The Association of Professional Bodies of Nigeria (APBN) met in Lagos recently. One of its major worries is the intensity with which foreign expertise is dominating the Nigerian market. Real Estate experts also aired their frustration on the development. A closer look at the nation’s Real Estate market however, would reveal that if care is not taken, the foreign-experts push might soon turn to shove.

In 2012, preparing for the first edition of the Real Estate Unite (REU) Conference and Awards; my boss, Ms. Ruth Obih and I had series of meetings with the GEMs 2 team. GEMS 2 is one of the four-tier Growth and Empowerment in States: a DFID-UKaid-sponsored scheme designed to generate employment and create wealth by empowering, principally, real estate artisans – brick layers, plumbers, tillers, etc.

Few months after GEMS 2 sponsored our Affordable Residential Real Estate Roundtable at the REU conference; I had a chat with Mr. Chu’di Ejekam, Director of Real Estate at ACTIS and we discussed, among other things, the high cost and limited retail spaces in Nigeria. Besides worrying that land consumes over 10% of the construction cost, Mr. Chu’di said the cost of having to “import” “labourers” and materials from countries such as Benin Republic and other neighbouring countries is high because employing local artisans is a daunting task.

Mr. Chu’di’s claims pontificate two of GEMS 2 mandates in Nigeria. Roughly defined, GEMS 2 is: 1) to technically intervene in creating activities in Nigeria’s 17 million housing market and 2) to train artisans in (modern) skill-set such that when the housing constructions begin, these artisans can be employable by most investors.

In sum, the two scenarios point to the fact that it is easier for a camel to pass through the eye of a needle than to get ‘qualified’ artisans in Nigeria. I had a taste of this reality too. I once hired a painter to work on my apartment; besides the fact that he made me buy more than the required containers of paint, I bet I’ll do a better job if I’d picked up the roller and painted myself.

The artisans are just a microcosm of our Real Estate system. At the Real Estate Unite 2013, Mr. Niyi Adeleye, Head of Real Estate Finance, Stanbic IBTC West Africa, didn’t mince words when he said there are just about six “bankable” Real Estate developers in Nigeria. We could go further to probe if these six are even wholly local developers.

In Real Estate finance, until the private sector and the World Bank came into the picture to give us the Nigerian Mortgage Refinance Corporation, NMRC, we all know that the Federal Mortgage Bank of Nigeria, FMBN, was almost in the dock of history.

Also, until the industry began to feel threatened by “imported” businesses, how many local Real Estate firms considered branding as an integral part of their business? Haven’t we all – in Prof. Timothy Nubi’s words – “been repeating the same challenges” at conferences over the decades? That is even when we take it upon ourselves to attend.

Nigeria’s real estate experts must understand that the market has changed. For example, commercial real estate and luxury apartments’ demands are on the rise because of foreign investors looking to invest in Nigeria. These investors will find it hard to put up with our “Nigerianess” in dealing with business.

For example, we bandy the concept of green building around when in fact there’s hardly any green building around. One fascinating feature of green building design that I have seen lately are designs which factored people with disabilities into their schematics. How many building can a physically challenged person access without help in Nigeria? These are some of the characteristics the new market is focusing on in Nigeria, and when local experts can’t even relate with the reality: the market will seek help somewhere else. It is as simple as that.

On the flip, local experts should not see the new trend as a threat. It is indeed an opportunity. The market is growing and with the pool of experts we have locally, the market can’t be sufficiently served without foreign influence in terms of service, quantity and expertise.

I must state that this is not to say there are no global-standard local firms in Nigeria; and I can name a few, but for the sake of space. What is core for our market is not to feel threatened or worried. We need more fora such as the APBN to challenge professionals to global best practices. When this is done, Nigeria’s Real Estate can also export expertise.

In real estate, we need more schemes that can improve the health of the sector. And again, we must understand that this kind of scheme can’t be achieved individually as a sector, but collectively as an industry. To borrow from Prof. Nubi again, our industry must begin to function “as a system”.

What’s your take on this development? You can engage me further on twitter or leave your comment below.

Written by: Olusesan Ogunyooye

2014-02-24