After a challenging year in which demand for real estate assets was near-zero, property development and investment companies have commenced the process of reviewing and repositioning their projects portfolio with the intension of meeting market demand now and in the coming year.
Due largely to the crippling impact of recession which has not only eroded consumer purchasing power, but also reduced the productive capacity of firms, there has been a major demand shift in the property market from large to smaller and multi-family housing units.
“It has been a very tough year for us as developers, but we are not there yet where we should be thinking of downsizing our workforce. We are not downsizing, but we are repositioning our products to meet market demand which favours smaller units and products with low entry barriers”, said Damola Akindolire, an Executive Director at Alpha Mead Development Company (AMDC) Limited.
“Recession has taught many people a lot of lessons and those lessons will start manifesting in the coming year. We have just discovered that demand is now more for land than finished houses. Within the year, were able to sell about 350 plots of land in our new scheme, but not up six houses were sold in our Lekki Pearl Estate in the whole year”, he disclosed in a telephone interview.
On count of that new discovery, he added, they were already building capacity to fully develop that aspect of their business, stressing that it was the new way to go for them in the New Year.
“With a decline from $375 billion in 2015 to $324 billion in 2016 in construction activities in Africa as contained in Deloitte’s 2016 African Construction Trends Report, no year could have been worse than 2016”, says Adetokunmbo Ajayi, CEO, Propertygate Development and Investment Company.
Ajayi attributed this decline to a combination of global economic headwinds, low growth and lower commodity prices, adding that transactional volumes of prime real estate in Sub-Sahara Africa stands at $150million, compared to approximately $400 million in 2015.
“But for us at Propertygate, we are privileged to have people who have seen boom and bust eras. We have continued to navigate the ship of the enterprise forward. Our domain expertise and disciplined management are some of our competitive edge. Without doubt, we see a better tomorrow”, he said.
Grenadines Homes, one of the frontline players in the luxury end of the property market is also repositioning its products with the development of The Coral which it describes as affordable luxury and a response to the realities in the market where smaller housing units are now in high demand.
“The Coral, an affordable luxury development, is part of our response to the recession in the country that has eroded not just consumer purchasing power, but also investment appetite”, Francesca Dyegh, GM, Marketing and Sales, told BusinessDay.
The project which comprises mainly two-bedroom apartments is currently being sold off-plan to would be investors and home owners who seek a better quality of life and unmatched value for money which the development offers.
CHUKA UROKO
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