OLUBISI SHAOLA is a property law expert and a renowned real estate developer. He is the founder of West Charms Global Services Limited, the parent company of Finn Grey Projects—a fast-growing real estate development firm in Lagos that has been able to provide premium affordable housing to its clientele. Shaola’s relish in making luxury housing affordable to the middle-class home buyers has been the driving force for his many strides in this sector. In this interview, he speaks about his journey, goals and challenges. He also speaks on Nigeria’s business environment among other issues. He speaks with CHUKA UROKO, Property Editor. Excerpts:
Looking back in time, tell us briefly what led you into real estate business after training as a lawyer. What was the initial attraction?
After my call to the Nigerian Bar in 2009, I took Property Law as an area of specialty, ranging from sales to management and consultancy. During my early years of practice, I had the leeway of interfacing with different strata of the society and I quickly deciphered then that there was (and still is) a huge housing deficit that government alone might never be able to adequately address without the intervention of the private sector. That discovery laid the foundation for where we are today.
Beyond profit motive, what exactly was the driving force that catapulted you from your core services to property development?
In 2013, we had a brief from a client to procure a piece of land in Lagos. Upon execution, he further reached out to me about a challenge he had due to the fact that he wasn’t based in the country. The challenge was that he desired to build, but had no inkling on how to go about it.
Recognizing the golden opportunity, I quickly contacted a civil engineer who was on our retainer at the time. He explained the rudimentary processes to me such as how we had to conduct a soil test to ascertain the bearing capacity of the soil (land) which would inform the type of structure the Architect would design therein after which a Quantity Surveyor would generate a bill of quantities.
Without any commitment from the client, I went ahead to engage the services of these professionals with whom we carried out all those preliminary steps and we thereafter presented the entire report to the client with the bill. He was elated with the report and the level of vigour put into it.
He signed us up immediately. Even though the aforementioned civil engineer was the project manager, I made sure I was part of all the stages of construction as I was also observing procurement procedures, recruitment of workers, work schedules, timelines and deliverables etc. That was how I cut my teeth and subsequently ventured into development.
When you provide quality service at an affordable Price and you mix that with honesty, funding wouldn’t be a problem.
The Nigerian business environment is a huge challenge to entrepreneurs like you. If it is not inflation, one will be talking about high exchange rate or high energy cost. How do you navigate all these?
It’s about determination. As the saying goes, where there is a will, there is a way. There is nothing of worth that is not accompanied by a set of hurdles. On daily basis, we jump through hoops as we deal with different situations. Outside the salient challenges you highlighted, you also have logistical issues due to bad roads, extortion from ‘area boys’ etc and these easily hamper the pace of any project.
One of the major ways that we have been able to escape some of the effects of inflation is that, we lock in deals with distributors, importers and some local manufacturers at the beginning of each project knowing that there is a possibility of having an inflation-powered increment down the road.
So at the outset, we procure a bulk of the materials that are susceptible to price fluctuations like tiles, doors, railings, black cement, POP materials etc and that has helped in limiting our exposure to the effects of inflation.
Read also: Investors trade stocks worth N2.183trn in eleven months
Nigeria’s huge housing deficit is considered an investment opportunity. But the contribution of real estate to the country’s GDP is almost insignificant compared to other economies. Why is this so?
The biggest economy in the world is the US economy. The real estate sector in the US accounts for 17 percent of its GDP while that of Nigeria accounts for 9.5 percent. For proper appreciation and context, Nigeria is a country with a very unique business structure and model.
There are two major federally-back mortgage companies in the US. Such set-up stimulates growth, thereby ensuring that the terrain is well suited for optimal contribution. Here in Nigeria, we don’t have such well-rounded system; yes we have the Federal Mortgage Bank of Nigeria (FMBN), but I have never met anyone that bought or built a house with credit facility secured from the bank.
According to the National Bureau of Statistics (NBS), the construction and real estate sectors contributed N20 trillion to the nation’s Gross Domestic Product in the first three quarters of 2022. So if you take everything as a whole, given the limited enablement, then we can both agree that the sector has performed well.
Finn Grey Projects is working to deliver 16 duplexes before the end of the first quarter of 2023. What gives you confidence in this economy where consumer purchasing power has dropped significantly?
Part of what fuels our growth is the ‘off plan system’. This is a situation whereby a prospective buyer, at the start of a project, contributes a percentage of the house cost (usually lower than the expected final cost). It is advantageous to both the said buyer and the developer.
Some of the merits of an off plan purchase for buyers includes paying a lower price, leeway to vary the internal arrangement of the building plan to suit needs and taste. This equally helps the developer with liquidity and reduces the business risk as that makes the unit(s) in question a guaranteed sale.
So 7 units of the aforementioned 16 units is in contract as we speak and the fact that we provide luxury at a cheaper rate is also a major advantage that steadily breeds patronage as we are hopeful of disposing the outstanding units timeously.
As a company, you have been in the market for a years and your mission is to contribute to solving Nigeria’s housing problem. How well have you done here? Tell us about your projects portfolio.
I would say we have done well given the resources that have come our way. We have provided a number of housing units across many locations in Lagos State and these include 12 units of two bedroom apartments in Ago Palace Way, Okota, Lagos; 9 units of two bedroom apartments in Agungi-Lekki, Lagos and 17 units of One bedroom apartments, Unity Estate, Egbeda, Lagos.
We have also provided 12 units of One bedroom apartments in Council, Ikotun, Lagos. 2 units of 2 bedroom apartments in Council, Ikotun, Lagos; 4 units of 4 bedroom duplexes in Mobil Road Estate, Ajah Lagos; 2 unit of 5 bedroom duplexes in Alake, Ikotun, Lagos, and 10 units of 2 bedroom duplexes, Chevron Drive, Lekki-Lagos,
Others are 1 unit of 5 bedroom duplex in Egbeda, Lagos; 1 unit of 4 bedroom duplex Chevron Drive, Lekki-Lagos; 1 unit of 4 bedroom duplex, Council, Ikotun, and 5 units of 3 bedroom duplexes at Chevron Drive, Lekki-Lagos.
Funding plays a pivotal role in real estate development. Looking at the size of your portfolio, how do you raise all the money to fund your projects?
Integrity is my first currency and I have always leveraged on same. It serves as the springboard for further funding. I didn’t have rich parents neither was I connected to anyone high up. The very first project I did was an offshoot of an earlier brief to procure a land.
The client saw that I exhibited honesty and transparency during the land purchase which must have made him expand the scope of his engagements with us further at the time. When you provide quality service at an affordable price and you mix that with honesty and God’s grace, funding wouldn’t be a problem. More often than not, we have off-plan buyers for most of our projects and this always helps with liquidity.
With the challenges in the economy and shrinking household income, what do you see as the future of housing in Nigeria?
The future of housing in Nigeria depends largely on the environment created by the government. I sincerely believe that the role of every government is to provide an enabling habitat that allows for productivity to be fully harnessed and optimized. In so doing, more prosperity is created. When the atmosphere is healthy enough, investors in form of mortgage companies can come in.
When they come in with massive capital, more homes are built and offered to the populace. The entire system is sustained by a productive workforce that is able to fulfill their financial obligations by making prompt mortgage payments courtesy of the plethora of well-paying jobs available in the country.
What is your vision and where do you see your company in future, say in the next five years?
My vision is to be the catalyst that empowers the seemingly ‘common man’ to enjoy luxury in form of housing not just in Nigeria but also all around the world. There is this joy that envelopes the heart to see the not-necessarily-rich people taste good and exquisite housing. I see us in no distant future set up shops in three to four other countries as we propagate this agenda of creating affordable luxury homes.
