• Friday, April 19, 2024
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FX shortage stalls project financing in real estate sector- Landwey CEO

FX shortage stalls project financing in real estate sector- Landwey CEO

Sheila Ojei is the chief executive officer of Landwey Investment Limited. In this interview with Josephine Okojie, she spoke about her career transition from the public sector into the real estate industry and her plans for Landwey Investment as the new CEO.

Your career has witnessed some interesting changes, what prompted the switch from the public sector to real estate?

My transition from the public sector into the real estate industry was driven by a combination of personal and professional motivations. My experience in the public sector, creating opportunities, strategic partnerships, planning, and implementing impactful programs for MSMEs and startups in Lagos to leading dynamic teams, provided me with valuable insights into the challenges faced by MSMEs as well as the impact of urbanisation in Lagos State. It was during this time that I became acutely aware of the population challenge in Nigeria and the importance of building communities that can cater to the growing population.

Real estate, in particular, presented a unique opportunity to address this issue and make a positive impact on people’s lives. The prospect of contributing to the development of sustainable, affordable, and quality housing options was a compelling reason for my transition. Additionally, the real estate sector offered a dynamic and entrepreneurial environment that resonated with my passion for innovation and problem-solving.

How will your experiences in recruitment/tech and the public sector help in your new role as the chief executive of Landwey?

My experience in recruitment tech has honed my abilities in talent management, process optimization, and leveraging technology and data for business growth. These skills are invaluable in the real estate industry, where efficient project management, workforce optimization, and the use of digital tools are critical to success.

On the other hand, working in the public sector, provided me with a deep understanding of government policies, regulatory frameworks, and the socioeconomic challenges facing Nigerians. This knowledge is essential in navigating the complex regulatory landscape of the real estate sector and advocating for policies that promote affordable housing and sustainable development.

Where do you think opportunities lie in the real estate industry?

The real estate industry in Nigeria is brimming with opportunities, and several key areas deserve attention. First of all, with Nigeria’s growing population and urbanisation, there is a significant demand for affordable housing solutions. Recently I came across some videos on social media where people were living in deplorable conditions and paying as much as N4,000 naira a month for rent, this should not be so. Real estate developers in partnership with the government can focus on creating affordable and/or social housing projects to meet this need. In addition to this, collaborations with government agencies on infrastructure projects need to unlock opportunities for real estate development in emerging areas.

Another opportunity is embracing environmentally friendly building practices and energy-efficient designs which are both responsible and appealing to environmentally conscious consumers. At Landwey, we have the Future City projects which include the luxurious Isimi Lagos, a sustainable and wellness city.

Finally, the rise of remote work and changing lifestyle preferences have created a demand for more residential properties, relocation to the peri-urban religions and the demand for flexible co-working and co-living spaces, offering a new frontier for players in the real estate industry.

Read also: Real Estate operators identify pragmatic solutions to meeting increasing housing demand

Inflation has reduced consumer purchasing power and for you as a developer, it has reduced your capacity to supply more products. It has also increased production costs. How are you coping in the midst of all these?

Inflation has been tough on the real estate industry, especially this year and we have been burnt by it. However, to cope with these challenges, we are continuously optimising our operations to lower project costs and enhance overall efficiency while ensuring we still deliver quality.

In addition, a lot of work goes into understanding the market and its changing trends which allows us to make informed decisions and adjust our offerings to align with changing consumer preferences and budgets.

In summary, the only way to cope amidst rising inflation is to be adaptable and resilient, which is something that we live by at Landwey.

Specifically, what segment of the country’s real estate market does Landwey operate?

Landwey operates in multiple segments of the country’s real estate market, including residential, commercial, and site and services. This diversified portfolio allows Landwey to cater to a wide range of real estate needs and preferences. In the residential segment, Landwey offers properties like “Urban Prime” and “Terra Gardens,” providing housing solutions for individuals and families. Additionally, Landwey also focuses on site and services projects, which offer land and essential services, allowing individuals to build their own homes. This diversified approach reflects Landwey’s commitment to meeting the diverse demands of the Nigerian real estate market.

