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Stakeholders urge audit of Lagos distressed buildings

Flustered by the unfortunate loss of lives in a three-storey building that collapsed in Central Lagos last week, experts in the built environment have made case for the review of all identified distressed buildings in the state.

They argued that since government is in possession of the list of such buildings, an audit process should be carried out with immediate effect.

According to them, government also needs to organise a forum where stakeholders from each council be represented while the authorities should give a moratorium to the affected residents and outlaw the redevelopment of the affected properties until a review of processes and systems.

Many primary school pupils were killed last week after a three-storey building at Ita Faji, Lagos Island, collapsed. The school occupies a space in the building.

Reacting to the incident, a town planner and member, Lagos Island chapter, Building Collapse Prevention Guild (BCPG), Akeem Bishi said the collapse was a reflection of a shoddy job on the structure that was built or renovated recently.

According to him, one additional floor was placed on top of the storey building.

He told The Guardian that the incident calls a stakeholders’ forum, which could be done in each local government areas whereby a general agreement for moratorium on all new development which will establish done.

“So it is very likely that there was no provision for the additional floor when the original foundation was prepared. Nobody knows whether the original foundation was even solid and so that is one possibility. But not until the result of the final professional technical investigation is out, nobody could say specifically what is actually responsible as the cause of the collapse.

He noted that generally building collapse don’t just happen overnight except it is sabotage, an explosion or something that could compromise the integrity of the structure on the spot which could happen any day.

“There is need for review of all previously identified distressed buildings. Several of the distressed buildings including the one that collapsed have been marked. What are the buildings still doing after they have been marked. If they alleged that the people are stuborn and don’t want to come out, government could chase them out by force if need be. We are more concerned about safety of lives and properties, which is also the responsibility of government. The first priority is to bring down the building so that it doesn’t kill people unnecessarily”.

“By rough estimate, there are another hundreds of buildings on Lagos Island and there are so many candidate buildings for collapse everywhere. In this particular case, it is neither of those, it is a shoddy job of a building that was built or renovated recently since the last few years. Based on the indications from people who live around the site, people said they have observed problems with the building and they had told the landlord about it before the eventual collapse”.

He explained that there is the need for those who monitor the buildings in Lagos to be more diligent in their jobs as they can’t be pre-empt of blames in the particular incident.

The coordinator of Lagos Island Cell of BCPG, Mubarak Gbaja-Biamila said the solution to the menace of building collapse lays in the hand of the government stressing that it needs the utmost sincerity of purpose with the people and ‘strong political will’ to mitigate the challenge.

According to him, government should prioritize housing provision for the people by making lands accessible and reducing the bottlenecks associated with land titling while issues of housing finance, which is challenged by high interest rate, must be made easy as well as provision of low cost and longer mortgage regime must be designed for residents.

 

Originally published in The Guardian

Afriland Properties Plc CEO Advocates for Collaboration Among Women at the NBPlc IWD Event

The CEO, Afriland Properties Plc, Uzo Oshogwe, joined other distinguished women in the corporate world at the Nigerian Breweries Plc, International Women’s Day event, to discuss creative ways to improve women’s political, social and economic status globally.

While addressing over 200 female staff members of NB Plc, she spoke on the challenges women face, especially in their various industries and how determination can be a catalyst for success.

“There’s no denying the fact that being a real estate developer has its challenges and its rewards. However, being a female in this male-dominated field is more demanding.

Regardless of gender, the industry requires vision, tenacity, and creativity in order to succeed. You have to be willing to dedicate yourself and make it your primary goal. This means prioritizing and focusing on what’s important. No task is too small, no detail is overlooked, and long hours are a necessity. Success doesn’t just happen.”

Speaking further, she congratulated women for what has been achieved so far in ensuring gender equality and stressed the need to collaborate more in order to break more barriers: “Though this is gradually changing, we still live in a male-dominated society, so women often feel they are competing for a smaller piece of the pie. This shouldn’t be so. Women should collaborate more, help and be there for one another.”

Other attendees include Ndidi Nwuneli, Managing Partner, Sahel Consulting and Chidum Ayeni, Business Transformation Lead at Nigerian Breweries Plc.

 

 

NOTICE OF 6TH ANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN that the sixth Annual General Meeting (“AGM”) of Afriland Properties Plc (the “Company”) will hold on Tuesday, March 26, 2019 at The Federal Palace Hotel, Victoria Island, Lagos, at 10:00 a.m. to transact the following business:

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AFRILAND PROPERTIES PLC CEO RECIEVES APPRECIATION AWARD FROM FIABCI

The Nigerian chapter of FIABCI-INTERNATIONAL, a worldwide business networking organization for real estate professionals founded in 1951 in Paris, has presented an award of appreciation to MD/CEO of Afriland Properties Plc, Uzo Oshogwe.

