How Lekki Gardens widens affordable luxury homes frontiers

The apprehension by most young families and other members of the growing middle class to own affordable cozy homes in a serene and high brow neighborhood seems set to be relieved by GT Rich Realtors, developers of Lekki Gardens.

Currently existing in four phases, all on the Lekki Epe Expressway of Lagos, Lekki Gardens is poised for a giant stride by providing over 1,000 luxury apartments for home owners and savvy investors.

The first phase of the estate comprising predominantly three bedroom duplexes and apartments blocks has been fully delivered to over 200 families who are currently reaping the benefit of tapping into the off plan scheme of the estate which kicked off sometime last year.

These proud home owners currently enjoy all the facilities of an uptown estate such as well paved inter-locked road network, water treatment plants, street lights, underground electrical wiring, over-night power supply and other facilities.

The second phase of the estate which is about five minutes away from Victoria Garden City (VGC), is currently fully subscribed with construction in top gear to deliver over 400 housing units of predominantly three bedroom duplexes and other house-types in time for subscribers to inhabit in the next few months.

Tucked behind the Lagos Business School, the third phase of the estate which is a mini-estate compared to the second phase and it  is expected to house over 150 families in three bedroom duplexes.

BusinessDay visit to the site revealed that construction was in top gear to meet delivery date. Roads, drainages were eagerly constructed and the lush green area of the estate was already mapped out while most houses were almost on decking level.

Construction at the fourth phase of the estate which is also on the Lekki-Epe axis is in top gear to deliver  residential apartments in the next nine months. “At the site, perimeter fencing and other infrastructure are currently being  completed,  while a  1.2km access road to the site has just been delivered to allow easy access to the site, Azuka Ugboh, the company’s media director, revealed to our reporter.

“Our  success stories have however,  been threatened by some  challenges which are affecting early delivery of the estates”, Ugboh said.

One of the major challenges we face is the doubt that has clouded the real estate sector in recent times, as clients fear that developers might not deliver on their promise, especially when it has do with off-plan sales.

However, at GT Rich we have been able to allay those fears by delivering the first phase in our series of Lekki Gardens.

“Also with the second phase fully subscribed, it is obvious our clients have a great deal of trust on us and that further informed our decision to see them as our partners rather than just clients,” he added.

“There is also the difficulty of the terrain on some of our projects because of the swampy nature of the Lekki environment; however, we have been able to tackle this by employing strategies that have helped us to dredge the areas,” Ugboh said, disclosing that they  construct their houses with raft foundation at some of the challenging sites to guard against future environment challenges

Nigeria’s farming reforms still face hurdles, say companies

Nigeria is reforming its farming sector to bolster production and draw investment but companies this week said more needs to be done to tackle entrenched corruption, poor infrastructure and rogue government agencies.

Nigeria’s annual economic summit focused on agriculture for the first time, in line with President Goodluck Jonathan’s commitment to fixing Nigeria’s biggest employer. Agriculture Minister Akinwumi Adesina, who has been praised by donors and businesses for his efforts, was keen to stress the success of reforms began two years ago.

He said subsidies used to reduced the cost of fertiliser for farmers were not longer managed by corrupt politicians but instead were given directly to farmers.He said food imports had fallen by 850 billion naira ($5.2 billion) and food production was up by 8 million tonnes, helping to create 2.2 million new jobs, Reuters reports.

The government wants to add 20 million tonnes of domestic food production by 2020 and rice, corn, sorghum, palm oil and cocoa have already increased, Adesina said. The world’s second-largest importer of rice, Nigeria aims to become self-sufficient by 2015 after introducing a 100 percent tax on polished rice imports this year, likely to mostly affect countries like India, Thailand and Brazil. Security sources and farmers have said one backlash has been a rise in smuggling of rice and sugar from neighbouring countries and into ports.

Higher cassava output has been used to make flour, reducing wheat imports mostly from the United States by almost 9 percent, Adesina who noted bank lending to agriculture had risen to 25 billion naira this year from just 3.5 billion in 2012
said.
Duties on agricultural equipment have been scrapped and tax breaks given to companies willing to invest in both farming and industrial processes, as well.
The country’s reforms have drawn new foreign investors such food giant Cargill, seed company Syngenta and brewer SABMiller, while Dangote Sugar and others are investing more.
However, many companies asked to speak at the summit gave a less rosy picture, saying state and local governments still extort unofficial payments, while officials at ports and customs either worked around government policies or outright ignored them.
Confusing laws on land, much of which is owned or claimed by government officials, also mean it is difficult to expand. That has left 60 percent of Nigeria’s arable land fallow, farmers say.
RHETORIC VS ACTION
“We’re still battling with the basics; visa processing times, port delays, access to credit, transport systems. Rhetoric is all we are getting. It’s time to walk the walk,” said Alan Jack, managing director of Shonga Farms, a mainly poultry and milk farming group which supplies the Lagos branch of Kentucky Fried Chicken, owned by Yum! Brands.
Jack said imported chicken from Brazil cost 135 naira per kilo, while a chick in Nigeria cost 180 naira, making government plans to emulate its South American rival unrealistic.
“Ports would scare the life out of anyone. It’s the worst thing about your system,” said Calvin Burgess, chief executive of Dominion Farms, a U.S.-owned firm looking to farm rice in Taraba state.
He said $10 million of agriculture equipment was delayed for almost a year because customs and other agencies sought bribes and noted Dominion had operated in Kenya for 10 years “without anything like these problems”.
The government says port reform is a key policy, but investors say progress is slow. Industry players were also critical of Nigeria’s dilapidated road network and
troubled power supply noting it is often more profitable to ship produce to the U.K. rather than transport it from Lagos in the south to the biggest northern city, Kano.
“We don’t benefit from any infrastructure put in place. We have to build our own roads and provide our own electricity,” said Gbenga Oyebode, chairman of palm oil firm Okomu Palm, said.
Nigeria is privatising much of its power sector, which should help improve electricity shortages that hurt the agriculture sector.
Nigeria’s reforms are needed to reduce reliance on a struggling oil sector and cut a $11 billion food import bill

3Investor programme assures on 50% reduction in investment transaction cost

Real estate investors and consumers who subscribe to 3Investor Loyalty Programme, one of the newest products in the property market presently, have been assured of 50 percent reduction in their investment transaction cost and professional fees.

The product, according to its originator, also offers subscribers other opportunities such as access to about 30 percent discount on purchases from subscribed outlets such as malls, airlines, haulage, real estate events, current information on market conditions and new projects through a weekly newsletter.

Ruth Obih, MD/CEO, 3Invest Limited, owner and promoter of the programme, noted at its launching in Lagos recently that her company was concerned about the current transaction fees (commission) paid by real estate consumers on property , which hover between 10 and 15 percent.
Obih said the loyalty programme launched alongside a Real Estate Investment Network (RIEN) at the Property Buyers Forum (PBF) organised by the company in Lagos was designed to help real estate investors and consumers.
According to her, the product is to be driven by REIN, an investment nexus that seeks to connect sponsors with investors who are willing to invest in income-producing real estate portfolios to expand their income margin.
“REIN is expected to broker investments within the 3Investor circle by introducing projects considered investible to a network of investors who will pull funds together to execute projects under predefined arrangements and earn income on such projects on an agreed percentage to every member of the network who has invested in the project,” she said.

