Owning a house is perhaps the best security for any man, going by Nigerian standards. This is why the race for house ownership is intense among young and upwardly mobile people. For some, home ownership represents asset and investment for the future.
But recent developments in the real estate industry has placed a question mark on the security of properties as a ready solution to urgent financial needs in times of trouble. This argument has been further accentuated by the prevalence of unoccupied buildings that dot the landscape of highbrow areas like Banana Island, Lekki, Victoria Island, Ikoyi, Abuja,et al.
A look around these areas makes one to come to terms with the reality of the day. Across these desolate and unoccupied buildings and properties, are several billions of naira in investments, wasting away. To benefit more from investment in properties, experts have said the venture should be seen more as a business for creating wealth, than a dormant asset. This is the position of the Chief Executive Officer (CEO) Beyond Building, Mr. Lanre Howell.
He said the industry has gone beyond just owning buildings, as there are several untapped opportunities in the sector. He blamed this on the inability of developers to make informed decision by investors in the sector.
He said in the last two centuries, over 90 per cent of millionaires who were thrown up, made money from keying into the business opportunities available in the sector. “A man who feels he needs to build a house before tapping the business opportunities in real estate business, is delaying himself,” he contended.
Beyond Building Investment Limited, Howell said, is a diverse commercial real estate investment firm, which provides a range of services to the Capital market, including acquisition, asset and property management, leasing, construction management, investment, advisory services, as well as development and disposition.
Howell, while explaining why potential investors fail to make money from the inherent business opportunities in the industry, noted that the “landlord syndrome” is a major factor, blaming the syndrome on the peculiar environment we live in, which in his opinion, does not encourage a person to put his money in real estate business to grow. Rather, he said such a person would wait and save until he has all the money to build his house.
Why invest in real estate
Howell said between 2010 and 2015, the sector has grown rapidly at an average rate of 11.4 per cent, contributing 3.9 per cent to the country’s gross domestic product (GDP). Presently, the real estate sector is forecast to grow at 5.39 per cent between 2017 and 2020.
The Beyond Building boss, revealed that by 2019, there would be a 100 per cent guaranteed capital gain once some projects, like the Dangote Refinery and Petrochemical Industry, Lekki Free Trade Zone, Lekki Deep Seaport, Dangote Fertiliser Plant, International Cargo Airport; Lekki International Golf Course, among others, are completed.
He listed some of the firm’s investment initiative to include the King’s Point Estate; Marvella Court; Varden Farms and Resort. It also runs the Rent Masters Realtors, saying investments with the firm gives a 20 per cent return.
Choosing estate investment
According to Howell, Beyond Building presents investors with viable plans to ensure good return on their investment. This is achieved through building a trading platform for investment in real estate. With this, an average person can own stakes in the industry without necessarily building or owing a house. For instance, one of the firm’s range of investment products, is trading. According to him, this is good for starters in the real estate investment and for people, who are seeking to grow financial strength with weak low risk involved.
The time frame for this is one to two years. “Our trading portfolio offers absolute returns and at the sametime ensuring that your capital is insured against loss and never tied down. It also has an easy cash pout plan at any time you may want to pull out. Your profit is annualised, but payable quarterly, with an option of convertibility of investment into land or unit ownership at the end of an investment period when offered,” he explained.
Other form of investment platforms offered by the firm include private equity partnership with a time frame of two to five years. This kind of fund, he said, allows high networth individuals to invest in equity property assets. These can range from new development and land holdings to complete redevelopment of existing properties or cash flow injections into already existing projects. Profit sharing here is based on a percentage of an individual’s investment to the total value of the cost of the project. “It is a high profit sharing deal and the stakes as an investor is high. This is for experienced professional investors or people seeking to risk more for maximum returns,” Howell said.
With respect to its Asset goal ranging from five years upward, this investment portfolio is for investors looking to build their investment through acquisition of properties, either to sell or keep as assets for themselves. This class of investment is aimed at growing wealth. “We researched and identified bottom-up investment opportunities within asset classes. We then blend these in multi-asset class portfolios, according to the client’s required long-term return,” he submitted.
Howells regreted that the 17 million housing deficit has not decreased several years since the figure was identified. He blamed this on the wrong attitude to building, which he said is due to the lack of understanding of the market. “We are building, but the deficit is not reducing. We need to build what the sector needs like shops, malls, and practical houses, not ones with over-bloated prices,” he said.