‘Properties are being over priced due to lack of market research’ – Vedelago

The group managing Director of Wrothams Windsor, Richard Priye Vedelago in an interview with Paul Obi of ThisDayLive spoke about the potential of Nigerian property markets and public sector investment in properties and housing

Read excerpts below:
If you take a look at the property sector in Nigeria, there are speculations that the market is saturated and that there are no immediate returns in investment. What is your take on this position?

That is not true. It’s about getting the right property, and working with the right developer who delivers on time. The property game is very much like retail where it’s about location, location, location; it is important to invest in the right development in the right area. Properties in VI & Ikoyi in Lagos are still doing very well. Why? Because there is limited land, a high demand for real estate in that area, and with every evolving market place comes the need for better properties to be delivered into the market which we are seeing realized in Lagos at the moment. The market price realities have to be considered, as a lot of properties nowadays are being over priced due to lack of market research that is being done when conceptualizing and developing projects. Even in light of this it doesn’t mean that the bubble will burst anytime soon, we are still seeing high levels of buyers looking at in country investments because Nigeria’s strong internal revenue is keeping local demand high, and the devaluation of the Naira also making it more attractive to keep money in country.

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You are now familiar with the Nigeria market, what do you think is the greatest challenge?

I think the pricing and deliverables of property in the market place are our biggest issue; we need to change our mindset if we are going to look at optimizing the real estate sector here in Nigeria. It is important to establish a specific standard that understand the market overview and allows people to get a realistic valuation of the properties and land. When you really look at the Nigerian market place with over 200 million people the area of opportunity is right here on our doorstep. We have to create a market reality that is not based on an artificial measuring system which has been created over time by a flow of public sector funds in the real estate market and base it on an actual tangible supply and demand formula that really understands pricing vs demand vs finishing. The truth of the matter is anybody can wake up and build their own property with the mindset that their product is worth a lot more than the market reality and that is why we are seeing a very low occupancy rate in commercial buildings as a result of them being over-priced. The largest growth in Nigeria is spurred by the emerging middle class and the entrepreneurial nature that is seeing more small medium enterprises being created. If we can tap into that reality and create viable products people can afford, we are going to see more business being achieved. Property development is an economy of scale business which is focused on building and selling, there is no value on building something no one will buy and use because you have overpriced yourself out of the market. Being a property developer is about understanding the market reality and understanding what the market requires, we need to stop building and letting properties sit idle because we refuse to accept the market reality and maximize our opportunities by developing better properties that stand the test of time.

What is your own understanding about the Nigeria market regarding the public sector investment in housing and properties?

I think the government has to do more to create more affordable real estate products whether in the form of the actual property itself or the finance of the real estate sector as we are still paying over 20% for mortgages locally. We have seen mismanagement of public sector assets that could be yielding massive returns for the public sector and we are continuously trying to work with the federal and state governments to optimize the assets they have. We help to give advice and an overview to the public sector on where to invest in real estate, manage and maximize assets that have remained dormant or underutilized, and help divest and liquidate assets. Wrothams Windsor as a property advisory firm looks at how we can add value across all sectors of the real estate world for the long-term benefit of our clients.
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