The rising need for economic stability across sectors particularly in Real Estate has brought together sector experts at the Nigerian-British Chamber of Commerce Real Estate Outlook 2023 in partnership with the national Real Estate Federation (FIABCI) with the theme “Pitching Your Tent Post-2023 Elections”. Industry stakeholders have emphasized the necessity for the government to offer incentives to participants in the ecosystem.
Addressing attendees at this event, the President and Chairman of Council -Bisi Adeyemi, stated that the major objective of this event was to examine the opportunities, challenges, and indeed the threats in the real estate sector in 2023 as it continues to show positive GDP growth and has again been identified as one of the sectors to look out for this year.
Ms. Toke Benson-Awoyinka, Special Advisor to Lagos State Governor on Housing, emphasized in her remarks that the real estate industry remained a focus of the governor Babajide Sanwo-Olu administration. However, she warned real estate players who were engaging in dishonest practices and taking advantage of helpless people to stop or face the repercussions. She stated - “We must sanitise the industry and stop the activities of those that would not allow Lagos to be the real estate capital of the world as it is poised to be”.
Speaking on government efforts at the state level, she highlighted that “At state level, we are seeking partnership with the private sector on training of artisans across the real estate value chain, to take back their jobs that outsiders had hitherto hijacked. This is to reduce the unemployment situation we have and create wealth… We also are going to key into the housing data that would be gathered from the forthcoming national population census, so that we are better abreast of the housing situation in the state,”
In illustrating the connection between the real estate industry and the economy, Dr. Biodun Adedipe, Chief Consultant, B. Adedipe Associates Ltd., stated that there was a 0.79 correlation growth rate between the sector's Gross Domestic Product (GDP) and the overall economy. According to him “The real estate sector is among the big six sectors that drive economic growth and while the sector has showed strong growth. It’s contribution to GDP appears to be trending downwards”.
The implementation of affordable housing was deemed necessary to address the nation's housing shortages, according to Mrs. Jumoke Akinwunmi, managing director of Alitheia. Yet, she asserted that the collaboration between the public and private sectors was essential to its success. Mrs. Akinwunmi pleaded with the government to offer more tools so that affordable housing would become a reality - “There’s also the need to create institutions that would serve as middlemen between the government and private sector for easy accessibility and to achieve the success it deserves,” she said.
The Sonedis Logistics CEO, Dr. Solomon Aigbavboa, highlighted the prospects for logistics, particularly warehousing, within the real estate sector. He stated that by the end of 2023, the warehousing market would be worth $170 million, with an annual growth rate of 11%. He indicated that the three main factors influencing it were an aging population, an increase in e-commerce, and a need for chilled storage. He said, “For the increasing demands of logistics of agro products, fast-moving consumer goods, and emerging specialised markets, such as cold chain facilities in pharmaceuticals, there is a greater corresponding amount of returns… This means that the logistics arm of real estate is an area for government and private sector to look into and invest in, to send a clear signal to the real estate sector”.
After the elections in 2023 and the transition to a new democratic government, Mr. Frank Okosun, CEO of Frank Knight Nigeria, predicted that the property market would experience a surge in demand.
“Thus, investible long-term capital would seek expression through the market… In the office market, vacancy rate is expected to rise slowly, due to downsizings and delayed lease renewal… Key areas of interest to watch out for in real estate include students housing, healthcare, warehouse, logistics and Information as well as Communication Technology (ICT)- Data Centres,” he said.