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Real Estate

Landlords offer incentives to counter “work from home” induced vacancy rates

The future of work has always been remote, however, the COVID-19 pandemic has accelerated the pace.

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Real estate, Landlords offer incentives to counter "work from home" induced vacancy rates

The adverse effect of the COVID-19 pandemic continues to take its toll on all sectors in Nigeria, including Aviation, Oil & Gas, and Entertainment amongst others and the Real Estate sector is not left out.

The changes made to the ‘8pm to 5pm’ white-collar jobs, due to the imposed lockdown as of April, 2020 has had a ripple effect on the sector. As the axiom goes, “When life throws lemons at you, make lemonades.” This exemplifies how corporate organizations in Nigeria have been able to turn the pandemic woes in their favour. In what seemed like a pipe dream about a year ago employers now grant access to their employees to work from home wherever possible.

READ: Is this Pandemic the death of coworking Spaces?

In one of the top Power distribution companies in Lagos, the staff rotate their ‘work from home’ initiative on a daily basis; such that when a staff resumes at the office today, they are scheduled to work from home the next day. In other notable cases, firms whose work description allows for it, the staff work from home permanently, unless when they have something imperative to do at the office premises.

This huge shift in the work structure has necessitated employers to rethink the need for their large rented office spaces, and many opting and negotiating for smaller office space, after their current rent expired.

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READ: Experts state how COVID-19 affects Nigerian real estate sector

With a major shift as this, Property owners are bound to suffer some setbacks, especially at a time when economic hardship has made Nigerians penny-wise. They feel the weight and have been forced to brainstorm on possible solutions to keep their property generating money, or risk a large empty space of air for months and possibly years.

Nairametrics interviewed several Property Managers in Lagos, and some said it became non-negotiable for them to introduce attractive incentives, following incessant pleas by their tenants to reduce the rent, and in some cases have asked to share the office space with another tenant to reduce cost.

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READ: Key ‘side-hustles’ Nigerian Bankers supplement their income with

Head, Administrative Department in an oil servicing firm around Norman Williams street Ikoyi, Lagos, John, explained that his firm had approached the property manager that it wanted to reduce the occupied spaces from three floors to a floor and half after the rent expired in July 2020.

He said, “We had to take the decision when it became obvious that we do not need that much space because more than half of our staff have been working from home since the lockdown. The truth is that they were more productive working from home than from the office. When we approached the property manager, initially he was delighted hoping to let out the space in no time. But when it dawned on him that more corporates were investing more in remote working or digital deliveries, he called back after two weeks, asking us to occupy two floors and reduce our tenancy period from 4 years to 2 years.”

READ: Bank’s Credit to Nigeria’s Real Estate sector hits 5-year low

In his own case, David, a property manager of one of the e-commerce pharmacies, told Nairametrics that the property owner, who he represents, also agreed to focus more on flexibility in leases and much shorter terms, especially as the pharmacy decided to shut two of its centres, as it introduced instant delivery service where orders could be placed via WhatsApp or phone calls during the lockdown.

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He said, “The new normal in the real estate sector is that several corporate firms had realised they could achieve more either working from home or implementing innovations like instant delivery after orders were taken via social media tools.We had to consider flexible leases because it is better to get something from them than seeing vacant office spaces for months or years.”

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READ: Working from home: Nigerian bankers share their experiences  

Post-COVID: Experts share expectations

Estate Intel, a real estate and construction information portal

In its recent report titled, ‘Nigeria’s Real Estate and COVID‘ it stated, “The future of work has always been remote, however, the COVID-19 pandemic has accelerated the pace at which traditional workplaces consider this option. Remote work options are expected to become a more standard requirement from employers, leading to lower space requirements and offices more focused on collaborative spaces. Many landlords have been incorporating attractive tenant incentives to remain competitive in recent years but we expect incentives moving forward to focus more on flexibility in leases in lieu of creative discounts.”

Suzanne Oluwole, Partner at Trillium Real Estate

“Occupiers and investors are adopting a maintain status quo stance where possible, whilst they wait and see. The full effects of the disruption caused by the pandemic still to come will transcend any shock wave the economy has ever faced before, and real estate is not immune. The trajectory of recovery we had been experiencing has been greatly affected and because this time it’s global, it may take some time to return to pre-COVID-19 levels.”

