Tag: real estate

Nigeria’s real estate ecosystem can do better with proper regulatory framework and achieve its utmost potential like other advanced economies, Olatubosun Fatoki has said.

Fatoki should know better as a realtor with vast experience in the built and construction industry.

Speaking in an interview with The Nation from his base at the United Arab Emirate, recently, Fatoki who sits atop as the Founder/CEO at Crest Range Properties LLC, said unlike what operates in Nigeria, obtaining approval and permits for property in the UAE is less than 24 hours if all the rights documentation are available.

“There are two different ways of getting properties. It’s either you are buying cash or you are getting bank finance, you are getting the mortgage. The process of getting the mortgage finalised sometimes takes about a month or within a day depending on the availability of the different documentation. The day the property is being transferred between the buyer and the seller, it’s mostly done at the government-assigned office.”

Widely acclaimed as a visionary entrepreneur and the first Nigerian to establish a real estate company in Abu Dhabi, Fatoki who acknowledged that a bit has changed in the nation’s real estate ecosystem was however revealed that there is room for greater improvement if the country wants to join other comity of nations with better enhanced, structured operating environment.

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According to him, Nigeria can borrow a leaf from the Abu Dhabi real estate market and see how to adapt its inherent benefits and usefulness.

“The regulatory bodies in Abu Dhabi have made the real estate industry very well organised and well standardised. This is something we need to learn about, how to bring in the international policies and the international rulings into how real estate should be run back home. A lot of things are still not done the way it should be done,” he stressed.

Pressed further, he said, “real estate is highly regulated here, and there are a lot of laws that have to be followed strictly be you a real estate company owner, a tenant, a property owner. There are different aspects of real estate that are really segmented and monitored here. There is the property management part, facility management and maintenance part of real estate.

“There is a lot that has been segmented and is highly regulated here. There is an owner’s association that oversees the affairs of buildings that represents the interests of owners. There is a tenant’s association. There is a dispute resolution department between landlords and tenants. There is a dispute resolution department between the buyers and sellers, between developers and investors. So a lot of things have been put in place here that we can also learn from, that I believe will really help our real estate back home.”

With its potential for steady cash flow and long-term appreciation, real estate is one of the most stable and lucrative asset classes, even though investing in real estate requires significant capital.

However, to get round the huge investment capital required for the purchase of a rental property or a commercial real estate, an innovative solution known as crowd funding is gaining popularity in the Nigerian real estate sector.

Though, a relatively new concept in Nigeria, crowdfunding is an innovative way of offering an everyday investor the opportunity of participating in the real estate market with relatively small amounts of money.

Realtor Segun Olumuyiwa said, for instance, that crowdfunding in Nigeria is still evolving, but noted that the most attractive feature of real estate crowd funding is perhaps, the ability to invest with relatively low capital.

Olumuyiwa said traditionally, purchasing a rental property or commercial real estate required hundreds of thousands or even millions of naira. He, however, said with crowdfunding, “you can start investing with as little as N5, 000 or 10, 000 daily  or weekly as the case maybe.

This, according to him, opens up opportunities to smaller investors who might not otherwise be able to access this lucrative asset class. In other words, crowd funding affords the public the opportunity to own houses in record time.

Furthermore, Olumuyiwa stressed that investing in real estate crowdfunding allows one to diversify his or her investment portfolio beyond stocks and bonds.

He said: “Real estate typically has a low correlation with other asset classes, meaning that it can act as a hedge against stock market volatility and inflation.

 “By adding real estate to your portfolio, you can reduce the overall risk of your investments while potentially boosting your returns.”

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Additionally, he said real estate projects often offer returns that are more stable and predictable, especially if one invests in income-producing properties like apartment buildings or office complexes.

 “This makes crowdfunding a useful tool for anyone seeking diversification with relatively stable cash flows,” Olumuyiwa added.

An Estate Surveyor & Valuer, Chidozie Ifeyinwa, also said investing in real estate crowdfunding allows one to benefit from real estate’s potential for appreciation and income without the need to manage properties yourself.

She explained that unlike buying a rental property, where one would need to handle everything from finding tenants to maintenance, crowdfunding allows one to invest passively.

According to her, the developer or project sponsor manages all aspects of the property, including day-to-day operations and decision-making.

The Estate Surveyor further stated that this hands-off approach is a significant advantage for those who are interested in real estate but don’t have the time, expertise, or inclination to manage properties themselves.

Ifeyinwa maintained that by investing in real estate crowdfunding, the investor can enjoy the benefits of real estate without the hassle.

