OLUKAYODE OLUSANYA is the chief executive officer of Oak Homes Limited. In this interview with CHUKA UROKO, he reflects on the Covid-19 pandemic and the impact it had on the real estate sector and the global economy. He also speaks on sundry real estate market issues and discloses Oak Homes ‘next level’ plans aimed at scaling up their offerings and redefining the Lagos skyline. Excerpts:
Like other nations of the world, Nigeria and its economy suffered the deadly impact of Coronavirus in 2020. Many businesses including real estate were swept aside. Others who survived are still smarting from the impact of that pandemic. What is your story; what kept you going?
Resilience, innovation, hunger coupled with the passion. That said, it’s no magic wand because we have always declared privately and openly that ‘Real Estate is REAL’. There is a dearth of housing: Qualitative and value creating at that. More than ever, the COVID-19 episode has proven that a home is where you retreat to when the streets are not safe. With the lockdown, you are locked home. We are confident that after everything else fails, we are the ones designed to bring respite to the people.
It is believed that the real estate sector and the investors are resilient and that explains why the sector grew by 3.85% in the second quarter of 2021. What other factors, in your view, made this growth possible?
Again, real estate is an asset class that stores value and will ALWAYS return on investments. Most other markets have taken a plunge with the nosedive in the value of the Naira, hence many investors now clearly hear our thin voices. Again, with rising insecurity across the country, you will realize that there are specific locations that are thriving. So several factors have helped in the growth of the sector.
Read also: Firms in season of alternative capital raise to build homes, create jobs
Some analysts say the growth recorded in the sector is not sustainable. Their reasoning is that there are serious threats to the growth, coming especially from macro-economic issues. Do you share this view? What other threats do you see?
Insecurity is key. A lot of people I personally look up to have questioned my sanity given our level of investments in the Nigerian dream. Some believe there won’t be a Nigeria to wake up to. EndSARS has also raised the alert levels. There are about 10 professional Nigerians resigning from top institutions daily to leave “before the ship goes burst”. These are some of the strong threats to investments. However, my personal sentiment and belief is that Nigeria will definitely hit a RESET. I might not have all the answers for you, but we won’t go burst.
The huge deficit in the housing sector translates into opportunities for investors, yet the sector is not among the top three performers in the economy. What are your recommendations to make the sector contribute significantly to GDP and economic growth?
Proper regulations are needed. Also the sector needs carefully designed and dedicated funding.
Over the years, the housing sector has faced policy inconsistencies that have not only slowed growth, but also impeded home ownership opportunities and compounded the deficit. What do you expect the government to do in the sector to change this narrative?
Contrary to this belief, I think the Lagos State government is doing a good job in addressing home ownership for its citizens. There are various initiatives that allow home buyers to pay on a monthly basis with about single digit interest mortgage systems. However, on the supply side, I think legislation should be managed to merge some agencies performing double and, in some cases, triple duplicative functions. That, I think, will help to improve on the present situation.
Now, tell us; what is Oak Homes and its management doing at the moment with reference to your quality and affordable luxury products offering? What project are you pursuing?
For us, it’s our next level. We are moving into a new definition of smart and luxury living. We need to redefine the game. So there is a major overhaul of our team which includes a new management staff with an expat Chief Operations Officer (COO). He’s worked with the big names and his major task is to make the Oak Homes brand even bigger. Our products in the coming months would redefine the tag “affordable”.
We are also spreading our wings from our “Home”: Lagos. We are moving into the federal capital territory (FCT) where we have long been asked to change or rather redefine the game. So it’s a whole new world for us as a firm. We just want to be the Best there is!
Sometime ago, your target market was mainly Diaspora Nigerians for whom luxury is given. What has changed given the pandemic and challenges in the global economy?
Hmmmm! Our target market was not mainly Diaspora Nigerians, but the Diaspora is a key strategic move given the foreign exchange power of that segment. This will not change. We are keen on increasing our market share of this segment. If anything, you know the power of the Dollar, for example.
In Nigeria today, the slowdown in economy has affected income across board, leading to a significant drop in consumer purchasing power. What is your experience playing at the luxury segment of the market where demand and consumer behaviour are elastic?
Indeed, income has been affected across board but the demand for luxury living has not been affected. However, you will find that the number of people who move into this potential clientele base has reduced. The market is for a defined class which is not increasing, unfortunately. But luckily, given the lack of investment options, the luxury market will always find its appeal with those who have the appetite for them.
In time of low demand such as we are in, products suppliers like you seek and adopt strategies that stimulate demand and attract buyer-interest. What strategies have you adopted in this circumstance?
Quality living brings about a following that is almost like a cult. Word of mouth sells more products than “make belief “. People have come to trust our brand and are happy to refer their family and friends to do business with us. We have not done one single page of newspaper advert in a while, yet we are busy! May God be praised, indeed.
Like human beings, businesses are also organic. Talking in terms of growth, what are your projections for Oak Homes in the next decade of delivering luxury in the market?
Our growth plans includes building several towers dotting the skyline of Lagos. We intend to upscale our operations to ultra luxury living. We intend to grow into 3 other continents doing what we know how to do best—luxury living at its finest!
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