She explained further that “REIN is expected to help sponsors raise more funds for real estate projects by building investors’ confidence and closing the gap between investors and developers; thereby ensuring that more activities are ongoing in the real estate sector.

“As a company, we are committed to how the industry grows and activities that make for its growth. That is why we have created the REIN and the 3Investor as platforms that can help increase the number of activities in the industry. We believe that when there are more activities, employment will be inevitable and where there is employment, real estate contribution to the GDP will increase.”
To her, REIN is an annual subscription-base network that runs on the 3Investor platform of Standard and Premium subscribers; Standard subscribers are willing investors with an investment portfolio of N1,000,000 and above.

Premium subscribers have their entry level pegged at N20,000,000, she said, pointing out that REIN differs from REIT – Real Estate Investment Trust – in that it does not bank or hold the investors’ funds and is not managed by a sponsor; “it only maintains the network of these investors and introduces investible projects to it and manages the project through an escrow account.”

Nigeria: Delta Donates 60,000 Hectares for Cassava Farm Project

To support the cassava bread and high quality cassava flour development initiative, the Delta State government has donated 60,000 hectares of land in Abraka for a mechanised cassava farm.
The Director, Press and Public Relations, Federal Ministry of Agriculture and Rural Development, Greyne Anosike stated this in Abuja on Friday.
The statement said the gesture was also part of the state government's support to Federal Government's Agricultural Transformation Agenda, adding that the state government also provided a 20-hectare farm land for flour factory in Abraka.

The state governor, Emmanuel Uduaghan, who announced the donation, commended the Minister of Agriculture, Akinwunmi Adesina, for taking agricultural practice to a higher level.
The statement also said the Delta Government was determined to exploit the potential of the agriculture sector as part of its medium and long-term strategies, to curtail unemployment in the state.
Mr. Adesina commended the Delta Government for the gesture and called on other state governments to partner with the ministry to realise the ongoing transformation of the agriculture sector.
The statement quoted the minister as saying that partnerships in agribusiness would create growth and development and called for a synergy between state governments and the ministry the sector's potential in job creation and economic empowermen

Flour Mills of Nigeria notifies NSE on agreement with Adecoagro

Flour Mills of Nigeria Plc has notified the Nigerian Stock Exchange (NSE) that it has entered into a technical assistance agreement with Adecoagro, a leading South American Agro Industrial Company.

Adecoagro owns and operates over 278,000 hectares of high quality farmland and several industrial assets where it produces over 1.2 million tons of food commodities and renewable energy, including, corn, wheat, soybean, rice, cotton, milk, sugar, ethanol and electricity.

Under the terms of the Agreement, Adecoagro will assist FMN in the management and sustainable development of its Kaboji Farm, one of the largest commercial farms in Nigeria comprising 10,000 hectares near Kontagora, Niger State dedicated mainly to the cultivation of maize and soybean.

The Technical Assistance Agreement envisages a mutually rewarding co-operation between the two leading companies (FMN and Adecoagro) with the purpose of increasing the historical crop yields, helping to provide sustainable agriculture, maximizing returns on the farm, creating jobs and enhancing value for farmers and achieve maximum yield and sustain profitability in the farm’s operations.

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CBN Disburses N6bn Agric Loans to Farmers

The Central Bank of Nigeria (CBN) has said it disbursed over N6 billion loans to farmers under its credit guarantees as at December last year. A report from the Bankers’ Committee at the weekend,  also anticipated that with the Nigerian Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL) and collaboration between banks and counterparties, the loans under guarantee would have risen to over N20 billion by end of the first quarter of this year.

The increase in agric sector credit was linked to the N200 billion agriculture credit scheme and the N600 billion NIRSAL interventions.

The NIRSAL guarantees up to 75 per cent of bank loans to the sector. The NIRSAL initiative, which was conceived by the CBN, the Bankers’ Committee and the Federal Ministry of Agriculture and Rural Development (FMARD), seeks to create incentives and catalyse processes to encourage the growth of formal credit, direct and indirect, for the agriculture value chain, as a mechanism for driving wealth creation among value chain participants.

According to the central bank, NIRSAL is also expected to be a catalyst for innovative risk management strategies, long-term financing for agribusiness and significant job creation by new entrepreneurs.

“The mandate of NIRSAL is to act as the custodian of all credit guarantee schemes, interest draw back schemes, and commercialisation initiatives related to an integrated value chain approach to agriculture and agribusiness in Nigeria,'' the CBN said. Under NIRSAL, there are five pillars to be addressed by an estimated $500 million that will be invested by the CBN,” the programme document explained.

There is also a risk-sharing facility of $300 million, planned to address banks’ perception of high-risks in the sector by sharing losses on agricultural loans. There is equally an insurance facility of $30 million intended to expand insurance products for agricultural lending from the current coverage to new products, such as weather index insurance, new variants of pest and disease insurance. Besides, there is also a technical assistance facility amounting to $60 million, meant to equip banks to lend sustainably to agriculture, producers to borrow and use loans more effectively and increase output of better quality agricultural products, among others.

“The current improvement in the sector’s  was linked to access to credit through the new policy focused on increasing private sector participation, emphasis on the entire agriculture value chain, and using agriculture to boost employment, wealth creation and food security,” it added.

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Lagos community protests abandonment of World Bank project

WorldStage Newsonline-- Residents of Badia community in Ijora, Lagos have staged a protest to Lagos State House of Assembly overthe abandonment of Lagos Metropolitan Development Governance Projects (LMDGP), a World Bank assisted project aimed at developing shanties and slums within the state, in their domain.

Led by their representative in the House, Muyiwa Jimoh and Prince Kayode Obadiah, a community leader, the protesters displayed various placards with captions such as 'LMDGP, tell us why you want to sack the contractor?' No roads for PSP vehicles,' 'Apapa Iganmu: LMDGP, your system five is a failure,' 'Our houses have been demolished, please help us,' 'Gov. Fashola, we thank you for using good contractor for your roads' among others.

 (LMDGP had embarked on construction of roads, sinking of boreholes, ultra-modern schools, complex and canal constructions which the protesters claim had been abandoned in the area.

In a letter addressed to the state governor, Babatunde Raji Fashola and copied to the Assembly, signed by leaders of the community, it was alleged that LMDGP had taken over the project from the contractor (Seg.Mahen Co. Nig.Ltd). The residents wondered why the project was not re-awarded to another contractor.

"We are writing this letter to our Dear Excellency sir, Mr. Babatunde Fashola (SAN), the governor of Lagos state and the contractor Director, Mr. Dayo Oguntunde representing World Bank in Lagos State to please save our souls.

"The World Bank has visited this community before our communities were enlisted among the areas to be assisted and we are part of Lagos," the statement read.

Some of the projects already abandoned included Canal (System V), which according to the letter was supposed to  serve as alternative to the drainage had stopped since 2011 resulting into serious havoc affecting the whole community.

While championing the cause of his constituency during the protest, Jimoh hinted that "the LMDGP has terminated the project as we speak and has not re-awarded it." He therefore appealed to the state government to urgently intervene to save his constituents from impending danger.

In his response, the chairman, House committee on Information, Strategy, Security and Publicity, Segun Olulade, who represented the speaker, praised the protesters for conducting themselves in a peaceful manner, adding that his colleague Jimoh had been proactive in his determination to making sure that the issue is amicably resolved.

