Nigerians are scared to invest in real estate due to insecurity — Akinrinade

Dr Oluwatoba  Akinrinade, Treasurer, Real Estate Developers Association of Nigeria (REDAN), Oyo State chapter, is the Managing Director/Chief Executive Officer, GestPoint Nigeria Limited, a real estate development company. In this interview with DAYO AYEYEMI, he spoke about some happenings in the real estate market that are limiting sales; rising land and house prices; details about agriculture real estate; and useful tips for first- time land buyers.

Some two weeks ago, there was a report that some realtors were kidnapped during a site inspection. Which signal does this send to operators in the real estate sector?

It’s a bad signal. It doesn’t even encourage sales at all. Currently, a lot of diaspora clients are a bit afraid of their investments or to invest more in Nigeria.  The way people in the diaspora see this issue of security is different from how Nigerians at home see it. To the former, it’s as if the entire country is not safe.

So, with that, they are afraid and panicking to invest in real estate. As a developer and businessman, we do encourage them and make sure that we guarantee their safety. In the real estate currently, many of us are investing seriously on security.

My people are just came back from Abeokuta where we have a new project . So we went with local security men. Four or five of them followed us.

Initially, we don’t need to pay for security, we just go anywhere. But now, we invest more on security to make sure that we can guarantee life and the investment of our people.

Engaging security men  is an additional cost to your company; How do you intend to recover that?

Most of those things are shared from our profits. The most important thing to us is not even the profit, it’s assurance and safety. People say now that if you want to go by air to Abuja, it will cost N400,000 and by road -N40,000. The same thing happens to business, as well. So the profits we are targeting, if there is no assurance of safety, there won’t be any profit at all. It’s going to be a loss. So the, wisdom is to direct. The point is, we cater for that based on our profits.

Is there any collaboration among developers  on one side, and with the government on the other side, to tackle the issue of security?

For now, based on my own knowledge, I don’t think there is something like that. I know the leadership of the Real Estate Developers’ Association of Nigeria is taking some steps. But collectively, there is a lot of information sharing, especially for many of us that have products in the same market. We make sure that we collaborate on security issues. We establish relationships with communities so that safety can be guaranteed.

How will you assess the real estate market now that the year 2025 is coming to an end?

For the market, real estate sale is not like before. It has dropped drastically. And I believe the economic situation of the country actually affected it. In the United Kingdom, there are a lot of policies coming from there that restrict any indigenous, especially the diaspora, citizens of another country that are working there. They limit their assets to cash, especially to what they can send to their different countries, especially Nigeria. All these factors really reduced real estate sales in the country. Most of the real estate companies are lamenting.

Why the lamentation?

Number one, the economic situation of the country. Number two, Lagos State’s  policy. You know, Lagos State  blacklisted some areas, especially the Lekki corridor.

And the demolition of some properties within the state also created negative effects on the real estate industry. Another issue is the ongoing Lagos- Calabar Coastal  Road. You know the realignment or changing of alignments illegally also caused some panic to some major investors.

Also,  some real estate companies lost their assets, their property, due to these issues.

I knew some real estate developers were blacklisted for not having planning approvals. Are you referring to this?

All those things are not straightforward. Government is not ready for what they blacklisted them for. Even the government has not put in any major thing in place.

How?

They asked us to come and do survey,  register survey, when they put embargo. The people within there are embargoed. For now, you can’t even chart. When you want to do your register survey, you can’t even lodge it, because  already, they have put embargo. So, what are they saying, that every developer or anybody that is buying, should come and process their survey when they have already put embargo? This is just to tarnish some people’s business.

Aside from Lagos, how is it in other states?

I don’t think there are many issues in Ogun State than doing your due diligence. I don’t think there are more government’s issues over there. The same thing happens in Ibadan, Oyo State. I don’t see much government’s issue there. The only issue we have in those two states is due diligence. Number one, check the status of your land very well if it doesn’t fall into any government’s acquisition. Secondly, make sure that the land is genuine.  I think those are the two issues we are facing in Oyo and Ogun states compared to Lagos State.

People are also complaining of the rising land and housing’s costs. How can this be resolved?

I don’t have much to say on that. Personally, I do encourage investors to go for what they can afford. We have some investors that what they want is premium, and we have some that what they want is low-cost. So, for my company, what we focus is  low-cost for now. This is not because we don’t want to do premium, but the current base we have now is low-cost.  Instead of buying a land of N100 million, why can’t you look for some areas, still under-developing but have tendency to develop in the nearest future? Do you understand? So, that’s what I focus on. But for housing development selling at N100 million, how do I sell it to my clients at N50 million? I don’t support that.  One of the challenges we have in real estate is people cutting corners. I can only advise that if you  don’t have the ability to buy premium, go for the low-cost. So, that’s my own way of tackling those challenges about housing deficit.

What are you offering in your estate?

This year, we changed our tactics to some extent. Most of our investments are close to where people are living, so that if you invest in our property, we have the assurance that in the next two, three years, you can start living in that environment where we have our property. That is the first tactic.

The second tactic is that, having understood that there are financial difficulties in the country, and the fact that people need to generate more income so that they can survive, we now decided to go into agricultural real estate.

That’s the project we are working on currently. The project is all about cocoa. So, the plan is that we are selling land per acre.

Currently, we are selling land at N3million at Abeokuta, Obafemi -Owode area to be precise. We are selling per acre and  not  per plot. One acre is N3 million. This is a pre-launch price.

So, what comes with this one acre?

We are planting 400 seedlings of cocoa on one acre of land. We have some experts who are supposed to nurture it for the next three years. So, after three years, we are assuring all our investors that on this land, they will be earning between N5 million to N8 million on a yearly basis, starting after the first three years.

This gives the assurance and  guarantee that they will earn this income in another 25 years to 30 years. We are saying that if you invest N3 million, you will use it to buy one acre of land. Then, we plant cocoa for you, and help you to nurture it. After three years, you  have the capacity to earn between N5 million and N8 million annually  for the next 20 years.

For the next 20 years?

It’s over 25 to 30 years, because cocoa has a longer lifespan.

We are getting positive, and we are not the first one to do that; we have other real estate companies that have done that, also.

So, what is the payment system like?

If they wanted to pay outright, that is N3 million, and that payment is within a month. If they want to structure their payment for six months, we are giving them at N3.5 million. So, with an initial deposit of N1 million, we can spread the balance for the next six months.

You said earlier that the wave of building demolitions in Lagos is discouraging investment, but the same exercise occurred in Ibadan, Oyo State. What do you have to say?

They politicised that. There is what we call Circular Road. This Circular Road has setback. So, there are some people that built inside that setback. Do you understand? A lot of Ibadan people are not charting their land before they buy it. Did you hear any real estate companies shouting on that? No! It’s individuals. People that bought one plot from Omoonile and they started building without  doing due diligence. So, those are the issues that happened in Ibadan. They are totally different from the one in Lagos.

What’s is your advice to the people buying land for the first time?

The first thing is to do due before parting with money.

Due diligence simply means that when you are buying land, buy from the right source, and then you do your verification; you check the status of the land, you get the government plans for that area, and ensure that you are not buying into waterways, and then, you quickly perfect your documents to the extent of having your Certificate of Occupancy.

What is your advice for your would-be customer, or clients in the new year, going forward?

I just want to encourage them that in respect of any discrepancy or form of discouragement they may be facing or hearing from Nigeria, they still need to invest in real estate. It is the only thing that can guarantee their financial victory. People should not lose trust in investing in real estate.