Akin Opatola is the General Manager/Chief Operation Officer of Brokerfield real estate. In this Interview with NREH correspondent, Elsie Godwin, he shares analysis on how the Real Estate business has fared in the year 2016 based on his firm’s experience and from dealings on the Lagos Island. He said the government should focus on housing for low incomer earners.
“2016 so far has been quite challenging. But it is expected if you follow the trend; The election year and the year preceding an election year tends to be very dull, things are sluggish, especially if there is a hand over to another government. Because our transactions are based on the Island – Lagos Island, I will base my opinion on that area. I have noticed that on the ultra high end, there is almost no change. The calls we get even from other professional colleagues shows that the market has been stable – slow but almost no change.”
“For the middle end of the market, I will say, yes, It has been quite challenging. People are building much more sophisticated buildings, new developers are building and there is a huge over supply. The old ones are still there and from the law of economics, when there is a lot of supply and there is no much demand, prices will fall,” he said.
He went on to say that the commercial space is not fairing any better. There are so many grade A commercial properties available. Newer ones I know, like up to 5/6 grade A properties will be available by the end of this quarter and early next quarter too, to add to the existing ones.
Akin, however, says he is still very optimistic, the budget has been passed, by the time cash begins to flow, we can steady the currency, the Ministers settle down and begin to work on the budget, things will begin to perform better, foreign investors will start coming in, they will need commercial space and demand will gradually begin to come in.
On Housing Deficit in Lagos State:
I will say there is a large gap. A lot of developers are doing very well, but the middle income can be further broken down – lower middle, middle and the higher middle. Even for those ones, so many of them are still looking for their own places. In Lagos, majority of them do not own their own houses. People need to own their houses before you can say we are meeting up with the demand in terms of housing. The Government and the private sector needs to do more. Then the interest rate need to be available and convenient.
On NIESV and their request for Real Estate Transaction Agency:
It helps transparency. In the average developed country, to find out how much is a developed bedroom in a certain location, you don’t need to ask anybody but here, things are shielded in secrecy. Whether it’s the government or private, it is necessary we have this, so that even a foreign investor coming in can easily get such data and not work with discrepant figures.
Advice to the Minister of Works, Housing & Infrastructure
“They call him a super minister because he is in charge of 3 portfolios for the first time, in a way, I am expecting a lot from him. I want him to really be a superman. Interestingly, those three portfolios go hand in hand, to me, if I am having lunch with him, I will say, ‘look, sometimes it doesn’t mean government should come in and build a thousand houses, either for sale or letting. Sometimes, you should go into a new area and do infrastructure.
I am impressed with the resilience of Nigerians, how they go to remote areas with bad roads, no streetlights, not water and they are still there. Sometimes, two to three people will come together to do their roads. It is frustrating. It reduces purchasing power. The government should also focus and leave middle and high income, they will sort themselves. Low income? Yes, they should step in and develop. They need to do a lot of things rapidly. Some area, just tarr their roads, do the streetlights and go. Somebody who bought a plot of land in that area, is waiting and doesn’t want to be the first person, when he goes there and see the roads and streetlight have been fixed, they will be motivated to go buy blocks and that will motivate others thereby bringing rapid development. Our government should not focus on one area.”
Brokerfield handles lettings, sales and marketing of real estate. We specialise in corporate real estate.