The penchant of foreign property vendors and developers from the United Kingdom, United States, United Arab Emirates and South Africa, among others, for coming into Nigeria and luring investors who could have put their money in the nation’s economy is raising concerns, experts have said.
The experts, who expressed fears of the potential negative impact of these activities on the economy and estate agency practice in the country, note that while the UK has become a conduit for capital flight through investment in student accommodations, Dubai (UAE) stands out as a haven for investment in private residential buildings.
They cited Palm Jumeira, an upscale neighbourhood in the city, which harbours choice properties owned by Nigerians.
Confirming this to BusinessDay, Johnson Chukwuma, a structural engineer and real estate consultant, states that ordinarily, there is nothing wrong with Nigerians investing in foreign property markets, but expresses worry that “the so-called investors are taking advantage of lack of regulation and control in estate agency practice in Nigeria to do what is not in the interest of our domestic economy”.
Chukwuma observes that apart from capital flight, the activities of these vendors tend to hold down the growth of the real estate market in the country, explaining that the growth of the sector will ultimately lead to economic growth through job creation and wealth generation.
Funke Okubadejo, director of real estate in Actis, agrees, noting, however, that in spite of the activities of these vendors, people are still investing in Nigeria and getting good returns on their investments.
Chudi Ubosi, Africa president, Federation of International Real Estate (FIABCI), notes that “the activities of these vendors are not for money laundering per se; but they are just cashing in on the penchant of Nigerians for real estate investment as a storage of value, security and prestige”.
Ubosi, who spoke in a telephone interview with BusinessDay, affirms that these vendors are coming and they are focused on areas that are of particular interest to Nigerians such as London, cities in USA and Dubai, pointing out that the investments they make for Nigerians, most times, come with advantages of citizenship, rental yields used in paying students’ school fees and also providing accommodation for the students and their visiting parents or guardians.
Joe Idudu, former president, Nigerian Institution of Estate Surveyors and Valuers (NIESV), in his presentation at a memorial lecture in honour of late Johnwood Ekpenyong in Lagos recently, stressed that these vendors were taking advantage of lack of regulation and control to undermine estate agency practice in Nigeria.
Idudu, who advised his colleagues in this practice to “gird your loins”, noted that “these foreigners mostly from UK, Dubai, France and the US come into Nigeria, check into high-class hotels, advertise their presence in the newspapers, and thereafter invite prospective Nigerian investors to their suites in order to arrange property investment abroad for them”.