To unleash the full potential of West Africa’s property market, real estate professionals have pushed for a conducive environment for housing and significant improvement in the operating environment.
They argued that there was a need to deepen the use of property technology (PropTech) to improve home production and operations.
Additionally, they advocated a change in land ownership and title regulations to unlock significant capital inflow into the sector. The experts at the seventh yearly West Africa Property Investment Summit (WAPI), themed: “Property Market Redefined,’’ held in Lagos in 2021. The forum hosted more than 70 speakers and attendees, representing over 170 firms.
According to the experts, increased investment will occur in non-traditional sectors such as residential, logistics and warehousing, student accommodations, healthcare, and data centers.
Experts who spoke at the event:
- Partner and West Africa Tax Leader, Deloitte, Mr. Yomi Olugbenro
- The Chief Operating Officer, Landwey Investment Limited, Seun Eyitayo
- Chief Executive Officer, Dutum, Mr. Tope Runsewe
Partner and West Africa Tax Leader, Deloitte, Mr. Yomi Olugbenro
Leading the discussion, the Partner and West Africa Tax Leader, Deloitte, Mr. Yomi Olugbenro, pointed out that there are new and existing constraints in the market threatening its growth. These include:
- The Land Use Act (LUA) requires the state governors in urban areas or the local government chair in rural areas to consent to every land acquisition transaction.
- The devaluation of the naira and heavy reliance on importation hamper the development of the property.
- Ease of doing business that continues to be a constraint despite recent improvements.
- Administrative bottlenecks regarding lack of transparency and limited access to finance.
Olugbenro said that with increasing poverty levels, housing affordability has become a more significant challenge. While interest rates on mortgages are falling, access to mortgages is still out of the reach of the majority, especially those in the informal sector.
Despite these, he observed that there are value extractions and opportunities for blockchain and tokenization, logistic parks and retail, mortgage, tourism and hospitality, crowdfunding, and local sourcing of construction materials.
He said: “There should be mortgages with longer-term, lower interest and lower equity contribution to increasing demand. And fast-track the finalization of PENCOM guidelines to enable pensioners to access their pension balance for funding mortgage equity contributions.
“It is necessary to regulate and standardize real estate crowdfunding to build trust, transparency, and drive growth. It requires investment in research and development, which will be aided by instituting the right incentives. While quality control and sustainability concerns need to be addressed in local sourcing of construction materials.”
The Chief Operating Officer, Landwey Investment Limited, Seun Eyitayo
The COO, Landwey Investment Limited, Seun Eyitayo, representing the CEO, said being innovative and providing the kind of housing people need would form a direction in the industry. Adding that the combination of multi-purpose property developments and PropTech are significant indicators of future trends.
She urged operators to embrace PropTech and digital transformation. Collaborate and develop eco-friendly projects to reduce greenhouse gas emissions and improve customer relationships.
Chief Executive Officer, Dutum, Mr. Tope Runsewe
On his part, Chief Executive Officer, Dutum, Mr. Tope Runsewe, called for support for local capacity in the construction industry through funding. Adding that if local operators cannot participate, knowledge would not grow.
He said: “Local construction service providers should be provided with the support of the government to grow. That support is providing platforms, funding, and opportunities that can make us compete. When foreign companies come with cheap funding at a zero-percent, and local contractors don’t even have access to funding that comes with high interest, it is a struggle to compete,” he said.
The Chief Executive Officer, Purple Group, Mr. Laide Agboola, stressed the need for government to issue guarantees to prequalified members of the real estate sector that would allow them to enter the market to raise private sector funding for projects.
“The executive order on the involvement of local capacity in projects is a good one, but the implementation is the problem.”