Omotoyosi Ajayi, head of marketing and communications at BlueSquare Limited, spoke with SEYI JOHN SALAU, on the several benefits of home ownership in Nigeria. Ajayi said that as a brand specialist, she leverages branding and communications as a tool for reinforcing value propositions, which leads to improved financial performance, higher productivity, brand recognition, and customer satisfaction. Excerpts:
What is your view on home ownership vis-à-vis the Nigerian environment?
Homeownership remains one of the biggest drivers of wealth creation but stepping into the home buying process can be overwhelming. Many renters aspire to homeownership but have questions about how to achieve it. The path to homeownership can seem daunting and unobtainable, especially in a unique market like real estate, but understanding the potential benefits of homeownership helps individuals see the value of owning property instead of renting. Home equity gains are built up through price appreciation.
Let’s look at the value addition your company provides for customers; what would you say is your niche area?
BlueSquare Limited, leading property development company in Nigeria is uniquely positioned to especially guide home buyers in Nigeria and the Diaspora on the potential benefits of home ownership and the investment opportunities therein. Delivering distinct, stylish and functional living spaces to clients in Africa since 2012, BlueSquare Limited in addition to property development offers advisory, resources and investment opportunities to clients, hand holding them as they make crucial real estate investment decisions.
Based on the property development advisory you offer your clients; what is the significance of home ownership?
A home is a significant purchase, it can be expensive initially, but when contemplating the fees and benefits you miss out on renting; buying a home is always a better investment in the long run. Home appreciation is based on many factors, including the economy and location. If you choose the right home, often in a developing or attractive neighborhood, you would see a steady increase in home value over time. Once you surpass your home’s purchase price, then you may be able to reap the rewards on your home’s higher value.
Outside home ownership, what other investment options are available in the real estate sector?
Looking at the rise of the shortlet industry in Nigeria for instance, the shortlet market is having a slice of the hospitality business in terms of the volume and value of transactions it is taking from the conventional hotels. While data from Statista put the average occupancy rate of Nigeria hotels at 47.5 percent in March 2021, a survey by BusinessDay across three of Nigeria’s busiest cities shows the average occupancy rate for short let apartments increased to 76.3 percent in March from 54.6 percent reported three years ago. Analysts believe shortlet holds investment opportunities for strategic investors.
According to data from Nigeria Property Centre, the average price of flats short let in Lagos is N65, 000 per day. This is compared to the average of N100, 000 or more charged per day by hotels for a similar apartment that falls within the three or four-star ratings. The Lagos short let market has grown by 263 percent over the past three years. This growth was mainly underpinned by rising demand for both long-stay and short-stay apartments in the wake of the pandemic according to the Lagos Short let Report by Pan-African real estate data company, Estate Intel. Ikoyi, Victoria Island, Lekki Phase 1 and Ikeja have emerged as the top shortlet hubs in Lagos. However, Lekki Phase 1 emerged as a stand-out performer maintaining considerably higher occupancy levels at 80 percent compared to the 60 percent and 70 percent levels recorded for Ikoyi and Victoria Island respectively.
What are the investment benefits of shortlets?
Investing in a shortlet apartment guarantees a consistent income from owned properties with the privilege to sell if need be. There is a massive gain from an increase in the property value over time due to changing demands in the area; even if the property does not undergo any changes, the value may rise significantly over a few years. As a property owner, you can make money without limits from shortlets.
There is a regular demand for it as there would always be business travelers in need of an affordable and comfortable place to stay while they are away from home. Shortlets give property owners the opportunity of having an alternative source of income when they are not in the country or in the city for a period of time. There is no limit to how much money one can earn from owning a shortlet home; depending on the season and time of the year.
If I am a first time home buyer, how will your firm assist me to manage my investment?
At BlueSquare Limited, we believe that everyone deserves the benefits of a modern and functional home, to truly live well, which is why we are constantly spearheading excellent and innovative spaces, with sustainable investment opportunities. As a first time home buyer, there is a lot of learning to embark on as home buying is a major commitment not just financially, but psychologically. Investing in the Nigerian real estate market can be overwhelming for new buyers; this is why our team of expert advisors and partners have been strategically positioned to walk buyers through the process.
As one of the biggest purchases of one’s life, we constantly ensure that prospective buyers enjoy a seamless experience, pointing them in the right direction to home ownership while being as transparent as possible. For Nigerians living abroad who wish to buy or build their own homes, we understand their concerns and that is why we are continuously partnering with relevant bodies, agencies and institutions to assist them in their home ownership journey. Buying a home can be challenging for a first-timer. After all, there are so many steps, tasks, and requirements, and you may be anxious. At BlueSquare Limited, we help demystify the process, so that buyers can get the most out of their purchase.
What would you say is the value of investment in the global prop tech industry?
Proptech is a relatively new area, but has huge potential to disrupt the real estate sector. A 2019 survey demonstrated this, when over 80 percent of commercial real estate capital investors indicated that they expect proptech to have a significant or moderate effect on the sector globally. The disruptive role technology is playing in the real estate sector will not only engender growth but will also address some of the challenges the sector is facing. Proptech, which is an application of information technology and platform economics to real estate markets, would address some of the challenges, leading to housing affordability and increased home access.
Proptech is growing rapidly in market size and the global real estate technology market size was estimated at $11.7 billion in 2022, and is projected to grow at a compound annual growth rate of 12.5 percent to reach $23.79 billion by 2027. It is a fast and dynamically growing industry and it is revolutionizing the real estate market. Proptech offers innovative technological solutions that bring industries to a new and better level, increasing revenues.
Finally, what do you have to say to a first time home buyer, especially in the diaspora?
You need to be clear on the type of home that will best suit your needs, is it a traditional single-family home, a duplex, a townhouse, a condominium, a co-operative, or a multifamily building with two to four units. Each option has its pros and cons, depending on your homeownership goals, so you need to decide which type of property will help meet your needs. As a prospective buyer, you also have to be clear on the specific home features you want.
While it’s good to retain some flexibility, you deserve to have that purchase fit both your needs and wants as closely as possible. Your list should include basic desires, like size and neighborhood, all the way down to smaller details like bathroom layout and a kitchen fitted with durable appliances. You may also want to consider how much Mortgage you qualify for if you are interested in any. Rest assured, we will guide you through the home buying process.
