Insecurity, Paucity Of Funds Compounding Housing Sector Woes – Oguejiofor

The chairman and chief executive officer of Rotech Energy Services Limited, Chief Austine Oguejiofor has identified insecurity, and paucity of funds as woes compounding the real estate sector problem in the country.

 

The firm is currently investing huge resources in the construction of a sprawling Housing Estate, Anambra Luxury Palace Estate, Nkwelle in Anambra State.

 

Speaking with newsmen he said the community is a planned model residential estate that is consciously designed from the start to have a high degree of social cohesion and teamwork.

 

Apart from insecurity and other constraints are currently affecting the private developers.

 

He also spoke on other issues and policies drawing back the wheel of progress in the nation’s housing industry.

 

On challenges, he said, “I will start with the professionals in the field. Real Estate is not a business where you must be a degree holder, you must be an engineer or you must be a town planner before you venture into it. But at the end of the day professionals must come on board.

 

“I said earlier that Rotech is a company where professionals agreed to work to achieve results. You are working with specification and approval by development control and we don’t change even an iron during construction.

 

“Our building work is peculiar, now you will go to another site, they will have two designs, approve this, the day the authority or Development Control, DC, will come for inspection they will present this and they are going far below the expectations.”

 

He stressed that the firm doesn’t compromise standards and quality.

 

“If you visit all our estates in Abuja, the nation’s capital will attest to what I am telling you and that is what marks the difference.

“Now you want to sell because of what you have put on the ground but on the other side of the game, your competitor is not selling at that rate may be below because of lack of due diligence on part of Development Control the Standard Organization of Nigeria in charge of regulations of products and all those provisions.

 

“Now you will continue to work and put the best on the ground and our clients, I don’t know whether it is the orientation, are not ready at some point to really see it, I know it is a matter of time people will definitely get to know that if you are dealing with such groups you don’t last.”

 

He said building an estate is the end product that people are looking at, adding that the major challenge, is those of them committed to building quality homes.

 

He said the real estate sector is capital intensive.

 

“Now anywhere you go to source for funds, you know how the country is, the banks are not ready to lend to real estate.

 

“The issue is if you touch it you will find out that professionals have made the business too bad; because from history, the bank will tell you, we have lent to company A but they can’t sell, maybe the company genuinely used good materials and calculated the interest of the bank and if you add it, they can’t sell and the project is there.

 

“Banks will say we did to that company; they did a poor job, now back to professionals again, that they can’t sell. So the banks will tell you that their monies are hanging in different places.

 

“When the product is compromised it is either the bank and people will not buy because it is poor or the finishing is good but because of the competition of the prices in the market,” he said.

 

 

On motive to compromise, he said, “The motive to compromise is the drive for profit because as a developer, your desire is not to incur losses.

 

“So a developer will be interested only in the management of the estate. If I sell at this amount, if I take 20 percent profit, this money will not be enough to use for iron as approved, so please go lesser so I will maintain; instead of taking down the 20 percent, the quality of the material will now go lower. So that is why I said, the reason for compromising especially is the pricing, is to make profit.”

 

 

He also lamented that 70 per cent of developers in Abuja are not professionals.

 

“In real estate business, there are three things; number one, it is either you construct or you develop, construction and development is the same path or you manage, these are two things and then if you construct or in construction or development, it is either you strict to the construction or the market.

 

“So if you go into the development you will find out that the CEO or the head of the company is not a professional then he is in the marketing. So whatever the construction guy says or decides to do, he is in the field of marketing after his calculation. But now, in this case, I am a professional, I am in it, setting out of the building, as a town planner, we have access to equipment, and I work with my surveyors and supervisors.

 

“Like our Anambra Luxury Palace Estate, Nkwelle, the estate is equipped to provide you the experience of living in nature without compromising the basic comforts of modern life. It is based on the value of building a serene community.”

 

He added that the estate is gifted with unique feature facilities with fascinating aesthetics and landscaping services professionally dotted the spacious landscape.

