Changes in Nigeria’s Real Estate Market Demand Uncommon Solution, Says Ogunniran

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Hakeem Ogunniran is renowned as one of the Chief Executive Officers of UPDC Plc that did frontline housing development within few years in the organisation. Now, he has his own company, Eximia Realty Company Limited, which was launched recently in the presence of most of the key players in the nation’s real estate sector, including his foreign partners. Ogunniran tells Bennett Oghifo that his desire ultimately, is to create a unique ecosystem of housing development, facility management, of financing that will help young people, particularly, to own homes

Tell us about your company, Eximia

Eximia Realty Company Limited is a real estate development, marketing and management company. Eximia is a Latin word which means unusual, extraordinary, outstanding. As a company, we want to do things differently from the way the market has been. Thus, we have taken the time to secure a very strong Board of Directors. I am a strong believer in corporate governance, and as the Founder, one of the things I paid attention to was corporate governance. We looked for a Chairman who could help us drive our ambition.

I approached the immediate past Vice Chancellor of Obafemi Awolowo University, Professor Bamitale Omole to be our chairman; other members of the Board are, Faith Tuedor-Mathews, an accomplished bank executive, change-agent, and strategist with 30-year banking experience covering domestic and international banking operations, profit & loss oversight, product innovation, strategy, and marketing; Steve Bayo Ogunfemi, a senior ICT executive and has been operating at Senior Management levels for over 20 years. His experience and expertise has been used to support, evolve and drive growth in the following sectors; Telecoms, Financial Services, Professional Services and Broadcast & Media. He was vice-president of a major ICT solutions company until Co–Founding Eniste Technology in 2015; Alh. Nuhu Abubakar; and Motunde Adeyemo. We also put together a small but effective management team, led by me, to drive our initiative.

What is Eximia bringing to the market?

It terms of our focus, the real estate industry/market has changed. We’ve done our research and we’re going to focus on mid-tier housing; we are going to focus on private housing in that category; we’re going to build one bedroom and two bedrooms in good locations. The customers we’re targeting in that category have preference for certain locations but they have to prepare to trade off size for such locations. They don’t want to live very far away; they want to live in places closer to their offices.

You launched a real estate cooperative, what is it about?

To help us drive our vision, one of the things that we did was to launch a real estate cooperative, designed as a platform to enable people to have house ownership targeted. They can save under the cooperative over a period of time. We have already launched the cooperative and people are joining and contributing over a particular period and that helps us to mobilise capital in a totally different way than what others have been doing in this particular market. The objective is to build huge membership of people who will off-take (buy) our projects in the future and can use it for investment in another real estate product. You can have targeted savings over a two-year period, particularly if you know that we will have a product in the market in two years. You can target and do monthly contribution that will enable you to meet the counterpart funding for it and we can help you to access finance thereafter. It is a model which has worked in other countries.

In Kenya, it is known as Savings and Credit Cooperatives (SACCOs), and they account for 35 per cent of national savings. SACCOs are bigger than banks in Kenya; they account for over 90 per cent of housing finance. If it can be done in Kenya, I see no reason why it can’t be done in Nigeria. That is my belief, and I’ve also had the privilege of doing big transactions with some cooperatives in Nigeria. So, I know that with the right form of organisational framework, proper positioning, you can mobilise capital in totally different ways and help people to achieve their objectives of owning homes.

What is the property market like presently?

Everything has changed; the customers have changed, they are now a lot more sophisticated, discerning, put a lot more emphasis on value, have wider range of choices. Years back we had only a few developers but in recent times we have many of them. So, you have access to a deeper pool of choices. Competition has also changed such that in the industry today you have some bright young men who have come to disturb the space. Even the whole world has change; there is significant impact of technology on real estate. Today, we talk of proptech; the whole market has changed. What we used to do and get away with 10 years ago, as developers, we cannot do again because the customer is very knowledgeable. To succeed in this market, you must take time to determine the category you want to play and you must understand what the customers in that particular category want.

With your background at UPDC and as a real estate Lawyer, some people will expect almost magic from you

Really, there is no magic in this business; this is about understanding the business. I don’t want to sound immodest, we know this market and we know this business. I used to teach real estate law in the university, so I have a unique understanding of the workings of real estate structure. I just want to take this thing in my strides; we are not going to over-promise and under-deliver; we are going to promise and we are going to deliver. A lot of planning has gone into this; I mean I’ve spent the last four to six months cress-crossing the whole world building partnerships. When I launched the company, my partners from South Africa were here. We also intend to open an office in Accra Ghana. We’ve done our homework; we understand the terrain and what it takes to deliver projects.

Tell us about your projects

We have just finished clearing our first site at Ocean Bridge Estate, where we will build Fiona Lawton Court. It is located at the fifth roundabout in Lekki, Lagos. One block contains 4 numbers each of Studio Apartments, 1 bedroom Apartments (Type A), 1 Bedroom Apartments (Type B) and 2 Bedroom Apartments. In all, there are 4 blocks which have 16 Studio Apartment, 1 Bedroom Apartments for Type A & B (32nos) and 2 Bedroom Apartments (16nos), making a total of 64 units. That is the first; we have several projects coming up; we’re already in Abuja, at Katamkpe where we are working with another developer. It’s called The Mews at Katampe, Abuja. It’s on Katampe Hills and sits on 3560square metres of land. We have jointly invested here with Trio Nominees.

We’ve accelerated the process and we’ll get that project ready in five to six months from now. We have a dream project called Lake City residential estate located in Alugbere Ojugbo Village, off the Lekki-Epe Expressway that sits on 10 hectares of land. It is a joint venture between us and a company called Forthright Securities. It’s going to be a unique project; we’re creating our artificial lake now, and we will build communities around it. We are also going to focus on the smaller units, even though we have other designs. There is significant shortage of one and two bedrooms in the market at this particular time.

We understand there is global liquidity and investors are looking for safe territories to invest, particularly in Sub Saharan Africa. Are you interested?

It is a bit tricky accessing funds offshore for investment in Nigeria because the economy is not stable. Look at what happened in 2016, we went to bed one night and when we woke up the Naira by almost 50 per cent; that can kill any business. The truth is that as a country we don’t have the requisite capital to develop this economy; we always need to have recourse to foreign capital.

What are your projections for the real estate market in Nigeria in the years ahead?

Real estate drives the economy; it mirrors the economy. So, when you have a country where the government is investing in infrastructure as the current government is doing, you need to be excited as a real estate player, and must begin to position yourself for what is going to be the inevitable uptake in that segment. The challenges will probably remain but the opportunities will be greater than the challenges; the challenges of land access, infrastructure, title, documentation, cost of transfer, perfection cost, for approval, etc. I believe in the saying in Mafia, they say “when there is blood on the street, it means there is money to be made.” If you’re able to successfully meander through these challenges, and deliver the right products to your customers, the reward can be significant in Nigeria.

You need to get very far away from the box and think; create the right products, create the right business enterprise that will deliver the right products in great locations, competitive pricing, adequate facilities. It is what the customers want and not what you as a developer think that they want. Another thing is that Eximia is moving away from marketing mothers and fathers to the children. We are profiling young people from age 25 to 35; we are bringing them into our cooperative so that in the next two to three years, they will have decent contribution in the cooperative which they can use to access other financing for owning their homes. My desire ultimately, is to create a unique ecosystem of housing development, facility management, of financing that help people to own homes in that ecosystem. That is exactly what Eximia wants to do.