Most cost-effective ways of managing estates

In terms of cost, land remains the most critical factors of production in every society. But that  is also one of the greatest challenges and deterrents to real estate development in Nigeria. It is the high cost of land and a culture, which values resold properties with 70 per cent consideration for land value and 30 per cent consideration for the occupying property.
The value of land in Nigeria is high. Consider this; two acres of land in Victoria Island, Lagos, the equivalent of San Francisco, California, recently sold for $12 million, which is at the equivalent of $1 million per plot of land. Such high costs are hard to find in developed economies but it is a present reality in Nigeria’s major cities from Lagos to Abuja, Enugu and Port Harcourt. Oddly enough, this piece of land is considered a good deal.
When faced with such charges and not understanding Nigeria’s appetite for real estate, most investors run. However, put in perspective, this challenge is a minor one because in truth, the value can be realised upon development, delivering a great return on investment.
One challenge posed to real estate development in Nigeria is accessibility and cost of funds. The average bank loan in Nigeria is around 17-23 per cent interest rate, which in America would be considered credit card rates. This makes development quite expensive and pushes developers to build for-sale properties shying away from rentals and other long term investments. Also, funds, when accessed, often do not cover the full value of development but a fraction leaving developers with a high cash input.
These challenges can be surmounted through sound economic evaluation of prospective investments, pre-sales of properties and acquisition of foreign loans of investor capital.
The most frustrating of the challenges in real estate in Nigeria stem from governments’ bureaucratic, ageing and sometimes corrupt agencies, which hamper and delay the process of documents processing and plans approval. This can be surmounted with a good legal team, strong research on the properties being acquired and perseverance and strict pre-adherence to recommended procedures.
According to Herbert Onodingene, Principal Partner, Herbert Onodingene and Partners, Estate Surveyors and Valuers, employing the right professionals, technical/management staff, and regular training would go a long way in keeping the staff of the estate abreast of the trends in town.
Otherwise, they could be charging either higher rates or lower rates. They could also be chasing products that are no longer in vogue during maintenance and giving the public bad impression.
“To manage your estate better, good management of the power house, the diesel usage and power apportionment are very critical.
In this regard, the estate manager must stick to the maintenance agreement without any default. This would go a long way in making the estate manageable, otherwise, if the occupants complain of power outage for long, it would become counter productive.
“Proper pricing and purchase of quality materials for repairs is a sure way of keeping your tenants. This is so because if you fail to consider the location of your estate, you would make the mistake of purchasing high class materials that the low income earners living in the estate cannot pay for. If you do this, you may eventually keep your estate in perpetuity with no one coming to ask for rent.
The problem is that the rich may not like the location and the poor would see it as exorbitant thereby keeping the owner in dilemma.
“Another factor is selecting quality tenants to live in your estate. If you perchance rent your estate to cats and dogs when your maintenance agreement put the cost of repairs and replacement on the owner, then everyday you would be buying and calling artisans to fit one thing or the other. This would make you to direct all your attention and income to that estate. It is not worth it at all.
“There should also be proper communication between the property managers and the tenants. This would go a long way in keeping the estate and ensuring tranquility within the estate. There is no love within the estate, either there would be regular fights or resentment among neighbours,” he concluded.
An economic challenge lies in the cost of developing buildings in Nigeria. Today dependency on imported finishes (tiles, lighting, among others), and wet construction methods using cement and blocks unnecessarily increases the cost of building in Nigeria.
A new consensus rises around the need to take a western approach to construction using locally manufactured products, timbers, dry wall and other dry construction alternative. While this sounds great in debate, the ground resources like manufacturers, traders and distributors who should create access to these materials are almost nonexistent.
The Nigerian real estate market is open for business, with a housing deficit of over 17 million units, a rapidly urbanising population, a growing middle class and an affinity to real estate as an essential asset, investments made here are primed for success.
Many challenges exist as in any other industry but it is in surmounting these challenges through strong research, adequate preparation and innovative deployments that one stands to reap the most returns.
Contrary to popular notions, citizens can afford new developments, they desire new approaches and would compensate for the challenges.