The award was presented in appreciation of her participation at the 2019 edition of it’s Prix D’Excellence Awards and Business Forum. As one of the panelists at the forum, she made recommendations on how to increase investor appetite and alternate sources of funding real estate projects.

Global affordable housing gap reaches $740 billion

A global property consultancy firm, Knight Frank, has released its inaugural Urban Futures report, which revealed that the affordable housing gap reached some $740 billion globally in 2018 with Amsterdam, Auckland and Hong Kong amongst the least affordable places to buy a home.

According to the newly published Urban Futures report 2019, the affordable housing gap – as measured by the difference between house prices and income – increases due to limitations on supply, historical restrictions and a growing urban population.

Urbanisation is the key trend leading to stretched affordability. Job prospects and increased wages are the major draw to global cities. The UN estimated that in 2017, over half of the world’s population lived in urban areas, up from 42 per cent 30 years ago. This trend is set to continue with the proportion expected to rise to over two-thirds by 2050.

Other factors influencing housing affordability around the world include: ONE: Housing as a commodity: Since the financial crisis, housing has shifted to become a complex investment vehicle attracting huge sums from funds and corporations.
TWO: Politics: The need to create more affordable housing is matched by governments’ desire to raise revenues
THREE: Supply: Land supply issues resulting from regulatory constraints

While young workers are still attracted to cities, older generations remain or are even relocating to urban areas. The relocation enables a greater level of independence and connection through access to shops, amenities and transport. With more and more people vying for space in cities, land values, and therefore rents and property prices, rise accordingly.

Knight frank, global head of residential, Andrew Hay said: “This growing pressure on housing affordability is changing the development landscape – influencing the types of product on offer as well as the locations developers are focusing on and even the organisations becoming involved in the development process.”

The Knight Frank report, which measures the difference between house prices and income, also shows that there is a growing global disparity between house prices and income. Across the 32 cities covered, there was an average five-year real house price growth of 24per cent, while average real income grew by only 8per cent over the same period. Los Angeles, San Francisco, Sydney, Toronto and Vancouver are also highly priced.

The most affordable cities are Dubai, Istanbul, Jakarta, Kuala Lumpur, Lisbon, Manila, Rome and Sao Paulo.

Similarly, Some cities bucked the trend; New York saw its income growth exceed real house price growth by 3 per cent. Moscow, Singapore, Mumbai and Paris also saw their average real income over the last five years grow faster than real house prices.

Moscow saw the largest difference where real income growth outpaced real house price growth by 22per cent whereas Amsterdam, Vancouver and Auckland saw real house price growth outstrip real income growth by 59per cent, 46per cent and 32per cent.

The report says that affordability in Jakarta and Kuala Lumpur remains a key issue, despite the cities falling into the ‘most affordable’ group as developers are reducing the size of new residential units to maintain maximum capital value at accessible levels

It explains what factors are influencing affordability and these include land supply, regulation and the political expectation that there is a need for more affordable homes to be built.

It also points out that housing is now seen as a commodity as since the financial crisis, housing has shifted to become a complex investment vehicle attracting huge sums from funds and corporations.

‘The issue of affordability is not limited to one or two cities globally. While Hong Kong, San Francisco and London might spring to mind as the cities at the sharp end, the issue of how to ensure workers can access housing is relevant to almost all successful urban centres,’ said Liam Bailey, global head of research at Knight Frank.

As part of the report, Knight Frank has launched its global affordability monitor, which analyses affordability across 32 cities. It takes into consideration three key measures of house price to income ratio, rent as a proportion of income and real house price growth compared to real income growth.

The research shows that there is growing global disparity between house prices and income. Across the 32 cities covered, over the past five years, average real house price growth outpaced average real income growth by 16per cent.

“The growing pressure on housing affordability is changing the development landscape. It is influencing the types of product on offer, the locations developers are focusing on and even the organisations becoming involved in the development process,” Bailey explained.

Originally published in The Guardian

FG to deepen mortgage industry with new guarantee company

The Federal Government through the Central Bank of Nigeria is working on a new initiative to deepen the housing finance industry.