"As a member of committee on Works,  I know the role he has been playing in ensuring that the matter is seriously looked into. I want to assure you that the House would surely look into it with immediate effect," Olulade promised.

Adding that the delay in completing the projects maybe due to the process of re-awarding the contract because the earlier contract has since been terminated because of misunderstanding between LMDGP and the contractor.

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Who builds for the poor?

In Marslow’s hierarchy of human needs, shelter ranks second to food, which pre-supposes that without food, shelter is the most important of all man’s needs on earth. Similarly, the National Housing Policy (NHP) of 1991 states that every Nigerian has a right to a decent and affordable accommodation.
 
However, the housing situation in Nigeria today, where the demand-supply gap is as wide as 16 million units with only 10 percent homeownership, obviously belies both Marslow and the NHP.
A critical look at this deficit shows that it tilts stubbornly towards housing for the poor who can hardly afford the millions-of-naira property that the market offers. In a mortgage-free environment like ours, where homeownership is by cash and carry and there is no social housing arrangement by the government, the poor are mere spectators, begging the question as to who builds for them.

We are worried that whereas the government tells whoever cares to listen that its responsibility in housing delivery is creating the enabling environment, private sector operators in the housing sector have concentrated efforts at building for the rich and the wealthy, leaving the poor to their fate.

A one-time commissioner for housing in Lagos State told journalists at a groundbreaking ceremony that government cannot build low-cost housing because it also goes to the same market where building materials are costly, adding that they are also in business to make profit. But a developer who spoke to BusinessDay said low-income housing is the business of government, explaining that lack of infrastructure and cost of building make that segment of the market unattractive.

The developer said that his company, without any apology, develops and delivers housing to the mid-upper end of the property market, arguing that he would do mass housing only on the condition that he would get land free of charge, or at least it must be given to him at a huge concession. “Also, I must get title for the land just by asking, that is, once I apply, I am given. Even at that, it must be given to me almost free of charge or at a huge concession,” he added.
From these standpoints, we can appreciate the dilemma of the poor in relation to homeownership and, for us, it is a very pathetic, though not helpless, situation.

 Much as we believe in free enterprise and that the business of housing delivery is better managed by the private sector, we do not subscribe to a total abdication of the sector by the government because housing has a lot to do with policy issues. Apart from favourable regulatory issues around land matters, government should also be sincere and responsible enough to provide enabling environment for private-sector operators to come in and deliver affordable housing.

We align with the president of the Nigerian Institution of Estate Surveyors and Valuers (NIESV) who has consistently canvassed some form of social housing for the very poor in society whose income cannot support homeownership. According to him, even though the housing sector is better driven by the private sector, government still has to enable equitable distribution of housing to ensure that everybody is properly housed, adding, “In India, for instance, there is the Council Flats with all manner of social housing components.”

We recall that when the Federal Housing Authority (FHA) was set up, part of its mandate was to develop rent-to-own and social housing for the class of Nigerians who needs them. Today, the authority has gone commercial, building houses where two-bedroom and three-bedroom flats go for N6 million and N9 million, respectively.
Because of its huge impact on productivity and economic growth, we are of the opinion that all stakeholders should explore possible ways of making housing accessible and affordable to the poor

Drama Consult premieres today in Lagos

DRAMA Consult, the film by German filmmaker, curator and international programmer, Dorothee Wenner, will be premiered today at the new leisure mall on Adeniran Ogunsanya Street (by Shoprite), Surulere, Lagos. Time is 7pm.

  The film celebrates an ethnographic expedition from Africa to Europe between real life businessmen who travel to meet with potential partners in Germany. Already, it has successfully been premiered at two big festivals — The Festival of Pan African Cinema in Ouagadougou, otherwise called FESPACO and the ongoing 34th Durban International Film Festival in South Africa.

  The film was shot in Lagos and Germany and it features business personalities and experts like Dolapo Ajayi, Sam Aniama, Jude Fejokwu,

Femi Ladipo, Biyi Tunji-Olugbodi, Alhaji Chief Musa Olukayode Adedipe Christian Wessels, and Dazaa Aniama. In the film, the businessmen from Lagos — a spare parts dealer, a real estate developer and a young shoe manufacturer with high-flying plans, accompanied by two smart business consultants, travel to Germany to link up with potential partners and investors.

  The film tracks the process of economic intervention as an adventure trip in the era of globalization. Wenner, who wrote and directed the film, is already in Nigeria ahead of the premiere. Wenner disclosed after the premiere in Durban that she had always wanted to do a film about Africa and Europe and she found Nigeria, which she has visited every year in the last 10 years because of her involvement with the Africa Movie Academy Award (AMAA), a good centre to focus the story.

  She noted, “There are a lot of prejudices about this great country, Nigeria and a lot of misconceptions and I felt that beyond giving the businessmen who are my protagonists the opportunity to explore business opportunities, efforts could be made to correct those other stereotypes like when people say, ‘Nigerian businessmen cannot be trusted.’ But here we see people who are ready to do genuine business and so on”.
  Drama Consult is Wenner’s second film. She produced and directed Peace Mission, a film that provided valuable insight into the Nigerian motion picture phenomenon.

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Nigeria: FG commends Rivers over land donation for housing scheme

WorldStage Newsonline—The Federal Government of Nigeria has commended the Rivers State Government for donating over 10 hectares of land to enable it execute one of its housing programmes.

The Minister of Housing, Ms Amal Pepple who said this when she inspected the parcel of land in Iriebe, Obio/Akpor Local Government Area of the state stated that “we are very happy to have this collaborative effort because I am not happy that I have not really done anything in Rivers state.”

Pepple who was accompanied on the inspection tour by the Rivers State Commissioner for Housing, Mr Marshal Uwom also said that with the land, she could now put the stamp of her ministry ”which is the stamp of President Goodluck Jonathan in housing in Rivers state because it is his government and we are all working and ensuring that whatever he wants to do, we do them.”

Continue After The Break...

Achieving Sustainable Development Through Affordable Housing

 The damning 17 million housing deficit in Nigeria obviously has had negative impact on the nation’s economy. In the years ahead, there must be deliberate and sustainable plan to bridge the yawning gap and get the citizenry composed for economic activity to thrive in the country. This can be effectively done through implementation of robust housing policies. GEORGE OKOJIE writes

For over 25 years, managers of the housing sub-sector of the Nigerian economy drawn from both the public and private sectors have tinkered with the idea of providing mass housing for the people. But the profligacy of successive government officials deployed to handle the sector and obvious failure of leadership has made many Nigerians to dismiss the new National Housing Policy as another effort in futility.

This loss of confidence arose from the fact that the government has failed to realise that housing does not only satisfy the basic human need for shelter, but it is a key component of economic growth and development and forms a substantial part of the Gross Domestic Product (GDP) of most developed countries.

LEADERSHIP Sunday investigations showed that, though Nigeria succeeded in churning out good policies in the past, its blueprints hinged on three main pillars of guaranteeing well-being and productivity of the people, provision of single digit mortgage and fostering sustainable and enabling environment for the private sector to operate optimally was never implemented.



Implementing The National Housing Policy

Interestingly, at the inauguration of a committee constituted by the Federal Government to produce a National Housing Policy for the country in 1985, the then Minister of Works and Housing had said, “Government plans to take positive steps to ensure that the less privileged members of the society, including the wandering psychotics who require confinement and rehabilitation, have access to dwelling houses.”

