The founding Managing Partner and Deputy CEO at Purple Real Estate Company, Mr Obinna Onunkwo, has said that real estate is not just a sector for housing but also intersects with various economic activities, including agriculture, entertainment, and technology, each necessitating unique real estate solutions.
He highlighted the significance of combining real estate with construction as a major driver of economic activity. This was noted during Nairametrics’ Real Estate Outlook event themed “How to Succeed in Nigeria’s Real Estate in 2024 – Challenges and Opportunities in a High-Cost Environment,” on Saturday, March 9, 2024.
Onunkwo also stressed the importance of strategic investment, technological integration, and sustainable practices in navigating the changing landscape of Nigeria’s real estate sector.
Strategic investments, and technology needed for the real estate sector
He emphasized the need for enhancing facilities, technological innovation, and capital to improve Nigeria’s real estate sector to foster growth and adaptability, especially to meet millennials’ demands through innovative and sustainable models.
- “Technological advancements, particularly in digitization and remote work, offer new avenues for real estate development beyond traditional models.
- “Real estate is not just a sector for housing but intersects with various economic activities, including agriculture, entertainment, and technology, each necessitating unique real estate solutions.
- “On the infrastructure front, Nigeria faces a substantial need for investment to upgrade its facilities, calling for innovative financing and policy strategies to attract both local and foreign capital.
- “Moreover, the changing demographics, notably among millennials, demand frequent innovation in product offerings, aligning with global trends and the digital economy.
- “As the real estate sector evolves, it must embrace both technological advancements and sustainable practices to meet the diverse needs of its clientele and contribute to the broader economic landscape”.
Although the sector has opportunities, he lamented the rising costs of building materials such as cement and sand, as well as finished products for housing.
- “Despite the challenges, opportunities for economic scale and cost reduction in real estate remain viable.
- “Manufacturing, healthcare and entertainment centres are notable areas having increased investments in real estate”. Top of Form
Investment and policy dynamics in Nigeria’s real estate sector
According to Onunkwo, the real estate and construction sector should be recognized as a crucial part of the economy and should not be overlooked in policy and investment decisions.
He cited the importance of real estate, as seen in Dubai and China, which demonstrates its role in national economic recovery and wealth storage.
He decried the mismatch between the short-term financial instruments and the long-term nature of real estate investments, suggesting a shift towards longer-term financing models.
- The real estate sector, when combined with construction, forms a crucial part of the economy and cannot be overlooked from both policy and investment perspectives. Historical examples from Dubai and China demonstrate the strategic importance of real estate in national economic revival and wealth storage.
- However, there is a current mismatch between short-term financial instruments and the long-term nature of real estate investments, which necessitates a shift towards longer-term financing models.
- Pension funds, for instance, are underrepresented in real estate investments, suggesting a potential area for growth.
- Policy plays a pivotal role in shaping the real estate landscape, as seen in the differing success rates between regions like Lagos and Abuja compared to others, influenced by policies around land documentation and transparency.