Though Nigeria has a large property market with huge and compelling opportunities for investors, it is not receiving the kind of investments funds it should from global investors for a number of reasons that are not clear to the investors.
Besides the frequently cited unfriendly business environment, these investors lack knowledge of how Nigerian property market works. This, according to Bill Endsley, Principal at World Citizen Consulting, is because there is lack of transparency in the market just as transactional data is non-existent.
“There are billions of global funds flowing into the property market at the moment, but not much is coming into Nigerian market; investors are unwilling to come to put their money here,” noted Endsley who spoke in an interview with BusinessDay on the sideline of a FIABCI International Real Estate Consultant (FIREC) programme hosted by FIABCI-Nigeria chapter in Lagos at the weekend.
Endsley pointed out that even though risks are always there for any investor, those risks have to be priced so that an investor that is coming will understand what exactly the risks are. He noted, however that it was difficult now to price the risks in the Nigerian property market because of what he called “unclean window”.
“We need to clean the window so that investors can see the risks,” he advised, adding that the Nigerian market also lacks transactional data for which the market should be looking at the property laws, the qualification of the professionals and the role of the banking sector in property transaction.
The stressed the need to train Nigerian professionals on international norms for real estate investing and standards so that they can attract more foreign direct real estate investors. He added that the professionals have to be brought to the level of world class consultants so that they can move Nigeria away from oil economy to the world of investment in property.
Endsley affirmed that there were opportunities in the Nigerian property market and now was the prime time to invest in the market because, as he put it, ‘the country is trying to move away from the commodity-oil economy to a new industry and property is the foundation of everything.”
For the investors, he advised that they should do proper market and financial analyses, explaining that market analysis would involve finding out what the market needs—whether it is residential or commercial property, while financial analysis would be looking at the cash flow and bank transactions.
FIREC programme, already in its second edition, is an annual event through which FIABCI trains and educates its members on current trends in the built industry. It is all about real estate and how things are done globally with reference to Nigeria.
“We need to push ahead otherwise the whole of us in the entire building industry will be far behind. In this age of digitalization, we need to keep abreast of events because things have changed drastically,” noted Adeniji Adele, President, FIABCI Nigeria chapter.
Continuing, the president said, “we need to begin to gain insightful knowledge and share same. That is the essence of this programme. It is about gaining insightful knowledge and keying into international principles and practice; we believe in the continuous education of our members and also in sharing knowledge. We also need to connect with other professionals in the outside world.”
He explained that the business world has become global and the real estate market has been internationalized, saying this has resulted in the need for professionals to transact business with investors from diverse cultures and backgrounds making it imperative for professionals to figure out how to deal with these cultural differences in their negotiations.
CHUKA UROKO