In developing the blueprint that was to drive that template, the technocrats were said to have paid attention to the need for the provision of mass housing in a decent, safe and healthy environment with infrastructure provided at an affordable cost. of ordinary Nigerians with shanties and slum conurbations becoming more pronounced in urban centres of the country.

In the face of UN-Habitat estimate of housing deficit of 17 million units in Nigeria, experts and stakeholders in the nation’s built environment are of the view that there is urgent need to think outside the box for a viable operational model for the National Housing Fund (NHF) scheme to succeed in Nigeria.

According to Okika Ekwem, a United States-based realtor, the federal government needs to come in, look at what is happening in other civilised world and test-run the model. He advocated the operational model of America’s Federal National Mortgage Association (FNMA) popularly known as Fannie Mae. Fannie Mae, he said is the US equivalent of Nigeria’s NHF, saying the huge success of the mortgage industry in America is traceable to its efficient operations mainly as a secondary mortgage institution.

He said “In the civilised world, there is a secondary market for real estate financing where commercial banks or individual brokerage banks lend money to people and thereafter sell the securitised certificate to the secondary market and come back again to lend to individuals”. The realtor added that the US government usually chatters bigger financial houses that buy off these securitised mortgage notes from the banks and are a bit insulated such that even where people fail to pay, they are assured.

On the way forward, the Head of Dipo Fakorede and Co., a firm of estate surveyors and valuers, Mr Dipo Fakorede noted that though the nation has one of the best housing policies in the world, it lacks the ability to implement the policies. In his words, “Government needs to play its role with the establishment of primary mortgage institutions. What they do abroad is that once you are 18 and working, you have access to mortgage, which you pay over a number of years. But here, you have to get land, pay contractors and build, that is the why property value continues to rise.

“The primary mortgage institutions must be in place for people to have access to mortgage facilities. Government must also build houses; they have good housing policy, which they never implement. Private sector operators are doing their best but we are all out to make money.

“As a businessman, when I develop houses, I will want someone who will buy, give me my money and I move on. But even in the private sector, the problem there is finance. Housing is capital intensive; you need a lot of money when developing houses. So, the government must come in to peg the interest rate and then people in the private sector will be fully involved. And the government should be sincere in terms of providing the enabling environment.



Harmonising All The Parameters

“All the parameters for developing housing must be brought down in a friendly way. Cost of land is expensive, especially in Lagos. If you want to build terrace houses, for instance, you will need a land of about 2, 000 square metres and you should automatically have about N250 million if you wish to acquire that. Then, you talk about approval and then you may be spending about N800 million at the end. So, how many years will it take you to recover your money if you are doing a mortgage arrangement?

“Government must come in, create enabling environment and give a chunk part of the budget to the housing sector so that there will be mass housing development and prices of houses will go down. Let them also make provision for workers to get mortgages for 15, 20 or 30 years depending on their ages, which is the way it is done”.



Legislating Lending Rates

The views of Mr Adeniji Adele, a frontline estate surveyor and valuer is not different from that previously expressed, except that he  told LEADERSHIP Sunday that  there is need to do something about the country’s faulty legislation which is one of the things frustrating effective funding of housing projects. Adeniji pointed out that the way out is for the legislative arm of the government to put in place an Act to reduce lending rate by mortgage and banking institutions.

“This will further reduce the risks associated with lending funds on the basis of real estate “Mortgages”. In addition to the above, the legislatures should legislate to ensure the following:  Single digit rate for mortgage for a term of between 15 to 25 years; Use of property pledged as security for loan should be well appraised; and due diligence should be carried out on the borrowers.

“Title to the property should be checked. Bureaucracy in getting government approval or consent on land matters should be reduced; if government could embark on provision of infrastructures and facilities, it will spur the development of even more remote areas even if only for use of tourists.

“As incentive to private developers, Government should negotiate with them on the provision of infrastructures so private developers will not be speculative on the provision of infrastructure and uncertainty over the conditions of infrastructure by both parties”. The lack of a robust mortgage financing system in Nigeria has made the rate of home ownership in Nigeria one of the lowest in Africa.



Nigeria’s Poor Home Ownership

Apparently disappointed about the housing provision in the country, the Managing Director, Federal Mortgage Bank of Nigeria (FMBN), Mr. GimbaYa’uKumo, said recently at a public forum that the country’s homeownership rate of about 25 percent is much lower than contemporary countries.

He juxtaposed the nation’s abysmal homeownership rate with countries such as Singapore 90 percent, Indonesia 84 percent, Kenya 73 percent, Benin Republic 63 percent, South Africa 56 percent and Libya 41 percent while that of the United States is put at 70 percent. He explained that mortgage credits account for less than five percent of total lending portfolio of Nigerian banks and just about 13.5 percent of mortgage lending by primary mortgage banks (PMBs).

The mortgage finance expert said, the Central Bank of Nigeria (CBN) supervision report 2008 reveals that 90 percent of housing developments in Nigeria are self-financed through personal savings for periods upwards of 10 years. He pointed out that housing not only satisfies the basic human need for shelter, but it is a key component of economic growth and development.

“The supply gap for low and middle income groups is huge, reaching a crisis level in some cities in the country, which is heightened by the rapid urbanisation of the population.” He noted that the World Bank has predicted that the housing problem in Nigeria will become even more acute, resulting in a housing crisis by 2020 if adequate measures are not taken,” he added.



World Bank’s N48bn Facility

Ya’uKumo said in line with its mandate, the bank has been mobilising domestic and foreign funds into the housing finance sub-sector, while also collecting and managing the NHF in accordance with the NHF Act for the purpose of providing affordable homes to Nigerians. He said the $300 million, about (N48 billion) liquidity facility from World Bank for the overhauling of the nation’s mortgage sector will soon be ready to enhance sustainable housing finance in the country.

President Goodluck Jonathan has continually said his government is taking steps to address the housing needs of Nigerians, saying the on-going restructuring of the Federal Mortgage Bank is geared towards making home ownership easy in the country.

According to him, “The Federal Mortgage Bank is being restructured to meet the demands of the sector, especially mass housing.  In addition, the Nigerian Mortgage Refinancing Institute is being set up with the aim of revitalising the nation’s mortgage financing institution with a $300 million liquidity support from the Word Bank. “It is expected that this programme, which will be launched this year, will enhance the level of financing available for mortgages across the country”.



Way forward

President Jonathan has emphasized that government places high premium on provision of affordable housing for Nigerians adding that accommodation is one of the strategic imperative for guaranteeing the wellbeing and productivity of every person. It is believed that for Nigeria to achieve sustainable housing for all, a new thinking cap need to be put on by those saddled with the responsibility of implementing the national housing policy.

Also, the legislature, banks, private developers, primary mortgage institutions, civil society organisations, private sector players and concerned Nigerians need to rise to the occasion to ensure that every Nigeria can afford as well as well find the modalities for accessing loans to build their homes easy and palatable. If all Nigerians find it easy to secure housing loans and own their homes, experts believe the country will be in a better stead to achieve the United Nations Million Development Goals (MDGs) as well as the Vision 20-2020 much faster.
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Doctor Loses N5m To Land Agents

Police at Lion Building Division, Campbell Street, Lagos Island, southwest Nigeria, have arrested a suspected land speculator, Amusa Suleiman Ishola, 32, for allegedly conniving with three others now at large to obtain N5 million from a medical doctor, Njoku Obiageli, under false pretence.

