Ruth Obih is the Chief Executive Officer of 3invest Limited, a real estate advisory and investment firm. In this interview with MAUREEN IHUA-MADUENYI, she says investment in local production, proper economic planning and massive investment in the construction sector will help Nigeria to come out of recession.
The economy is currently in a recession, what effect is this having on real estate transactions?
Recession is a temporary period of economic decline. The International Monetary Fund made a global economic surveillance and all of a sudden, everyone is in a panic. Earlier in the year, the IMF stated that emerging markets and developing economies were now confronting a new reality of lower growth, with cynical and structural forces undermining the traditional growth paradigm. It further advised that these nations should focus on the critical area of infrastructure, where power, transportation and housing are especially important. If we must panic then, we must heed these warnings.
On its effect on real estate, I must also state that a lot of this has to do with us not being a commodity producing country. When you have to rely heavily on trade, then you lack resilience. I must advise that we should focus on the positive impact of times like these. Produce and plan better, especially when it comes to spending. We must be cash-backed. However, it is time to invest and every investor must make hay while the sun shines.
What steps should stakeholders take to help the industry recover?
Use of technology, increase in local production and proper economic planning will be of great use. Access to data is key. The government must encourage and invest in research. In addition, I think it is high time we started looking at the positive effects of this recession rather than living in fear of the negatives.
Also, we must refrain from negative media utterances, which induce investor apathy. These and many more drove our decision and focus for this year’s Real Estate Unite conference as ‘Looking inwards to fill the gaps’.
As industry professionals, we believe it’s time to blow the whistle and begin to look inwards as a great nation with huge potential. We must act fast and begin to exploit the potential that these critical areas, especially the housing sector bring; not only does it help to secure the nation’s tourism and leisure sector, it will help increase the Gross Domestic Product.
At Real Estate Unite conference, which holds in October in Lagos, our goal is to identify the gaps impeding progress in the key areas of the Nigerian economy and understand the new growth drivers in today’s local capacity and resource-driven market.
Nigerians are known to invest in real estate outside the country, how much of this has been recorded in recent times?
I must state that in real estate investing, location and not country of investment is important. It doesn’t matter where you decide to invest as far as the returns favour your investment. Real estate investing must be approached as a business with adequate cash flow planning. A true investor who has great knowledge about real estate understands that a period of downturn is a buyers’ market; hence, the best time to invest is now no matter the location.
What is your view about the glut of luxury properties in the market, while the country battles a huge housing deficit?
Developers must source and make use of data. The first point of call for any developer should be the planning authorities to ascertain the rate of approvals for the luxury or high-end properties in question. This information will prepare your sales strategy. Yes, we have a healthy demographic but what is our buying habit and power? What percentage of this power is resilient? There is indeed glut in the luxury property market, likewise the Grade A office sub-sector. There is a high rate of unsold and unleased properties today. Are you aware that we have also witnessed developments where demand outweighs supply? Planning must be airtight with strategic sales and exit plans. On the other hand, the housing deficit we face in Nigeria today is self-induced and both the private and public sectors have individual roles to play.
Recently, the price of cement was reviewed upwards and some stakeholders are against the increase. What’s your take on this?
Nigeria as a country must embrace the use of technology. Imagine if you didn’t have an elevator to take you from the ground floor of the Burj Khalifa to the topmost floor of the world’s tallest building, how long in your opinion will it take a man to reach the top floor if Elisha Otis did not invent an elevator in 1852? Are there alternative building technologies? Use them.