The concerned stakeholders are already at the concluding stages of the initiative, known as the Nigeria Mortgage Guarantee Company, expected to be inaugurated at the beginning of the second quarter.

The NMGC is the second major initiative under the CBN’s Nigerian Housing Finance Programme, a Public-Private-Partnership designed to improve access to affordable housing finance in the country.

The NHFP is set up by the Federal Government and implemented by the Central Bank of Nigeria with four components – the Nigeria Mortgage Refinance Company, mortgage guarantee insurance, housing microfinance and technical assistance.

The project is being funded with a $300m procured from the World Bank during the previous administration.

The Head of NHFP, Mr Adedeji Adesemoye, said mortgage banks principally had two challenges of liquidity and credit, adding that the NMGC would solve the credit aspect of the problem.

“For credit risk, commercial and mortgage banks need another company to share with them, which is what the guarantee company is, so they pay the guarantee fee of about three per cent of the mortgage and the guarantee company will provide the guarantee just the way people pay for insurance,” he said.

According to him, the NMGC is expected to be a PPP arrangement, where the private sector holds the equity and the government can lend to them tier-two capital, just like the Nigeria Mortgage Refinance Company.

He added that it would enhance credit to primary mortgage banks as well as commercial banks.

“When there is a default, the guarantee company will pay certain percentage of the money when a foreclosure sets in, while the bank keeps originating mortgages,” he said.

Among the benefits the new company is expected to bring to the mortgage industry are access to housing finance and lower down-payment, access to higher amount of mortgages, better loan terms and conditions, standardisation, consumer protection and financial literacy for borrower while mortgage banks will have lower credit risk of up to 40 per cent protection for the principal, larger business volumes and reduced capital requirements.

Mortgage banks are also expected to have viability of mortgage operations and access to ancillary services.

According to the Director, Other Financial Institutions Supervision Department of the CBN, Mrs ‘Tokunbo Martins, the upcoming mortgage guarantee programme is designed as a private sector commercial enterprise.

“It is paid for by the borrower which is expected to generate income – thus creating a commercially viable and sustainable product,” she said.

Martins explained that it would provide a risk-sharing mechanism between the mortgage guarantee provider and participating mortgage lenders, which risk would have been borne by the mortgage lenders alone.

She added that it might also provide reduced capital charge through capital relief for legal mortgages and also produce a much more sustainable product uniquely suited to the Nigerian system.

Martins said, “Mortgage guarantee provides credit default loss protection to mortgage lenders enabling them to increase the loan to value ratio by reducing or removing the necessity for equity contribution by mortgagors.

“Mortgagors can thus access higher value mortgages with lower down payments while the lender can expand into new markets or deepen existing ones. Mortgage guarantee indemnifies the mortgage lenders at the point of default of the mortgagor unlike mortgage insurance which indemnifies mortgage lenders after foreclosure process has been concluded.”

As at the end of 2018, it was gathered that stakeholders were finalising the business plan for the company, with Martins saying that the consultants, while cautiously optimistic about the viability of the project, had identified multiple constraints to its success, several of which they were familiar with.

She said the biggest constraints were the 1978 Land Use Act as well as cultural biases towards mortgage loans.

She however stated that stakeholders had been encouraged by the interest shown at state government levels, adding that there were also expectations for significant progress in mortgage friendly legislation in future.

Originally published in The Punch

Discordant tunes over N30.94b housing budget proposal

After over 58 years of Nigeria’s independence, the housing delivery system remains unpleasant due to several factors and challenges. However, experts say poor budgeting and implementation remain clogs in the wheel of progress.
Although, the Nigeria real estate sector is growing fast and is now the sixth largest sector in the economy, it still has a low homeownership rate of 25 percent, lower than that of Indonesia (84 percent), Kenya (73 percent), and South Africa (56 percent).

Home purchase and rent prices have also grown ahead of general inflation with a standard three bedroom middle income apartment currently commands a rent of N300, 000 per annum and a purchase price of N10 Million.

The major issues that continue to affect housing in Nigeria include inadequate access to finance, slow administrative procedures, the high cost of land registration, and titling. Even some Government policies on housing in Nigeria are not favourable.

More pathetic is that a majority of Nigerians are living in a state of hardship, while the remaining relatively insignificant minority is living in affluence.

According to reports, housing affordability is compromised when households in the bottom 40 per cent of income distribution spend more than 30 per cent of their household income on housing, adjusted for household size.

The shortage of housing in the urban areas is more pronounced and critical than in the rural areas. Thus, cities suffer more than villages due to urbanisation.

