Stakeholders in Nigeria’s real estate business have outlined some of the measures that will further deepen investments in the sector.
They were speaking at the West Africa Property Investment Summit, themed, “New Frontiers in the New Normal,” held in Lagos recently.
The Head, Real Estate Finance, West Africa, Stanbic IBTC, Tola Akinhnami, said the institutionalization of policies and programs will play an important role in the real estate market.
He said: “Institutionalization plays a key role in the property market. However, it is not limited to that industry. When an industry is fragmented, there are different players who cannot take advantage of the opportunity to attract capital. We are talking about significant capital, both from our local market and abroad.
“That’s why it’s important that the opacity that you find in the industry is removed and part of that is what we’re doing now, which is about renting information to our people, stakeholders and experts for thriving solutions so that we can grow the market.
“When we talk about institutional investments, it goes beyond rational debt; it’s about how you tap into a capital market, and the risks involved. The investors in that market require transparency, they need detailed information that you cannot access if you are not institutionalized. Also, where the gaps were, we must understand the language; what do investors need in terms of returns and the delivery of what was promised?”
Speaking on what it would take to institutionalize the real estate sector, Akinhnami said getting capital was the first step.
“First of all, it’s starting to come in with capital and I think that’s already happening,” he said.
He added, “A lot is also riding on the macroeconomic impact. So, it’s a collective effort, there are a lot of nuances, you want to ensure that investors see the asset class and see the country as an important destination for investment.”
The Senior Director, Raddisson Hotel Group, Erwan Garnier, spoke about the hospitality industry as he highlighted that the market has benefited from the COVID-19 pandemic.
This, he said, was because of the restriction that prevented people from traveling abroad as Nigerians chose to use the hotels in their country.
The Legal and Compliance Manager, Pennek Nigeria Limited, Michael Obianuju, spoke on the projected 22 million housing deficit in Nigeria.
He said: “We started in 1991 with seven million. In 2007 it became 12 million, in 2009 it became 14 million, in 2019 it was 20 million, and now 22 million.
“What you will realize is that it is growing, the numbers are big, and it all comes down to the population in Nigeria. Look at our neighbors. Ghana, we are talking about two million; South Africa, 2.5 million; and Ethiopia, 1.2 million.
“These are the statistics of the housing shortage. Why is Nigeria different? Overpopulation, in addition there is the concentration of individuals in a certain area. Our population is increasing at a rate of 3.5 percent per year.”