As we all await what could perhaps be one of the most momentous events in real estate and political history, the swearing in of real estate tycoon PEOTUS, (President Elect of the US) Donald Trump in a few days, we recognise that change is in the air all across the world. We are entering an interesting, maybe even more exciting, but definitely uncertain and tough season in global politics.
A strategy of reinvention… Closer home, tough times may be a constant in the foreseeable future in the Nigerian market going by our current political and economic outlook. And in the world of real estate, nothing spells change like seeing street after street of vacant properties towering majestically into the skylines. Properties that were once fully occupied, or that were snapped up by purchasers before they were even completed, now sit in the market for months on end and in some cases, years without being rented or sold.
As corporate tenants adjust their rental budgets aggressively downwards both in the residential and office segment and individuals watch their incomes dwindle, a leisure drive along many roads in Ikoyi and the numerous for sale and to let signs will reveal the true state of the market.
Without, a doubt, changing times require a change in strategy. To stay in a box of old prices, old models and stale expectations about a market, whose ship long sailed is perhaps to eat the food of fools. And it’s surprising how many investors, landlords, developers have either inadvertently or by design have chosen the unwise route of holding on to the past instead of reinventing for the future.
Defying the odds… To the ever recurring question, why are so many properties vacant? To the untrained eyes, there are no solutions. My answer however, as a real estate advisor and investor remains the same; good quality and good value (I.e market related pricing) has always been and will remain a winning formula. It is not rocket science. In the same vein, there are a few outliers that will have the luxury to perhaps carve out and operate in a totally different market reality. The handful of truly well built, well designed, well managed and well-presented properties with a strong sense of brand identity along with a culture of trust that discerning clients desire and are willing to pay for, will continue to defy the market odds.
For new projects, are there still opportunities to reinvent? The answer is in reinventing your new project offering especially if the project is not yet off the ground. For some, the wisest decision will be the decision not to proceed with a project yet, unless it’s a legacy project and you have the staying power to sustain it beyond the current market.
Fine and Country is privileged to work with discerning clients, who recognise that all markets including real estate markets in any part of the world happen in cycles, and no cycle lasts forever. This is however, a time to tighten seat belts, adjust your seats and potentially prepare for a long range landing. Only those who are well-advised, equipped and ready to reinvent will land safely.
In summary, times of change and correction require intelligent reinvention.
Ps. Case studies will follow in the next edition.
Udo Okonjo, LL.M (Lond), CEO/Vice Chair, Fine and Country W.A., a member of the Oxford Real Estate Society