04 Apr 2009 |
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That Abuja is the Federal Capital of Nigeria is no news, what is new is that, it is the future capital and anchor point of Africa, and as such, a time to invest for those that has the money-in real estate or individual housing. The city is being developed in accordance with a carefully structured development plan comparable to any international masterpiece. Abuja is currently one of the fastest developing capital cities in Africa, and it the headquarters of the Economic Community of West Africa State (ECOWAS) and a hub for major political and corporate activities in the West Africa sub-region. Abuja has being experiencing substantial growth in business and corporate activities, and that this has been creating increasing demand for residential and business accommodation in the city and the surrounding areas. Abuja’s developments pay no attention to the dwindling global economy! Abuja has growth (and growing) radically in population since it was established as the capital of Nigeria in 1991. Available unofficial demographic information shows that the city is now believed to be home to around 5 million people. The current high population and prospect for growth in the years to come no doubt have massive implications for residential accommodation supply and demand within the city. Residential property development in Abuja occupies an important position in the overall development scheme of the city. This is clearly reflected in the phased development programme adopted for the city. Phase I is the central area and includes some residential development; phase II is the largely residential areas immediately surrounding the phase I development. Phase III comprises more remote residential areas while phase IV goes even further out towards the Abuja International Airport. Phase I to VI is the best and right place to leave a name and a milestone for your generations to come, either as an investor or as an individual.
Those that are familiar with Abuja needs no lecture on the fact that lands in phase I and phase II have been fully allocated (to themselves). Phase II development is always being noted to be well underway in continuous development, but the fact is that only a handful of “sites” are still currently available, however, phase III and IV developments – within which this proposal to wise Nigerians (and those in diasporas) is based is beginning to get underway, and thanks to the invalidated El Rufia’s sharing formulae. Phase IV land is currently being allocated, and necessary contracts to extend infrastructure and improve service delivery in phase II and phase III are currently being awarded(or has been awarded) to assist in land sub-division and occupation, in response to the growing population and increasing demand for residential accommodation in the city. The residential property market in Abuja, from available evidence, remains strong with obvious shortage of good quality stock across the city presenting great opportunity for well-conceived and properly packaged schemes. Although no established sources of statistical information on supply and demand logistics were available, but anecdotal evidence overwhelmingly supports huge supply shortfall in the market, thus opening up opportunities for private participation and this is where my appeal once again goes to entrepreneurs to wake and look even beyond Abuja-City, but into Abuja itself (including all other settlement miles away from the city.
The current supply shortage is believed to have become much more pronounced partly due to increased pressure on land in the city which has led to rising prices and indirectly reduced the willingness of site owners to permit squatting to take place. Mallam El Rufia’s antecedents have also contributed in no small measure to the problem, and created imbalance in the demand and supply of residential accommodation as easily noticed in the inflated prices of properties in Abuja. I must however commend Mallam El Rufia for this (not because he did not demolish my house), but because he gave Abuja a new face -a model of what Nigeria should be like, and he himself a role model of any typical Nigerian politician (whether he’s part of the problem, is another debate; at least, he shop-and-work evidently! Okay, El Rufia is not my theme here, but I am convinced many will agree with me? Furthermore, the constraint to residential property supply in Abuja also goes beyond issues of access to land and El Rufia, but lack of capacity in the housing finance, construction and building materials are all key factors, contributing in some measure to the quality and quantity of available stock, which is generally poor and sub-standard. However, with a little effort opportunities still exist for the supply of very high quality apartments and residences capable of satisfying the taste and requirements of the growing population of foreign nationals and high net worth Nigerian professionals. The potential target market includes the staff of foreign missions and organizations with diplomatic status, and of multi-national corporations operating in Nigeria as well as large indigenous conglomerates. These categories of people possess the financial capability to satisfy their requirements for high quality properties. Private sector residential property development no doubt accounts for a large majority of the housing stock in Abuja, although this is mainly through individual schemes that are typically undertaken on a small scale. I am of the opinion that the market has capacity for absorbing speculative estate type development, especially of good quality.
Demand for up market high value luxury apartment type development despite the global economy still remains significantly unsatisfied and some developments offering some resemblance of modern living, already completed in the city, are normally fully subscribed well in advance of completion. High demand exists for apartments and marionette type accommodation especially two and three bedroom accommodation while some measure of demand was also noted to exist for slightly bigger residential accommodation either as flats or as houses. Potential purchasers of residential property include public and private sector purchasers, owner occupiers, foreign embassies and high commissions, multi-national organization, as well as local and foreign based Nigeria investors who are eager to have some presence in the shape of investment in the city’s property market. This realization of unsatisfied demand constitutes a strong case for any Nigerian with a business mind to enter the industry. Principal viability appraisal shows that the housing project s/investment in Abuja is overwhelmingly viable, if undertaken professionally. No person can loose, especially with the current strong demand for good quality residential development in Abuja, and the prevailing high prices that the few available ones presently command in the market. Also, another advantage is that Nigeria is not a popular potential development-financing destination, let us seriously considers investing in the Abuja market as it’s is feasible and presents exciting potential economic benefit, even financiers, investors and subscribers will, in my opinion agree and benefit. A word is enough for the wise.
Rowland Adewumi http://www.rowland-adewumi.com
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