Technology with its deepening penetration is, increasingly, emerging a strong gamechanger in every sphere of human activity and it is expected that, in the next five years, it will change considerably the economics of demand and supply in real estate. The change, which will also impact on construction, transaction and pricing in the sector, will be driven by already visible growth in online shopping, virtual office and estate agency practice which has yielded significant ground to on- line marketing of real estate products and services.
Online shopping in Nigeria, Africa’s largest economy by GDP size, is catching on like wild-fire with the proliferation of e-commerce plat- forms operating different business models. A recent report by Phillip Consulting, a leading research and training firm, shows that local online shopping sector grew from N49.9 billion to N62.4 billion between 2010 and 2011, representing about 25 percent increase within that period. Obi Ejimofo, the CEO of Lamudi Nigeria an online property market place—affirms, disclosing that his company has seen its traffic increase by 20 percent month-in-month out in the last 12 months.
“We launched in Nigeria in October 2013 and by January 2014, we had about 2,000 properties listed online; by the time we closed in December 2014, we had over 36,000 properties listed on our site; I can’t tell you what percentage of growth this could be, but it was monumental and beyond our expectation”, he said in an interview with BusinessDay. Expectation is high that, by 2020, global stock of investable real estate would rise by more than 55 percent to about $45.3 trillion, up from $29 trillion in 2012 and, according to Ruth Obih, a real estate consultant and services provider, while the world stands to gain from this, “growth in online shop- ping will continue to reduce the need for retail space”. Continuing, she said that “as workers increasingly work from home or satellite offices, the need for office space will decrease, and for developers, technology advances will make eco-efficient building more practical”.
On the flipside, technological advancement is already impacting on construction models being adopted by developers especially in office space market where, increasingly, products are being differentiated by energy-efficiency which reduces energy and other occupational costs by as much as 20 percent. For a combination of factors, including convenience, time saving and, in extreme cases, low capital outlay, some businesses now operate from what has come to be known as virtual offices which Chudi Ubosi, principal partner, Ubosi Eleh + Co, says is growing considerably.
“Demand for office space has dropped significantly; what is happening is that there is growth in what is called virtual office where people operate from the comfort of their homes or just take up a room, put a table with laptop and telephone and conduct their office businesses from there”, he emphasised. Ejimofo, however, noted that “just like anything else in Nigeria, where there is growth and opportunity, there is also the possibility of risk, especially the risk of people who have less ethical approach to market transaction”. He advises the public not to deal with people who engage in sharp practices, disclosing that his company was out to educate the public on the right thing to do.
“We try as much as possible to educate people on the state of the real estate business in Nigeria. This year, we want to increase and improve on the role that we play in the real estate space; we will be widening our scope of the kind of advisory job that we do”, he assured.
