• Sunday, May 19, 2024
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Tenants in serviced estates cry out as rising energy cost bites – Survey

Developer narrows knowledge gap in estate agency, educates practitioners

Across Nigeria, the situation is dire for tenants in serviced estates and apartments as rising energy cost has not only squeezed their lean pockets further, but also compelled them to make hard choices in matters of comfort and living standard.

From Lagos to Port Harcourt, Abuja to Benin and Abeokuta, tenants experiences are virtually the same of how scarcity of premium motor spirit also called petrol has combined with rising price of diesel to make life and living a mini-hell for Nigerians and their businesses.

Rising energy cost in Lagos


In Lagos, the rise in the price of diesel from N320.00 per litre in mid-January to between N600.00 and N730.00 per litre in March is taking heavy toll on tenants of the many serviced estates where managers have either raised their service charge of adjusted services, especially power supply.

A recent survey by BusinessDay shows that tenants are really not having it easy as 75 percent of those polled who live in serviced estates said services have dropped, especially power supply. They noted that power supply is now supplied according to need or request.

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Folú Williams, a serviced estate resident, writing on his Twitter handle, @WilliamsFolu, said, “they are robbing us; we are paying for darkness. Estimated bills are is the reason they are frustrating metering. We want to pay for what we use for God’s sake,” making veiled reference to epileptic power supply.

“Before now, we were getting 24 hours power supply. But since the rise in the price of diesel, we are left with the hard choice of getting 24 hours power supply and paying more or reducing the number of hours and paying less,” disclosed a tenant who identified himself simply as Ebubechukwu.

Frank Okosun, CEO, Knight Frank Nigeria, confirmed this development in a telephone interview with BusinessDay, saying that some tenants are already finding alternative sources of power such as inverters and solar power.

“But these cost millions to acquire and not everybody can afford them. What we are doing now is invoicing tenants differently. We already have diesel account and electricity account which we sum up as consumption account, separate from service charge,” he explained.

He added that tenants were now asked to decide how they would like to have power supply.”If a tenant wants 6-hour power because that is what he can pay for, we supply him that much,” he said.

Wale Odufalu, managing director, Apha Mead Development Company (AMDC), a subsidiary of Alpha Mead Group, also confirmed to BusinessDay that the high energy cost is taking toll on their business, saying that they were communicating price changes to the tenants.

“In our estates, we have different people with different interests. Some people who work from home would like to have 24 hours power supply, unlike those that work in offices or go to their shops and return to the house only in the evening. This latter category of tenants don’t need long hours of power supply,” she said, adding that people get power now as a matter of preference.

In Port Harcourt

In Port Harcourt, the Rivers State capital, there is a slight difference in tenants’ experience. BusinessDay findings show that despite the rising cost of energy in the Garden City, facilities and estate managers have found a way to absorb the cost and shield the tenants from the shock in such a way that they don’t feel the pain directly.

“We have not been asked to pay any extra money for purchase of diesel by the management of the estate despite the increase in the cost of the product. Again, we still have regular light as before,” a tenant, who lives in Peace Haven Estate in Woji, Port Harcourt, told our reporter.

The tenant, who did not want his name mentioned, added, “I am aware that prices of fuel and diesel have gone high but to tell you the truth, it’s not affecting us because we still have our regular supply of light. At least, every night, we sleep with light and that’s what they promised me when I was renting this place before.”

At Cocaine Estate, Aba Road, Port Harcourt and Amadi Gardens, along Abuloma-Peter Odili Road, residents also said they did feel the effects of increased energy cost, as the management of the estates had maintained the normal power supply.

“This increase in energy cost you’re talking about is not supposed to affect us in this estate because when you’re packing in, they will add the cost of these services to your rent and you pay. They know that once you pay that money, you have paid for all the services – light, water, security, everything.

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“The management knows that the economy can change, inflation can come and prices of things will be affected. So, I believe they factored these things in their rent charge. That’s why their rent is high. Even though price of diesel is increasing, they cannot come and ask us to pay more money because of that,” the residents reasoned.

Rising energy cost in Benin

In Benin, the Edo State capital, tenants experience is also not as bad as it is for their Lagos counterparts. BusinessDay gathered that service charge and delivery had not changed even though energy cost has gone up.

But it has not been easy for facilities managers. “It hasn’t been easy with the management. So many persons normally increase their price when things like these happen but this is not the case here as they are still maintaining the amount,” a tenant at Zuri’s serviced apartment, noted.

Tony Alogaga, the manager of Ed’s Luxe Apartments, said though the cost implication of managing the apartments is huge, the service fee has not changed. Alogaga, however, noted that they were studying the situation and if by April, the prices of diesel keep going up, they might review the service fee.

“We just have to please our customers no matter the present situation. For now, we are still maintaining what we normally give to them which is N80,000; that is, N60,000 for a two-bedroom apartment and N20,000 for caution fee.

“We don’t want to increase and then reduce again. We are keenly looking at the situation and if by April, the prices still go up, then we may just have to sit down and decide our next step,” Alogaga said, disclosing that, on a daily basis, they spent nothing less than 50 litres of diesel which is about N35,000 or more.