 

 

On Abuja Master Plan, he said the development of FCT is so interesting that there is a Master Plan.

 

“Now in this place, from the approval, the Development Control sets in, according to the engineering department, the road level that will come over time will be this metre, don’t use the ground level now, you use what the engineering department set, FCDA has played their part as regards the Master Plan but the issue now is the implementation of the master plan.

 

“The amount I suppose to pay connecting the sewage, environmental protection board of the registration, I will dig a septic system and I will still pay the government. Now it will take me a distance of 400 metres to connect to that estate. So like I said implementation of the master plan is the problem.

 

“Abuja is a calculated city in such a away that the Development Control officials will tell you what could be done or couldn’t be done in a place. They will tell you we cannot give you approval for this number of families because, in the Master Plan, this plot of land should not take more than this number of families or less than this number of families. So at the end of the day if you look at the FCT you will see that it is sweet and will not be as bad as other cities.

 

“So you can see it is your choice, if the document is there, no way FCDA will allow a portion for filling station to be used for church or any other purpose.

 

“So, if FCDA will go and say in a district, let’s say there are 10,000 plots in a particular district and 5,000 have paid for C of O will not attend to infrastructure, attend to the implementation of the master plan because number one, the utilities and services are basic in the implementation of that district.

 

“If you look, over time, El-Rufai tried because he is from the field too, but Bala Mohammed came, he is not from the field, he just allocated plots and left, this present minster, came, there is no feeling of his existence.

 

“So implementation is not easy, the guys we are having on board are not from the field. So, I feel this if the FCT will look at it and drive by the current report of FCDA, of course, we have AGIS an arm of FCDA that has records of all the lands.”

 

“Insecurity is another thing that is touching almost everyone. Real estate is one of the businesses that you will do and go and sleep but because of insecurity people don’t want to see it that way.

 

“For example, you can’t compare past administrations that moved money easily, some that invested in real estate, and some that took the money away out of town, which one is better.

 

“So insecurity is another thing in the business. Now even in the heart of Abuja, it is not safe. In places like Citech, Gwarimpa, and others, there are fears of insecurity.

 

“If the government will look at that angle and handle it well, people will feel safe; people will feel free to invest. I know of people that have relocated out of the country,” he said.

 

On the high cost of materials, he said even sinking a borehole is now expensive.

 

“Way back, a borehole with casing could cost about N1 million but it is now a different case. The price of every building material is skyrocketing, name them, is it cement, iron rod, or roofing sheets. So, it is very expensive to construct a building up to the finished level. We are buying at over 100 percent compared to what entails about six to three years back.

 

“I think I will advise the government to give serious attention to the building of massive housing because efforts in this direction will go a long way to navigate the country from the current recession. This sector holds the key to economic recovery.”

 

 

On bridging 20 million housing deficits, he said the federal government should provide a secure and conducive business environment.

 

“As a man of international repute, we will use our business contacts to woo investors to invest in the building sector of the economy.

 

“I will encourage foreign investors to bring in their business community to invest in the country. Nigeria is a haven for any genuine investor because of its high population. I have easy accessibility to the world, to Europe, the far East, the Middle East, and other major African countries, from where investors will willingly invest in property in Nigeria.

 

“It is also important for the government to establish a viable mortgage system because it will strengthen home ownership. For example, a mortgage system where rent payment will lead to owning a house. This system will afford low-income earners the opportunity of owning an apartment after many years of paying rent to the mortgage institution.

 

“From being a tenant, they become a landlord. Government should therefore come in to provide the enabling environment by encouraging mortgages. Government should as a matter of urgency consider public housing as a form of social responsibility considering that the financial arrangement with the mortgage institutions may be beyond the reach of low-income earners in Nigeria.

 

“Local building materials should be encouraged and also mass production of building material. This will make the materials to be affordable to the poor. I will also suggest that process of building plan approval and issuance of a Certificate of Occupancy should be made faster and less cumbersome. The cumbersome property registration processes are major barriers to housing development and home ownership, leading to the country’s huge housing deficit,” he added.