AMID increasing glut in the Nigeria’s property market as a result of the economic recession currently facing the country, the Chief Executive Officer of Sujimoto Construction Limited, a Lagos-based real estate development company, Mr. Sijibomi Ogundele, has revealed that the surge in the number of empty apartments in Ikoyi, Lagos, is due to over pricing. Ogundele added that this disturbing phenomenon must have prompted the well-informed and educative research publication of economy watch, Financial Derivatives Company Limited recently, which informed that “The number of vacant properties in the upper class real estate neighbourhoods of Lekki, Victoria Island and Ikoyi has risen by 72 percent over the last 18 months”. Ogundele who is fondly called Sujimoto, said the cost of construction is usually padded, warning prospective property investors to beware.
According to him, “This has become a motto on a whole new level for prospective investors, who seek the very much-deserved value for money. To avoid drawing hasty conclusions and to guide our investment choices, investors should only listen to industry experts and verifiable perspectives as seen in the FDC research, and avoid the bandwagon of those listening to jaundiced opinions, which are quite popular. “For example, the fact that former UK Prime Minister David Cameron said Nigeria was fantastically corrupt, does not in fact mean each and every Nigerian is corrupt.
Also, the fact that a few celebrities find themselves enmeshed in marital problems does not mean that the marital life of every Nigerian is in danger. “To put this more clearly, apartments that should not cost more than 100 million naira, are costing investors 400 million naira to construct. Therefore, owners have no other choice than to let out the apartment at 40 million naira, transferring the padded cost of construction to tenants. What is the difference between Ipekere locally fried plantain chips sold in remote areas and the same plantain chips sold in urban areas? “Have you ever wondered why a good meal prepared in Ijebu Ode would cost lesser than one sold in Lagos?
An estimated rental for an apartment in Ikoyi is about $80,000. The same apartment in Lekki would cost $30,000. What do you think makes the difference? Value in terms of price, quality and location put together in the same place. If location is a fundamental principle in real estate, how much more luxury real estate?”, Ogundele stated.
Describing the situation as a case of quality versus quantity said a developer who compromises on quality of materials, no matter how highbrow the property’s location, has no right to place an exorbitant price on it. Thus, the argument for demand exceeding supply, as far as empty apartments in Ikoyi go, is unfounded. “Luxury apartments are in high demand. Poorly finished buildings with exorbitant prices constitute the pile of empty apartments constantly being alluded to.
Consider this: Are developments such as Tango Towers and Ultimate Towers in Ikoyi, empty? If such developments are not empty, imagine what would happen when the Lorenzo By Sujimoto with its high-end features, state-of-the-art facilities, exceptional returns on investment and competitive pricing, is completed? “I once pointed out that luxury is not expensive. It is the intention to deliver luxury that is expensive. While the cost of a nice three-bedroom apartment in Johannesburg would go for about $350,000, the same apartment in Ikoyi would want $1 million.
If the cost of construction materials is the same all over the world, the price of marble, granite, cement, tiles, kitchen, doors, paints etc, why is cost in Nigeria about 300 per cent higher? “You cannot offer a Toyota for the price of a Bentley. One might argue that both cars will eventually ply the same road but the efficiency and prestige of a Bentley speaks for itself. Luxury sells itself. For us at Sujimoto, our biggest marketers are our clients. Listen, I have sold crap before and I have sold luxury and I can tell you from experience that it is easier to sell luxury than crap. “When you sell luxury, you sell peace of mind, you have not only sold something that would last for generations, but you win the heart of your client who now becomes your evangelist.
With the oil price plummeting, and major economies across the world experiencing down turn, individuals and organizations no longer have loose money to throw around. And with the current downsizing by companies, prospective tenants demand full value for their hard-earned money. “Nigerian developers must realise that times have changed. The quick fix, quick gain syndrome has ended. Real estate developers who fail to understand that the current investors and real estate enthusiasts are upbeat about quality and finishing having seen same from their travels around the world. “If we desire to be the best and want to compete with foreign developers such as the Germans, Lebanese and Italians that have spent decades mastering their craft, we will need to raise our standards in the Nigerian construction market. Or else, one day we would wake up to find all our apartments empty”, Ogundele warned.
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