VENTURES AFRICA – Africa’s real estate industry is experiencing exponential growth as economies across the continent record impressive growth, with the real estate market in Nigeria alone worth $360.3 billion, according to the Federal Mortgage Bank of Nigeria.
With Africa’s population expected to double and hit 2.4 billion by 2050, economies are certain to forge on their growth paths, rural-urban migration is also to increase, making cities swell and force newer ones to spring up.
The real estate investment industry in Africa, like the rest of the world, will find itself at the center of rapid economic and social change in the coming years, which is transforming the ‘built environment.’
Most of these trends are already evident, says professional services firm, PwC, but their implications may be underestimated.
3invest, an online real estate information portal based in Nigeria is one of the few players in the industry who are looking into not just the current state of the real estate industry in Africa, but also what the future holds, and has therefore organised an event that will see the largest convening on African real estate.
In its third year, Real Estate Unite conference will dwell on the theme, “Igniting the F.I.R.E: Where Lies The Key?” A new platform for women in Africa’s real estate industry will also be inaugurated at the event.
Ruth Obih, CEO of 3Invest spoke to Ventures Africa on what participants at the event and other stakeholders in the real estate market should expect from Real Estate Unite 2014.
What is Real Estate Unite to You?
Real Estate Unite is the 3Invest Ltd response to the networking gap we found in the real estate industry. When we began, multiple stakeholders were operating in silos without proper collaboration or transfer of knowledge and opportunities. We conceived the event as a way to bring together the active and aspiring players in the sector to collectively unlock opportunities in the sector. We broke Real Estate Unite into three tiers to adequately address the needs of the industry: we have the awards which celebrates excellence in the industry and helps put innovative, successful business and individuals in the spotlight as a way to raise the standard of performance; we have the conference where attendees get to benefit from the experience and initiatives of experts as well as actively debate issues affecting their real estate businesses and projects; and finally, we have an exhibition to showcase products and services related to the industry. You will be surprised how many other sectors are dependent on what we produce in our industry. Real Estate Unite is a common ground for everyone to find out more.
How would you rate the last two editions?
The past two events led us to where we are today. In 2012, the maiden edition of Real Estate Unite had as its theme, “Jumpstarting Nigeria’s Real Estate for Global Investment”; an event that opened up a lot of minds, resources and networks for the industry. After taking off, we then went on in 2013 with the theme of “Advancing Nigeria’s Real Estate for Economic Growth” because the industry was now operating with a view that we had a strong role to play in promoting economic growth in the country. This year, we have identified four factors inhibiting us from enacting on the results from last year and these are Finance, Infrastructure, Red Tape and Education.
So you see, the event is very strategic and important in finding solutions to position the industry for its growth.
In terms of impact assessment, how would you rate its impact on the real estate sector?
The impact of Real Estate Unite has been phenomenal and it further strengthens our resolve to build the event from year to year. Remember, I said that when we started, everything was operating in silos. Now, we have increased collaboration. If you even look at the variety of exhibitors we have this year, you will see that so many businesses are stepping forward to claim their share of market space. We are bridging the gap between products, services and the consumer market. The event is for owners, occupiers, investors, developers and policy makers; and these could be anyone out there. We are helping to set standards with the awards categories and encourage businesses to strive for global standards. We are highlighting new market opportunities and providing platforms for new networks within the industry to be created and thrive.
How do you see the real estate industry in Nigeria?
We are the best indicator of growth in this country. Currently, we account for 7.6 percent of the nation’s GDP and this is because we are not fully leveraged. If we were, I can assure you, we could contribute as much as 40 percent because there is no sector that does not have a real estate component. Is it education? Well, without the proper structures and technologies that enable good learning, we will not propel the nation forward. Is it finance? Real Estate offers one of the safest invest opportunities for any individual because property usually appreciates in value over time. When finance comes in, new structures go up, occupiers move in and pay, the money rolls out at a profit over time.
The issue we have is the gap in supply and demand. We have a deficit of over 18 million in affordable housing. We are also lagging behind in global best practices because we have not streamlined many of our practices.
This is why Real Estate Unite is important. Here is where we bring everyone up to speed, unveil opportunities and introduce new innovation. Now, you have many property websites offering virtual tours; the information you provide as an agent to your client is much more than the square footage of a space; you have to connect them with the community.
In my opinion, in the next five years, we will be having a much different discussion on real estate based on some of the changes happening now; and some of them at Real Estate Unite. This year, we are introducing a new market opportunity in healthcare real estate highlighted by the recent outbreak of Ebola; and launching the first African Women in Real Estate (A.W.I.R.E) network to promote increased participation of women in the industry.
What do you think are the challenges?
For me, it is the sheer scale of demand versus supply. Like I mentioned before, we have a huge deficit in access to affordable housing. The population is youthful, entrepreneurial and yet access to affordable retail/ commercial space for SMEs is dismal which then means that if a startup is spending up to 60 percent of their operating costs on space, they are losing resource to have been put towards marketing and by extension, building their business. The cost of land is so astronomical that it automatically shoots the cost of construction through the roof with the result that the price on a new property is inaccessible to the common man.
But, I am optimistic that that will change. So many initiatives are being introduced at the state and federal level to open up opportunities to the average Nigerian.
Real Estate Unite 2014 has a theme: F.I.R.E. Can you explain in detail what you mean by this and what you try to achieve?
Our theme for Real Estate Unite 2014 is “Igniting the F.I.R.E: Where Lies the Key”. F.I.R.E represents four key factors that we have identified as having the key to catalyse the industry. F represents Financing. I represents Infrastructure Investing. R is for Red-Tapism or simply put, bureaucracy; while E is for Education. We are asking relevant questions such as: How can finance be raised for building projects? Why should infrastructure investing be addressed? How can red-tapism be eradicated from the housing sector? What is the way forward for the education sector in terms of investing and security? We are even going to have a debate to explore if any one of these factors needs to be given precedence over the other, or we have to tackle all four in equal measure.
We are confident that with the way the agenda is structured, we will come away this year with decisions and new initiatives to drive the industry forward; using financing, infrastructure, red-tape removal and education as the launch pad for growth.
You also what to launch or focus Women in real estate in this year’s event, what informed this?
This year, we are launching the African Women in Real Estate (A.W.I.R.E) network as a first of its kind platform to promote inclusion and participation of women in the real estate industry. The reasons for an African chapter of Women in Real Estate (W.I.R.E) are many because simply put, any business sector that is not enabling to women is not on a sustainable track. Gender diversity and inclusivity ensures better outreach for products and services. Real estate—and by association construction and development—is a core investment avenue as well as a strong indicator of economic progress for any nation. However, women are grossly disadvantaged and underserved whether in ownership, access or entrepreneurial opportunities within the sector; thus leading to disparity and unsustainable growth. This is why it is time to launch A.W.I.R.E as a networking forum for African women (AWIRE) in the industry to come together to share best practices and promote the growth of the sector.
Other sectors are reforming to do the same. Financial services, healthcare, judiciary and legal services; just to name a few. Real Estate cannot lag behind. If we had more women having access to the resources to own, invest in, develop and manage properties whether for private or commercial use, the industry would be well on its way to reach and/or surpass its 40 percent contribution to the national GDP.
When you invest in women, and invest in real estate, you invest in a community. This is what A.W.I.R.E is about: a way to do all three.
How many exhibitors have you got their assurance for this year event so far?
We are going to be presenting a little over 50 exhibitors at this year’s event. The businesses showcase represent multiple sectors from policy, financing, real estate management, investment, retail, architecture & interior design, building & construction and even media.