In investing in real estate in Nigeria, you stand to reap tremendous financial returns whether you are renting or selling, building single family homes or mass housing estates.

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‘N18m contract loss attracted me to real estate’   
Mr. Kennedy Okonkwo, Chief Executive Officer and Managing Director of Nedcomoaks, has said that inability to bear the loss of a worth N18 million ($90,000) to a competitor as a part time property consultant pulled him fully into property business.
Okonkwo however said that since he ventured into property business, he has been able to successfully put up several massive projects such as Kiryan Court, Dream Court IV, Crystal Dreams Apartment, Crystal Court, and Sandton Court. But most recently he just delivered the Victoria Crest I, while work has fully commenced on the Victoria Crest II, which is presently on sale.
According to him, Victoria Crest II is an estate of 76 units of three and four-bedroom homes and is located by the second Lekki toll gate on Buena Vista Road, adjacent the  Buena Vista Estate.
Other estates in its proximity include Lake View II, Essential Homes, Ocean Bay Estate, Bricks and Brains Estate, Golden Leaf Estate and the Shell Cooplag Estate.
However, Victoria Crest I is a collection of 92 units of three and four-bedroom terrace duplexes, all rooms en suite built for first time home owners or smart investors.
It is a fully serviced residential community. Victoria Crest offers a unique opportunity to acquire and invest in a property within a private gated community located in the reserved and much sought after area of Lekki, Lafiaji. Victoria Crest, according to Okonkwo, is now selling at rate of N30 million for three-bedroom terrace homes and N34.7 million for the four bedrooms  with flexible payment plan.
The project’s features, according Mr. Vincent David, one of the residents, include fitted wardrobe and cabinets, stainless steel staircases and balconies, Turkish security doors, quality tile finishing, generous living areas, spacious main plus family lounge, gate house, fitted kitchen with cabinets, kitchen sink and tap, beautiful ambience and great neighbourhood, street lights, excellent drainage infrastructure, central water treatment plant, ample parking space and many more.
Dream Court IV,  located near the Pinnock Beach Estate developed by UPDC, is another gigantic project being developed by the company. The project, which comprises 30 luxury flats with an attached boys’ quarter, according to the company, will be a contemporary luxurious design hoping to surpass the expectations of subscribers who have commenced buying into the project on an off plan basis stemming from the huge return on investment of its previous project and the company’s remarkable project delivery track record riding on the success of Kiryan Court, Dream Court I-III, Crystal Dreams Apartment and the Victoria Crest Apartments.
“I went into the property business because I felt there is a real need for it. For everybody, when you look at your needs, it’s probably food first and then you think of shelter. So there is no way anybody that is providing shelter will get it wrong. I think there are enormous opportunities to tap into in the Nigerian property market today and the reputation of the developer matters a whole lot.
“In the operational aspect of construction, it has a tendency to drive up the cost of the construction because most of the finishing materials are imported and so the restrictions on forex make it difficult to import these goods, which drives up the price. On the other hand, a property that was selling at $150,000 can now go for $100,000 if the person has forex, so for these people, there is a higher advantage,” Nedcomoaks’ CEO said.

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NUJ/NAWOJ complete foundation laying of Pen Jewel Estate in Ogun
The Nigeria Association of Women Journalists (NAWOJ), in partnership with the Nigeria Union of Journalists (NUJ), last Wednesday laid the foundation stone for its 800 low cost  NAWOJ/NUJ Pen Jewel Estate in Ogun State.
NAWOJ’s National President, Mrs. Ifeyinwa Omowole, during the ground-breaking ceremony in Abaren community in Mowe, commended the NUJ for helping to achieve the dream to provide affordable housing for journalists.
She said that she realised the dream because NUJ provided the land.
At the site to build 800 low cost housing units for practicing journalists at Abaren, Mowe,  Omowole promised to demonstrate true Corporate Social Responsibility (CSR) that captured host communities. “We are going to use this opportunity to teach Nigerians, corporate organisations, the political class and the world how to do CSR that benefits host communities directly,” she said.
She explained that in the course of the project, the community’s primary school would be roofed and electricity and road networks would be extended to the Abaren community.”
