Dosunmu: How to Avoid Sour Property Deals
The Managing Director of Noble Grounds Ltd., Olajide Dosunmu, a Civil Engineer, tells Bennett Oghifo he is practicing real estate out of passion and the desire to give value in the industry. He also gives a guide on safe purchase of property
How did your career in real estate begin?
I began my career as a consultant and later founded a consulting and construction firm, Noble Sovrano Ltd. Driven by a passion to deliver value in the industry, we also established Noble Grounds Ltd, a real estate company focused on developing land and building homes.
What are the opportunities in the Lagos property market?
People need homes because of the growing rural urban migration. People come into Lagos and sometimes they’re below the social ladder but eventually they climb and then there is a need for homes. And there’s mostly a need for affordable homes. With the growing population, I expect that in the future there will be more highrise buildings, which should be supported by the government and the government too should subsidise homes so that more people will enter the bracket of owning homes among Lagosians.
We’re told there are challenges in land documentation. What has been your experience?
A major challenge is the time it takes to get title documents for properties and this disenfranchises people from getting access to finance. With their title they can get loans. The government should ensure that people get title easily.
What section of the real estate market do you prefer, commercial or residential?
Both the commercial and residential market, depending on which one we’re getting into. We have invested in both commercial and residential real estate. Both are fairly profitable. For commercial, it is easier to get regular income over a longer time but for residential, mostly you sell off or get rent.
Tell us about your recently launched project, Pleasant Hills Estate, Ogun State.
Pleasant Hills Estate is a residential development being developed by Noble Grounds Ltd. It is nestled along Apena Otere Road, opposite Christopher University, on the bustling Lagos-Ibadan expressway. This vibrant development is conveniently located just a 30 to 40-minute drive from Ikeja, Lagos where you have the Muritala Mohammed local and international airports. Envisioned to accommodate up to 500 homes upon completion, Pleasant Hills Estate is meticulously designed to blend residential, commercial, public, and recreational spaces, seamlessly. With recreational greenery spaces interspersed throughout the estate, residents can enjoy a balanced lifestyle. Pleasant Hills Estate is being developed to provide amenities, including paved roads, underground stormwater drainage system, electrification, and perimeter fencing. Our aim is to provide more than just homes and serviced plots; we aspire to create a secure and enriching community experience for residents.
What’s the return on investment (ROI) like with your projects? What can tilt prospective buyers your way, considering the stiff competition out there in a depressed economy?
At Noble Grounds, we are highly strategic, leveraging government plans, actions, and policies in selecting locations for our real estate developments. For instance, with Pleasant Hills Estate, an over 20 hectare estate development situated off the Lagos-Ibadan expressway close to the redemption camp, we acquired the property when the federal government was focused on the aggressive reconstruction and expansion of the expressway. Despite the initial hardships and long travel times due to traffic congestion on the narrow, over-utilized road, we saw potential. Early investors purchased plots at Pleasant Hills for as low as 950,000 naira in 2020. Thanks to ongoing infrastructure improvements within the estate, such as paved roads, drainage systems, and a perimeter fence, combined with the now completed and wider Lagos-Ibadan expressway, which has significantly reduced travel time to Ikeja from 1 hour 30 minutes to about 30 minutes, the plots now sell for N10 million in 2024. This represents an impressive 900% return on investment, far outpacing the naira’s devaluation of 285% over the same period. Our strategic approach and focus on high-potential areas ensure that our projects not only provide substantial returns but also stand out in a competitive and challenging economy.
Is there any plan to replicate such a project in other parts of the South-west?
Definitely, we plan to replicate similar projects, starting with the South West area of the country. We also have a similar estate called Mid-Town Park, sitting on a 30-hectare proposed mixed-use development located along Moniya-Iseyin Road, about a 15-minute drive from Moniya train station in the suburb of Ibadan, Oyo State. We hope to extend this model to other locations as well.
How affordable are they and what are the benefits to buyers?
Pricing: Property prices at Pleasant Hills Estate are designed to be affordable, particularly to attract first-time home buyers and investors. Here are the current prices: 350m² land parcel: N7 million; 550m² land parcel: N10.2 million; Modern 3-bedroom detached bungalow: Shell option: starts from N35.8 million; Completely finished: starts from N49.8 million; 4-bedroom detached duplex with BQ: Shell option: N64.9 million; and Completely finished: N88.6 million. Benefits: The shell option includes a completed exterior with accessories and painting, while the interior has cement plaster. For home buyers, we offer various financing options to ease the purchase process. We facilitate 5 to 15-year mortgage loans through partnering Primary Mortgage Institutions. Additionally, for those who choose to pay directly to our company, we offer a flexible “small-small” payment plan over a 1 to 5-year period, allowing for construction to be completed progressively.
What is your advice to prospective buyers of real estate in Lagos?
