Maryanne Udo Okonjo
Fine & Country West Africa in collaboration with the Institute of Real Estate Excellence (IREE) will host a hands-on training on real estate marketing for developers next month. In this interview with Bennett Oghifo, the Chief Executive Officer of Fine & Country, Maryanne Udo Okonjo says participants will learn how to achieve the bottom line, which is, for any serious investor, to successfully sell or lease their property to the best tenants at a premium price, and for institutional investors to exit profitably within an allotted time
Give us your professional assessment of the real estate industry in Nigeria
The Nigerian real estate industry has come a long way in the last 7-8 years. The caliber of residential, commercial, retail, hospitality and mixed use developments on the market and the quality of professionals continues to grow and is getting more impressive. We are beginning to see more astute and institutional investors changing the skylines of Nigeria, especially those of Lagos, and Abuja with innovative, good quality, and some iconic real estate projects that largely offer standards comparable to other key commercial cities and hubs globally. A few factors continue to dampen the projected growth of the real estate market. Some of the factors include, the difficulty in accessing well priced mid-long term mortgages, the current monetary and economic realities, such as the low crude prices, the impact of the foreign exchange policies, the recent subsidy removal and rising inflation which all converge to weaken the appetite for major new real estate transactions. However, the recently signed budget, which has the Ministry of Works and Housing with one of the largest budgets, should help with the infrastructure side of the sector, which in turn will have a long term impact on the quality of real estate investments all around. Lack of infrastructure and the cost of infrastructure has been a major deterrent to investors and a contributor to the excessive cost of most real estate projects. With specific regard to commercial projects, although currently, there appears to be an over supply of grade A/prime offices, however, the massive capital requirement, the technical sophistication needed and the difficulty in accessing finance will continue to present high barriers to entry into this segment, which will ultimately be positive for those who are able to finance such projects unlike most residential projects which has more competition due to lower barriers to entry. In the medium term (7-10years), we project a strong and stable commercial office segment, as investors make the required adjustment occasioned by the current economic and market volatility.
What fueled your desire to do the Intelligent Real Estate Marketing Conference and Training?
The bottom line for any serious investor is to successfully sell or lease their property to the best tenants at a premium price and for institutional investors to exit profitably within an allotted time. The bridge between innovation and profit is successful marketing which powers successful sales and leasing outcomes but which for some weird reason most developers in emerging economies don’t seem to find relevant. Recently one of the observations and questions I get asked as an adviser very frequently, is about the over supply of prime real estate versus the demand, and the high vacancy ratio of these properties especially in prime locations such as Ikoyi, Victoria Island, some parts of the mainland, Lekki, but also Abuja, and Port Harcourt in both residential and office segments. In addition, we are all witnesses to multiple residential blocks specifically on Gerard Road Ikoyi, Banana Island, and environs which have been on the market in excess of 2 years in some cases and still waiting for buyers or tenants. There are also many office and retail projects that fail to meet their projections. The big question is this- what questions did these developers and their financiers ask before the project started? Were they the right questions? Who was their target market? Was it clearly defined? Did they actually do a stress test of an identified clientele base, to assess that what was being built was what was required, both in terms of design, specifications and pricing? You will be amazed what answers we get to these questions even from top projects financed by top financiers and high net-worth clients. One of our most unique experiences in Nigeria has been dealing with a lot of new developments, and interestingly we have seen even astute investors go in semi-blindly led by a general sense of what they liked, or preferred or thought would do well. In many cases, their project vision did not align with the strategy adopted and the obvious outcome was less than satisfactory. The question for example when building a prime residential project with a significant number of units, anything from 10 units, should be what type of apartments are likely to be taken up easily based on current demand, why build only 3 beds or 4 beds? What determines the ratio of 3 beds, 4 beds and maisonettes for example? Should I include 1 or 2 beds? Why? What determines the design? Is it the demand, the regulations or is it a developer’s preference? If it’s an office, what truly does a Grade A office need to have to qualify for that vey specific description? Does a building need the bells and whistles we frequently include and what’s our real objective? How will we realise the gains? Over what period? What is a grade B office? Is there a demand for it and at what price point? Is location truly the most important consideration to end users or are there other critical factors? What experience do more discerning end users expect, especially as the market gets more competitive with increasing supply of top grade real estate assets in all real estate categories? Are you offering those experiences or are they easily replaced by another development? What makes one real estate stand out and others fade into oblivion over time? How do you future-proof your development? Is it possible to build brand equity into real estate projects and how do you do this for sustainable profit to all stakeholders? To what extent do real estate documentation/contracts, facilities management, and other key issues play a role in attracting and retaining the right clients (tenants/buyers/end users) both in the short and medium term. What are the future trends that investors should anticipate from a rapidly changing and more dynamic target market? And finally, how quickly can we sell or lease and at what price? How do we achieve the best price in a tough market or any market? What are realistic prices and timelines and how are these determined in a non-transparent sector. These are a few of the intelligent real estate questions that we expect investors, developers and anyone working with them to ask and which this training and conference seeks to answer.
What impact do you think the conference would make in the operations of real estate practitioners?
