The founder/ CEO of Eximia Realty Company Limited, Hakeem Ogunniran, has called on the government and the stakeholders of the Nigeria Housing Sector to transform housing to a buy-able and sell-able sector as well as industrializing the processes involved in housing as the way forward for the housing industry which is perceived not to be faring well over the years.
Hakeem who described housing as a crucial sector of the Nigeria economy, proffered these solutions to the poor performance of the housing sector in an interview with the Africa Housing News. He said, “there are two things we have to do as a nation if we must crack the problems of the housing segment. Number one, we have to commoditize housing, to create a framework that commoditize housing, whereby you’re able to buy and sell houses; practically the same way you buy and sell any other commodity, we have to get to that level. And that means that all asset creation, asset transfer, or lucky value, creating investment out of assets, we have to streamline and eliminate them. That is number one.
“Number two, we have to industrialize the process. Today, we are still building houses, we have to start manufacturing houses, we have to standardize our processes, we have to deploy technology, you know, we have to move away from Baba Sharata and Baba Tohib which many of us still use in the industry. We have to deploy appropriate technology, which enables us to deliver to scale, you know, all these 10 units, 20 units and 30 units, they cannot solve the problem.
“So, we have to industrialize the process. At Eximia, we’re working very hard to create a framework that enables us to fully standardize our processes, to deploy appropriate technology, and work in a manner that we’re able to build and deliver to scale. Once we do that, then we will be on the path to solving the housing problem.”
In his response to why capital market funding has become and issue in the housing sector and what can be done to have appreciable capital market funding for housing, he said, “As a matter of fact, I always trust that real estate is always a long term business because its due 2 years or 5 years. So, if you play in this segment, you have to have access to long term funding. You cannot fund real estate with funds from math or money market, because you will have a miss-match of assets or liabilities, which is why I have always preached that the most veritable platform for you to raise the kind of funding that you need for real estate is the capital market. Because capital markets in any country is the platform for mobilizing capital and disbursing for long term usage. You know, I’ve made some very good progress, you know, and then, all the bottlenecks on the part of creating the right sort of rich instruments in the market, have largely been removed. So I’m very hopeful that we know with the innovations of the new finance act, and all the other revelations in recent times, people now should be able to create additional routes in the marketplace in Nigeria, you must know that everybody keeps talking about inability to access special funds, but most of that pension funds cannot invest directly in the real estate. they can only invest in vehicles created to create real estate assets.
“And these are risks and recourse as the law has provided, you know. So, we made some progress, but we need to focus a lot more. I always see that in Nigeria, we’re very good at property development, and property management, people have to now move to property investment, which is when you create assets, unlock the value of those assets immediately, and use the value that you create immediately to create further assets, that’s the only way.
“So now, CBN has created this 200 billion Naira fund, you know, we need to have visibility through the entire chain. 200 billion looks big, you know, but how much is 200 billion when we’re talking of 20 million units of housing shortage? So, part of what we should be doing is to regard the 200 billion a seed capital to create the initial assets, and then create vehicles into which you bundle those assets, unlock value by selling units and rights in vehicles, and then bring value immediately to create for the asset. That is why we need to think holistically, you know, and not desperately, as many people do in the current dispensation. That’s the way I think we need to drive this market forward.”
