Since the 21st century, the real estate sector has continued to play a tremendous role in growing the economy with land being a major contributor. As economic activities have become more urban over time, the crucial role of the real estate sector cannot be undermined. This is because there is hardly any business conglomerate that does not require some form of real estate: from the small-scale businesses that need offices, to the large-scale businesses that need factories.
In light of this, Udo Okonjo successfully launched the Fine & Country West Africa in Nigeria in 2008. Under her leadership, the West African office has leaped to become one of the leading companies in the provision of real estate services. The company has also received multiple local and international awards.
Ventures Africa caught up with Udo Maryanne Okonjo, Chief Executive Officer of Fine and Country West Africa, the hosts of the refined investors series, for more insight on the event. Maryanne Okonjo who is an astute real estate investor and trusted advisor also gave her expertise on the real estate sector in Nigeria. She spoke about the opportunities available to Nigerians during this recession, different urban cities/projects and luxury investment.
Ventures Africa (VA): What is the idea behind the refined investors series?
Udo Okonjo (UO): The Refined Investor Series is a real estate thought leadership event targeted at high-net-worth investors, economic influencers, real estate developers, property enthusiasts and aspiring investors. The event is aimed at generating high-level conversations on smart real estate investment strategies and opportunities.
The main objective of this year’s edition of the Refined Investor Series being hosted by Fine and Country West Africa on Tuesday, November 22nd from 9-2pm at the Wheatbaker Hotel is to provide accurate and current real estate insight to investors whether aspiring or astute, whether investing in emerging urban cities to high-end luxury, whether residential or commercial. We will help you make sense of the current volatile recession economy and show you where the opportunities off the beaten trail are. “Out of the Box” is the theme for this year’s series.
VA: Do you think the refined investors series has provided insights into the future of prime residential & commercial real estate in Nigeria?
UO: The theme of last year’s edition was aptly “Building the Future of Real Estate in Nigeria” which provided insights into the future of prime residential & commercial real estate in Nigeria based on the feedback received. The projections from the 2015 edition have been mostly played out in the real estate sector and the economy at large. Part of what RIS deals with is a projection of the future market conditions in the real estate market barring unforeseen circumstances.
VA: What are the real drivers of commercial leasing decisions?
UO: The real drivers of commercial leasing decisions are Location, Budget, Available spaces, Facilities provided, Parking requirements and Terms of Lease.
VA: How can real estate opportunities be unlocked during a recession?
UO: There are out of the box approaches to unlocking opportunities in residential and commercial real estate in any economy but especially relevant in times of transition and recession. A few may include, re-assessing and understanding real market demand, reclassifying locations, change of use, creative funding and pricing strategies. These are some of the strategies to be discussed at the Refined Investor Series on November 22nd by the RIS experts and investors.
VA: What is the best way to get maximum value from new urban cities or projects?
UO: New urban cities are a reality in building the future of real estate in emerging economies, and represent some of the best and strategic responses to meeting the growing social and economic needs of growing urban populations. It is of importance that these new cities are designed with the needs and wellbeing of the target market they are looking to serve.
New cities represent an opportunity for learning from past mistakes of some of our worst living environments by observation and examination of past failures along with engagement of the new emerging population. They also offer a unique opportunity to integrate best practices in planning, design, and policy while leaving room for evolving trends. They also have the potential to become smarter, less wasteful, and more socially inclusive cities if well thought through and articulated. Finally, new cities offer unmatched opportunities for innovation and experimentation in an era where dynamism and change are watchwords.
In light of the fast changing economic and environmental factors, it’s apparent that there will be more urban areas required to be built during the first few decades of the 21st century than in all of the previous history combined.
VA: What is the true value of real luxury investment in Nigeria?
UO: True luxury is an evolving trend in Nigeria with many agreeing that luxury exists in the eyes of the beholder. In the real estate market, luxury is mostly focused on the location and price, finishing specifications, build quality, lifestyle and the experience some of which are not easily quantifiable. These definitions in a local market with a dearth of infrastructure even in some high brow locations presents a multi-faceted challenge which developers and buyers need to contend with in a creative way if they are to enjoy real returns on their investments. The market for luxury by its nature is usually specialized and focused on a small segment, usually the upper quarter tile of the market in any market. If well harnessed, true luxury real estate delivers unsurpassed value in terms of appreciation over a long term.
VA: What are the real risks and benefits of investing or living in a multi-owner residential development?
UO: The biggest risk is usually around shared values or lack thereof especially as it relates to maintenance levels and lifestyles. The benefits typically include reduced cost for services, convenience factor with little or no worries over property management, enhanced security and the generally accepted benefits of a sense of community.
In most cases, they are easier to rent or sell than a stand-alone residential property.
VA: Following the current economic situation in the country where do you see the real estate industry in 2017?
UO: For Commercial Real Estate, flexibility in lease negotiations will continue with top corporates calling the shots mostly with the larger office spaces where there’s a more pressing need to fill up vacancies. In terms of stock, we expect to see a more measured supply of new offices, with many decisions on new projects delayed or withheld for lack of funding and a lack of confidence in good quality demand. A handful of special owner-occupier projects will, however, proceed especially in cases where funding has been internally generated or patient capital can be deployed. In the mid to long term, however, as the opportunistic developers make way for the longer term commercial developers/investors, the supply will match demand and stabilize prices at a more realistic level.
We expect that older buildings will experience high levels of vacancy as high-end tenants migrate to newer buildings in search of better value for their reduced rental budgets. The increase of newly built offices will raise the standards in the sector as more buildings strive to attain international standards to attract multinational clients.
In the retail segment- e-commerce, devaluation, inflation and other economic conditions will continue to adversely challenge the retail segment. Rental rates will continue to adjust to market realities. The real winners will be developers who can value engineer their offerings whether in residential or commercial to suit the redefined pockets and discerning requirements of their target clients through efficient design, pricing, efficient facilities management, market positioning and good customer service.
VA: What has been some of the best and worst moment of fine and country in Nigeria?
UO: Fine and Country’s best moment has always been taking on a tough mandate whether in residential or commercial and delivering results especially where others struggle to meet the requirements. We are comfortable operating in a recession or boom economy because our Nigeria and West Africa business was launched at the height of the 2008 recession. Our worst moment is whenever we have to turn down a mandate or a client because we do not believe in the client’s ability to deliver or in the fundamentals of the project. It’s always a tough conversation and one we don’t take lightly but recognize it’s in the best interest of all parties that we play to our strengths.