Most people face significant loss when purchasing real estate in Lagos primarily because they fail to conduct proper due diligence. While it is recommended to buy from a trusted real estate developer, those making independent purchases should ensure they employ the services of a registered town planner to check the following: A. Authenticity of the Land: Ensure you are buying from the right source, especially if the land is still held by the aboriginal owners. B. Title Confirmation: if the seller claims to own a registered title, verify its authenticity, such as a Certificate of Occupancy (C of O) issued by the government. C. Land Use Alignment: you need to confirm that the intended use of the property aligns with the government’s master plan. For example, you might buy land intended for residential purposes, but the area could be designated for industrial use in the future. D. Government Acquisition: Ensure the land is not under government acquisition. Using the services of a registered town planner, the proper order of checks is: A. Surveyor Coordinates: A surveyor will take accurate coordinates at the proposed site. B. Surveyor General’s Office: the survey coordinates will be used to check at the Surveyor General’s office to ensure the land is not under government acquisition and verify if it is not already registered to another party. Also, check the name of the family the land was initially gazetted to, ensuring you are buying from the correct aboriginal family. C. Ministry of Urban and Physical Planning: Confirm the approved land use for the location to ensure it aligns with your intended purpose. This ministry will also check for proximity to waterways, canals, or future infrastructure like roads, electric transmission lines, and water lines. D. Ministry of Lands: If the property has a C of O, ensure you are purchasing from the rightful owner and that there are no liens on it. E. Survey and Sales Agreement: After confirming there are no encumbrances, conduct a survey and obtain a survey number, which you will include in the sales agreement or deed of assignment with the seller. F. Payment and Possession: Pay for the land and take immediate possession by fencing or marking the land with corner pieces. G. CofO or Government Consent: Proceed to obtain a Certificate of Occupancy or government consent as required. By following these steps, you significantly reduce the risk of falling into the wrong hands or losing your property.
There is an unwholesome trend now that is frustrating most investors, who don’t get what they bargained for because of some terms and conditions that they either did not see at the beginning of negotiations or were introduced after the buyer commits. What is your advice in this regard?
To mitigate this issue, investors should insist on documented correspondence from realtors, preferably via email or similar channels. Additionally, they should request a comprehensive sales agreement to ensure clarity on the proposed purchase, documenting the expectations from both the buyer and the seller. This approach helps eliminate ambiguity and serves as a means of recourse in case of any inappropriate actions.
Is it compelling for everyone to build a house or have access to decent accommodation?
Access to decent accommodation is indeed a fundamental human need and a basic right. It is compelling for everyone to build a house, as this fairly guarantees a roof over their head and a place to call home, especially in times of economic trials. Aside from providing shelter, having a house, especially with a corresponding title, offers financial leverage. It allows individuals to seek bank loans to foster further investment or businesses, thereby improving their financial standing. Moreover, owning a house has proven to be a worthy investment that can serve as financial leverage for future generations. Therefore, while building a house may not be feasible or necessary for everyone, ensuring access to suitable housing is essential for a sustainable and inclusive society.
What role do you think the government should play to enable more Nigerians to have suitable accommodation?
To enable more Nigerians to have suitable accommodation, the government should ensure inflation rates are below 5% to establish sustainable mortgage rates. Currently, inflation rates exceeding 30% contrast with the government’s efforts to subsidize mortgages at a 6% rate, creating affordability complications. Lower inflation rates would help reduce the gap in rates between those offered by Primary Mortgage Institutions and Mortgage Refinancing Companies (MRCs), which currently range from 6% to 25%. State governments must promote the vertical development of homes, such as high-rises, in densely populated urban cities. Additionally, the federal and all state governments should ensure the provision of subsidized homes to all civil servants. The government should facilitate the reduction of housing costs by promoting the local production and financing of key construction materials. Moreover, promoting the use of cheaper alternative construction materials can further contribute to reducing housing expenses.
Housing finance is a crucial component of homeownership. What do you think about Nigeria’s mortgage system?
Nigeria’s mortgage system has seen progress in recent years, yet challenges persist. High interest rates, limited access to long-term financing, and complex documentation processes remain barriers to widespread homeownership through mortgages. It is pertinent that for the mortgage system to be sustainable the government must strive to achieve inflation rates below 5%. Initiatives like the National Housing Fund (NHF) and regulatory improvements aim to tackle these issues. However, the soaring cost of construction materials, such as cement and reinforcement rods, has significantly inflated housing prices beyond the reach of the average Nigerian thus making many unqualified for mortgages due to low wages in comparison to expected monthly payments. To address this, the government should intervene by promoting alternative, cost-effective building materials like compressed earth blocks (CEBs). Additionally, subsidizing finance for steel and cement producers, sourcing raw materials locally, and revitalizing key steel production facilities like Ajakuta and Delta Steel can help reduce housing costs. It’s worth noting that in 2007, a two-bedroom house with necessary infrastructure could be built for 2.5 million naira, making mortgage payment plans more feasible for average Nigerians. Today the same building would cost about N25 million in the most affordable locations. Moreover, collaborative efforts between financial institutions, government bodies, and private developers are crucial in expanding access to mortgage financing and making homeownership more attainable for aspiring buyers.
There are growing cases of conflict between developers of estates and homeowners in respect of control of facilities. What in your opinion can resolve this issue?
One effective solution to resolve conflicts between developers and homeowners regarding facility control is to establish clear guidelines and agreements from the outset. This includes transparent communication about the responsibilities and rights of both parties regarding the management and maintenance of facilities within the estate. Additionally, setting up a homeowners’ association or committee empowered to oversee the management of common areas and facilities can help ensure collective decision-making and fair representation of homeowners’ interests. Regular meetings and open channels of communication between developers and homeowners can also foster understanding and collaboration, leading to smoother resolution of conflicts as they arise.