In terms of impact, we want more investors to achieve better profitability both in the short term and long term. There’s a science to the madness that we currently see in all the unoccupied real estate and there’s no need for any developer worth its salt to have a project sit on the market for years, in some cases. There’s a clear strategy and solution to any sales or leasing problem, no matter how tough the market is. The challenge is the assessment and diagnosis. Participants will get to understand the market dynamics from a practical perspective as we are using a case study approach to engage them to draw their own conclusions and hopefully seeing things differently so they can achieve better results in terms of financial profitability but also long term brand equity through positioning and other strategies which we will discuss. This is particularly relevant for those who have a strong vision and are in the business of real estate development /investment as a serious part of their long term portfolio.
Some developers build what they cannot sell. How will the training change this dilemma?
This training will address the need for developers to understand the market and create products that answer the right questions asked by the right audience. It will help them understand what their particular target audience needs and not what they think the market wants or would like. We will also guide developers and their advisers on how to use objective parameters to determine what and where to build, how to position and price to achieve sales success, and applicable strategies even if they’ve already built the projects.
How do you intend to measure the success of the training?
The measurement of success will be assessed by the actions taken by the participants when they leave the session. Ultimately, knowledge applied is the only true measure of any knowledge gained through training or experience and the only way to change an outcome is to change the action being taken based on new perspective gained. Change usually starts from a change of perspective, which is what the Intelligent Real Estate Marketing session intends to bring about. Finally, as we are very keen to see growth in the industry in terms of improved sales results, part of our follow up strategy is to assess whether participants actually applied and experienced a different and better result. These will then be used as case studies for future trainings.
Tell us about your resource persons and what they will bring to the conference
Our resource persons include some of the most decorated and notable experts across business disciplines, branding, marketing, sales, legal and real estate strategy, who will be sharing tried and tested principles. Mr. Dan Agbor is a Managing Partner at Udo Udoma & Belo Osagie one of the leading and most respected commercial law firms with diverse experience in advising and representing multinational investors, and Ultra High Networth investors (local and inbound). They represent a growing list of real estate and infrastructure investors. Dr. Ogechi Adeola, is a multi award winning Lecturer in Marketing at the Lagos Business School, with multiple papers and lectures as well as practical experience in this area. Dr. Fabian Ajogwu, SAN, also a Lagos Business school alumni and professor, has an astute and strategic business mindset which he brings to bear from his combined experience and expertise in business, lecturing and winning some of the toughest legal battles as a Senior Advocate of Nigeria.
Chizor Malize, MD and Founder of Brandzone, the curators of the notable Brand Innovation summit, is recognised as a leader in her industry. I am also facilitating the session. Fine and Country as content curator working alongside the Institute of Real Estate Excellence has provided advisory services for the top quartile of real estate investors across West Africa and globally, and will also bring a wealth of knowledge from real life development research, advisory, marketing and strategy cases. Attendees will leave, knowing what to do and what not do with regards to creating winning projects and marketing their developments profitably.
Do you have prospective participants that have confirmed attendance? Tell us about them.
The prospective participants include developers of commercial, and residential developments, some financiers of real estate projects and mortgage providers who, of course, want to ensure they understand the critical success factors for projects they fund, and real estate professionals who are looking at delivering better results in their respective businesses. Portfolio managers for private High Networth investors have also been in touch. The training session is really for those who wants to achieve sustainable real estate results in a tough and changing market.
Give us highlights of feedback from your previous outing.
The Refined Investors’ Series, which held in November last year successfully, had approximately 200 stakeholders, real estate investors and economic influencers converged together to explore, understand and unlock the opportunities in the Nigerian real estate market. The attendees went away with better clarity on investment options and how to extract the best value for their investments. This particular training is a response to the feedback of highly satisfied segment of participants, to develop further content in line with specific pain points. This is therefore a more targeted and directly relevant content for investors/developers, their marketing teams and advisors.
Tell us about the Institute of Real Estate Excellence (IREE)
The institute for Real Estate Excellence aims to raise the professional standards of the Nigerian and African real estate industry through research, training and coaching to meet international standards. It was birthed in 2012 as a response to some of the gaps that we believe exists in the sector which we feel uniquely qualified to bridge drawing on a rich pool of local and international knowledge and resource base. The transformation of mindset, professional practices and the development of high performance leaders for the real estate sector is at the heart of the IREE’s mission. Leadership development is at the core of Fine and Country’s mission hence our interest in supporting the industry through this institute.
A word for those still undecided
Recently, I had an opportunity to speak to a developer who is currently doing some good quality although small scale projects in the Ikoyi axis. He wasn’t clear why this course was relevant since he’s already in the market and achieving some measured results, by his own admission. My response to him is applicable to anyone who is still unsure whether the Intelligent Real Estate Marketing is relevant. Are you satisfied with your current real estate results? Are you achieving the full potential of your developments and your personal or corporate vision? If you think you are already doing well, what would happen if more international players came into the market? Would your legal contracts, customer service experience, presentation of your property and pricing standards be able to compete? If, of course, you are content to stay a marginal player, or happy with mediocre performance, or to operate in the dark without upgrading your knowledge of an ever changing and challenging marketplace, then you don’t need to attend. I am pleased to say, he signed up after our conversation and I hope others recognise that as tough as the economy is, the sum of N195,000 is money well spent to prevent costly mistakes on a development project. For our target audience, each day or week your property stays on the market unsold is worth millions not thousands. So, why would you be short sighted about such an opportunity to invest in achieving better results? Times are tough, but your response to tough times will determine your ultimate outcome. One thing is for sure, doing nothing or maintaining status quo is a recipe for becoming extinct, as the economy will get even tougher before turning around. The decisions you make today will determine whether you get to participate when the boom time returns, because it will. The choice is yours.