Globally, the outgoing year was, indeed, a
defining moment for the property market with many regions of the world, notably
Africa, Asia, Europe, United Arab Emirate (UAE), etc, recording significant
recovery and growth across various segments of the market.
In Africa, particularly in sub-Saharan Africa
including Nigeria, Ghana, Sierra Leone, Cote d’Ivoire, among others, 2013 saw
continued growth driven by demographics, rising spending power and the
softening in the economy of the developed world.
In South Africa, the story was, however,
different with price index for medium-sized apartments falling by 2.01 percent
year-on-year to third quarter (Q3) 2013 and, according to Global Property
Guide’s Q3 2013 housing prices survey, prices declined by 15.5 percent in the
country during the global financial crisis.
Dubai, Nigeria, UK and the US markets which were
badly affected by the global economic crisis had struggled through that period
to the last quarter of 2012 when, in a dramatic way, prices started climbing
with investor-appetite growing to appreciable level.
Global Property Guide, a research house and
website dedicated to residential property, reports that of the 24 European
housing markets included in their survey, 19 performed better in Q3 2013 than
the previous year, disclosing that prices rose 1.8 percent in the UK.
Dubai, the survey adds, remains the best
performer, explaining that house prices soared by 21.37 percent during the year
to Q3 2013, such that luxury residential towers in Dubai now sell like pancakes.
It cited Skai Properties, a new luxury apartment complex located on the Palm
Jumeirah that sold 98 percent of its 702 units in September 2013.
The survey says United States saw prices rise by
6.1 percent, adding that overall house prices rose in 32 of the 51 advanced and
emerging market economies in the IMF’s Global House Price Index.
In Nigeria, it was not just a story of visible
recovery, but also of growth, especially in the commercial segment of the
market where analysts estimate that investor-confidence and interest soared,
seen in the quantum of investment in the development of retail centres and
office buildings.
“Across the country and also West Africa, there
has been continued growth in retail. It is happening most in countries like
Nigeria, Ghana, Cote d’Ivoire, etc. New retail facilities are being built and
new retailers are coming in. That is one major thing that has happened in
2013,” said Obi Nwogugu, head, real estate unit, Africa Capital Alliance, an institutional
equity investment firm.
Nwogugu, who spoke in an interview with
BusinessDay, added that the office space market has also seen continued growth,
estimating that “in Lagos, between Ikoyi and Victoria Island where you have
business hub, there are close to 250,000 square metres of office space coming
into the market”.
Across various segments, there was some level of
movement, even though Erejuwa Gbadebo, former CEO, Broll Property Services
Nigeria, sees “a bandwagon thing” in the movement in some of the segments. She,
however, agrees there was a difference from what obtained in the market in
2012.
In the residential segment of the market, UAC
Property Development Company (UPDC) plc and Lekki Gardens were quite bullish,
addressing the narrow upper-end market with their mega million naira products.
Estate Links Limited, a local and international
real estate services provider, also made a little impact with its 18-unit ‘The
Lofts’ which targeted the middle-income earners, selling at N25 million per
unit.
Growth in low-income housing was quite remarkable
as a few developers found meaning and sense in addressing this largely
un-served market with blocks of flats, apartments and bungalows.
Analysts observe that this new interest was driven by rising vacancy rate
in the high-end market.
A good number of low-cost housing came into the
market from Common Sense Company with its 100-unit Signature Estate comprising
one-bedroom bungalows available in detached, semi-detached and terraces at N3
million as minimum entry level.
Avenue to Wealth (A2W), a cooperative partnership
scheme, also offered studio apartments selling for N3.4 million on
outright payment, while Multi-Purpose Infrastructure Development
Construction (MIDC) also came into the market with 1,000 low-cost housing units
at its Teju Royal Garden in Lagos.
In what Chudi Michael Ejekam described as a
revolution, the commercial properties were a toast of investors in the outgone
year with retail malls and office buildings delivered and new ones initiated.
Heritage and Cocoa Malls in Ibadan, Oyo State,
opened for business; Omais Homes’ Trinity Mall in Lagos also opened for
business, while UPDC started construction on its N5 billion Festival Mall in
Festac Town, Lagos. Actis, an international private equity investment firm, is
building the Ado Bayero Mall in Kano and the Jabi Lake Mall in Abuja with Duval
Properties.
While The Mansard Place and The Brook were
completed within the year by Mansard Insurance and BusinessDay Media Limited,
respectively, Actis started work on its 14-floor Heritage Place in Ikoyi, and
RMB Westport also took off with its 15-floor The Wings.
Another significant development in this market
was the mortgage sector reform which saw the primary mortgage banks (PMBs)
migrate from the statutory N100 million to N2.5 billion and N5 billion for
state and national operations, respectively.
Of more significance was the setting up of the
Nigerian Mortgage Refinance Company (NMRC), a private sector-led secondary
mortgage refinance company being promoted by the Federal Government with $300
million seed capital provided by the World Bank. It is expected that when the
company becomes operational from the first quarter of this year, it would
change the face of mortgage banking and housing finance in the country, giving
hope of improved homeownership level in the days ahead.
Written by Chuka Uroko – Businessday
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