Fresh insights to weather the harsh economic climate have been provided by eggheads in the real estate sector, who believe that despite the turmoil in the market, the industry is headed to a better year.
They expect continued appetite for prime commercial real estate in 2018 with investors increasingly focused on good income-generating opportunities in the office and residential sectors. But noted that the liquidity crunch in the economy will affect demand significantly in all market segments.
The experts made the submission at this year’s Economic and Real Estate Outlook series organized by Fine & Country in collaboration with Business Day and Lagos Business School(LBS) at the LBS in Lagos.The programme revealed the winning strategies for the current economic climate and also identify the trends and opportunities in the industry.
Fine and Country predict sustained rise in supply of commercial real estate, as over 50,000 square meters of prime office space will be introduced into the market in 2018. In the past five years, over 120,000 square meters of space was introduced in five years.
“Existing corporate tenants will migrate to newly built offices in search of better services. Older buildings will be left vacant, and landlords will look to either sell ‘as is’ or renovate and lease for significantly lower than historic rents.”
According to the commercial real estate outlook, the first three quarters of the year is expected to improve while a slow down in commercial activities will be recorded by the fourth quarter, as the flow of foreign capital halts, with the companies taking strategic decisions ahead of the elections.
Specifically, Mr. Frank Aigbogun, Publisher, Business Day, provided insights to the current economic situation and the potential effects in the real estate industry, while the CEO/Vice Chair of Fine & Country, West Africa, Mrs. Udo Okonjo lead discussions on the various issues.
She revealed that there are emerging opportunities in the real estate sector, especially in the residential market, where the upper and upper middle class will be looking for safer and secured lifestyle in gated communities.
“Some of the vacant apartments in Ikoyi and Victoria Island precincts are now converted to short-let apartments, providing flexible accommodations for people. While the vacant semi and fully detached are now converted to one-bed apartments and studios, providing much needed accommodations for young working class singles who need to live close to work.
“We will expect to see more technological solutions being used to improve real estate solutions such as property search, leasing, facilities management and smart technologies as well as more vibrant residential market,“ Okonjo said.
She harped on the need to establish retail malls for the individual communities, and developers to explore students’ housing and creating schemes in Ogun State to tap into the proximity to Lagos.
Real estate experts on the panels included, Mr. Hakeem Ogunniran, MD, UPDC: Mr Adeniyi Adeleye, Head, Real Estate Finance, Standard Bank Group, Professor of Housing and Dean, Environmental Studies, UNILAG, Timothy Nubi; Mr Bolaji Edu, MD, Broll, and Mr. Munachi Okoye, MD, MCORE.
They shared their insights and experiences on the topics- Real Estate Disruption; Creativity in Bridging the Financing gab and Residential, Commercial Trends and Opportunities. The panelists presented the winning strategies for the current economic climate and also identified opportunities in the residential and commercial sectors. The theme for this year’s series was ‘Navigating Change’.
Prof. Nubi said that the pockets of opportunities in the real estate sector centres around provision of low-cost or low-priced housing for the vast number of person who want to access the home-owner bracket.
