A whole new world, new thinking and new horizons for real estate?

2016 has being such an incredible roller coaster globally, with many wondering whether there’s unseen conductor orchestrating the world’s affairs considering the similarity of issues. With the 2015 transition from an incumbent to a former military dictator and now democratically elected President under the premise of a “change” agenda, Nigeria has in 2016 officially declared a recession with inflation at almost 20%, lending rates inching in excess of 25%, and the Naira taken the worst bashing at the quickest pace since Nigeria’s independence.

We saw a Brexit vote in the UK in the summer of this year as the UK voted to leave the EU seemingly without a clear sense of clarity as to its full implications. And as fall befell the U.S., the controversial, dogged, and astute real estate (Billionaire by some accounts) tycoon Donald Trump emerged as the U.S. Presidential nominee, to beat the seasoned and “people’s candidate” U.S. former Secretary of State Hilary Clinton who by all accounts including the popular vote was tipped, hoped and positioned to win the elections.

Engaging an uncertain future: How should we engage?

As the world catches its breathe, with many nations, families, and businesses left trying to figure what else could the future hold, perhaps a more relevant question should be “How should we engage the future?” How should investors and business owners reposition themselves to take advantage of the future possibilities in the crisis that will surely emerge from a fast changing global and local political and economic landscape? The thinking that took many experts and astute strategists by surprise across many markets, and nations will surely fall short in this dynamic, volatile and acutely uncertain new world?

New world, new thinking, out of the box real estate: the only way forward

Real estate tends to mirror the economic and political landscape and location. It is therefore not removed from the stagnation, uncertainty, ambiguity and volatility being experienced across many markets but especially in Nigeria where our issues are compounded by a marked sense of growing unease about the political and economic direction and focus on what appears to be a one issue governance focus on “corruption” an unacceptable malaise no doubt and arguably the true bane of our lack of development.

The inconsistent economic policies and posture are however, a considerable distance from the needs of a restless populace who are seeking for the ever so slight ray of hope that tomorrow will be more stable, solid and secure. As investors, risk has a price but confusion and uncertainty are much more difficult to analyse and when uncertainty exceeds an acceptable level, especially in a market where there are many complicated moving parts, investors tend to vote with their global feet, and even those with only local feet tend to freeze major investment decisions.

Nigeria arguably is however in a unique position. As most key economies are currently facing their own fare share of uncertainty, our economy now presents opportunities for the brave hearted who can take advantage of the massive gaps in all key aspects of the economy. It is however not a time for old thinking, as old wine will not survive in the new economic skin. Only those who can assess, define and interpret the market accurately, whether it is coming up with innovative solutions for social infrastructure to affordable and mid market housing, renewable power to new urban cities, or locally engineered retail centres which take into account our infrastructural challenges, social interactions along with our economic attitudes and depth – the opportunities are endless for those who are willing to unlock them. And there’s never been a better time.

The silent minority…or the power investors?

With the right financing structure and strategic market facing focus, investors have a unique opportunity to attract Nigerian diaspora into our housing market with their unusually stronger spending capacity, and to properly serve the growing “Nigerianised-expat families” or ” those already doing business in Nigeria and can’t uproot as quickly as foreign investors” (a largely ignored, silent but strong minority) who may be facing the increased pressure of an unstable world, but for whom Nigeria holds an appeal of some measure of familiarity and economic opportunity.

Arguably Nigeria has no clear middle class, but the aspiration and appetite for housing remains high amongst the emerging professional and entrepreneurial class and cannot be ignored by local investors who require a mix of innovative thinking and intelligent insight to unlock these burgeoning opportunities.

It’s these creative and none obvious off the beaten trail opportunities that this year’s Refined Investor Series aptly tagged: “Out of the Box” seeks to explore, unlock and develop as we approach what we can all agree will at least be “an unusual 2017.”

Welcome to a New World that requires New Thinking to unlock New Horizons whether in Nigeria, Great Britain, the United States of America and beyond.

 

Udo Okonjo