He was alleged to have tricked the woman along with his accomplices to part with her money on the pretence of selling a parcel of land to her at  Parkview Estate, Ikoyi, Lagos, a claim he knew to be false.

Lagos advises residents against patronising unregistered estate agents

There are many unscrupulous estate agents in Lagos.
The Lagos State Government on Thursday urged residents to desist from patronising unregistered estate agents while looking for decent accommodation.
Jimoh Ajao, the Special Adviser on Housing to Governor Babatunde Fashola of Lagos State, told newsmen that such agents could run away with their money.
Mr. Ajao also urged residents to patronise only estate agents that registered with the Lagos State Real Estate Transaction Department (LASRETRAD). He advised agents and property service providers to register with the department in compliance with the stipulated laws.
The governor’s aide said that the agency was set up to check activities of unscrupulous estate agents who had bastardised the noble profession. He said that the major concern of the state government was the need to provide affordable housing for the increasing population.
“This informed the various strategic steps taken by the government to check activities of quacks in the real estate sector of the state,” he said.
Mr. Ajao said that the agency would enhance the state’s position as an investment destination and further create a sustainable climate for doing business.

Man arrested in Nigeria over attempted real estate Crime in Western Australia

A man has been arrested in Nigeria over the attempted fraudulent sale of a home in Western Australia, in what is believed to be the first arrest of its kind by Australian authorities.
WA Police worked with Consumer Protection and a real estate agent over eight months to intercept the sale of the house in Falcon, south of Perth.

The owners of the home are based in South Africa.
Ntuen Promise Ekenmini, 27, was apprehended by Nigerian authorities yesterday when he went to collect documents using a fake drivers licence in the name of the real home owner.
Police allege the attempted fraud began when a man contacted the property manager of a Mandurah real estate agency on 17 December, 2012, pretending to be the owner of a home being managed by the agency and requesting documents relating to the rented property.

He allegedly used an email address in the name of one of the real owners, who is a resident of Johannesburg, and requested all future correspondence be forwarded to it.
On 18 January, 2013 the agency received a request to sell the property and a sales agreement with false signatures was returned to the agent, together with copies of fake passports of the two owners, a husband and wife, as well as a forged document purporting to be from the Australian High Commission in Pretoria confirming their identity.

The agent became suspicious and reported the attempted fraud to authorities.
In conjunction with the police, the agency engaged with the alleged offender - at one stage instructions were given to deposit $AU785,000 into a bank account in South East Asia.
Detective Senior Sergeant Dom Blackshaw says police are investigating whether the crime is linked to previous cases of real estate fraud in the state.
He says six of the seven cases involved owners who live in South Africa, have investment properties in Perth which are rented, and have had their identities stolen.

"There's every chance that these people are the same offenders; however, we are working with the police in Nigeria to identify whether that is the case," he said.
"The offenders are very tenacious; they haven't given up. This has been eight months that they've been contacting the agent.
"They've been changing email addresses, telephone numbers, even to the point they've been threatening the agent when things have been delayed."
"We need to be constantly vigilant. We can't afford to rest now and think 'ok we've caught someone, that's the end of it'. There will be further attacks from further offenders in those countries and we need to be very mindful of that."

Mr Ekenmini is expected to be charged with fraud and theft.

Nigeria: Lest We Be Surprised Again

President Goodluck Jonathan's latest remarks about the activities of the deadly Boko Haram sect were probably made in all sincerity but they merit a comment if only because he inadvertently admitted lapses and unpreparedness by government with respect to its most important function,
i.e. securing the lives of Nigerians and their property. Speaking at the State House in Abuja on Tuesday night during the breaking of Ramadan fast with Muslim members of the diplomatic community, Jonathan said the activities of the Boko Haram sect and its tactics of terror took the nation by surprise.

The president regretted that attacks by the sect resulted in the death of thousands of innocent Nigerians, including security operatives. He however said that with the Federal Government's commitment and with prayers by Nigerians, the insurgency has been significantly contained.

Only recently, Defence Headquarters in Abuja announced that the special military operation mounted in three North Eastern States since May has reduced the level of insurgent-perpetrated violence in the region by ninety percent. For once, this was a claim by Nigeria's security agencies that appears to accord with realities on the ground.

While many Nigerians initially doubted that the military-led security operations in the North East and other states could ever contain the murderous sect's activities, the surge ordered by the president since May when he clamped a state of emergency on the three states of Adamawa, Borno and Yobe has evidently worked. So successful has the operation been that the military-led Joint Task Force, which up until May was seen by local residents as a bigger threat to their lives than the insurgents, has undergone a complete reversal of fortunes in its public image.

Where once community leaders were calling for its withdrawal, hundreds of youth now formed vigilante groups, nicknamed themselves "Civilian JTF" and proceeded to help JTF in manning check points and in combing neighbourhoods to fish out insurgents.
Hence the president is right when he says the Federal Government's actions have ameliorated the situation, even though he also acknowledged Nigerians' prayers. Inevitably, as the violence dies down, hopefully for good, the national soul-searching will commence as to exactly what happened during Boko Haram's reign of terror, how and why we got there as well as what we must do to consolidate on recent gains and, most importantly, prevent a future recurrence.

President Jonathan unwittingly kicked off this debate in his recent remarks to the diplomatic community when he said the nation [read: the Federal Government] was taken by surprise when the insurgency exploded first in the North East and later spread to many other Northern states.

Why was the government "taken by surprise"? To begin with, the manner in which the security agencies, most notably the police, handled the case of captured sect leaders should have been a warning to the authorities that fleeing sect members could be bent of revenge. Even before the events of 2009, Boko Haram sect's activities in the previous decade should have attracted high interest from the security agencies, especially those ones of them that are in charge of intelligence gathering and risk assessment.

Nor was Boko Haram the first time ever that a misguided quasi-religious group took up arms against the Nigerian state. The Maitatsine group serially unleashed mayhem in Kano, Bulunkutu, Tudun Wadan Kaduna, Yola, Gombe and then Funtua between 1980 and 1993. Any security agency worth its salt should have known that such a thing could happen again.

Of course, the socio-economic milieu that enabled deranged clerics to recruit thousands of misguided urban youths for such operations still obtains in Nigeria; in fact it has decidedly worsened since the 1980s with a larger reservoir of unemployed youth and wider economic disparities. As such, all that is needed at any one time is for some event or person to ignite the powder keg. At the beginning of the Boko Haram palaver, the Federal Government was much distracted by many of its leading members' belief that the insurgency was but a reaction by Northern power brokers at their loss of presidential power.

It took a long and precious time before leaders of the Jonathan administration came round to realise that this was not the case, that is if they ever did. Nor do the Nigerian security agencies have any good excuse because in the 52 years since this country's independence, the security sector has gobbled up a larger proportion of the national budget than most other sectors. That it was caught napping when a ragtag sect went to war suggested that the sector did not utilise all those monies properly.

The most important thing now is to prevent these sad events from ever occurring again, not only in the North but in any part of Nigeria. It is clear now that security agencies, in particular the State Security Service [SSS] must pay special attention to odd quasi-religious groups and closely study their trouble- making potential. The police too must do something to enhance its capability to handle internal insurgency in order to prevent the military from taking over its duties as happened in this case.