In all, it is expected that reduced usage due to the lockdown and pandemic will encourage occupiers to request concessions, while uncertainties will slow decision making.

Abiola has spent about 14 years in journalism. His career has covered some top local print media like TELL Magazine, Broad Street Journal, The Point Newspaper. The Bloomberg MEI alumni has interviewed some of the most influential figures of the IMF, G-20 Summit, Pre-G20 Central Bank Governors and Finance Ministers, Critical Communication World Conference. The multiple award winner is variously trained in business and markets journalism at Lagos Business School, and Pan-Atlantic University. You may contact him via email - [email protected]

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Real Estate

Real Estate: A universal convertible survival tool

If you have not taken investing in real estate serious before now, it is high time that you begin to.

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Real Estate in Lagos

Abraham Maslow’s hierarchy divides human needs into three (3) broad categories. The basic needs category describes safety and physiological needs such as food, water, and rest. The second category describes our need for esteem, love and belonging. These are psychological needs. The final category describes self-fulfilment and self-actualization needs.

I like to think that human needs as presented in these three broad categories are first emotional. Remember that saying about a hungry man being an angry man. Even food trigger intense emotions yet we need food to survive. Meeting these needs deliver emotional fulfilment and reward. The amazing thing is that real estate meets needs across the hierarchy from bottom up.

READ: Would you have invested in buying a plot of land in Abuja FCT in 1980?

READ: Real estate: Experts lament over challenges in the industry

Let me show you how.

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First, let me describe real estate.

Investopedia describes real estate as the land along with any permanent improvements attached to the land. Whether natural or man-made—including water, trees, minerals, buildings, homes, fences, and bridges.

This description means that there are many ways to look at real estate. Shows how convertible it truly is. Don’t get stuck looking at it from just a perspective.

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READ: Key ‘side-hustles’ Nigerian Bankers supplement their income with

The Basic Needs: These are also physiological needs; food, water, warmth, rest, security and safety. Food in agriculture and water is from the ground. Warmth and rest do not happen in isolation. We derive them from a subset of real estate such as a built property. Likewise, within a bounded area is where you feel safe and secure.

When you provide basic needs to your family or other people, you derive a sense of fulfilment. This is regardless of the provision being free or paid for. Sometimes you feel you have self-actualized doing this.

READ: Square buys $50 million worth of Bitcoins

This is why it feels terrible when parents are unable to provide shelter for their wards. Especially when these wards are still financially vulnerable. It even feels more terrible losing your shelter when your ability to earn an income has now reduced as a result of advancement in age or other reasons.

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When your basic needs are met, you are in a positive emotional state and motivated to be more productive. This is why the end police brutality protest agenda includes demanding improved remuneration and better living conditions for officers of the Nigerian Police. Force.

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READ: Thrive Agric: “Where is my money?”

The Psychological Needs: Ever wondered why some people buy houses on certain streets and neighbourhood? While there are several reasons, chief on the list is because they want to belong and remain within a certain societal class. Psychological needs are the esteem, belonging and love needs. We crave these emotions at varying degrees and want to have them fulfilled. Real estate is a tool that is used to meet these needs. You have been using real estate to meet these needs and you do not even know it! You derive esteem or have a sense of belonging to a certain class when you occupy or use real estate in certain locations.

READ: Landlords offer incentives to counter “work from home” induced vacancy rates

There is also the case of perception. Sometimes, people will only regard you based on your house or property investment location on the earth’s map. In many cases, people will only do business with you because your office has a certain address. Apart from the perks of having a Victoria Island business address, it is also to meet these psychological needs.

READ: Everything you need to know to become a real estate investor

The Self-fulfilment Needs: Self-actualization is achieving one’s full potentials or attaining a high level of creativity. The Dangote Foundation once donated ₦1,200,000,000 worth of student accommodation to the Ahmadu Bello University, Zaria. Going by the history of the foundation’s activities, finding a deeper level of fulfilment is at the core. By that donation, he has contributed to a people-centred purpose.

