Property experts see sustainable growth for Real Estate Sector in W’Africa
Ahead of the annual West African Property Investment (WAPI) Summit, the region’s largest real estate investment and development conference comes alive in Lagos on 15 & 16 November 2018 at the Eko Hotel and Suites, experts have predicted sustainable growth in the sector.
According to the summit’s host, API Events’ Kfir Rusin, this year’s theme: RE-Calibrating Supply and Demand for Sustainable Growth is a natural evolution of the previous year’s theme, Changing the West African Narrative, which aided more than 400 delegates representing over 200 companies to reposition the sector in a region sparked to a growth footing by Nigeria’s exit from recession.
Rusin in an interview believes that “The market has undergone a shift, which is most evident in the changing retail and office occupier market. To help our 500 delegates unpack these changes – we’re pleased to announce that we’ve secured more than 60 well-known regional and international thought leaders to speak at #WAPI2018. These include, Broll Nigeria’s CEO, Bolaji Edu, regional legal authority, Olasupo Shasore, Ali Djire, Fraym’s Country Manager and PwC Nigeria’s Chief Economist Andrew S Nevin.”
As the head of one of the region’s largest multi-disciplinary commercial property services providers, Broll’s Bolaji’s Edu, position provides him with a unique position to gauge how the market has re-calibrated post-recession.
He added that “If we analyse the grade-A office market in Lagos and the overall retail mall market following the economy entering a deep recession in 2016; take up dropped by approximately 40% (offices) and 55% (retail) between 2016 and 2017. However, as the economic recovery strengthens, we have seen numbers flatten out, and we expect to see an increase over the whole of 2018 from the low point of 2017.”
However, as Bolaji argues that the drop-off proved challenging, it did enable the market to strike a balance, especially at the height of investment – with property values reaching sky high levels. This boom, he says can be attributed to the post 2007 global recession economy whereby investors fuelled by low interest rates entered emerging markets aggressively searching for high yields.
“We don’t expect to see the same level from the institutional international investment community, which lead to emerging market currencies being too strong and artificially inflated the size of the economies and the size of the middle class in USD terms.”
Against the backdrop of inflation and subsequent re-adjustment, Bolaji believes that the market is now on a more long-term stable footing. Commenting that: “The market has begun to rebase itself down from a level where rent levels and capital values in parts of Lagos were comparable to the wealthiest cities in the world such as New York and the out skirts of London.”
For him, this is most evident in the reducing rates in the commercial and retail sectors, which are now at “more sustainable levels”.