As for the military, which should never have been involved in this campaign if only the police were trained to handle it, the impact of these operations on its professionalism will only be felt in years to come.
When all is said and done however, it is a steady improvement in the economic fortunes of Nigerian citizens, effective poverty alleviation measures, widening of educational opportunities, effective skills acquisition programs, reduction in wealth gap, just implementation of social programs, banishing the cancer that is corruption as well as credible political leadership that will together erode the pool of disenchanted and misguided youths available to undertake any crank project that anyone will dream up. All these must be done as much as possible to prevent ourselves from being taken by surprise again.

Ogun and the quest to boost food production

Ogun State Government is truly shifting focus to agriculture in the belief that it would be good for all Nigerians to cultivate the land for products that would serve local and international consumption.
That is why the government has expressed displeasure at the colossal waste of scarce resource on the importation of food that the country has capacity to produce, a development that has impacted negatively on the nation’s economy as it fuels domestic inflation, displaces the local production and creates rising unemployment in the nation.

Governor Ibikunle Amosun, while declaring open this year’s National Council on Agriculture and Rural Development meeting with the theme: “From Farm to Table: Developing Agricultural Value Chain to create Wealth and Jobs and Assure National Food Security”, held in Abeokuta, Ogun State, had lamented that “it is rather unfortunate that despite the abundant agricultural potentials and the comparative advantage that the nation as the production of many crops, Nigeria still imports over N1.3trillion worth of wheat, rice, sugar and fish every year. Our country, Nigeria, is said to be the world largest importer of United States’ hard, red and white winter wheat and second largest importer of rice’’, the Governor said.

He added that for Nigeria to become an agricultural industrialised economy, agriculture should be seen as a viable business venture and very well funded.

Therefore, due to the effort of the government to give more attention to agriculture, a Model Farm Estate aimed at resuscitating the farm settlement concept of the defunct Western Region of Nigeria was established at Owowo near Abeokuta, to encourage youth involvement in sustainable agriculture.
This is just one of the many projects the government is embarking on, and in the nearest future, the state will become the country’s food basket.

•Deborah Odulate, Ogun State Ministry of Agriculture, Abeokuta.

Burutu Community Petitions Jonathan, Transport Minister

The people of Burutu community in Delta State have petitioned President Goodluck Jonathan and the Minister of Transport, Senator Idris Umar, over alleged sale of their land occupied by the Nigeria Port Authority (NPA) in Burutu.

The community, in a letter written by its lawyers, M.E. Ukusare and Associates, entitled: ‘Burutu Community Lands/Property Occupied by Nigeria Port Authority in Burutu, Delta State’ and made available to THISDAY in Lagos yesterday alleged that the Chief Executive Officer of Akewa Global Services Limited, Chief Kenneth Donye, was laying claims to a vast array of Burutu community property, which he (Donye) alleged had been bought by his company from the federal government

The people said there was never a time their property was sold to the government, group or any individual and wondered why Donye, who was among the people who challenged the move by the Federal Ministry of Transport to auction the property currently occupied by over 1,000 indigenes and non- indigenes of Burutu, should now turned around to be the buyer.

The letter stated that Donye had, through a letter to chairman of Burutu community and copied to the President, Burutu Youth Forum in the state, intimated them that his company had bought a list of 21 units of property at the Burutu Port Yard, from the federal government.

While questioning the legality of the purported sale of the property, the community however, implored President Jonathan and the Minister of Transport to “call Donye to order, as it is impossible for an individual to lay claims to ownership of more than three quarter of the entire Burutu community.

And also, review the purported sale of the community’s property occupied by the NPA with a view to ascertaining the true state of affairs of the said property vis-a-vis Donye’s alleged ownership claims.”

The letter said the community wanted the government to “pay the Burutu community people the accumulated ground rent due to them since 1968 when the last rent was paid by the United Africa Company Nigeria (UACN) at the rate of twenty pounds or its equivalent in naira from 1968 till date.

“And return all lands/property occupied by the NPA in Burutu to the members/people of Burutu community in the event that the Federal Government of Nigeria no longer need same for public use.”

source

Nigeria: Fashola Orders Sealed Kalu's House Re-Opened

FORMER Governor of Abia State, Chief Orji Uzor Kalu, and Lagos State government, Tuesday, disagreed over the reason for the sealing of Kalu's property in Park View Estate, Ikoyi, Lagos.
Meantime, Lagos State Governor, Babatunde Fashola has ordered that the house be reopened.
While Kalu's aide linked the sealing of the house to the criticism of Fashola by Kalu over the deportation of 72 residents of Lagos, who are of South East origin, the Special Adviser to Governor Babatunde Fashola on Media, Hakeem Bello, said he believed the action has nothing to do with the alleged deportation of Igbos from Lagos.

According to him; "Fashola's administration has no time for trivial matters."
Emeka Obasi reacts
Reacting to the sealing of the Park View house of Kalu, his Special Adviser, Media, Emeka Obasi, said it was done as a revenge for the criticism of Kalu, who is the Coordinator of Njiko Igbo, a group fighting the cause of the South East.

Obasi said the property had been there for several years and that sealing it after just two weeks of his boss criticsing Fashola over the deportation issue was an indication that there was more to it.
Obasi said Kalu was not the only Igbo to have suffered such fate in Lagos State "after the wicked and ungodly act of deporting legitimate residents of Lagos State."

He added, "Why is it that it is now that the property is being sealed, barely two weeks after my boss disagreed with the action of Fashola? We maintain our stand and this will not distract us from fighting for the people.

"The action of the Lagos State Government remains unconstitutional because every citizen of Nigeria has a right to live in any part of the country. Fashola should remember that the Igbo community constitutes about 35 per cent of registered voters in Lagos State and they should be treated like they matter in the scheme of things."

Hakeem Bello comments
The Special Adviser to Governor Babatunde Fashola on Media, Hakeem Bello, when contacted, said he could not give any details on the development as he had not been briefed on the matter.
He, however, said that if the owner of the building had committed an infraction against any of the state laws, he or she should be ready to be sanctioned when the long arms of the law finally caught up with the him or her.

" I don't think it has anything to do with the alleged deportation of Igbos from Lagos. Fashola's administration has no time for trivial matters," he said.

Carlson Rezidor to open Park Inn by Radisson Abuja Kaura, Nigeria in 2015

Carlson Rezidor Hotel Group will unveil the 150-room Park Inn by Radisson Abuja Kaura in Nigeria in the first quarter of 2015. The full service mid-market property will be located in the Kaura district of Abuja, the capital city of Nigeria. The property will feature a restaurant and bar, a club lounge, a rooftop bar, a business lounge, 6,561 sq ft of meeting and conference facilities, a gym and wellness spa, and an outdoor swimming pool, a release stated.

Wolfgang M Neumann, President and CEO, Rezidor, said, “Nigeria is a focus country for our business development. The country’s economy is one of the fastest growing worldwide, and we see considerable growth potential for our core brands Park Inn by Radisson and Radisson Blu. With this signing we bring our portfolio to eight hotels in operation and under development in Nigeria."

Fitch Downgrades 13 Distressed Classes of JPMCC 2008-C2 on Dos Lagos Sale

Fitch Ratings has downgraded 13 and affirmed nine classes of J.P. Morgan Chase Commercial Mortgage Securities Trust, series 2008-C2. A detailed list of rating actions follows at the end of this release.
KEY RATING DRIVERS
The downgrades reflect the expected losses after the sale of the largest asset in the pool, The Shops at Dos Lagos (12.4% of the pool).

