‘We help our clients to see the future and make wise investment decisions’

Kfao Corporates is a new entrant into the Nigerian real estate market. It is one of the few companies dominating new opportunity frontiers emerging from urban community developments in Nigeria’s major cities. In this interview, AYODEJI FINNIH, the company’s MD/CEO, offers insights into investment opportunities in this market. She also offers guidance and expert advice on wise investment decisions  among other things. She speaks with CHUKA UROKO, Property Editor. Excerpts:

Yours is a very young company. What business do you have in the real estate market?

Our business in the real estate market is real estate. What we do is real estate. We sell land and houses. We are also into real estate development. We are a very young company that is less than one year old. But that does not mean we are entirely new in this business. We have been around but have been operating informally. So, speaking formally, we are just some months old and that is looking at when our company was incorporated.

As an individual, my interest in real estate started some years  ago when I did a transaction for my friend in Diaspora who needed a piece of land. Buying that property made me fall in love with real estate. Since then, I have been in this business and I am here to stay. I did not do anything related to real estate in school. As a matter of fact, I studied Human Anatomy in the university and this has no link whatsoever with real estate.

The real estate market has gone through  economic boom and downturn in the last couple of years. What experience do you have to share from these circumstances?

I think my major experience in this business has been with the issue of documentation and survey. The survey fee which the government increased from N150,000 to N500,000 was discouraging. This has the negative impact of making potential buyers and investors skeptical about real estate. Documentation is a very big issue. A lot of people who invest in real estate don’t even know about such things as land titles. Many people are just familiar with Certificate of Occupancy (C-of-O). This is a big challenge and it is not supposed to be.

Location also matters and that is why Ibeju Lekki in Lagos is the new investment destination today. One of the major problems there is flooding which happened recently. That made many potential investors to relax with their investment. We have, however, made them realize that this incident is just for a while and will not continue forever.

You said you are into estate development too. Tell us about your project portfolio?

Well, we do not do projects by ourselves. Rather, we are into collaboration with companies that do developments. Actually, we act as middleman between developers and people who want to buy properties. We also structure joint venture deals. If someone has a parcel of land but doesn’t have the money for development, we come in and make development happen.

As a middleman, you must know this market well in terms of where opportunities are. How true is this?

A lot of people believe that because of the economic recession, the property market has crashed. But I don’t think so. The market has not and cannot crash. It is even becoming stronger. Right now, many more people are taking interest in investing in real estate. Gone are those days when people did not like to invest in this market. Yes, because of recession, values have come down, not in all cases. There are some segments of the market that recession has not affected.

But demand has come down significantly because  purchasing power has dropped over job losses or pay cuts. What’s your take on this?

Well, let me say this. Some people think that if you want to invest in property, you need all the bulk of money you can get to buy at once. No, that is not the case, especially with us at Kfao. Here, what we do and will keep doing is getting land in bulk for cooperatives and they buy and pay by installments. We have this arrangement for as low as N25,000 per month. In this case, recession does not affect the market so much. We also offer installment payment packages for individuals. People need to set their priorities right and have financial discipline to be able to invest in property. So, people are getting aware of the need and the benefit of investing in property regardless of the level of their income.

We are, however, not unmindful of the fact that some people have had their income slashed because of recession. We are equally aware that some people can longer pay their rent. So, we are working on packages that will ensure that no matter how little their income is, people will be able to have roofs over their head. We are already in collaboration with other players in the industry, especially developers to make this happen.

Right now government is not doing much to solve people’s housing problem and so we have decided to step in to make sure that people don’t sleep under the bridge or along the road. We are not going to give out houses free of charge, but the houses would be as low-priced as possible.

Talking about collaboration, which companies are you collaborating with and which locations are you looking at?

For us to do this, we will be looking at areas where land price will not be so high that it will be unaffordable. We won’t be looking at areas like Ikeja GRA, Magodo GRA, Ikoyi and the like. We are looking, instead, at areas where land prices are not high. But I want to say that we are not a charity organization and even if we are one, we don’t want to shoot ourselves on the foot. But we are looking for the perfect location to do this. We are already collaborating with developers on this.

