Debo Adejana is the Managing Director and Chief Executive Officer of Realty Point Limited, an astute real estate entrepreneur with specialty in Real Estate Development, Investment, Training/consultancy and marketing syndication. In this interview with The Top10 Magazine, he shares his views about the Nigerian real estate markets, the impact of covid-19 on the industry, and the need for everyone to invest in real estate as a way of preserving value.
From our background checks we discovered that you are somebody with vast knowledge in the Nigerian real estate market can you give us an overview of the current state of the industry in the country?
Talking about overview, market is still on the very downward-spiral especially as a result of the COVID-19 pandemic. The market has slowed down and deep actually. However, we would expect that you follow the trend the COVID presents to businesses. Typically, we know that real estate is always sluggish in recovery, usually about the first to be impacted and the last to recover when there is an economic situation. We know that the health situation of COVID has more or less morphed into a financial or economic situation. So, at the moment, we expect that market will still be a buyers’ market and it will be challenging as usual. They are still buckets of very well defined needs for developers and builders who can reach the market. By that I mean who can by way of survey and all, dissect what the market wants at every given time and will still be able to do some level of business. It may not be the hurray of business as usual but it doesn’t have to be totally bad, however, generally speaking, the environment is tough right now and the market is tough and it may remain so during the period of this COVID-19 effects. That’s that about the first question.
So far, year 2020 is starting on a strong note can you give a projector outlook for the industry in the year?
The outlook could be that we would have to ride on the wave of this COVID-19 pandemic effects to the end. 2020 is more or less halfway now, and the recovery is still on the way. In fact, as a nation going by the figures, the infections is still rising and the implication of that is we are not slowing down, we have not flattened off or started to recover in terms of reduced rate of infections as a country and what that means is that our movement and interactions will still be very cautious and no treatment has been discovered. What I would say is that, for the rest of this year, on a general scale, I would rather not be so optimistic regarding the market. However, there would still be specific performances that will not be too bad or follow the pattern of the norm for their peculiarities and ingenuity. So that is what I would say regarding the outlook. It appears that it will be stormy almost all through.
As an industry expert, how would you advise people to take investment in the real estate as a priority in other words, why do I need to invest in real estate?
Well, everyone needs to invest in real estate as long as you can afford it because this is really one of the best choices of value and everyone likes to preserve value. So if you want to preserve value for preserve purchasing power, this is an asset class you will definitely want to invest in. Also, don’t forget that real estate itself is life. Actually, it is the very thing to which existence rests on because real estate is land and everything on top of it, everything under it, everything attached to it, that leaves room for almost nothing else. So, it’s really very basic and the need for it is very basic in life. It’s one of the most very basic things and being that demand is going to rise as long as population continues to grow. There will always be market for real estate and it will remain a very bestow of value.
Real estate industry in Nigeria is getting saturated by the day making it an all-comer affair. What do you think needs to be done to sanitize the industry and make it more professional?
Well, I think the people practicing it now, owe it a duty to be professional, to practice it well, and to up the game and raise the bar so that it’s not as easy to just come into it and the upcoming syndrome would anyway die a natural death. Yes, I understand what you mean, by itself, regulations may help to achieve this and when I say regulation, I mean particularly starting from a collaboration between the private sector, that is, trade association right now and government and not either of the parties trying to do it by themselves. I think that is the bane of how we’ve left real estate industry to its fate because each government is trying to regulate for whatever reason on its own, the organized trade association are trying to also regulate by themselves for whatever reason. I think they have to be a nexus between those two parties to be able to have an effective regulation in the industry either by way of proposing a bill that would give powers to the association so that they are not just seen as trade association but a self-regulated professional body. That way, it will help in sanitizing the industry. That’s what I think the focus should be and that the regulatory framework should really be enhanced and the foundation laid to be able to function well and ensure that control is in place in the industry.
There seem to be a competition between the old and new generation players in the industry. In your opinion, what are the striking difference between the old generation players and the new generation players?
Well, I won’t call it competition, it’s just that things are evolving. Just as it is in any industry or any profession. Things are evolving from one generation to the other and that is what is happening and it is most really peculiar and unique to the real estate industry. On the striking differences, the old people still think a lot more on brick and mortar that is what I would say is the major striking difference which is bricks and mortar while the new generation is trying to explore the ways by which real estate can be more liquid than it is naturally known to be. Real estate is naturally known to be highly illiquid but the new generation is trying to explore more ways to make it more and more flexible and liquid than it is naturally believed to be and that I think is the major striking difference. Of course, manner and approach, importance accorded the marketing, and sales strategies by the new generation player are definitely broader in perspective and scope and more elaborate compare to the old generation, so they are exploring new ways of reaching customers and putting themselves in the face of the customers and the consciousness of the customers that’s the new generation and they intend to be reaching more people far and wide. They are also demystifying distance in terms of reaching people in need of physical inspection, in terms of introducing virtual stuff and meetings in terms of using online tools to be able to close the gaps, the geographical and to be able to sell across continents and countries.