The Shops at Dos Lagos, a $124 million real estate owned (REO) retail property, was sold July 23, 2013 for $30 million. Including advances, appraisal subordinate entitlement reductions (ASERs), fees and other unpaid amounts of approximately $41 million, the loan loss severity will be approximately 109% on the current loan balance.

Realized losses to the trust will reflect the full principal balance of $124 million. Losses are expected to be incurred as of the Aug. 12, 2013 distribution date. Classes C through Q, currently rated 'Csf' or 'Dsf' by Fitch, will be affected. These classes rated 'Csf' are downgraded to 'Dsf'.

The additional amount of $11.4 million will cause permanent shortfalls to the transaction. These amounts were part of the total $27 million ASER (advances not made due to an appraisal reduction). Therefore, the sales proceeds of $30 million will be used to pay fees, expenses, advances and $16 million of the total $27 million in ASER amounts. The remaining $11.4 million in ASER amounts will not be repaid, while the most senior bondholders with an interest shortfall will recover $16 million in interest. No additional interest is expected to be taken from the trust due to the disposition of the Dos Lagos asset.

The property is a 345,847 square foot (sf) lifestyle/entertainment retail center built in 2006/2007; therefore, the property was not fully stabilized, with no operating history. The loan transferred to special servicing in October 2008 for monetary default after the borrower indicated the property was significantly affected by the downturn in the economy. The special servicer foreclosed on the property and, along with a third party management team, worked to stabilize occupancy. The last reported occupancy was 72.5%.

The property represented phase one of a two-phase, 534 acre development that was significantly pressured by economic conditions in 2009. The development included a residential subsection, a golf course, hotel, office building, a senior housing development and a 135 acre wildlife preserve. The retail center was 95% occupied at issuance; however, occupancy steadily declined to a low of 68% in early 2012. The borrower cited slower-than-anticipated growth in the residential neighborhood for the decline in performance, as tenant sales, rental rates and ultimately occupancy declined.

RATING SENSITIVITIES
The super senior classes' Rating Outlooks are revised to Negative due to the erosion in credit enhancement and continued risk of both principal and interest losses as the pool becomes more concentrated. After the sale of The Shops at Dos Lagos, eight loans (18.4%), including three REOs (1.8%) remain in the pool. Downgrades are possible if expected losses increase or if these classes are affected by repeated interest shortfalls.

Fitch downgrades the following classes and revises Recovery Estimates as indicated:
--$116.5 million class AM to 'CCsf' from 'CCCsf'; RE 50% from 100%;
--$14.6 million class C to 'Dsf' from 'Csf'; RE 0%;
--$10.2 million class D to 'Dsf' from 'Csf'; RE 0%;
--$10.2 million class E to 'Dsf' from 'Csf'; RE 0%;
--$13.1 million class F to 'Dsf' from 'Csf'; RE 0%;
--$11.7 million class G to 'Dsf' from 'Csf'; RE 0%;
--$16 million class H to 'Dsf' from 'Csf'; RE 0%;
--$14.6 million class J to 'Dsf' from 'Csf'; RE 0%;
--$14.6 million class K to 'Dsf' from 'Csf'; RE 0%.
--$8.7 million class L to 'Dsf' from 'Csf'; RE 0%;
--$4.4 million class M to 'Dsf' from 'Csf'; RE 0%;
--$5.8 million class N to 'Dsf' from 'Csf'; RE 0%;
--$4.4 million class P to 'Dsf' from 'Csf'; RE 0%;

The following classes are affirmed and Rating Outlooks and Recovery Estimates revised as indicated:
--$71.2 million class A-3 at 'Asf'; Outlook Negative from Stable;
--$45.6 million class A-SB at 'Asf'; Outlook Negative from Stable;
--$354.6 million class A-4 at 'Asf'; Outlook Negative from Stable;
--$145 million class A-4FL at 'Asf'; Outlook Negative from Stable;
--$60.4 million class A-1A at 'Asf'; Outlook Negative from Stable;
--$61.2 million class AJ at 'Csf'; RE 0% from 40%;
--$14.6 million class B at 'Csf'; RE 0%;
--$2.9 million class Q at 'Dsf'; RE 0%;
--$1.7 million class T at 'Dsf'; RE 0%.

Classes A-1 and A-2 have paid in full. Class X was previously withdrawn.
Additional information on Fitch's criteria for analyzing U.S. CMBS transactions is available in the Dec. 18, 2012 report, 'U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria', which is available at 'www.fitchratings.com' under the following headers:

Structured Finance >> CMBS >> Criteria Reports
Additional information is available at 'www.fitchratings.com'.
Applicable Criteria and Related Research:

--'Global Structured Finance Rating Criteria' (May 24, 2013);
--'U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria' (Dec. 18, 2012).
Applicable Criteria and Related Research:
Global Structured Finance Rating Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=708661
U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=696969

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=799070
ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

Meltdown: Nigeria in context of global response to impact on real estate

As the global economic crisis persists, different countries of the world have devised measures for responding to its impact on real estate. CHUKA UROKO writes that top of these measures are cuts in interest rates on mortgage lending and housing loans.

Developed economies like United States, United Kingdom, United Arab Emirate and even South Africa– countries where property market had experienced a boom before the crisis-are at the forefront of nations have adopted friendly measures in the bid to stave off the effect of the global financial crisis on mortgages and housing loans.

Nigeria has not shown any serious commitment in this direction, though that is understandable given that the country is yet to develop a functional mortgage system.
UK banks now provide cheap funds for loan seekers. In October last year, the country had its lending rate at 4 percent. Right now, it is as low as 0.5 percent. When it was 4 percent, most banks were lending at 4.75 percent. What this means is that the cost of funds is cheap, making it attractive for people to borrow to buy or build homes.
An international real estate investor and consultant, Gbenga Olaniyan, who disclosed this in an interview with Business Day in Lagos, stated that UK banks were trying to normalize things to enable them give out these mortgages, adding, “it is expected that by the end of this year, the effect of this move must be felt; with the cheap loan, what it means is that more people will be able to afford to buy”.

This move has not only affected the new entrants in the real estate market. People who have mortgages, especially those who didn’t negotiate fixed interest rates while taking mortgages, will see their monthly payments drop, say from 800,000 pounds to 500,000 pounds.

This means that a man whose house would have been repossessed and had that same house put in the market at a reduced price can now afford to hold unto his property. The property will no longer go into the market and cause mayhem, thereby reducing foreclosures because people can now afford their mortgages and keep their homes.
Olaniyan says that for new buyers, the cost of buying will be done through mortgage, adding that people who would ordinarily have rented, would rather buy now.