While donating accommodation facility deriving a sense of fulfilment, a basic need for the students is being met using real estate. The students will be getting an education with some level of comfort. It then becomes easy to get more creative because there is now shelter besides security.

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READ: DEAL: Custodian Investment agrees to buy majority stake in UPDC

If you have not taken investing in real estate serious before now, it is high time that you begin to. It is a convertible tool that meets almost all human needs. Real estate makes being a human being possible. It delivers emotional fulfilment. It supports the essence and existence of life.

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Therefore, you should pay attention to how you invest in real estate and convert it to meet your needs. Especially if you are not satisfied with the status quo or you are ambitious. Extracting optimum value from real estate does not happen by chance. It requires intentionality.

READ: Key things to consider when investing in real estate investment trusts

5 simple ways to be intentional about real estate investing.

  • Know how you respond to real estate. We respond to real estate differently and this has been proven by research.
  • Check what you know about real estate investing and deriving value from it. While some people are fine with just having a home, you may want more than having a home. How you approach cash flow generating real estate is different from how you approach home-ownership in Nigeria.
  • Be real estate investment literate. Even when you plan to just buy a home. Due to real estate investment illiteracy, people end up losing their homes despite all the sacrifice to own one. You don’t want to have that experience.
  • Read biographies of people who have legitimately extracted value from real estate. Remember it is universally convertible. For the ambitious investor, you can draw lessons from the experiences of other investors.
  • Have a clear and relevant goal about what you wish to achieve using real estate. Your wealth goal is unique to you. Achieving your goal will also not be in an exact manner that someone else will achieve theirs. Find out what works effectively for you.

READ: Thrive Agric drama: What it means for Nigerian investment startups

How you see real estate and being intentional about how you invest in real estate, reduces waste of resources and incidence of loss as is now common. You are also positioned to extract optimum value from your investment.


 

Author Profile

Oluwakemi Adeyemo is a sought after real estate investment advisor. The expert who helps you to stop losing money in real estate. She delivers sure value real estate services using technology.

Her job is to get to know your investment goals and provide you with expert analysis on real estate investment options. She researches a lot, consults and scrutinizes real estate investments so you don’t have to.

She believes that real estate is designed to sustain human existence and it is the bedrock of wealth creation. Therefore she helps you gain real estate investment literacy which increases your confidence as an investor, shows you how to prevent losing money to optimize profit and create wealth.

https://www.assuredrealestateprofit.com/

IG handle https://www.instagram.com/realkemiadeyemo

Twitter handle https://www.twitter.com/realkemiadeyemo

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Real Estate

Real estate: Experts lament over challenges in the industry

Experts in the real estate sector have disclosed new challenges facing the industry in the post lockdown era. 

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Despite the fact that out of the N3.26 trillion proposed Capital Expenditure for the 2021 budget, Works and Housing has the highest capital allocation of about 12.42%, which is N404.64 billion; Real Estate experts believe there are more hurdles ahead for property owners.  

They argued that the sector needs government intervention now, as it is struggling to survive the COVID-19 pandemic. 

READ: Landlords offer incentives to counter “work from home” induced vacancy rates

Real estate practitioner and the Vice President, Lagos Chamber of Commerce and Industry (LCCI), Gbenga Ismail, expressed his displeasure over what he described as the government’s negligence and insensitivity to the sector.

During an interview on Channels TV, Ismail explained that the real estate sector has been taken for granted by everybody, including the government. He said, “Government does not realize what it has to do for the sector. When the government is offering bailout or supports for other sectors, it needs to consider areas where the building materials are coming from, like developers, interest rates, contractors who are going into these areas, because they would be affected. If they get affected by any of those variables that have been affected by the lockdown, they won’t be able to deliver. If you look at the stakeholders’ situation in the real estate value chain, from acquisition, construction, and all the areas connected, there must be a way for the government to intervene, especially taxes and levies, without necessarily having to put money in someone’s hands. But the things that add to the cost of the building must also be looked into.” 

