The early stage of real estate development in Abuja was primarily driven by a strong government regulation through a seamless allocation of land tittles and easy access to bank loans, a frontline Estate Surveyor and Valuer, Chudi Ubosi has recalled.
Ubosi said this during the December edition of the Real Estate Roundtable Series organised by Bamigbola Consulting on Friday, with the theme, “Real Estate Market Evolution in Nigeria: Assessing the Past; Projecting into the Future.”
At the virtual event, Principal Partner, Ubosi, Eleh & Co., Chudi Ubosi and Chief Executive Officer of Castles, Dipo Davies joined the Senior Partner, Bamigbola Consulting, Dotun Bamigbola during which they made a scoop into the history of real estate sector in the country, while assessing its present status as well projected into the future of real estate sector in Nigeria.
Recalling the Abuja real estate market in the 80s and 90s, Ubosi said: In Abuja, people got titles from government and it was easy to raise capital from the banks and develop properties. Again, the properties were easily let out because there were no houses and demand was high. The early years of real estate market in Abuja was characterised by this kind of trend.
“You would build a house and one paratsatals would offer 10 years rent and you take the rent, acquire some land and develop two or three more houses and that was it. The early real estate market in Abuja was primarily a case of the confidence that government allocations gave to the people who have such allocations. This is what makes it easy and see that real estate development becomes dynamic.
Ubosi maintained that the role of government and banks in developing the real estate sector in Nigeria remained paramount.
Speaking the same era in Lagos real estate market, the renowned estate surveyor and valuer said banks readily gave loans following the government’s creation of tradable land titles through various site and service land schemes like Lekki Phase 1, Ogudu GRA, Magodo, among others, which became a key catalyst for the growth in the real estate sector in the 1980s.
He said: “In the 80s, you could get a loan from the banks of about N100,000 to build two wings duplex in Ogudu, or Magodo and at completion, you could let a wing at N15,000 per annum. This led to a healthy growth of the area. I used to drive from my home in Maryland to VGC to see a friend there in 30 minutes.
“Lekki was just an open space. Lekki began to grow in the late 80s and early 90s. We sold a plot of land at N150,000. There was no road in the place. You struggle to locate your plot in the place. Later in the 90s, we were able to sell at N400,000 per plot in Lekki. The First plot I sold in Ogudu was bought at N30,000 and was little less than 1000sqm. This will cost over N300 million now.”
Ubosi explained that real estate is so intertwined and dynamic that the impact of cost in one area can increase cost in a neighbouring area, noting that “it is the N2.5 million to N3 milion cost per square metre in Banana Island that is pushing up cost of land in Ikoyi right now.”
Earlier, Castles CEO, Dipo Davies praised the ingenuity of the Lagos State Government in creating land out of the ocean and the lagoon, a development that made him to describe land in Lagos State as “infinite.”
“Land is not finite in Lagos. The Lagos government keeps getting land out of the ocean. For instance, the Eko Atlantic is twice the size of Victoria Island,” he observed.
Also narrating a major event in real estate in the 80s, Davies said it marked the era when commercial real estate moved from Lagos Island to Victoria Island.
“Such relocation of commercial real estate still happens today. People are still moving their offices from one phase of Lekki to the other and recently, people moved their businesses from Apapa due to traffic gridlock. The market also reacted to the economy as dollar exchange business moved from Ikoyi in the 80s,” he recalled.
For the convener of the roundtable, Dotun Bamigbola, a Fellow of the Nigerian Institution of Estate Surveyors and Valuers (NIESV) and a former chairman of the Lagos State Branch of the institution, the state Rent Edict which also came up in the late 80s was a turning point for rent payment from monthly basis to annual.
He said looking back the past of real estate sector to assess what we had in the past would form the background for what we can get in the future.
The real estate experts also discussed the importance of data in real estate sector. According to them, lack of adequate real estate market data is making it difficult to assess growth in the sector.