Notwithstanding the crippling impact of the economic downturn in Nigeria, foreign and local investors are still confident in the country’s economy and have therefore continued to invest in the real estate market as a preferred destination.
Analysts note however, that the confidence in the face of widespread lamentation by both individuals and institutions is not unconnected with the compelling fundamentals, which the country’s real estate market presents to investors.
“The Nigerian housing sector is supported by favourable demographics and a huge supply deficit; this is a country of 182 million population growing at 2.5 percent; 80 percent of this population is living in unplanned poor settlements with poor living conditions; the country’s housing stock is only 11 million units,” reveals Eric Fajemisin, CEO, Stanbic Pension Managers.
These are not the only attraction to the country’s real estate market. Hotel room rates in the country are encouraging and the market is quite large. Again, the country has a housing deficit that is estimated at 17 million units and for its large population; there are only 300,000 mortgages.
It is for this reason that a couple of investors came into the market recently to invest. One of them is Sogenal Group and their partners, Eris Property Group, who have perfected plans to build a 14-storey office space on Kingsway Road in Ikoyi, where the likes of Heritage Place, Kingsway Towers, Alliance Place, etc are already scrambling for the skyline.
The Sogenal Group, a conglomerate with interest in oil and gas, financial services, telecommunications and real estate, has been involved in the acquisitions of Transcorp Hilton Abuja, NITEL, and Sapele Generating Plant. The planned ‘Sogenal Tower’ represents another landmark investment by the group, and according to Funso Lawal, chairman of the Group, “from the beginning, Sogenal’s leadership sought to come up with a development that would be representative of our corporate ethos of doing the right thing.”
Eris is a property development and services group, which provides a range of commercial property skills in the South African and sub-Saharan African markets. The Group employs 405 people across 7 offices and understands that all levels of property-related decisions are critical to the long-term success of all stakeholders. Sogenal Towers is part of its proprietary investment.
The 12,000 square-meter office tower which holds promise to invigorate urban life and serve as a beacon for Sogenal Group will provide up to 1,000 new jobs in the course of construction and is expected to be completed by the second half of 2018.
In a similar development, Eagle Hospitality and Leisure Limited is currently in Benin City, Edo State capital, to build a 4-star hotel which will be operated by Starwood Hotels and Resorts Worldwide Incorporated, using the Four Points by Sheraton Brand. This is one of their top brands and it is a fast growing brand meant to cater for the needs of all cadres of the society.
Recently, the hospitality firm entered into a management agreement with Starwood Hotels for the establishment of the Four Points By Sheraton Hotel estimated to cost $29 million (about N10 billion).
According to its director, Dominic Isunuoya, the management agreement was historic, explaining that they were quite pleased that they had reached the milestone. “It is an indication of so many other things that need to be done. This is just the first step. We are going to bring the consultant to site to commence work on the project.
CHUKA UROKO
