John-Adejumo: We Offer Luxury Property, With Lower Entry Point than Others

Segun John-Adejumo, Managing Director/Chief Executive Officer of Prescioso Homes tells journalists that their focus is on luxury projects but with lower entry point than other development companies offer

As a real estate developer, you also pride yourself as an entrepreneur. Tell us about yourself and what you do.

I am an entrepreneur focused on real estate market. But our core area of focus is investment, so we target investors, people that are not first time home buyers. These are people that buy for the purpose of investment and generating income either for capital appreciation or normal rental income. We started with two and three bedroom apartments, but now we are into one-bedroom apartments.

As an entrepreneur real estate developer, how long have you been in business and what is your drive?

I was in finance before now. You see, when you go into some apartments in Lagos, very expensive ones for that matter, you see that the level of work done is not impressive at all. So I told myself that I could make a difference in this business. My motivation was not money, it was about adding value to assets so that they could be more valuable than what the competitor would offer. Now, we are adding value to the investor such that he is getting more than he pays for in terms of the quality of finishing and the entry price. So, for us to achieve that we usually sell off plan. In this, people rent at a lower price than current market value so that, by the time you finish, they already have capital appreciation on their property. Our customers normally come back happy and that’s what gives us joy. We don’t have clients that are cursing and looking for us everywhere. With that, we are always happy with what we have done. For instance, we did a project and told them we will deliver in nine months, a lot of people did not believe that it was possible, that we will be able to finish fourteen apartments in nine months. We still did very good work within that time frame, so worked every day, we started after Endsars and every day even Christmas and New Year day, we worked till the last day.

When did you start and what is driving you?

I have been in Lagos for five years now

There are two ways to this; when you add value, you also make impact, looking back five years when you started, how much impact do you think you have made, especially how many families have been able to get homes because of your services?

At least we have done over 200 apartments, and when we build we usually don’t look for customers because people that bought from us before are happy and satisfied. We have project we have not moved to site for one the half month but people have already paid for them, because of what we have done. For me I will say that is the impact we have made because we are trying to change a perspective, people didn’t wish to buy lands until about seven or eight years ago in Nigeria, a lot of developers too are crafty, so you pay for something and delivering becomes a problem so he tells you he will deliver in four or 12 months and four years after you are still battling with that person to deliver. People lost trust in off land sales, it took a lot of convincing to get the people we have on board and once we convinced them, we delivered so it was easier because the customers began to market us.

You said your focus is not on first time buyers

There are some people who haven’t owned their own home, for instance, when you cannot afford to buy the kind of house you want now, so you buy a smaller one for investment purposes, so you watch the investment and build your own income stream and capital, then you can fund what you genuinely want, those people buy from us. Like I said, we usually do two bedroom and one bedroom, for the first turn, they usually want a three or four bedroom house, so that’s why I said that most of our customers are not first time home buyers. So they bought before and now they want to buy again for investment, because for two bedroom the turnover is high, the demand is extremely high in terms of rentals whether for short let or normal rental, so if you a two bedroom apartment for instance, and you put it in the market, if it’s nice with good location, within one month you have rented it out and people that stayed in three bedroom within two years or maximum three years they are out, mostly a year. If you are a young bachelor or young couple, and you are renting a two bedroom, you are going to move away, because they also allow you as a property owner that wants to rent a property, you have a house that someone have been staying for four to eight years, how do you increase your rent? Even if the market has moved, you can’t increase your rent because you have an old tenant that you have a relationship with. But for two bedrooms, you don’t have to be in that situation because most times they move quickly, so even if you have high turnover, it is so easy for you to rent out. The turn over allows you to adjust your rental income according to the market reality.

Something bothers me, you said you are coming from finance bank, what are your experiences because we have seen a lot of people venture into the business and venture out, so I want to find out from you what keeps you going as an investor and developer?

As I earlier said, I am a business man and when you do property development, there are three aspects of it, they are; finance, construction and marketing. It is difficult to have the three traits in one person, so usually you can find one or two, but what we do is we give contractors to build for us, we manage the process. As a property developer, I am not an Engineer and I don’t have to be one, I am a business man so what I do is to bring the funding, marketing skills, constructing skills and manage all the processes, so I am more of the process manager.

Where are your projects located and what are the reasons for your choices?

Lekki Phase 1, Ikoyi, and as I said our focus is more on hospitality, so people that buy from us are investing in hospitality in one form or the other, short let is hospitality, so where we have demands for that are usually Victoria Island, Ikoyi and Lekki axis, because you have to give the customers what they want. If my customers want short let in Lekki Phase 1, why am I giving them properties in Mowe-Ibafo for instance? There will be a mismatch, so I give them what they want. It basically goes on demands.

Let’s go into the economy, COVID-19 came and distorted a lot of things, particularly the way we do our businesses, relate and live. The hospitality area you are talking about was one of the most impacted because of the restriction of movement, then you are talking about doing very well in that segment of the market, we are also talking about the economy having gone down to a point where consumer income has dropped, and consumer purchasing power has also dropped so what is your experience in the midst of all this?

During COVID-19, there were different perspectives to things, you are saying it from your own perspective, I know some people that had full occupancy despite the restrictions during covid, there were restrictions and scandals at the hotels, so people were going for short let. We had people that were stuck in Nigeria during that time; they couldn’t stay in hostels so they were staying short let apartments, so the demand for short let didn’t decline. If you talk to people that actually own assets during the period of time, even if there was a decline, it was marginal, not significant. I am talking from experience; we have interest in one or two so I know what the numbers were saying during that period of time.

When you say you are doing well, what is the market value of what you have done so far?

While things are going down in some places, there is a rising elsewhere. The market is changing, and if you are not moving at a very good pace, you will get stuck. So the guys in tech were making a lot of money, their income is increasing, we have Nigerians in diaspora and more than 60% of our properties were bought by them, so even the people locally buy properties too so even though there is a slowdown in the economy, you still need to own an asset, you still need to buy property. So, anybody that has not bought a house is aspiring to buy one someday, even though you have small money, look for a way. Market and cash will always find themselves, is just that pricing might change and that is why for us, even though we offer luxury property, our entry point is lower than what other people are offering. When I say lower, it doesn’t have to be in Naira term, it’s in value, you can be the same price but the value I am giving is more than others. We are offering much more than other people are doing, so we are getting better returns, we are investing because the people are buying from us.

There are cases of people leaving their shores to invest in other places. For instance, Nigerians having investments in Ghana, from your experience is this actually a case?

International trade is not a bad thing; it actually shows sign of growth. So the fact that Nigerians are investing abroad doesn’t make it a negative thing, it’s been happening since the 60s. Our grandparents and co that owned houses in America, they have been doing this a long time ago, it is not new and it will continue to be. The same way you see foreigners buy assets here in Nigeria, things like that will happen in Nigeria whereby people will go abroad to buy assets. Sometimes people don’t look at the numbers properly because of you look at the numbers, the tax, the things you have to pay, by the time you calculate it, sometimes it is not better off buying off shores.

Sometimes you pay extra amount of tax and can’t sell within a period of time, when you want to sell and because you are not a citizen, so when you look at this kind of numbers, does it add up eventually?

Maybe or maybe not, it is not a bad thing that people are investing in another country, it just shows that Nigerians are growing. So, we will try and give them what they want also in Nigeria so that they don’t have to go abroad, and we also show them the numbers.