The recent GDP report released by the National Bureau of Statistics (NBS) showed that the real estate sector cracked the monopoly of the previous largest traditional contributors to the economy. The sector leapt above oil and gas, telecommunications, and agriculture, which were traditional leading contributors to the economy.
This cheering news underlines the immense potential of the built environment and provides a new angle of vision that should inspire strategies to further the contribution of the sector. Seriously though, for some of us who continue to deploy a blend of technical competence and local capacities to enable robust investment performance for investors in the sector, there is hardly a better way to start the new year.
2024 scorecard
Precisely, across sectors, only crop production and trade performed better than the real estate sector. The sector’s 46.52 percent expansion, 16.5 percent quarter-on-quarter growth rate, and 5.43 percent contribution to real GDP in Q3 of 2024 provide room for more optimism in the sector. For starters, the sector valuation is projected to climb to $2.61 trillion this year and $3.41 trillion by 2029, according to Statista.
No doubt, if properly harnessed, the real estate sector will play a significant role in driving the achievement of Nigeria’s N1 trillion economy ambition through extensive job creation, urban and rural landscape renewal, and robust tax and fee contributions. However, the projected growth and contribution of the sector can be hampered without maximally utilising the role of facility management in the built environment.
Facility management coordinates people and processes to expand the productivity and value of properties. Its operations comprise the construction, maintenance, and remodelling of buildings. It extends to carrying out repairs to problems, providing security services, fire safety, cleaning, day-to-day management of operational costs, space allocations, identifying and reducing risks, and initiating processes to improve productivity.
Traditionally, it is within the purview of facility management consultants and professionals to carry out tenant services involving answering and responding to requests and enquiries, investigating new needs, and ensuring health and safety regulation compliance while serving as a critical interface to smoothen the relationship between tenants and owners. It also carries out an inventory of properties and provides reports, budgetary analysis, and payment information on facilities. It screens and oversees vendors, maintaining accurate records of equipment functioning status. These core operational services often determine the utility of buildings.
Read also: Understanding the relevance of facilities managers in real estate development
Outlook for 2025 and beyond
Meanwhile, trends in sustainability, cybersecurity, automation, workplace and home well-being, smart building, and artificial intelligence have expanded the operations of facility management consultants beyond the usual traditional roles, making engaging their services a necessity if the growth trajectory of the real estate sector is to be maintained.
For instance, globally, the adoption of predictive maintenance and the use of analytic tools offsetting downtime and equipment failure lead to elevated tenant experience in the real estate sector.
Advanced data integration buoyed by the installation of energy meters, IoT sensors, and building management systems provides actionable insights to enable smart decision-making, asset tracking, and energy optimisation. Organisations seeking to reduce their energy footprint rent spaces fitted with green technologies in line with renewed global Environmental, Social, and Governance (ESG) goals in a bid to forestall regulatory backlash.
Data collection and analysis, implementation of facility assessment tools, and the use of dashboards to track performance metrics are being prioritised to further aid the efficiency of facility management decisions. Autonomous solutions are deployed in carrying out routine facility tasks, thereby streamlining operations for efficiency.
These trends offer a pathway to strengthening growth in local property utility, resulting in impressive property valuation and investment yield. They are also comparative advantages for developers and owners aiming to scale estate value.
Sustainable growth
Here is a warning to developers and owners who choose not to engage the services of a facility management firm or consultant. It is most likely that keeping in step with the growth trajectory of the real estate sector and coping with trends in facility management will be overwhelming. An attempt to self-play both roles will yield poor facility management, which snowballs into an unsatisfactory tenant experience, complaints, court cases, unrealised utility projection, threat to human health and safety, structure deterioration, expensive repairs, facility failure, abandonment, and low investment yield.
This is it. While developers can capture the market in the residential and commercial real estate market, the dynamics driving change in tenant experience and demand for continuous facility adaptation and management can become stressful. Noting that more emphasis will be placed on adopting sustainable construction and eco-friendly building practices, tenants are most likely to show a preference for energy-efficient homes driven by environmental concerns, improved servicing, well-being, connectivity, fun, and safety.
Without utilising the expertise of a facility management company or professional facility managers, all the activities surrounding the development of housing could distract the developers or owners from the onerous tasks of efficiently maintaining properties to expand value for users. The impact on the growth trajectory of the real estate sector can be telling.
This is why at Alpha Mead Group we keep scaling our operations to support the growth of the real estate sector—not just in Nigeria but across the key locations within the African region. Our services are designed to help investors in the real estate sector achieve their objectives.
Currently, Alpha Mead Group is one of Africa’s leading facilities management companies, certified to ISO 9001:2015 international standards by United Kingdom Accreditation Services, UKAS. We provide integrated facilities management operations and consultancy services to large-scope, complex, and multi-serviced facilities across Africa. For over a decade, we have provided quality facility management services to some of the Fortune 100 companies operating in Africa and the Middle East markets.
It is not enough to celebrate the rebased position of the Nigerian real estate sector. Concerted efforts should be targeted at scaling performance to make the sector the first or second largest contributor to the GDP. This will help the government and private investors scale returns, as users scale experience. Utilising and optimising trends in facility management is key to reaching that feat.
Femi Akintunde is the Group Managing Director (GMD), Alpha Mead Group.
Join BusinessDay whatsapp Channel, to stay up to date
Open In Whatsapp
