 projects, we have delivered about 20.

What are your expectations for the year ahead?

The market remains unpredictable. Experts have been advising us not to make any big bets, because the economy is a bit too uncertain. We are in critical times, and we do not see an immediate bolstering of the economy. We foresee the economy taking some stable form; however, not toward an aggressive growth trajectory. We have enjoyed superb growth for the past three years. We started in the real estate business with NGN750,000, which was at most about $5,000 in 2009; that is all we could muster as a business owners. In the last few years, we have done businesses in hundreds of millions of dollars annually. We never received capital injections from any other source, and we do not have any major shareholders or debts. We have borrowed in bits in the past, but not taken on substantial debt, and in three years we have done huge volumes. In the past three years, there has been no year that we have not grown at least 100%. Sometimes we have grown by 700% or 1,000%. In 2016, we want to consolidate. We started consolidation in January 2015; we still have to do a lot more of that and restructuring as well, so we do not expect a lot of explosive growth so that we can contain the growth that we have.