Though the real estate sector limped to the finish line of 2020 with bruises sustained from impact of Covid-19, the sector holds out promise for investors with residential and industrial facilities brightening its outlook for 2021.
The residential, construction and industrial segments are the sector’s major growth drivers at the moment and are poised to deliver good returns for developers, investors and landlords, according to a new report on the sector.
The report compiled by a leading firm of estate surveyors and valuers, Ubosi Eleh + Co, notes that rising demand for these two segments of the real estate market is a fallout of the Covid-10 pandemic.
“The office space market that was on its way from the effects of the 2017 recession took a hit from the pandemic which, because of the social distancing rule, questioned the purpose and value of office space,” the report says.
On the flipside, the fate that befell the office market turned a big boost to residential real estate because the pandemic offered opportunity to developers, more so as companies embraced the new normal, working virtually or remotely away from physical office building.
“The lockdown and reduced economic activities were some of the reasons that accounted for the rise in demand in the residential market. But the demand was mainly for small-sized, pocket-friendly, family housing units,” the report explains.
This means that prospective investors should not just move cash to the market, but also have the good sense to dimension the market and know that residential is the way to go, but focus should be on small-size family units.
The report points out that as a result of the crisis from the pandemic, it was no surprise that healthcare real estate jumped to the forefront in investment decisions with emphasis on emergency care developments.
It stresses that the demand for logistics and mid-size warehousing increased because “last mile warehousing, logistics and home delivery gained traction from the transition to on-line shopping”.
The 125-page annual report which also comes with prediction for 2021 highlights how Covid-19 pandemic affected economic activities including real estate in 2020, recalling that on March 20, 2020, the federal government’s travel restrictions took effect.
The ban applied to travels from countries where more than 1,000 cases had been recorded including China, Italy, Iran, South Korea, Spain, Japan, France, Germany, US, Norway, UK, Netherlands and Switzerland, according to Nigeria’s Centre for Disease Control report.
“Covid-19 pandemic with the attendant lockdown in Nigeria and across the nations of the world was a singular event that changed global economy, Nigeria inclusive. This, by many accounts, was the most significant health crisis in half a century,” Chudi Ubosi, principal partner at Ubosi Eleh + Co, noted.
Ubosi affirmed that there is hope of growth and good returns for investors in the sector. He cited a recent survey by KPMG as a major source of hope. The survey shows that the percentage of CEOs that plan to cut back on offices has come down from 69 percent in August 2020 to just 17 percent currently.
