Real estate developers are always confronted with the perennial problem of being responsible for the provision of basic public amenities that should ordinarily be provided by the government in the bid for developers to make the houses they are constructing livable.
This was the view of Mr Hakeem Ogunniran, Managing Director of UACN Property Development Company (UPDC) Plc, who in a recent interview with the Nigerian Tribune, insisted that these developments were largely responsible for the increased costs of housing in Nigeria.
He also insisted that the ‘uncertainty of titles’ remained another critical challenge confronting the sector, saying title-related issues had stalled the progress of many housing ideas in the country which could have helped in mitigating the problem of the estimated 17 million housing deficits in the country.
“Today, every developer is a local government on its own; you have to provide your own road, your own water, power, sewage treatment plant. All these add to the cost of development. In this country we don’t produce any finishing material; we import everything. We create very complex challenges for the people in the sector. Long-term funding is not readily available, and when it is available, interest cost is so high; business financing is a problem, and we don’t have a very effective mortgage financing in place,” he added.
Speaking further, Ogunniran said, “Real estate is a very risky business. You always have the problem of uncertainty of titles. This can be considered as a major issue faced on daily basis. But what we try is to have a very robust, due-diligence framework in place and this helps to mitigate the problem. Though the problem keeps arising, we deal with them as they arise. There are also other critical issues facing the real estate sector such as the issue of infrastructure,” he stated.
“These are the problems, but we have created a business model that helps us to meander through this problem and minimise its negative impact on our business. We work very closely with our customers and we empower them from time to time. We create products and services which stick to what our customers specifically ask for.
“For example, we have taken a careful look at Ibadan; we have done our research and we have determined the kind of houses in Ibadan. We have also identified the kind of businesses that thrive in the Ibadan and which will take us to the next level, which will be a Premium Estates, like the Olive Court which we are trying to develop in the state,” he said.
This item originally appeared in Tribune news