UPDC Plc has stressed the need for market shift strategies from the development of mansions and maisonettes in high-end locations in Ikoyi, Victoria Island in Lagos, and Abuja, to the middle-income neighbourhoods in Lagos.
According to its management, this strategy has started paying off as the company recorded strong revenue growth from N5.34 billion in 2023 to N11.78 billion in 2024. Its audited account also shows a profit before tax of N1.309 billion, its highest in nine years.
The company’s CEO, Odunayo Ojo said, despite the rising cost of construction materials coupled with adverse macroeconomic conditions, especially inflation, which hiked construction cost significantly, the company’s revenue more than doubled in 2024.
He attributed that sterling performance to the strategic market shift to the new market where, he said, demand is quite encouraging.
Other factors, according to him, were their experience in the market which taught them a number of lessons, including ability to manage market risk and cost.
“Procurement process was also part of our success story as it enabled us to weather market storms; we were also able to manage our loyal customers who maintained confidence in us despite everything; we were also able to leverage institutional support to absorb shocks,” Ojo revealed.
Speaking on the market shift, he noted that, “we’ve decided to move a little bit across the real estate value chain to focus on middle-income housing. Originally, we used to do a lot of projects in Ikoyi, Abuja, and Victoria Island, but these days, we realize that the critical mass is in the middle-income housing.
“Whether it’s middle-income or low-income housing, ‘affordable’ housing is what everybody talks about. So, we believe there’s a huge gap in terms of demand for housing in the middle-income segment of the market.”
He noted further that, there’s a huge housing gap in Nigeria, explaining that, whether it’s 22 or 28 million housing units, it’s still a huge number, and UPDC is doing its part in plugging that gap one project at a time.
“Beyond just doing this as a business, we see it as a real social need because in any developing economy, housing is a critical cornerstone, and Nigeria cannot be an exception. So, that is a critical part of our strategy,” he said.
The company’s head of development, Olatunde Jagun offered brief insights into their projects, chiefly Hampshire and Brompton City, both of which contributed significantly to the 2024 revenue growth story.
Hampshire is a five-hectare mixed-use development located at Sangotedo, further down Lekki-Epe Expressway. It is a moderate estate comprising 62 serviced plots with high-end infrastructure. The Estate, according to Jagun, has been completed and sold out.
Brompton City is a much larger estate, sitting on 300,000 square metres of land being developed in four phases. The first phase, measuring 100,000 square metres, has been completed and also sold out while work will soon begin on phases two and three combined, measuring 125,000 square metres. We will do groundbreaking for this soon, he assured.
Going into the future, Ojo disclosed that the company will be focusing on young professionals who, he noted, are largely underserved. The young professionals are a group of customers that a lot of developers are not focused on adequately, he stressed.
To make the development in those locations sustainable and affordable, Ojo disclosed that they would be working with institutions like the Ministry of Finance Incorporated Real Estate Fund (MREIF) which offers mortgage finance at 12 percent interest rate and for 25-30 years repayment period.
He promised that the company will be working with the National Pension Commission (PenCom) that allows pension contributors to access up to 25 per cent of their retirement savings to pay as equity for home purchase.
