Lagos property market seen attracting $5bn investment in 5years
…as experts show path to becoming successful developers
Lagos property market will attract $5 billion worth of investments in the next five years, Chudi Kalu, CEO, Middlechase Properties, also known as Coach Kalu, has said.
Kalu explained at a Property Developers Forum held in Lagos recently with the theme, ‘Predicting the Property Market of the Future,’ saying there were several opportunities inherent in Nigeria’s property market as about 48 million people would want to own a house every year while about 8 million people would have the capacity to buy a house every year.
He said that property companies needed to change their ways of operations, especially as times were changing even in the real estate market.
According to him, developers in Nigeria needed a good marketing strategy, make a good investment, and have a good system to benefit from the opportunities in the industry.
Kalu, who narrowed his points to the topic, ‘Dominating in an Overcrowded Property Market,’ said that “every developer needs to build a system that will enable the company to operate successfully with or without him.”
He predicted that many property companies will be bought over by top-performing companies through mergers and acquisitions while mediocre companies will remain mediocre because they practice real estate business with small minds.
“A developer needs to establish himself as a creator and an inventor because a developer is somebody who creates something that was not in existence. A developer must develop the competence of marketing. We need to stop adjusting and start dominating a particular aspect of the real estate market,” Kalu said.
He pointed out that a developer also needs to create a space where his or her company can dominate and sustain profitably by identifying a property market such as a hostel among others that matters to the company and its clients.
While advising developers to narrow their operations and focus on a particular segment of the property market that would be beneficial to them, he said “no one developer can have the resource to market and sell all the real estate products at the same time.”
“You may be doing more when you narrow your space. You can dominate by narrowing your products. Therefore, focus on the property product that is going to help you to either build cash flow or profitability,” he advised.
Gbadewole Amos, the managing director/ CEO of Crown Allied Homes, advised developers not to sell what they think is good but to create a product people will be willing to pay for and can get value for.
While advising developers to be mindful of dubious site workers, he pointed out that developers can only become successful if they are able to block all revenue leakages in the company.
“A developer needs to be disciplined and to market his or her product by creating an internal marketing system. He or she also needs to have an accounting system, engineering system, corporate communication system, and good procurement system that are handled by trusted hands,” he said.
On his part, Adetola Nola, another successful developer, who spoke on ‘Raising Money for Development,’ identified customers’ funds as the cheapest source of funds for real estate development.
He listed other sources of funding real estate projects to include bank loans, which can be driven by the company’s cash flow and secured by its assets, as well as capital market’s bonds or commercial papers that can be secured with investment-grade ratings, project ratings, or solid business plan.
Nola noted further that sources such as high net worth individuals (HNIs) and private money lenders are also options for securing funds for real estate projects, adding that developers need to ensure their companies have good branding to enable them to secure the needed funds.
Olawale Ayilara, another developer, who listed quality and services as essential tools to becoming a successful developer, said developers also need to build a credible team by employing people with good understanding of the business and are also experienced.
He added that service is critical and advised developers to enhance their services to their clients by using modern techniques.