PROPERTY MANAGERS

Nigeria 2019 | REAL ESTATE & CONSTRUCTION | B2B

Real estate companies that managed to survive a bear market for years have come out on top by rethinking strategies and expanding into new operational areas and sectors.

Uzo Oshogwe
UZO OSHOGWE
Managing Director
Afriland Properties Plc
Femi Akintunde
FEMI AKINTUNDE
Managing Director
Alpha Mead Facilities

What is your growth strategy, and what makes Afriland Properties stand out among its peers?

UZO OSHOGWE Though markets will continue to change due to political, economic, and technological forces, our plan is to leverage new technologies to improve product development, enhance customer relations, streamline operations, and market effectively. We currently manage several residential and commercial facilities and will deepen our market penetration in this area. To this end, we hope to kick off some of our projects in 2019. For example, we are the project directorate for Transcorp Hilton Hotel and will continue to work with it on the ongoing refurbishment of Abuja Hotel and on the proposed expansion program in Lagos and Port Harcourt. Afriland has also developed low-end products such as Afri-shops, its ultra-modern lock-up shops to help small-scale businesses achieve their goals. What separates us from the competition is our focus on quality and perfecting the act of execution; strategy without execution is a futile effort. We have a track record of excellence, and our clients trust that we will always deliver on our promises. In short, our tagline, “Execution perfected, Excellence Delivered," says it all.

Can you give us a brief overview of your operations in Africa?

FEMI AKINTUNDE At inception, our primary focus was facilities management, followed by a real estate development company. We have expanded into new operational areas such as electronic security and fire systems services, real estate bridge-financing, and warehousing and logistics, positioning ourselves as one of the leading complete real estate solutions company in Africa. One of the areas we are expanding into is the healthcare sector. In addition, we continue to provide FM services to residential estates, corporate offices, malls, government offices, and aviation facilities. One of the reasons public-sector employees may not be as productive as their private-sector contemporaries could be related to their work environment. That is why we have redefined our business along operational dynamics rather than geographical, enabling us to have a sharper focus on different segments and come up with the right real estate solutions to improve employee productivity, increase the lifespan of public assets, and provide strong support to government.

What are the new realities in real estate to look out for when considering properties?

UO All around the world, infrastructure drives urban development. It plays a vital role in stimulating urban land development and economic activities. This means accessibility and transportation, electricity/power, clean water, and so on must be top priorities. Unfortunately, this is not the case in most African cities. The government needs to pay more attention to infrastructure. People are beginning to realize the importance of a good quality of life. Where they live and work matters to them and how they commute between the two locations is key. Furthermore, certain policies need to be reviewed to meet the housing needs in Nigeria. The government understands the urgency of reducing this deficit drastically and is taking steps toward meeting these needs. Many states around the country are going into joint ventures with the private sector in a bid to bridge the housing deficiency. We are hopeful that many other states will follow.

What trends do you observe in the Nigerian market in the segments you are in?

FA Assets in the real estate industry in Nigeria are a proven wealth creator; however, the Nigerian real estate sector is far more difficult to operate in. For example, the Land Use/Act of 1978 vested ownership of all land in the hands of the state government. One has a right to use land for a maximum of 99 years, which makes it difficult to use land to leverage funds as a collateral, unless there is property on it. As a result, developers are unable to unlock the real estate market's potential. The second major challenge is the forfeiture law for a company with debts as it makes it difficult for banks to look at the real estate sector as a safe area for investment. Moreover, many of the land titles have not been registered, making it more difficult for investors. On the demand side, not many people can afford to buy a house. Elsewhere, one can invest in a building with a loan at 4-5% interest rate, rent it out at a yield of 10%, and make a 5% profit. But in Nigeria interest rates are about 25% and the maximum yield one gets is about 5-6%. Therefore, property in Nigeria is a liability unless one is using it for something else than renting it.