Also speaking, a Realtor, Igbinoba Osamudia, said crowdfunding is a relatively new concept in Nigeria, but it is rapidly gaining traction as a way for individuals who otherwise could not own land or houses of their own.

He, however, said with innovative crowdfunding platforms, such individuals have been able to achieve it in fewer years than if they went about it on their own.

Explaining how crowdfunding works, Osamudia said platforms list various real estate projects, ranging from residential and commercial developments to rental properties where investors select a project and invest their desired amount.

He said in turn, investors receive fractional ownership in the real estate project proportional to their investment.

According to him, this arrangement has benefits, as real estate crowdfunding lowers investment thresholds and allows investors diversify their portfolios by investing in multiple real estate projects.

 “It also ensures professional management as some of the platforms often partner with experienced real estate developers and property managers,” Osamudia added.

Confirming the benefits of crowdfunding, investors such as Alhaja Sidiat Abiola, Ifedayo Olagunji and Luqman said they never thought they would be house owners in a record time of five years.

They stated that this was because the platform they were contributing divided them into batches of 20 persons and today they are proud home owners in one of the satellite towns on Lagos/ Ibadan expressway.

Others recounted how they became proud home owners along lfo/Abeokuta Expressway, recalling what they suffered living in make-shift homes and in the hands of their former landlords.

According to them, being semi learned, petty traders  and artisans in a way limited them, in addition to government having interest in making provision for low income persons and those in the informal sector.

Indeed, real estate crowdfunding has grown in popularity over the past decade, driven by advancements in technology and the rise of online investment platforms, including the search for innovative solutions to help close Nigeria’s estimated 17 million housing deficit.

Some of the real estate crowdfunding firms in Nigeria, including platforms and apps include but not limited to CrowdForce that offers a variety of real estate investment opportunities, including commercial properties and residential developments.

There are also Wealth.ng, a platform that allows investors to participate in different asset classes, including real estate; Risevest, a platform that offers opportunities to invest in high-potential properties in Nigeria and abroad; and Coreum, which allows investors to invest in real estate in Africa without physically owning a property.

Other crowdfunding platforms in Nigeria include FundAnEnterprise.org, NaijaFund.com, PiggyVest, Farmcrowdy, and Impacthub.

The crowdfunding business in Nigeria is being regulated by the Securities and Exchange Commission (SEC). The SEC issued the Crowdfunding Rules in 2021, which came into force on January 21, 2021.

Despite SEC’s regulation, Olumuyiwa said the regulatory environment for real estate crowdfunding in Nigeria is still evolving.

The Nigerian real estate sector will see significant growth in the coming years with luxury real estate and low income housing emerging as primary drivers.

According to ‘BuyLetLive 2024 Nigeria Price Index Report,’ key players in the market such as    property managers, developers, investors, landlords, tenants, estate surveyors, valuers,   agents, and research analysts identified these segments as having the most promising potential for growth.

It observed that 60 per cent of respondents saw low income housing as the biggest opportunity, pointing to it as the key growth area.

This reflects the growing demand for affordable housing solutions in Nigeria, where the need for cost-effective housing continues to rise due to urbanization and a rapidly expanding population.

The report said: “We also asked key players to identify the biggest growth opportunities they foresee in the real estate market over the next 3-5 years. Our analysis revealed that key players in the market anticipate that the most significant growth opportunities in the Nigerian real estate sector will be in the affordable housing segment,”

The report further noted that as a result of affordable housing standing out as the biggest opportunity, both private investors and the government are focusing their efforts on addressing this gap, seeing it as essential for long-term economic stability and growth in the real estate market.

Luxury real estate followed closely, with 21 percent of the market players highlighting it as another area poised for growth. The demand for high-end properties is increasing, especially in major cities like Lagos and Abuja, driven by a growing number of affluent individuals and investors seeking premium homes and exclusive developments.

Read Also: ‘Real estate now third in the nation’s GDP’

In addition to these primary sectors, the report notes other opportunities for growth with 12 percent, nine per cent and eight per cent of respondents indicating potential in these categories.  This is in addition to industrial/warehouse spaces at 4 percent and green buildings at 3 percent.

Furthermore the report stated that in the first quarter of 2025, the Nigerian real estate market is expected to experience a cautious “wait-and-see” approach from investors, as they await clarity on the 2025 budget announcement and its subsequent execution. This period of anticipation reflects investor interest in understanding how fiscal policies will influence the macroeconomic landscape and impact real estate demand.

Also, the report  maintained that looking beyond the first quarter, the overall outlook for 2025 presents a more optimistic picture such as the introduction of investor-friendly policies and gradual improvements in key economic indicators  that are expected to restore confidence, driving both local and foreign investment in the sector.

