Property market still struggles with empty houses, low rental income

Though the E call-up system powered by a technology called Eto App has succeeded in controlling truck movement and clearing traffic congestion significantly in Apapa, the impact is not being felt as much in the property market where houses remain empty and rental income is deplorable.

Ignorance of improved traffic situation, doubt, lack of trust and confidence that the technology and its application would be sustainable long term and the difficulty in relocating families and businesses with equipment are some of the reasons that have been fingered for the struggling property market.

Eto App is the reason Apapa has ceased to be a bye-word for the dreaded gridlock that drove businesses, landlords and tenants away from their homes and offices, leaving behind an estimated 40 percent of buildings in the port city empty.

In the last 12 months, Apapa has seen sanity return to its environment as the gridlock has largely disappeared.

Mohammed Bello Koko, acting managing director, Nigerian Ports Authority (NPA), estimates that the gridlock has been cleared up to 80 percent, leading to improved living and driving experience, less congestion at the ports and reduced freight charges.

Yet, the Eto technology with its positive impact has not been able to lift the property market from the dungeon of low demand, near-zero rental income, reduced property value and high vacancy rate.

“We have seen a little improvement on the road; we have seen re-inflow of people and businesses into some areas; we even see new houses being constructed and old ones being remodelled, but all these are so gradual that their impact is not being felt,” Ayo Vaughan, chairman of Apapa GRA Residents Association, confirmed to this reporter.

The chairman noted that landlords were yet to see any significant uptick in demand for homes for either rent or buy such that rental income for the landlords who are mainly retirees remains at a near-zero level.

Paul Odey, general manager of Apapa GRA Residents Association, stressed in an emailed answer to our reporter’s questions that everything had been too gradual at less than 10 percent improvement on the old order. He explained that part of the reason was ignorance. “Many people do not know that traffic situation in Apapa has improved. Those who know are still sceptical,” he said.

According to Odey, it would take a minimum of two years before investor trust and confidence are restored, especially in the traffic management ability of the call-up system to keep Apapa completely free of gridlock.

An estate manager in Apapa, Uche Chiejina, in a telephone interview, shared Odey’s view, adding that it was always a tough decision for families or businesses that have left an environment because of an adverse condition to return to that environment immediately the condition improves.

“A family, for instance, that has left Apapa may have paid two-year rent in its new residence. They have to live out the tenor of that new rent before thinking of returning to Apapa. Again, the family must have withdrawn their children from schools in Apapa and enrolled them in new schools where they live now.

“To return to Apapa, they have to withdraw the children from their present schools and begin to find new schools for them in Apapa. All these involve time and money which are hardly enough,” he noted.

Chiejina explained that the new construction and remodelling of old houses earlier alluded to were the normal thing done in old places like Apapa GRA, where houses that were built over 30-40 years ago are renovated or pulled down and rebuilt, citing Ikoyi where such activities are going on.

He noted, however, that in the midst of all these, rents have remained static, neither rising nor going down for years as landlords are holding on to their property, not ready to let go.

Apapa before the deployment of the call-up system was a terrible business and residential neighbourhood. Its environment was badly degraded by rampaging trucks and other marine activities. These were made worse by its inadequate and poor road infrastructure.

The deployment of the call-up system by the NPA working collaboratively with the Lagos State government has, so far, changed the narrative.

Besides the call-up system, the NPA has also employed other measures to ensure that Apapa breathes again. “We are promoting multi-modal transport systems through the use of barges for the movement of cargo in and out of the ports; this development has tremendously reduced congestion at most terminals, thereby improving ports efficiency,” Bello Koko revealed.

Read also: Real estate trends to watch as sector recovers

He added that NPA had also put in place a new policy that compels shipping lines to take, at least, 80 percent of the loaded containers that they came with for every voyage in terms of empty containers and export cargo.

“Over time, we discovered that most shipping lines were storing their empty containers in Nigeria, which was cheaper for them. We have introduced this policy whereby shipping companies are directed to take back 80 percent of the loaded containers they brought to the country from the stock of empties and export cargo, which has also reduced the number of trucks laden with empty containers that were waiting on the roads.

“What this means, in a lay man’s language, is that if a vessel brings 100 containers, for instance, such vessel must take back 80 containers, which must be among the empties and export containers without which the vessel would not be allowed to sail out of the ports,” he explained.

These measures, together with the call-up system, have brought the sanity and relative peace Apapa has seen in the last 12 months. But challenges remain. Lull in the property market is one. The unwillingness of investors to come to the port city is another, meaning that Apapa residents and businesses can only clap with one hand for now.

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