The Managing Director of The Infrastructure Bank Adekunle Oyinloye says the real estate sector is projected to grow by 10 per cent annually over the next 10 years.
Oyinloye said this while delivering a paper on “The Infrastructure Banker’s Perspective – International Funding for Real Estate,” at a business forum in Lagos.
He called on stakeholders tap the huge opportunities that would abound with the progressive growth in real estate sector in Nigeria.
Oyinloye identified the residential real estate segment of the market as the sub sector with massive inherent untapped potential.
He quoted the National Bureau of Statistics (NBS) as saying that “Nigeria real estate market was valued at approximately N1.4 trillion in 2011 and has risen to N6.5 trillion in 2015.’’
The TIB boss said that the sub-sector’s contribution to Gross Domestic Product (GDP) was 7.7 per cent in 2012 and later rose to 11 per cent in 2014.
According to him, growth in population, burgeoning middle class economic expansion, building hospitality industry among others are catalysts for further growth in the real sector.
He said that 80 per cent of the adult population was living in rented apartments in Nigeria compared to Ghana and South Africa which had between 20 and 25 per cent, respectively.
Oyinloye said that 50 per cent of Nigerians were either homeless or were living in inadequate shelter.
He said that his bank was already working on modalities that would provide solutions to the challenges in the residential real estate market in Nigeria.
He said that TIB was collaborating with local and international financing and funding communities on the bankability process in getting funds of the right makeup best suited for real estate projects.
Oyinloye said that the Nigeria Mortgage Refinance Company (NMRC), a Public Private Partnership (PPP), would help make it easier for the working low to middle income earner to purchase homes.
He maintained that the package was structured to revamp mortgage financing and home ownership among the low to medium income class in Nigeria.
The bank boss said that the new PENCOM Act 2014 allowed pension funds administrators to invest in certain real estate vehicles such as mortgage backed securities and Real Estate Investment Funds (REITs).
The managing director commended the board and management of Lekki Gardens for its innovative delivery and marketing strategy, aimed at providing affordable houses to the middle-income segment of the Nigerian society.
“Lekki Gardens has demonstrated that with an effective and efficient delivery mechanism, pricing for houses – which has hitherto been the Achilles heels of developers – can be made affordable, even in high brow areas such as Ikoyi and Lekki.
“Lekki Gardens is again blazing the trail with this epic workshop, which is hoped to identify with each stakeholder’s value proposition with a view to creating more value for the residential real estate market and capturing same for all concerned parties.”
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