Alphacrux Real Estate Outlook Conference is an annual gathering of industry experts, developers, economists, and investors to network, learn, share knowledge and discuss the real estate business year. The 7th edition was designed to engage real estate stakeholders in “Navigating the real estate industry in the wake of elections and economic crisis”. The event was held at Landmark Tower in Lagos and was also open to virtual attendees. The event had 2-panel sessions, 1 of which I was the moderator.
Panel Session 1: Navating the real estate industry in the wake of elections and economic crisis and making affordable housing a reality in Nigeria
This panel session was moderated by Wole Famurewa who is an Achor at CNBC Africa. On the Panel we had:
- Tobi Adama (CEO, Alphacrux Limited)
- Mr Tobi Osonuga (MD/CEO, Chateau Royal Real Estate Limited)
- Oladapo Runsewe (Senior Research Analyst, Estate Intel) who was representing Mr Dolapo Omidire (CEO, Estate Intel)
- A representative for Mrs Toke Benson (Special Adviser to The Lagos State on Housing)
- Ms Lanre Shola (MD, Brook Assets and Resources Limited)
Key Takeaway 1: We have entered a new normal
Tobi Osonuga gave valuable insights into the new normal of Nigerian real estate following the pandemic.
The real estate industry has undergone significant changes due to the pandemic. With remote work becoming the norm, many commercial buildings now sit empty with as much as 50% of office space unused. The pandemic has also brought in the trend of hot-desking as companies embrace more flexible working arrangements, leading to a shift in the demand for commercial real estate.
This shift away from traditional work environments means the demand for large commercial buildings has declined, leading to a shift towards more flexible, home-based workspaces. The “new normal” in real estate will require a reimagining of the way we approach office spaces and the real estate industry will need to adapt to this change.
In addition, Oladapo Runsewe commented on how the Industrial real estate sector has boomed. Since the e-commerce market is growing, the demand for Industrial spaces in Ibeju Lekki and Epe has seen growth. He also emphasised how the real estate market is still majorly funded by Nigerians in the diaspora, which we know from multiple articles that have been released in the last few years.
Tobi Adama also spoke about how 1/2-bed apartment projects are regularly sold out even before completion.
Key Takeaway 2: LASRERA is here to help
LASRERA is the Lagos State Real Estate Regulatory Authority. They are responsible for overseeing the activities of real estate developers, agents, and property managers, protecting the rights of property buyers, and ensuring the quality and standards of real estate development projects in the state. LASRERA is also responsible for providing an enabling environment for the growth and development of the real estate industry in Lagos, promoting transparency and professionalism, and contributing to the economic development of the state.
The representative for Mrs Toke Benson (Special Adviser to The Lagos State on Housing) gave valuable insights on the work that LASRERA have been doing regarding advocacy and sanitisation of real estate transactions. She said that last January there were only 2 petitions and this year’s January there were 28. Petitions are the complaints people have made regarding fraudulent real estate transactions. Many of these are by Nigerians in the diaspora who have fallen victim to unscrupulous dealers.
She also gave the good news that they are in the final stages of digitising the ability to search for the land titles of any land in Lagos!
Key Takeaway 3: Mass Housing is key
Ms Lanre Shola gave invaluable insights into how Mass Housing works. She spoke about how these projects may not even be profitable for developers yet they do this to ensure that those at the bottom of the wealth triangle can become homeowners, even if they only just break even on these transactions.
Investing in mass housing in Nigeria is important due to the high demand for affordable housing. The government has set a target to provide 3 million new homes by 2026. Brook Assets and Resources Limited is a company that is helping to meet this demand through its affordable housing projects. By investing in mass housing, not only is the housing shortage being addressed, but it can also provide a profitable investment opportunity for investors.
Panel Session 2: Examining the Influence Of Proptech In The Real Estate Market; The Past, Present, And The Future
This panel session was moderated by myself Salewa Isaac, CFA. On the Panel we had:
- Ms Lolita Ejiofor (General Manager, Abbey Mortgage)
- Mr. Chude Osiegbu (CEO, VENCO Africa)
- Ms Daniella Ajala (COO, Spleet)
- Mr Philip Ese (Technology Adviser, Alphacrux Limited)
Key Takeaway 1: We are still at inception
The Proptech industry in Nigeria is still in its early stages, with a lot of room for growth and innovation. Companies like Venco are offering innovative solutions to improve facility management and make it easier for people to manage their properties. Another example is Spleet, a company that aims to make real estate transactions easier and more accessible by providing a platform for buying, selling, and renting properties. These types of solutions have the potential to revolutionize the real estate industry in Nigeria and make it easier for people to invest in and manage their properties. With the continued growth of the industry, there is a lot of potential for new and innovative solutions to emerging, making the Proptech industry in Nigeria an exciting space to be a part of.
Key Takeaway 2: There are so many ideas for new Prop Tech solutions
The Proptech industry in Nigeria is still in its infancy, but there are already new and innovative solutions emerging. Real estate crowdfunding and digitized REITs are just a couple of the exciting possibilities that were discussed by Daniella Ajala on the panel. It’s important to remember, however, that the psychology of African consumers is different from that of Western consumers. It’s crucial to avoid simply copying solutions from the Western world and instead tailor them to the unique needs and preferences of Nigerian consumers. Companies like Venco are already improving facility management, and there is a lot of room for further growth and innovation in the Proptech industry in Nigeria.
Key Takeaway 3: The data is rich and has many further use cases
There was a fantastic question by Ladi Abiodun-Wright in the audience. He asked how Proptech solutions in Nigeria are taking advantage of the rich data that they attain from their solutions.
Essentially, Proptech solutions in Nigeria have a unique opportunity to leverage the data they collect to not only generate revenue for themselves but also to drive innovation and create value for consumers. By leveraging data analytics, proptech companies can gain insights into consumer behaviour, preferences, and needs, allowing them to tailor their offerings and improve their services. For example, data analytics can be used to optimize property management processes, streamline real estate transactions, and improve customer engagement and experience. In this way, proptech companies in Nigeria can not only build sustainable businesses but also make a real impact in the industry and beyond.
Conclusion
In conclusion, the Nigerian real estate market is still one of the most profitable industries to participate in. The residential market is booming due to people working from home and an increase in single individuals looking for spaces. The industrial market is also growing as a result of the growth in e-commerce. Mass housing should not be overlooked as a potential investment opportunity, especially for those at the bottom of the wealth triangle. Proptechs like Venco are improving facility management in estates, and there is a significant opportunity for other Proptech startups to enter the market. However, funding remains a critical challenge for all these innovative founders entering the proptech space. Hence, investment in the Nigerian real estate market and Proptech space is highly encouraged.