The challenges of housing in Nigeria have continued to remain a major problem if not tackled.

For example, almost half of Nigeria’s population in cities, with 64.2 percent living in slum conditions and the rapid growth of cities have engulfed nearby towns and villages, and pushed back mangrove, while the lack of adequate infrastructure and planning have caused deforestation, congestion, poor health, and poverty

Although specialists have proffered some housing problem solutions in Nigeria, they have little or no impact.

One of the solutions preferred is proper budget implementation.

For instance, the World Bank had in 2016, projected that it would cost Nigeria about N59.5 trillion to address its housing deficits, recent budgetary allocation to the housing sector has been dismal to the chagrin of the stakeholders.

But the N30.04 billion budget proposal set aside for Federal Government National Housing Programme 
 for 2019 could not be said to be a serious effort to tackle the severe and peculiar housing problems in Nigerian cities.

The figure represents about N5.36 billion shortfall from the N35.4 billion budgeted by the Federal Government to address the housing needs in 2018.

This was also a further dip from the N141billion allocated to the sector and the social housing programme in 2017.

Amid the dip in government revenue and consequently low housing budget in the recent time, experts said proper implementation and application of the limited revenue key areas that can drive the sector is the main issue for the sector.

To them, for Nigeria to make a head way in the housing sector, there is the need for appropriate budget and channeling of the provisions to expected use and not in paper.

Especially, when adequate housing implies more than just a dwelling but includes all that is within the dwelling and the creation of a conducive environment in which people live and grow.

An estate surveyor and valuer and former President, African region, International Real Estate Federation (FIABCI) Chudi Ubosi noted the inadequacy of housing proposal in 2019 but blamed it on dwindling government income, especially with the fall in oil price in the last three years.

He stressed that though N30.94 billion is like a drop in ocean considering the huge housing deficit and the World Bank projections for housing development, government cannot go above its limit.

Ubosi said with other competing needs, the proposal could be work upon to ensure that the deficit is bridged.

But renowned town planner and former president of Association of Town Planning Consultants of Nigeria (ATOPCON), Mr. Moses Ogunleye was more concerned with the release of budgeted fund for housing projects.

Relaying his frustration on non-implementation of budget proposals, Ogunleye said although no amount is too much to be budgeted for housing development, the issue has remained the release of fund.

According to him, the key question is has the money budgeted last year what percentage of it was realized or actually expended?

Ogunleye stressed that from what is evident in regard with national housing programme only about 35 per cent of the allocated sum was released from the budget last year.

The focus, he said, should be full implementation. Even if N5 billion was budgeted let it be released for housing development, as it will reduce the deficit.

“ We should be emphasizing more on the release of fund for national housing programme and not just in paper because I am aware that they did not release money at all for the urban development as captured in the budget last year”.

For the President of the Nigerian-British Chamber of Commerce (NBCC), Mr. Akin Olawore, what is importance is the allocation of the funds to critical areas like mortgage refinancing and infrastructure that supports housing.

“ I want to see breakdown of the budget in such a way that it is devoted to support infrastructure and secondary mortgage it self ”, he said.

Olawore, a chartered Surveyor and Valuer said, it is nice to know which amount is available to support secondary mortgages itself and infrastructure so that developers can go in and develop houses.

With proper infrastructure and mortgage refinancing, private institutions with credible assets and mortgage institutions will grow in the sector.

Why do we still talk about deficit when we have vacancy houses littering all over the highbrow areas. We don’t have to spending hours in traffic to get to works at all.

The money should be devoted to infrastructure that support housing, pick people from where rail will drop them, where development have provided, these are critical for our housing needs

Originally oublished in The Guardian

Afriland Properties Plc CEO, Uzo Oshogwe, Joins Panelists at FIABCI-NIGERIA Prix D’Excellence Awards and Dinner

The Managing Director/CEO of Afriland Properties Plc, Uzo Oshogwe, joined other industry experts, government representatives and key private sector players, at the 2019 edition of FIABCI-NIGERIA Awards, Dinner and Business Forum. This year’s event was tagged: The Ease of Doing business in Nigeria – The Nigerian Experience”.

Speaking during the 2nd panel session on the sub-theme: “Attracting real funds in our real estate market” at the Lagos Oriental Hotel in Victoria Island, she shared her perspective on ways to attract funds in the sector: “Ticking all the boxes to ensure an enabling business environment for foreign investors is crucial, but while this is in progress, we also have to look inwards.

