Globally, the property market in 2013 was the icing on the cake among various investment asset classes and in the Sub-Saharan Africa, particularly Nigeria, Ghana and Kenya. The market witnessed what analysts have described as a revolution.
The market looked good all through the year, ending with high expectation and optimism of increased activity and investment in 2014 which, interestingly, presents a very bright and positive investment outlook for savvy and discerning investors.
We share in this optimism, especially from what we’ve seen so far with a bullish entry into this New Year by UAC Property Development Company (UPDC) Plc which, recently, unveiled an ambitious plan to commence construction on six projects that would deliver 502 residential housing units in five cities of Nigeria including Abuja, Lagos, Asaba, Calabar and Ibadan.
The management of UPDC told journalists at the unveiling of the projects that its decision and outing were premised on a market research which revealed encouraging demographics, market potential, improved infrastructure and urban renewal in those cities, all of which are catalysts for the growth and development of real estate market.
At the commercial segment of the market, the outlook is even brighter with a flurry of investment already happening, and huge expression of interest in the market from both local and foreign investors.
It gladdens our heart to note that, in Lagos alone, between Ikoyi and Victoria Island which are business hubs, there are close to 250,000 square metres of office space that will be coming into the market. Among many others, the market expects RMB Westport’s US$182 million office complex called ‘The Wings’, while African Capital Alliance is perfecting plans to invest yet-to-be-disclosed amount in an international standard office complex.
In retail, Actis and Duval Properties are coming up with the Jabi Lake Mall in Abuja estimated to cost over US$100 million; UPDC will be delivering its N5 billion Festival Mall by December this year; Ado Bayero Mall in Kano is also coming up while, Lancelot Ventures’ shopping mall in Ibafon, Ogun State is equally on track.
Driven by demographics and strong spending power, many international retailers, including Carrefour—a renown retail chain from France—will be coming to invest in Nigeria and other West African markets, while those that are already on ground such as Shoprite, Walmart, Park n Shop etc are in ambitious expansion plans with more investments in stores and shopping outlets.
In the hospitality sector, on account of growth, trade and business, over 40,000 new rooms in 207 hotels are expected in Africa’s market with Nigeria as a major destination. From Lagos and Kigali to Nairobi and Johannesburg, the world’s best known hoteliers are targeting the continent’s growing urban centers to benefit from a rising number of business travelers.
Much as we share in the optimism and joy of the unfolding investment opportunities in this market, we are nonetheless worried about the unlikelihood of all of this coming to fruition because of the peculiarly hostile Nigerian business environment which has been the bane of our economic growth and development over the years.
Real estate is about land and we are not unaware of the limiting and frustrating impact of government land policies on the growth of this market, hence our appeal to the government at all levels to deliberately start creating the enabling environment to make this imminent growth happen.
We also urge the government to keep in check all macro-economic policies in order to guard against inflation and high exchange rate that are barriers to investment and therefore, capable of scaring away potential investors especially those coming from outside our shores.