Technology and automation are playing key role in housing delivery in the advanced world, how are Nigerian players ranked in the application of technology to housing delivery?
Well, we are not doing badly, at least subject to affordability, you know, he who knows who pays. We have smart tools for example evolving gradually in the country and at least some sectors of the economy can still afford that. I will say technology is gaining ground and of course, not as much compared to the advance world, but it’s showing its relevance in the new methods and ways of construction of materials we are now using, finishing and the likes, smart homes and additions that we bring to the eco-system, that is how it is being used and that is how we are faring technologically.
As a player, what are the major challenges facing the industry?
The challenges facing the industry can be probably referred to as legacy challenges. They still remain the same, they’ve not changed. Unfortunately, we have not been able to resolve them as much as we have tried. So, issues like access to land, this is a case of having wide land but still seems like you don’t have land. They are so many vacant lands everywhere but so many challenges to acquisition, in terms of dealing with traditional ruling families, claiming rights and privileges to the lands and dispute in terms of title, hereditary, customary titles among many others making it very difficult for someone to acquire. Even in some cases when you have surmounted all the aforementioned, when you have gotten the title, the ability of governors or government to be able to follow just sometimes one may consider not to be at power, for reasons someone decides not to be at power or arguable or defendable cause
when someone acquires thousands of hectares of land that they are not able to use within their administration and probably after 3 or 4 administration have not been able to utilize and it wasn’t acquired for a specific purpose but just declared them acquired. By that we know that is hindering free access to such lands and nobody has free access to such lands. It’s not making things easy. So, in the sense that C of O can be revoked, compensations are not standard, in most cases, it is not worth the sweat, these are challenges. Access to land and finance which is a major one, interest rate is still double digits in most cases hardly can you do any sustainable business with this kind of rate, even when rates are doubled, nobody wanted elongated tenure as it were. If a single digit and longer tenures, a lot of business can be done, both on the supply and the demand side. So, these are a lot of the legacy issues but these are few mentioned ones. The depth of infrastructure is also a problem because, places that people can afford, they really may not be able to access those places which means they really can’t buy there and still don’t enjoy any reasonable quality of life. So, infrastructure if it is widespread and distributed would open up land space and make people even move into such areas.
What do you have to say as per government policies as they affect the industry and what suggestions do you have for government?
I will simply say government is really trying its best but I think we are chasing our shadows. Take, for example, the issue of collapse buildings, they keep pressurizing and bringing up one law or the other to try and curtail the collapse meanwhile, laws we have on ground already can do the work if we can only address the major problem which is self-interest and corruption. If people can work with the existing laws and ensure that substandard materials do not get into the country, project is not built except they are properly approved, construction site is monitored, testing material laboratory that they really test materials, if we ensure all these things are properly done, it will reduce the rate at which we have collapse because we have those professionals who know what they are doing.
Ordinarily, if everyone is working in a fair and a better thoroughly and genuinely policed environment without victimization or extortions and other related things, I believe that we don’t need new laws. We just need to take corruption and self-interest away and walk towards the common good of all to know that what you make happen for one will also to you and do our jobs professionally and where people hear especially that they are found wanting and they face the wrath of the law as it is required, it will go a long way and this is what I need the government to really look at and similar areas and make sure that the laws works. Law is not abused is for the benefit of those in power. I think we need to get rid of the system of government abusing the law for their selfish interest. We would gain a lot of mileages from what will come there in terms of structure and laws and department and parastatals and agencies rather than creating just new ones and just making ourselves or the practice very difficult for people.
What is your parting message to the stakeholders in the industry?
I would like to say that we all should dig deeper right now and to come out with things that are adaptable and that can take us through this pandemic or this situation, see how we can still operate our business, it’s still very possible money can still be made because we are in an essential industry. we should just explore all the other possibilities and roll up our sleeves and get to work and make things happen. It can still happen, it may not be the way we are used to before, but we can still make a lot happen so I will tell us not to lose faith and not to think that everything is down and collapsing but to look at the horizon cause they are opportunities out there.