Title Search, Construction Experts Reduce Risks in Real Estate Investment

William C. Okpala is an entrepreneur with over 20 years of experience in the real estate industry; a chartered Estate Surveyor and Valuer with the Nigerian Institution of Estate Surveyors and valuers (NIESV). He tells Bennett Oghifo that anyone who wishes to invest in real estate should avoid smart talk by sales people, carry out due diligence in title search and compile a team of construction professionals, when they are ready to break ground

Give us your background in real estate and your key portfolios

I come from an entrepreneurial family, my father was a renowned Estate Surveyor and Valuer and a successful businessman and my mother was a businessperson. I believe strongly that I got the desire and love for the real estate business from my parents. I’m a graduate of the Estate Management programme, which equips me with foundational principles in Real Estate practice and business. Further to a plethora of courses and training within and outside of the industry to always update my set of skills and knowledge with ever-changing times. My journey in this industry started in 2003 with Sunbo Onitiri & Co. Subsequently, I joined my father Dr. Okpala William of William & Partners firm as a junior surveyor where I grew through the ranks. Our key portfolios range from commercial to residential assets under management in Lagos, Abuja and Enugu. These assets are proprietary and, also under management are clientele assets. There are also financial institutions and corporate entities under our portfolio where the business is on retainer offering Valuation and Advisory services. 

Tell us what you think about the Lagos property market and its challenges

Lagos is a dynamic mega city with great prospects for significant growth. Lagos as a mega city commands an ever-growing population currently circa 23 million persons. The real estate market in Lagos drives the rest of the country’s real estate opportunities by its location as a city with the convergence of both air and sea ports, its historical location as the capital state, its infrastructural advancements, its high urbanisation and its over 25 years of steady growth. Comparatively, Lagos outpaces other states and regions. Unfortunately, with its high population, Lagos has a large housing deficit of 17-20 million. However, the state’s real estate comprises a comprehensive shelter and functional environment to make living sustainable. Lagos requires balanced attention to residential, commercial, industrial, recreational and associated infrastructure mix converging to make living in such an environment sustainable. What do I mean by that? The level of intentionality and attention given to a city like Dubai show all components of real estate connected to make Dubai what it is today. From the residential neighbourhoods to commercial hubs, down to the transportation infrastructure, all show how real estate is perceived in a broader scheme. Now in Lagos, a comprehensive framework is required, which would affect exponential growth in real estate activities all around Lagos.

What projects would you prefer to market, commercial or residential?

My analytical training teaches me to create and claim value at the same time. That being said, the choice of residential or commercial would be made by an investment analysis of a proposed project taking into consideration the location. Business is purely benefit-driven so any analysis that gives the best benefits is where I invest.  

A good number of people have suffer setbacks in terms of investment in property in Lagos. What is your advice for prospective investors?

Usually, the need for experts in this regard cannot be overemphasised when it comes to investments in real estate. From as little as carrying out due diligence in title search to compiling a construction team in building a project, requires experts that will reduce the risk factors associated with the investment. Experts are crucial in reducing risks also the purpose behind your investment has to be determined and realistic. Real Estate investment isn’t a quick return scheme so a mid to long-term view is required. Your purpose for investing also has to be scrutinized. Is the purpose for status benefits, generational wealth purpose or speculative reasons all have to be identified as the objective before investing?

What’s the ROI like with your projects What can tilt prospective buyers your way, considering the stiff competition out there in a depressed economy?

The projects that we have driven range from locations within Lagos from Lekki, Victoria Island, and Festac town respectively. Our experience over the years speaks to satisfactory returns and realistic during the periods of transaction. Speaking of real estate as an investment asset class, I must be factual about the current market trends to my clients. What I strive to offer as added value is positioning projects within strategic locations to give that extra advantage.  

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?

Well, that is a tricky issue. Should some terms and conditions be contentious in an agreement, the investor should always employ the professional expertise of a legal representative ie a lawyer knowledgeable in real estate transactions. We can’t overemphasise the need for experts and their critical role in the process. However, if there are adjustments in the transaction structure after commitments, then skilled negotiations between the investor’s representatives and the promoters are required. As long as there is clear transparency and these adjustments are out of the promoters’ control, negotiations to reach an amicable agreement should be available. 

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?

For every challenge, there are solutions. Firstly, what causes these disputes, primarily transparency? Data shows that estates, where the management of facilities is in the hands of the residents, are usually the trust deficit challenges when it involves management. I would advocate that promoters who intend to manage facilities of their estate should ensure that the requisite infrastructure is embedded during the construction stage. This is essential in deploying smart digital platforms and technology in managing facilities. Technology provides efficiency effectiveness and most especially transparency. There are so many facility management platforms in the market that come as web apps, some come bespoke curated for the peculiarities within individual estates while others can be found in Android or IOS stores.

Housing finance is a crucial component of homeownership. What do you think about Nigeria’s mortgage system?

Financing housing is a crucial part of a country’s GDP. In Nigeria, the ratio of mortgage loans to GDP stands at circa 0.6% which is significantly underserved. One of the major challenges in the current mortgage system is the inability to provide sustainable long-term financing to mortgagees due to a lack of access to long-term funding and the high cost of funds. The population of Nigerians who can access some level of financing from financial institutions is far below 10% of the population. 

What role do you think the government should play to enable more Nigerians have suitable accommodation?

The government currently have laudable initiatives to drive the industry. Such initiatives like the N100 billion private sector-led real estate financing scheme expand access to housing. This initiative is part of the Ministry of Finance Incorporated (MOFI) Real Estate Investment Fund (MRIEF). Other schemes such as the National Social Housing Programme (NSHP) and National Housing Fund (NHF) provide over 300,000 homes with associated 1.5 million jobs. NHF initiative aims to assist Nigerians who cannot afford commercial housing loans such as civil servants, traders and artisans to own a home. There are a plethora of government-backed initiatives which when implemented with military precision would yield the required results. My encouragement to the government is to allow and engage private professionals to own and drive the processes end-to-end.

Is it compelling for everyone to build a house or have access to descent accommodation. What are your thoughts on this?

That is a thought-provoking question. Data has shown that recently, the short-let market has been on an upward trajectory. The demographic that significantly uses these short-term rentals is within the range of 18 years – to 40 years. This market feeds on well-furnished and maintained facilities for a temporary stay. The size of this market is growing exponentially resulting in higher demands in short-let accommodations witnessed in the last “Detty December”. This now answers the argument for whether it’s compelling to build your home or to have access to decent accommodation. The recent market trends show that both sides are critical, especially in the demographic one belongs.

Some people have bought land designated as government excision from people who are not authorized to sell. What do you think can prevent this, particularly with prospective buyers?

I believe in the use of professional experts from legal representatives to land surveyors and ultimately estate surveyors etc. The Bible tells us, “He who walks with wise men will be wise”. I will always advocate for the use of seasoned professionals to guide you through the murky waters of land administration.