Properties are pretty expensive in the major cities, especially Lagos. A lot of Nigerians feel that real estate developers charge exorbitantly and are driven only by profit. Some Nigerians think this is limiting the sector’s growth and also denying average Nigerians the opportunity to own properties. How true is this statement?

The perception that real estate developers charge exorbitant prices and prioritise profit over affordability is a valid concern in some cases. However, it’s important to consider the complexities of the real estate industry, especially in Lagos. To begin the costing of any property, you first need to know that land in Lagos is not cheap and developers need to be able to cover the cost of acquiring the land before they even start any form of construction.

At Landwey we have seen our construction cost almost triple in the last few years, even the cost of labour as well. Not to forget the regulatory hurdles and documentation that usually costs quite a penny. Although we continue to strive to make real estate accessible to all, the truth is that to have ‘affordable’ housing options, there have to be strategic partnerships with the government which can help drive the costs low and allow every Nigerian the opportunity to own a property.

How is FX scarcity affecting the country’s real estate industry?

It is no no-brainer that as a country we are heavily reliant on foreign exchange (FX) and the real estate industry is not exempt from this. Many real estate developers rely on imported construction materials and equipment, causing the FX scarcity to contribute towards inflation, increased costs, project delays, and a general rise in property prices. The scarcity is also affecting project financing as it is risky to take advantage of any FX facilities due to the fear of paying more than you got and also eroding investor confidence in the Nigerian real estate market.

To mitigate these challenges, some developers have explored local sourcing of materials, however, with that comes the challenge of quality and durability.

Read also: The role of real estate investment in Nigeria’s economic recovery

As a female CEO, how have you navigated the terrain and become this successful?

I find this question interesting as I have had a fluid career across different industries, also I believe that the term success is relative because who defines the parameters of measuring success? But to answer you, getting to this point today has been a combination of focusing on my competence and expertise, understanding what value I bring to any organisation I join, and being open to learning.

However, as a female CEO in a male-dominated industry, I would like to see more women in leadership roles in the real estate industry. Women bring diverse perspectives and skills to the table, and I believe that diversity is essential for innovation and growth in any industry.

The Nigerian real estate industry is highly saturated, yet the country’s housing deficit is increasing daily. Why is it so?

The persistence of a housing deficit in Nigeria despite a highly saturated real estate industry can be attributed to a combination of factors. First and foremost, Nigeria’s population continues to grow at a rapid pace, we have an estimated population of over 200 million and the United Nations projecting it to surpass 400 million by 2050.

This population growth, coupled with increasing urbanisation, has created a continuous demand for housing in major cities like Lagos, Abuja, and Port Harcourt. It is estimated that every hour alone, about 85 people come into Lagos so you see how that can pose a huge challenge for the state. Additionally, economic challenges, such as income inequality and limited access to affordable financing options, hinder many Nigerians from accessing homeownership.

However, amid this challenging landscape, companies like Landwey Investment Limited have emerged as key players in addressing the housing deficit in Nigeria. Landwey’s Urban Prime project is a noteworthy example of our commitment to transforming peri-urban areas into urban hubs, thereby contributing significantly to the solution.

Complex regulatory processes and bureaucratic hurdles often delay housing projects, reducing the supply of affordable housing units. According to a report by the World Bank, Nigeria’s housing deficit was estimated at over 17 million units in 2019, and this number is expected to rise if concerted efforts are not made to address the issue. To bridge this gap, collaborative initiatives between the government, real estate developers, and financial institutions are essential, along with innovative financing solutions and streamlined regulatory processes to accelerate housing development and make homeownership more accessible for the average Nigerian.

Can the real estate industry diversify the country’s economy?

The answer is an absolute YES! Real estate generates employment opportunities in construction, architecture, engineering, and related fields, contributing to reduced unemployment rates. It also provides opportunities for skills development in vocational and technical skills. Other ways the real estate industry can diversify the country’s economy is by attracting foreign investment which can bolster the country’s foreign exchange reserves and economic stability and finally, the urbanisation of the peri-urban and rural areas can lead to further development and economic growth in those areas.

I would recommend that the government continue to create an enabling environment that supports real estate development, streamlines regulatory processes, and encourages investment in infrastructure.