You have been talking about the low and mid-income market. What is happening at the high end?

In Abuja, we have presence in areas like Kado and Lugbe; not places like Maitama or Asokoro. Getting land in Maitama or Asokoro is not something you just wake up and start pursuing. Right now we don’t have any property of our own in Ikoyi, but we have our partners’ property which we are pushing to the market. We also have such property in Banana Island.

Still on the high end market. How do you cope with the high vacancy rate in that market?

The high vacancy rate we have in places like Ikoyi is not strictly as a result of recession. Some of the houses you have there are empty because the owners may be out of the country and do not want to rent them out. They are used mostly as holiday or vacation houses. Again, some of the occupants are moving out of Ikoyi to new towns that are coming up. I don’t know if you know that Ibeju Lekki is going to be the new Ikoyi or Banana Island in Lagos because of the new developments going on in that part of town. So, many people are already moving in to take position.

Everybody is now rushing to Ibeju Lekki as you have said, but the place is not planned yet. Don’t  you foresee an urban slum developing there?

I don’t foresee such development. What is going to happen is that there will be different levels of developments like Ajegunle, Ikeja GRA, Ikoyi, existing side by side. The whole land in Ibeju Lekki is not of the same price. You have the high and low priced areas. There are eye-catching areas that may form the GRAs of the up-coming city.

There will be segregation in terms of settlements. So there will be low, middle and high income locations in that area just as you have Ajegunle, Festac Town and Ikoyi. There are three distinct settlements in Lagos and each represents an income level different from others. So, there will be slum, but it will not be the whole of that area.

What does it take to buy a plot of land from this up-coming ‘city’ you are talking about?

We have properties in this area whose prices range from N700,000 to N18 million and above. But the advice I have always given to buyers is for them to go for properties that have good title no matter how much they have.

What returns do you assure someone who is buying for investment purposes, say in five years?

I can assure you that if you commit N700,000 on a plot of land in Ibeju Lekki, in the next five years, your return on investment will be over 100 percent. I may not have the exact figure, but it may not be anything less than 150 percent because the rate at which developments are coming there is just encouraging. You have the Lekki Free Trade Zone, Dangote Refinery, International Cargo Airport, the Smart City, Deep Sea Port, etc. Work has started on most of these projects.

Infrastructure is a key driver of developments. What is the guarantee that infrastructure, especially access roads, will come to meet these developments?

Already there is a good road network in that axis. But the government is working towards expanding the roads to accommodate the heavy traffic that will be coming to that axis. This is going to be a joint venture between the government and the private sector operators especially Dangote Group.

There are many real estate marketing companies out there. Why must a property buyer or investor come to you and not another competitor?

Clients would always prefer us to other companies because here we do not just market in order to get paid, nor do we market a property to a client and end the relationship there. We are here to build relationships and make friends too while doing the business. We help our clients to see the future and make wise investment decisions. We offer the right advice and provide market intelligence to our clients. We go out of our way to plan for our clients in a way that other marketers will not do. We advise our clients on location, possible return on investment, etc. We don’t market real estate strictly because we want to make money but because we want to plan the future with our clients. We want to help see their investment grow and we monitor that for them.

Every company makes projections for itself. Where do you hope to be in the next four to five years?

We are working to see ourselves as one of the top-ranking real estate companies in Nigeria in the next couple of years. We are putting a lot of strategies in place to make that happen. We expect that the real estate market in Nigeria is going to be one in which even higher school students will be investing. A lot of information is now going out on what it takes and the benefits of investing in real estate.

Before now, everybody was talking about investing in the stock market. It is no longer so because people now hear and they can also see that return on real estate investment is almost incomparable. A lot of young people now prefer this asset class to bank shares, buying cars, etc. So, I can see the market booming more than ever before.