Real estate, at the recent West Africa Property Investment Summit held in Lagos, building industry experts convened to discuss pivotal issues affecting the sector and proposed strategic measures to foster private investments and spur growth. A key consensus among the experts was the urgent need for increased funding and the removal of bureaucratic bottlenecks that have hindered the industry’s potential.
The summit, titled “Rewriting the Narrative: Positioning and Strategies for the Future,” addressed the significant macro-economic challenges faced by West Africa. These challenges include the persistent rise in inflation, the devaluation of national currencies, political uncertainties, and the impact of national debts on specific countries. These macro-economic issues have rippled into the real estate industry, resulting in escalated construction costs, increased importation expenses, and a surge in professional service costs.
Paul Onwuanibe, the Chief Executive Officer of Landmark Group, emphasized the pivotal role of government intervention. He urged the government to evaluate the economic contribution of the real estate sector and allocate adequate funds to facilitate its growth. Onwuanibe advocated for the adoption of the British Rule Section 106, allowing developers to extend their focus beyond individual projects to encompass the development of immediate surroundings.
Highlighting the bureaucratic hurdles faced in real estate production, Onwuanibe suggested that the government should streamline administrative processes to reduce costs. He argued that by simplifying procedures, the government could potentially generate more revenue from taxes than the existing system of fees associated with title registration and other documentation.
Muyiwa Oni, Head of Equity Research, West Africa, at Stanbic IBTC Bank, painted a challenging outlook for the real estate sector in the next two years. Citing current economic realities such as inflation, Oni anticipated a tough environment and suggested that the process of repairing the monetary policy environment would be time-consuming.
Tola Akinyomi, Head of Real Estate Finance at Stanbic IBTC, provided a more optimistic perspective, noting the sector’s resilience amid the challenging macroeconomic environment. Akinyomi highlighted the long-term nature of real estate as an asset class, emphasizing its role in providing essential business infrastructure.
Damilola Akinbami, Chief Economist at Deloitte, underscored the importance of clarity in reforms and policies. She also emphasized the need to address the supply of foreign exchange by exploring alternative sources, cautioning that uncertainty in the industry limits investor confidence. Akinbami proposed diaspora remittances as a long-term solution for stabilizing the national currency.
Pepler Sandri, Head of Capital Market, Sub Saharan Africa, at JLL, acknowledged the global downturn in the commercial real estate cycle but emphasized the necessity of regulatory changes and the adoption of best practices to stimulate liquidity for further development in Nigeria.
Temilola Shonola, Co-lead of the International Finance Corporation (IFC) Edge Green Building program, advocated for environmentally sustainable practices. Shonola stressed the importance of investing in greener buildings, noting that it requires only three to five percent of a developer’s capital expenditure compared to the conventional 30 percent. The IFC representative expressed the belief that reducing building emissions would positively impact greenhouse gas levels in the atmosphere.
Conclusion: Real Estate
The West Africa Property Investment Summit brought together industry thought leaders who, collectively, urged comprehensive measures to address funding challenges, bureaucratic impediments, and macro-economic uncertainties. The experts emphasized the role of the government in fostering a conducive environment for private investments, advocating for policy reforms, infrastructure development, and sustainable practices to ensure the long-term growth and resilience of the real estate sector in Nigeria.
