UbosiEleh Report Plays Down Impact of COVID-19 in 2021 Real Estate Forecasts

By Fadekemi Ajakaiye

Estate surveying and valuation firm, UbosiEleh+ Company has released “The Nigerian Real Estate Report 2021” reviewing the sector’s outlook in the 2020, and predictions for 2021.

The 125- page annual report dwelt extensively on how the COVID-19 pandemic affected economic activities including real estate in 2020. The Report noted that by 20th March, 2020, the federal Government of Nigeria’s travel restrictions took effect which applied to travels from countries where more than 1,000 cases have been recorded including China, Italy, Iran, South Korea Spain, Japan, France, Germany, US, Norway, UK, Netherlands and Switzerland, according to the Nigeria’s Centre for Disease Control’s report.

According to the Report, the Covid-19 pandemic with the attendant lockdown in Nigeria and across the nations of the world was a singular event that changed global economy, Nigeria inclusive, by many accounts, the most significant health crisis in half a century.

The Report noted with the “ a result of the crisis from the pandemic, it was no surprise that healthcare real estate jumped to the fore front in investment in Nigeria’s real estate market with emphasis on emergency care developments.”

It reiterated that the demand for logistics and mid-size warehousing increased because “last mile ware housing, logistics and home delivery gained traction from the movement to on-line shopping.”

In the submission of the report, “office real estate market that was on its way from the effects of the 2017 recession took a heavy blow from the pandemic, which questioned the purpose and value of office space”. On the flip of the coin, it was a big boost to residential real estate because the pandemic “offered opportunity to developers as the gains in commercial real estate dried up because companies had embraced the new normal working virtually or remotely, away from physical office building.”

The Report continued: “the lockdown and shrunken economic activities were some of the reasons that accounted for the rise in demand in the residential market. But the demand was mainly for small sized, pocket friendly, family housing units.”

In making forecasts for the fate of real estate in 2021, the Report opined that although “the real estate market limped through to the finish line of 2020 with bruises sustained from economic fallouts due to COVID-19, the property industry appears to hold potential for the new year (2021)” In the view of the Report,” Opportunity created amid the pandemic have raised optimism that 2021 will be a good year for the estate sector. The collapse of money market instruments as an investment has more or less assured this.”

The Report expects the residential, construction and industrial segments of the market to drive the real estate sector’s growth and deliver good returns for developers, investors and landlords. The growth is premised on the new normal, a corollary of COVID -19 pandemic. Another indicator of this growth optimism is a fall-out of a recent survey by KPMG which showed that the percentage of chief executives that plan to cut back on offices has come down from 69percent in August, 2020 to just 17 per cent.