3 approach to reducing Nigeria’s housing deficit – Lawore
3 approach to reducing Nigeria’s housing deficit – Lawore
By Editor
Effect Of An Application Brought Under A Wrong Court Order Or Rule Of Court
Infrastructural development in Abuja.Photo: ASKLEGALPALACE
Olaposi Lawore is the Managing Director of Dynasty Real Estate (DRE). He has a passion for environmental and social development and has been involved in the design and execution of several notable residential and commercial projects for mainstream banks, QSR’s and other corporate businesses. As M.D of DRE, the real estate investment and property development subsidiary of VFD Group, he manages the organization’s operations, strategic growth and multi-billion naira real estate portfolio.

He speaks with Tonye Bakare on the recovery expectation of the sector from the effects of the Covid-19 pandemic, Nigeria’s housing deficit challenge as well as the innovations that are assisting the development of the real estate sector.

In what ways can the real estate sector innovate to bounce back from the effect of the Covid-19 pandemic?
This is something that we have been looking into as an organization for the last few months.
We have carried out extensive research as to how we can adapt to what was possibly one of the greatest things that could have impacted the real estate space in the last couple of years. One of the key things that came to mind is the fact that we need to, first of all, start to rethink our construction processes and material sourcing. From a material procurement perspective now, part of what we have started to do as an organization and what most developers have also started to do, is to start to source for materials locally.

You know, in the past, everyone used to sort of rely on importation. But at this point, it is imperative that even for the nation to grow right, there is a need for us to start looking at purchasing locally-produced and fabricated materials. There are some that may be out of reach, you know – maybe sanitary fittings, and light fittings, electrical fittings, but when it comes to all of those items that we can purchase locally, we do just that.

For items that are being manufactured abroad, what we started to do as an organization is to stock up on them when going into a project rather than waiting until there is an immediate demand, that way you mitigate against the effect of inflation. Most developers are starting to do that. In addition to that, we have also started to rethink our design and re-evaluate our processes to be a bit more focused on efficiency and functionality.

The third thing that we have done as an organization is to partner with a mortgage bank and other financial institutions to give uptakers flexible payment plans and in doing this, a lot of people that have actually been buying. So, those little things here and there and obviously the use of technology, amongst other things, are part of things we are focusing more on.

How do you apply technology in property development?
Let’s focus on the design and production aspect. 3D printing is one of the innovative ideas that we are currently exploring in the Nigerian market. We have a number of individuals and organisations who are currently investing in 3D printing as a solution because with 3D printings, some other countries like China have been able to actually manufacture, like the framework of an entire house. So you can use it in producing different functional components of a building including aluminium frames and to an amazing level of precision.

We also have BIM – Building Information Modelling. From the BIM, you are able to invariably look at all details and diagnose through a construction processor. With this level of information, you are able to actually foresee and project all the necessary details, all the potential hiccups that you may have during the construction process, and you can address them before they become issues.

From a procurement perspective, to also give credit to some organizations that are doing well, there are locals who have invested heavily in a lot of machinery and actually produce items and materials that are at par with some of the materials we import from abroad.

So, I know that there may be a gap when it comes to some of the materials that we use in construction in Nigeria in terms of production, but I think from a large perspective, the quality is actually improving. Currently, on some of our projects, we are utilizing aluminium frames that are produced locally and we have a local door manufacturing company that we are in partnership with too. Most of the time, it is just a matter of time and patience in finding those organizations that can deliver good quality materials.

Let’s talk about mortgage. About 23 million Nigerians live in extreme poverty, how do you arrive at a mortgage situation that is inclusive of all the socio-economic classes?
When it comes to mortgage, like I always say, we need the government’s intervention in subsidizing the mortgage rate power.

Invariably, it is the cost of funds. When you interact with mortgage firms, they will tell you that the cost at which they are getting the funds in the first place is really high. So by the time they put all the necessary considerations in their own end, they will end up having a double-digit interest rate in comparison to other countries. We need government intervention in providing policies that actually support mortgage banks to be able to give single digits mortgage rates.

Without government intervention, it makes it a little bit difficult for us, and even developers, on a national scale as well. But with sound policies, we can take quality real estate to all those other remote parts of the country where there isn’t adequate housing to support the moving economy.

A recent PWC report says that Nigeria has about $300b and $900b of dead capital in residential estates and fallow agriculture land. What are the opportunities here for the real estate sector?
One of the key solutions we are exploring in our organization,is what is called, ‘adaptive re-use’ – where you are able to take over abandoned properties.

We come in as developers, and present property owners with a proposal of how to convert their properties into what we call ‘micro-housing units’. We are then able to break the real estate. Take for example, we have high rise buildings with large apartment units that are not being utilized. We are able to take such buildings and break them into fragments of micro spaces and put them back in the market.

We make studio apartments, one-bedroom apartments that are a bit more desirable and a bit more affordable. We do extensive renovation and refurbishment and things like that. Besides building afresh, we repurpose for temporary housing also. That’s our thinking as an organization.

Does the real estate industry in Nigeria have enough capital to take up the unique national properties that the government is offering to sell to fund the budget?
Most developers right now have strategic partnerships with financial institutions who have been providing sufficient capital for us to actually be able to take our project to the next level.

We have Abbey mortgage bank to provide us with some level of support. In some instances, we take advantage of our network within the government space in acquiring some of these abandoned properties. We recently just acquired one or two of such abandoned properties that we are currently working on repurposing to put back in the market.

What is DRE doing to address the housing deficit gap?
Thank you for that question. We can address it from three different perspectives. Number one way is the home financing model that we have in Nigeria. It needs to be retooled and reevaluated – talking about mortgage and helpful government policies for uptakers.

From a developer’s perspective, we need to evaluate our construction processes with the aim of reducing the cost of construction and completion of the project so that it’s not ultimately transferred to the uptakers. There are so many developments that we have in different areas that are greatly overpriced because developers have spent money in importing all materials from abroad and then inflation hits forcing them to increase prices. Quality locally-produced materials is an alternative to cutting down on excess cost, importation, freighting, shipping and clearing cost.

We need to approach the housing deficit clearly from the consumers’ perspective, the financing perspective and the construction handshake between the government and the developers in ensuring that we are able to deliver more affordable housing that would, in turn, reduce the deficit that we have.

What are the major achievements of DRE for the last six years?
The consistency of the quality project that we have been delivering over time. We have been able to attain a certain level of consistency which if you check records, right, a lot of developers tend to struggle with that, so, they do a good project today, tomorrow not so good job, but we have been able to attain that level of good consistently.

The second thing we have been able to achieve as an organization within the last six years is strength: the ability to build strong, both from technical and non-technical perspectives. We’ve had to ensure that we put adequate criteria in place so as to ensure that everybody that we bring on the team is a positive reflection of the organization and the culture.

And the last is our innovations. As an organisation, we continuously research and pride ourselves in our research processes because we don’t like to look at things from a conventional perspective. We don’t see real estate space as just alone, as a self-initiative or business, for us, it is how we are able to solve complex problems within the real estate space. How are we able to provide houses that are user-friendly, that are efficient and not bother whether or not we are making enough profit margin, but actually deliver adequate quality into the market.

So, we are consistently innovative. We are constantly researching to ensure that we are able to deliver this to the market, we are able to deliver quality real estate to the market. So those are the past few successes that we have been able to record within six years of our existence as an organisation.

In this article:

Leave a Reply

Your email address will not be published. Required fields are marked *