Market expectations from IPDC in 2014
This year, we are not restricting ourselves to Lagos as we aim to enter the Abuja market. So, we are looking at doing terrace houses in Asokoro that will be called Hilltop Terrace. It will be 10 units of four bedroom terrace that will be like a lifestyle community with amenities such as swimming pool, club house, automatic gate, etc. It won’t really be too expensive, though the location might make it somewhat premium priced. We still do not want it to be out of reach even as we want to give you these luxury amenities. In Lagos, we will continue with our one-bedroom apartments; we will be doing a phase two of the Lotus Apartments around the LNG Estate in Ikate, Lekki.
We will be developing another project called Estivo, which is going to comprise 50 units of two bedroom apartments. It is going to be a lifestyle estate with a club house, a spa, a swimming pool, a playground for children within the estate and other upscale amenities. The target market are the starting families, a couple with one child, or two children, so that the pricing can be moderate. The location will be in Lekki.
We also have a project called Seven Degrees. It is a 10-floor office space where each floor will rotate seven degrees from the preceding floor. We plan to do that in Lagos and Abuja, and the idea is that we will sell the floors because we realise that a lot of people are looking for office space to buy but may not want to invest in building their own office space. So, we are looking at giving such people the opportunity to own their own space. This is also because we have realised that so many firms are renting office space even when they are willing to buy.
The property market in an election year
During most election years, politicians don’t usually acquire properties, but our target market has never been politicians but rather corporate clients, high net-worth individuals, business executives, etc. So, I don’t really expect our sales to be affected. This is because even the money that will be amassed by the politicians will be returned to the economy; it won’t be kept dormant. So, it is just the politicians that won’t be doing the buying and they are not my target market. Our target market remains everybody who can afford to buy what we have on offer. So, I don’t expect the political outlook to affect us.
Impact of macro-economic policies on real estate
Definitely, that is a possibility because we can’t pre-empt the decision of the person coming in; we don’t also know factors in the economy that would present themselves. For instance, if there should be excess liquidity, then there is need for a new policy to help mop up that liquidity, which is unforeseen. But that in mind, there is the Nigerian Mortgage Refinance Company (NMRC) that has just been set up, which is supposed to refinance mortgage at very affordable interest rates. That would help the market maintain some stability despite what the economy might throw up.
This also means that we already have some positive outlook for the near future and should upturn what ever negativity the market might throw up. We expect NMRC to drive boom in real estate sales because of the affordable mortgage it promises. However, whatever happens in the course of the year, we will devise a way to deal with it.
We have always had a good foundation in this country, just that along the line, some interests thwart the effort. I just hope that things will be done fairly; that real mortgages will be created, not ghost ones, and monies will be used for properties and not diverted. I expect a lot of monitoring and regulation. The regulatory body has to be on top of it and see that these mortgages are real; that the values are real and not inflated just to get the money out and be diverted into other ventures.
Besides that, it is a great concept that we have needed forever. The truth remains that in Nigeria, we are not operating to full capacity. For instance, if a developer can build about 400 houses to sell, he won’t build because, if he does, there is nobody to buy it. Those who could have bought it through mortgages can not pay 20 percent per annum for a property. That means, in five years you have paid 100 percent of the value, which is double the value of the house. This makes it difficult to sell houses, but when you are asked to produce only 10 percent equity while a mortgage institution finances 90 percent at 10 percent interest rate per annum, the developers will be encouraged to build and buyers will be encouraged to buy as well.
How sustainable is the mini-apartment market in Nigeria?
The truth is that the population percentage of young people in Nigeria ranks the highest, and it will take a huge supply to meet their needs. I think between the next 15 to 20 years, there will continue to be a major demand for those mini-apartments, and that has informed our decision to concentrate on those types of accommodation
Odinaka Mbonu
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