There is bright future and many opportunities through which the nation’s economy can be boosted in the real estate sector, experts have stated.
A former Chief Executive Officer and Managing Director of Asset Management Corporation of Nigeria (AMCON), Mustafa Chike-Obi, who was one of those who shared the belief, called for adjustment in the tax benefit of Real Estate Investment Trust (REIT) to encourage investments in the real estate sector.
Chike-Obi, who spoke at the maiden edition of Fusion of Real Estate, Interior Design and Art (FREIA) conference held in Lagos, stressed that there is too much emphasis on the tax benefit of REIT coming from company and personal income taxes, which he said is not encouraging more investors.
Earlier in his welcome address, the convener of the FREIA event and the CEO of LVG, Tommy Odama, described the forum as an event which explores the dynamic relationship between real estate, interior design and art and the opportunities that come alive when industry stakeholders collaborate.
According to Odama, the event which will be held annually, will raise the bar for real estate events in Nigeria, adding that he hoped that FREIA would one day become a global brand.
The event was kick-started with an art and design exhibition which was curated by Oliver Enwonwu of Omenka Art Gallery and featured a mix of distinct traditional and contemporary art works as well as one of a kind made in Nigeria design pieces.
While extolling the resilience of operators in the real estate for working in what is acclaimed all over the world as the most difficult circumstances, Chike-Obi had called for more government roles in the sector by guaranteeing certain type of mortgages.
According to him, at present, government is only guaranteeing the lender, which is not doing much and as such should guarantee the mortgage itself.
“Enforcement of mortgage is key to the development of the sector hence government guarantee is key because of the enforcement issues on mortgages.
“This is the way to go in most parts of developed countries like the United States because right now banks are not really interested in mortgages.
“They are very wary about enforcing their property rights because of the image it will create on them”, he said.
He stressed the need for creation of a system where parties collectively bear the cost of evicting tenants, who refused to pay their rents.
Chike-Obi, who is the chief executive officer of Alpha Africa Advisors, also lamented lack of mortgage financing in Nigeria, saying the huge collaterals attached to such financing, is making it a difficult journey.
The former AMCON boss urged stakeholders to create a pressure group that will discuss with government and commercial institutions on the right ways to finance mortgage because government does not listen very quickly in Nigeria unless trade groups, who are credible can sufficiently articulate their desire
Other speakers included; Director of African Artists Foundation, AzuNwagbogu; CEO, Agatha’s Interior Design, Agatha Eric Udorie; and a Senior Development Manager, Rendeavour West Africa, Odunayo Ojo.
Speaking on return on investment for real estate developers in Nigeria, one of the panelists at the event, Olajumoke Adenowo said: “Good design is related to ROI directly, it pays for itself, that’s why there are signature buildings. It can be likened to buying into a Picasso. Such investments have enduring legacies. As we move towards commercial development, estate and malls, it is best for real estate investors to consult and engage architects with in-depth understanding of architectural psychology, to create designs that make a piece of real estate stand out and make it financially rewarding.”