Real Estate Sector In Nigeria
<p>The properties and development industry are arguably over 4 trillion naira.</p><p>It is a large industry and contributes over 6% to the country's total GDP. It is a very good investment with high returns, even for non-active participants.</p><p>From sales of undeveloped land to the developed lands for commercial and residential purposes, to build units for direct sales, rents, or lease.</p><h2><span style="font-size: 14pt;">Current Scenario in Nigeria</span></h2><p>Despite these industries' beautiful features, the risk could sometimes be as high as the ROI. These risks are borne majorly due to land insecurity and government non-regulation. Businesses and individuals are either losing their properties or are in an unending legal battle.</p><p>Some risks involved are :</p><ul><li style="list-style-type: none;"><ul><li>Proper identification of stakeholders, well-executed deed of assignments, PR, etc., seem insufficient in securing your properties.</li></ul></li></ul><p style="padding-left: 40px;">Last year I worked with some foreign investors in developing a real estate firm, and the maiden estate is yet to kickstart because of new development on the land and the need for massive ratifications despite 100% duly diligence, investigation, and perfection that was achieved before, over 700-million-naira deposit on the land! And the list goes on!</p><ul><li style="list-style-type: none;"><ul><li>Other risks are non-credibility, unprofessionalism (both from personnel and agents), and fraud.</li><li>Unstructured: Real estate is one of the country's most unstructured and undisciplined industries! It is filled with questionable investors and owners and unqualified professionals running the business.</li><li>Products are being ditched out massively to no particular end users. Instead, it is being rotated into the hands of investors under the illusion of investments that most are already regretting or will soon regret.</li><li>Demand and Supply: The basic principle of Demand and Supply is not being practiced in the industry. Market survey, which will lead market segmentation and focus, will lead to well-designed business model, whose proposal will be customer-centric with scientific strategies, which is strange to many of the players in the industry.</li><li>Marketing communication: unrealistic and deceitful marketing communication through campaigns. A crop of unprofessional human resources dominates the industry, from shoddy legal practices to non-professional construction personnel, to un-proficient sales personnel that know nothing about basic science and the process of sales but go out there ruining the already damaged credibility of the industry! </li></ul></li></ul><p style="padding-left: 40px;"> </p><p><strong>Negative Effect of the Agent/Agency </strong> </p><p>I was sad some years ago when interviewing a candidate for the post of Sales Manager, he told me it was okay, but he could not join my team because of organization polity he will have to do with, reporting, doing it normally, etc. </p><p>The agents disrupt the pricing that ought to be set by values, demands, scarcity, competition, etc., instead based on their greed. The lies lure their buyer into closing sales and result in no customer satisfaction, retention, nor reference that should have been established. And the management they leave to the firm they sold their products.</p><p> </p><p><span style="font-size: 10pt;"><em>This article was contributed by our expert <a href="https://www.linkedin.com/in/abimbola-adefolalu/">Abimbola Adefolalu</a></em></span></p><p> </p><h3><span style="font-size: 18pt;">Frequently Asked Questions Answered by Abimbola Adefolalu</span></h3><h2><span style="font-size: 12pt;">1. What are the main risks of real estate ?</span></h2><p><span style="font-size: 12pt;">Some of the risks involved in real estate are Administration, bad locations, Price Inflation, negative cash flows, structural problems, etc.</span></p><p> </p>
KR Expert - Abimbola Adefolalu
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