“Real estate investment is delayed due to lack of funds”
Building industry experts are calling for adequate funding and the removal of bureaucratic bottlenecks to enable private investment and growth in the sector.
They made the call titled “Rewriting the Narrative: Positioning and Strategies for the Future” at the West Africa Real Estate Investment Summit in Lagos.
The summit comes as West Africa grapples with macroeconomic issues such as rising inflation, devaluation of national currencies, political uncertainty and the impact of national debt on specific countries. This has affected the real estate industry, resulting in an increase in prices in the real estate industry. increased construction costs, increased import costs and increased costs of professional services;
Landmark Group CEO Paul Onwanibe said government needs to determine how much real estate contributes to the economy and invest appropriately in the growth of the industry.
He noted that adequate funding is needed for real estate to function and advised the government to adopt section 106 of the UK Regulations, which allows developers to also develop neighboring environments.
Mr Onwanibe said: “There is so much administration involved in the production of real estate. It is too expensive and the government needs to remove excessive administrative bottlenecks. You’ll get more out of your taxes than you will in a paying system.”
Muyiwa Oni, Head of West Africa Equity Research at Stanbic IBTC Bank, maintained that the next two years will remain a challenging environment for the real estate sector due to current economic realities such as inflation.
“We believe the process of repairing the monetary policy environment will take some time, and could take even longer given central bank policy management. “Next year’s inflation rate should still average within the 20s, and hopefully by 2025 inflation will be in the 10s,” he said.
Meanwhile, Stanbic IBTC’s Head of Real Estate Finance, Tola Akinyomi, said the sector has remained resilient amidst the impact of the microeconomic environment, adding that the asset class is long-term. It added that it will provide much-needed business infrastructure.
He said the government could improve by ensuring access to land, as land is a key cost element in any real estate project. Mr. Akiyomi also called for infrastructure development, including rail and road access to ease movement.
Damilola Akinbami, Chief Economist at Deloitte, spoke on the need for reform and policy clarity and the importance of addressing foreign exchange supplies by looking for alternative sources of funding, adding that uncertainty in the industry is limiting investors. I warned you that
She said discrete remittances are a long-term solution to stabilize the naira. Mr Akinbami, however, said Nigerians in the diaspora should take advantage of real estate investment opportunities in their home country because of their strong foreign currency income.
Pepler Sandri, Head of Sub-Saharan Africa Capital Markets at JLL, said that although the stage of the commercial real estate cycle has reached a relatively low level globally, growing real estate in Nigeria will require regulatory changes and said that it is necessary to introduce best practices in the market. . This will create the liquidity needed for further development, he said.
Meanwhile, Temilola Shonola, co-director of the Edge Green Buildings Program at the International Finance Corporation (IFC), advocates for greener buildings rather than brown ones, and said developers would be able to reduce their capital expenditure by 30%. However, about 3% to 5% is needed, he added.
He said IFC believes that reducing emissions from buildings would be reflected positively in greenhouse gas emissions into the atmosphere.
Source: guardian.ng