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READ: Real Estate Developers express fear over selection process of CBN’s N200 billion Housing Fund

Real Estate Analyst, Martin Uche, is optimistic that the remote work policies by some corporate bodies, especially the multinational firms, will affect the Lagos A-Grade office market, not now but during the next round of renewals. 

According to him, the international corporates in the financial, technology, and management consulting sectors, who account for up to 70% of prime office tenants in Lagos, are increasingly adopting remote work options, and this will impact the Lagos A-Grade office market during the next round of renewals. 

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READ: Healthplus: NASSI asks FG to intervene

In one of his report, he said, “Though many offices are starting to open up, the enforcement of varying levels of lockdown as a result of the coronavirus forced corporates to temporarily close their offices in the first half of the year or introduce new work policies to sustain business operations during the period. In response, most companies allowed staff to work remotely during the lockdown period. Though working remotely was a means of keeping businesses running in the heat of the pandemic, it is clear that many international corporates will not be returning to the status quo. Instead, they are considering a number of options centered around downsizing the space they currently occupy, as many have realized that they can operate without the entire team in the same brick and mortar space.” 

READ: Scaling in Nigeria’s fashion industry is tough work – Ugo Monye 

We look forward to the changes that remote options will bring to the market during the next round of renewals. 

A Director at PricewaterhouseCoopers, Bola Adigun, had explained that the growth of real estate is dependent on the health of the economy and if the economy does well, the industry would do well  

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She said, “The private sector should look at ways by which they could partner with government to ensure that the nation has a sector that is profitable, bankable, and working. There are multiple areas by which the real estate operator could benefit from the budget.”

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Real Estate

Real Estate Developers express fear over selection process of CBN’s N200 billion Housing Fund

The developers tasked the apex bank to ensure genuine developers with sincere intentions benefit from the preogramme.

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Real Estate in Lagos

Real Estates Developers have expressed fears regarding the transparency of the selection process of the Central Bank of Nigeria’s N200 billion Housing intervention programme targeted at low-income earners.

They tasked the apex bank to ensure genuine developers with sincere intentions benefit from it in the public’s interest.

This was disclosed by the Chairman, South West, Real Estate Developers Association of Nigeria (REDAN), Bamidele Onalaja, according to Punch.

READ: Nigeria invest $9.4 million in Shelter Afrique; emerge as the second largest shareholder 

He explained that he doubts the workability of the price tag of N2million on the housing units except in places such as Gombe, Jigawa and others but not in major cities across the nation.

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Back story: Nairametrics reported when the CBN approved the sum of N200 billion as mortgage finance facility to the Family Homes Fund Limited (FHFL) and targeted at low-income earners.

According to a circular, which was issued by the CBN and seen by Nairametrics, this financing initiative is to be implemented in collaboration with the Family Homes Fund Limited as the lead developer, as it is introduced to support the Federal Government’s Economic Sustainability programme.

READ: Real Estate: Still not out of the woods

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This fund is to fast track the construction of 300,000 homes in the 36 states of the federation and the Federal Capital Territory and to create up to 1.5 million jobs in 5 years

Onalaja, who is also the Managing Director, RevolutionPlus, advised Family Homes Fund Ltd to ensure they give only to those who were qualified with a track record of providing affordable housing.

He said, “Land acquisition is a major issue but it is not impossible. In states such as Jigawa and Gombe, a one bed may be possible excluding land.”

On the criteria for qualification, Onalaja stated that a developer should have genuine land with title while the CBN would provide a consultant.

Explore the Nairametrics Research Website for Economic and Financial Data 

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He said the association was elated because the facility type was a term loan to enable FHF to finance the construction of social housing units for low-income earners for a three-year tenor from the date of disbursement.

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According to a statement issued by the association on Sunday, the fund is to fast track the construction of 300,000 homes in the country, in addition to creating up to 1.5million jobs in five years.

READ: UAE firm partners DBillions to address housing shortages in Lagos

However, he lauded the initiative, adding that if sincerely applied, it would achieve the long dream of affordable housing by the public.

“In that regard, the programme will deliberately aim to revitalise local manufacture of construction materials. If the government is able to effectively handle their side of the bargain, then the whole programme will run through,” he added.

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