AI IN HOME SECURITY

Nigeria 2020 | CONSTRUCTION & REAL ESTATE | VIP INTERVIEW

TBY talks to Umar Abdullahi, CEO of Cosgrove, on the inherent risk of the real estate sector, affordable housing, and hopes for the coming year.

What challenges are inherent in the sector?

One of the major challenges we are face in Nigeria is the dearth of skilled labor. I think we should go back to vocational training otherwise there will a lack of skilled people with requisite required skills; and as a result, every sector will suffer. Often, fresh graduates lack practical experience, so companies have to spend a lot to train them. In addition, risk in the real estate industry is global. Whenever there is a recession or economic downturn, the first sector that gets hit is real estate. Moreover, there are unavoidable external factors, therefore, we need a strategy to help us navigate out of a crisis. 2016 was a bad year for the Nigerian real estate sector; we got out of the recession at the beginning of 2017 and this is when we established Cosgrove to take advantage of the booming economy.

How did you manage to build a solid reputation in the market in only two years?

We are doing something different because we are leveraging on technology to enhance the quality of homeowners' life and protect the environment. Our methodology integrates technology into the real estate value chain, making Cosgrove pioneer in real estate automation and energy management, which is why I think we are making the headlines.

What technologies and projects are your key differentiators?

In order to better understand our target market, we conducted surveys of housing needs and found that the biggest priorities are security, power, location, quality, aesthetics, in that order. Therefore, our main priority is providing secure homesteads for all Cosgrove homeowners. Security in Nigeria is predominately human-based and our idea is to make it technology-based through advanced AI platforms. On the energy side, we are conscious about the environment and know the impact of hydrocarbons on the atmosphere. We won't be competitive if we invest 100% in renewable energy because the government and other private companies are offering cheaper gas-based alternatives. We are looking at this situation from two angles. First, we are going to make sure all our estates are sustained by renewable energies. To that end, we are planning to generate up to 1,500KVA of hydro energy. Also, we are in talks with the government to get permission to install solar panels; under our model we can generate around 2,500KVA of solar energy per hectare. We will be then able to sell the excess energy. We are trying to conserve the environment and ensure that we are operating on clean hydro and wind energy. Using our design, we can cut down energy consumption by half. For example, we can internally design the street lights and the elevators of all the apartments to be solar powered. We have one of the most advanced electricity inverters in the industry today. We are working with the second-largest security company in the world on AI-based services as well.

What is your target market?

Our clients are HNIs and upper-middle income individuals. Cosgrove has first movers' advantage and are committed to standardize smart tech integration with real estate, we envisage regulation as new entrants come into the market. We are trying to expand into affordable housing but the level of energy solutions and automation will not be as sophisticated.

What is your view on the affordable housing gap?

There is a bigger gap in affordable housing because of the kind of mortgage system in place. In Nigeria its quite hard to get long-term funding. This is where the mismatch occurs and I believe if the government can create an enabling environment for investors to bring in long-term funding, it will close the gap. The Federal Mortgage Bank of Nigeria gives working class people access to low-interest loans for housing but the government should either float an international bond and make it private and expand their capital base. This will enable them to cater for a larger percentage of people who require affordable housing. The mismatch between the financial sector and the real estate sector is what is creating the housing deficit. This is not only the case in Nigeria but in most African countries where traditionally most people buy houses with their savings.

How do you plan enter the affordable housing market and why do you want to expand into this sector?

It is about bringing development to our country; it is not always about making profit. We believe the federal government is doing its best to create an enabling environment. The affordable housing market will be very attractive in the near future with what government is putting in place in terms of the framework and structure. Within the Federal Capital Territory, a company entering the affordable housing market can apply for the land but it is expected to provide the infrastructure to build. On the other hand, the cost of land in free which brings down the cost of the houses significantly.

What are your goals and objectives for 2020?

We are working with the World Bank through the IFC to certify our projects as green projects. That will give us the credibility and clout in the international market. We are using our 33-ha project in Katampe by Ministers' Hill Maitama to achieve that; our plan is to build over 1,000 houses and establish a mini smart city within the city. This is our vision for 2020.