Omowole said the estate in Lagos was a pilot scheme, which would be spread to other parts of the country for practicing journalists soon.
Lagos NUJ Chairman, Mr. Deji Elumoye, said the first set of 200 houses would be delivered to beneficiaries on or before December and the remaining 600 within 36 months. “Our concern is to ensure an average journalist has shelter,” he said.
The Chairman of Primewaterview Holdings, developer of the project, Prince Adetunji Ogunwusi, promised to provide the estate with 24 hours uninterrupted power supply, which would be extended to the community.
“The kind of electricity will be renewable energy, we will not disappoint you because we are working with you in a milestone,” he said.
Earlier, the Group Managing Director, Primewaterview Holdings, Mrs. Morinola Babalola, promised to engage youths and artisans in the community in the construction work.
Babalola who distributed educational materials to school children in the community on behalf of her organisation said the gesture was to show real love to the community for accepting the project. “We are going to create jobs for youths and artisans in this community, “she said.
Traditional ruler of Abaren Kingdom, Chief Solomon Akinyemi, commended the initiative and thanked the unions for bringing development to the area.
“We built the schools here through community efforts and we started bringing electricity poles but we are amazed at the offer to use modern roofing sheets for our schools and give us uninterrupted power supply. We thank the journalists and developer and pray that they keep their promises,” he said.

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Eko Atlantic City completes first 8-lane road   
A vibrant environment having 21st Century ambience with unique, innovative development situated on the coast of Lagos has come alive with the unveiling of Eko Atlantic City.
The city, which has reached advanced stages in the first five million sq. metres of construction is not only boasting of independent power and water supply, seamless communications network, but also an eight-lane arterial road of over 1,500 metres long which would be the first of its kind in Lagos and Nigeria.
Divided into eight districts, the city is planned for mixed-use with commercial, residential, entertainment and leisure activities to make it a lively environment. Inherent city amenities and services would include an international school, plant nurseries, hospital and a state-of-the-art shopping mall.
The Chagoury Group, which initiated the development project and based in Nigeria, was founded in 1971 by Gilbert R. Chagoury and Ronald Chagoury.  The portfolio of activities include construction and property development, flour mills, water bottling and purification, glass manufacturing, healthcare, insurance, hotels, furniture manufacturing, telecommunications, IT, catering and international financing.
According to the group, the boulevard’s eight-lane  road design and construction has been built to world’s best practice with beautiful paved, tree-lined  sidewalks and streetlights completed with a stunning ocean view. One of the considerations when developing the Eko Atlantic City was to guarantee a traffic-free zone. This has now been achieved with the major road network recently completed.
The extensive road network is now clearly defined with an area in excess of 200,000sqm. Most significantly, Eko Boulevard, the focal point of the business district, is fully completed from Ahmadu Bello Way in Victoria Island to the Ocean Front Sea Wall.
The group said, “we are extremely proud to have achieved another major milestone in the development of Eko Atlantic City. This futuristic city is not just for residential and commercial activities but a tourist attraction. We strongly believe the new road network will enhance business activities, facilitate intercity transportation as well as attract tourists from all over Africa.
“In addition, the city’s infrastructure network makes it the most technically advanced city in Nigeria and Africa. It comes with a fully integrated autonomous and reliable infrastructure networks with all the following installed under the extensive paved sidewalks- storm-water drains, sewer drains, water supply piping, power cables and IT network.
The city, it said, also offers 15 connecting bridges, 14 of these have been completed. All bridges in Eko Atlantic employ a post-tensioning system for their bridge deck reinforcement.  The technique uses cable under stress rather than reinforcing rods, which is a common approach worldwide.
Eko Atlantic, which will soon become a home to over 450,000 people and 300,000 commuters has also made considerable progress in the city-wide canal network with 4,000 metres of canal side sheet piling already installed.
In 2006 South Energyx Nigeria Limited, a group subsidiary, was awarded the concession to reclaim land, develop infrastructure and act as the exclusive authority in the development of Eko Atlantic City. The subsidiary was specifically created to oversee the planning and development of Eko Atlantic City. - THE SUN