Cost of fund remains one of the greatest challenges in the real estate industry, especially because investments are usually for the long term. All over the world, governments utilize idle funds as investment options to improve infrastructure and develop the economy. Though we’ve heard of the restrictions on direct investments, pension fund is one of the best options to finance real estate projects in Nigeria.”

In a keynote address by the Honorable Commissioner for Housing, Lagos State, Prince Gbolahan Lawal, who was represented by Adetoun Adeyemi, he reinforced the state government’s commitment towards a more conducive business environment, especially in the real estate industry: “The construction industry represents a significant component of the local economy. At ministry of housing, we understand the constraints that the real estate sector, an offshoot of the construction industry is facing. Hence our full support for joint venture initiatives amongst others. “

Other panelists at the event were immediate past FIABCI world President, Mr. Farook Mahmood; Senior Special assistant to the President on Industry, Dr. Olajumoke Oduwole and other renowned professionals form diverse sectors.

FIABCI is the French acronym for “Federation International des Administrateurs de Bien-Conselis Immobiliers” or the International Real Estate Federation.

 

Fashola advises construction experts on conflict resolution

The Minister of Power, Works and Housing, Mr Bababtunde Fashola, has advised construction experts to adopt international laws that suit Nigeria’s needs to reduce conflicts in project execution for economic growth.

Fashola gave the advice at a regional workshop organised by the Lagos Chamber of Commerce International Arbitration Centre.

According to the News Agency of Nigeria, the programme was put together in collaboration with the Association of Consulting Engineering in Nigeria and some law and construction firms.

It had the theme, “Dispute Management in Africa Infrastructure Projects’’.

Fashola noted that costs and risk management were important factors that must be taken into account when undertaking projects.

He said that most Federal Government projects adhered to the International Federation of Consulting Engineers principles.

The minister noted the need to ensure that the FIDIC researches were adapted to local construction needs and policies.

Citing various countries as examples, the minister explained that Nigeria had a land tenure system with ancestral lands or shrines where people were prohibited from building on.

He said the Mambila Power project suffered some setbacks because of several conflicts that led to litigations.

He said, “If we apply international processes, there must be some room to reflect on international diversity and way we do things without necessarily being sub-optimal. Our land tenure processes, for example, are not exactly the same as that of Europe.

The minister said that lawyers sometimes made some project agreement ambiguous and so difficult to understand, adding that adaptation of laws to suit local requirements was important.

He said that the Mambila Power Project would provide huge employment and investment opportunities for the quarries, haulage companies, banks and other stakeholders in the construction value chain.

According to him, 18 million tonnes of stones and 42,000 tonnes of steel were some of the materials needed for the Mambila Power project which was a huge opportunity for job creation and local businesses.

“If you own a quarry now, you are sitting on a gold mine, especially if it is near Taraba State. That is the tomorrow I see; that is work; that is prosperity and the driver is infrastructure,” he said.

He said Mambila project would be guided by FIDIC rules, adding that guidelines for procurement process of the project had begun.

Fashola reeled out statistics of cement, stones and other inputs needed for the construction of the second Niger Bridge that would boost revenue in the construction value chain.

Originally published in The Punch

Afriland Properties Plc recognized in London Stock Exchange Group’s Report

Afriland Properties Plc has been identified in the latest report by London Stock Exchange Group as one of the companies that would inspire Africa in 2019. The report which is the second edition and a celebration of Africa’s most dynamic growth businesses, identifies a new cohort of fast growing and dynamic businesses across Africa.

Speaking on the report, the Chief Executive Officer, AfrilandProperties Plc, Uzo Oshogwe, said “We recognize the cruciality of championing the development of Africa’s Real Estate market, while leveraging our values; Execution, Enterprise and Excellence.

This report further attests to our strategy and purpose to keep investing in the development, management and maintenance of Real Estate offerings across Africa. “

The report was produced in partnership with African Development Bank Group, CDC Group, PWC and Asoko Insight who contributed their research and expertise to select the featured companies, and the report is sponsored by Instinctif Partners and Stephenson Harwood.

Afriland Properties Plc is a property management, investment and development company, offering end-to-end services along the real estate value chain, from management to joint-venture investments.

With a portfolio size of over N15 billion and one of the largest land banks in Nigeria, Afriland is pioneering the opportunities presented by an institutional approach to real estate, serving niche markets throughout Africa.

Follow the link below to view report.

https://www.lseg.com/sites/default/files/content/CTIA/2019/LSEG_Companies_to_Inspire_Africa_2019.pdf

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