The report stated that despite of the challenges faced in 2024, including high inflation and currency instability, which dampened investment and demand, 2025 offers a more favorable environment for growth.

“One of the most significant areas of opportunity is the continued surge in demand for affordable housing, which remains a priority for both developers and the government with several initiatives under the Renewed Hope Project expected to be completed in 2025, efforts to address the housing deficit, particularly for middle- and low-income earners, are gaining momentum”.

“These initiatives align with the increasing need for accessible housing solutions, despite the rising costs of construction materials driven by currency pressures”.

The warehousing and industrial sectors are also projected to maintain steady growth, buoyed by heightened demand for logistics and manufacturing spaces. The commercial real estate segment is likely to benefit from the ongoing recovery in business activities, although rising costs may temper the pace of growth in this area.

Some Real Estate Analysts also agree that as this year progresses, the collaboration between the private sector and government will be essential in addressing persistent challenges such as infrastructure deficits, regulatory bottlenecks, and currency volatility.

They also agree that Innovative construction techniques and localized production of building materials could help reduce costs and enhance market stability, fostering sustainable growth.

The real estate sector is poised to witness a groundbreaking initiative with the launch of Madiba Countryside City, a 5,000-acre development designed to provide affordable land and housing options.

The initiative seeks to create a thriving countryside city in Obafemi-Owode, a fast developing town in Ogun State, with a unique interest rate of nine per cent per annum financing plan, which is touted as a game-changer in Nigeria’s real estate market.

Speaking on the project’s concept, the CEO of CommonSense Group, Dr Olumide Emmanuel, explained that affordability and authenticity were at the core of the initiative.

“Many people dream of owning land or homes but struggle to find genuine and affordable opportunities. That’s why we acquired 5,000 acres to build a city where everyone can own a plot, an acre, or even more. It’s about giving people an investment that can bless them during their lifetime,” he said.

Located in Obafemi Owode Local Government Area of Ogun State, Dr Emmanuel noted that the city will feature residences, a retreat center, and a resort, including amenities like wellness centers, theme parks, film villages, and farm estates. The project, he said, is designed to cater to residential, recreational, and commercial needs, offering what he calls a “reside, retreat, and resort” lifestyle.

“We want families to visit as they would Disney World during holidays,” he noted.

The real estate industry in Nigeria, Dr Emmanuel asserts, faces significant challenges, particularly due to limited government support. He, however, urged the government to create an enabling environment for private-public partnerships to thrive.

He also emphasised collaboration with government and community leaders to ensure the project’s success. “The local government chairman, councillor, and even the king are part of this project to ensure it benefits the community. However, a stable policy framework is crucial,” he added.

While acknowledging the risks of policy changes, Dr Olumide, who is also a wealth creation coach, remains optimistic, stating: “We can only do our part and work closely with the government to mitigate risks. We hope this project will be a model for sustainable development.”

The development is also incorporating innovative energy solutions. CEO, Prenedos Power Ltd., Denedo Emmanuel, underlined the project’s transformative potential. “This initiative is inspiring and life-changing. We are handling the electricity component, ensuring reliable power supply, just as we’ve done in previous projects with Dr. Emmanuel. This is an opportunity the public shouldn’t miss,” he said.

What sets Madiba Countryside City apart is its financing model according to the CEO of AssetPlus, Osho Abiodun, who highlighted a groundbreaking nine per cent per annum financing offer.

He said: “This is the first of its kind in Nigeria. While other countries offer single-digit mortgages, Nigerians have had to contend with rates as high as 30 per cent. We’re changing that narrative by financing property acquisition—land or houses at just nine per cent with no hidden charges.

Read Also: Fed Govt launches N250b real estate investment fund

The rate, Abiodun stressed, applies on a reducing balance, ensuring affordability.

“Once financed, buyers can start building on their land or move into completed houses immediately after paying a 20 per cent equity,” he added.

Co-founder of Pertinence Group, Wisdom Ahamefula Ezekiel, highlighted the significance of the initiative, stating: “Dr Emmanuel has been a trailblazer in real estate, raising giants in the industry. This project will revolutionise housing in Nigeria.”

Ezekiel urged Nigerians to adopt strategic investment approaches. “In today’s economy, the middle class is shrinking. Strategic positioning in investments like this is essential to securing a better future.

“Whether you earn N10,000 or N1 million, investment is key. Start small, take consistent steps, and align with trusted leaders like Dr. Emmanuel. Real estate remains the real investment,” he advised.