According to him, “it is expected that the UK market is getting to the bottom and so, by the end of this year, that market will bounce back and the effect will be felt”.
South Africa has also cut its lending rate but unlike UK, interest rate in the country was not cut heavily. It was cut by just one percent from 12 percent to 11 percent. Whatever the case, at the end of the day, you find that it has made mortgages cheaper and more affordable.
In the US, where the housing situation had been worrisome with the sub-prime mortgage crisis, the number of empty houses is so staggeringly high that no one has an accurate count. The managing director of UACN Property, Abdul Bellow notes that the city estimates that 10,000 houses, or 1 in 13 are vacant, all owned by lenders who foreclosed on the properties and also by the wholesalers who are now sweeping in to pick up houses in bulk as if they were trading in baseball cards.
This situation might soon give way to something cheering as the Barrack Obama administration has taken some steps aimed to address the problem of the housing sector. Recently, Obama sent a $500 billion mortgage bill to the parliament and it is expected that when the bill is passed, it will turn the mortgage sector around and the economy as a whole will be the better for it.
The United Arab Emirate (UAE) government has also cut down interest rate on lending. Though the figures were not disclosed to this reporter, it was said to have been reduced to a level where people are encouraged to borrow to do business.
Abdul Rahman Kadiri of Ark-Gold Properties who disclosed this to Business Day noted however, that banks in the country have made modalities for lending very stringent.
According to him, “before now, what the banks required from you as a borrower was just a proof that you are working with your six months pay slip; a bank statement for six months and a declaration that all is well. If it is a business loan from a company, all they required from you was two, three years audited account; your business plan and any other thing they might consider necessary”.
He said that before you get the loan now, banks have to do a lot of scrutiny to be doubly sure that you are credit-worthy. “Before this time, one of the businesses that was booming in Dubai was the property market where you could just walk in and see a property of your choice and approach a bank and within two-three working days, you get your loan”, he said, adding that most banks have stopped giving loans for property transactions and even where you get an approval, you have to bring high equity contribution.
He recalled that banks once required a maximum of 10 percent contribution from you and they would provide the remaining 90-95 percent. “Now, banks demand as high as 30-40 percent equity contribution from you which has drastically reduced the turn around in property development and transactions”.
Nigeria is a peculiar case because less than one percent of those who want properties have any form of mortgage or loans. Unfortunately, those are the people who need houses. The likely thing is that the man who does not have a loan is able to hold onto his property.
When, therefore, you compare other countries that enjoyed the pre-meltdown boom with our own, you find that our own situation is very peculiar because we have never really had a mortgage system.
Olaniyan says that it is even now that we should endeavour to develop our mortgage system because it remains the only way we can really arrest the slump. Unfortunately, if any bank is lending, it is lending at an interest rate of close to 30 percent. Any property investor who is in his right senses should not touch this kind of interest rate.
He however, enthused that in spite of the seemingly adverse impact of the meltdown on the real estate sector, there are still opportunities for those who have cash to move into the market.
“This is the best time to buy real estate. For example, in the US, a house that was put up for $300,000 around September last year was sold only a couple of weeks ago for $100,000. The tenant who is occupying the house now is paying $20,000 per annum. You can see that in five years, he will recoup his investment”, he disclosed.
Coming back home, he said, a plot of land that was selling for N80 million as at September last year, recently, someone was offering another plot of land at the same place for N54 million, adding that some areas had gone that bad, “but mind you, the high end market has gone flat. Some parts of Lagos have not gone down that bad such as Ilupeju and other areas where supply is limited. If you want a plot of land in a place like Ilupeju, there might be just one for sale. If you want it in Lekki, you will get 20 plots, VGC-30; Oniru-15 and Ikoyi-10″.
Olaniyan said that at the end of the day, a lot of opportunities are out there because the market will bounce back, stressing that this is also the time to buy and not to sell because people who sell now are those who cannot afford to hold onto their properties.
Kadiri agrees that the meltdown presents a fine opportunity for those who have cash to move same to Dubai property market because as he put it, “this is one market that presents almost limitless investment opportunities courtesy of the impact of the meltdown”.

Before the economic crisis, Dubai property market was one of the most flourishing in the world, giving fabulous returns on investment within shortest time possible. All that has changed now and the market is currently witnessing a downturn in demand, prices and returns on investment.

Kadiri disclosed that house prices in the UAE city have dropped considerably to about 30-40 percent, adding that the market is currently witnessing considerable price correction which has also brought about a slowdown as experienced in other markets. According to him, there are some 3-bedroom apartments which about nine months ago went for $500,000-$600,000 each, but now sell for about $400,000 each while a one-room apartment which at the same period was sold for $400,000 now sells for $250,000.

“In each case, you can readily find a tenant who will be paying a rent of $30,000 per annum. You see that from the rental income, you make about 10-20 percent annual return on your investment”, he explained.
Because of difficulty in getting easy loans to invest in properties, speculators have been eased out of the market, he said adding that the market is maturing and genuine investors are the ones left in there.

Again, he said that rental income can give an investor reasonable return on his investment.
“There is what looks like a fad among Nigerians to send their children to school in UAE and this is an added reason why such parents should buy homes there. What stops such people from buying homes in Dubai so that their children can move from their homes to school even as it is cheaper that way”.

He noted that “a lot of people now retire to Dubai into their own homes and for some people, it is an economic pride and status symbol to have a house outside like in London, America, etc. People should also aspire to own their homes in Dubai which is today a new world”.

He advised that Nigerians should go there because as at today, Nigerians are not yet on the top list of property owners in the country. “For those who have the means, this is the right time to buy because prices are very low compared to what they were before. This is the right opportunity to buy”, he stressed.
Globally, the real estate sector, like other sectors of the economy, is passing through difficult times. What is intriguing however, is that while other countries are putting measures in place to save the sector from collapse, Nigeria appears to be an onlooker.

Source

Lagos slum dwellers protest planned cancellation of N3.2b World Bank loan

WORRIED by the risk of missing out of development, slum dwellers in Lagos Wednesday petitioned the Lagos State House of Assembly on the proposed cancellation of Lagos Metropolitan Development and Government Project funded by the World Bank.
   The project, worth N3.2 billion is designed to upgrade the low level of human, social and infrastructural base of communities like Amukoko, Ajegunle, Agege, Badia, Ijeshatedo, Iwaya, Ilaje-Bariga and Makoko among others.

    The slum dwellers, numbering about 100 stormed the Lagos Assembly to protest the plight of over 500,000 Lagosians living in slums and alleged plan by the World Bank office in Nigeria and state officials to suspend the project.

   Led by the Centre for Public Opinion Monitoring (CENPOM), a coalition of 20 civil society organisations, the protesters drew the attention of lawmakers to “impending cancellation by the World Bank and possible transfer of the funds to other elite initiated projects being promoted by a cash and carry commissioner of the state.”

    The petitioners, in a letter addressed to the House, added “at the centre of the plan to truncate the redevelopment of Lagos slums is the Nigerian Country Director of the World Bank who has not hidden her dislike for the continuation of the programme beyond September 2013.”

   They noted that while the Lagos State Government, the beneficiary of the loan and the Federal Ministry of Finance that executed the loan agreement of the project, had supported the continuation of the project through extension for another 18 months, “a move said to be supported by the Internal Task Team of the Bank, the Country Director has blocked the extension, preferring to transfer the remaining funds in the project to another one,” the statement reads in part.

  Zonal Coordinator for CENPOM South West, Segun Adebanji, on behalf of the petitioners, urged the Lagos Assembly to prevail on the Country Director of the World Bank to stop her intention to cancel the project funding for a minimum of 12 months and allow for the completion of all outstanding projects currently abandoned at different levels.

   They also appealed to the Minister of Finance, Dr. Ngozi Okonjo-Iweala, to intervene in the matter, adding that if the matter is not nipped in the bud, the suspension of the project will affect youths and women.
   According to Adebanji, about 17,000 pupils who are to benefit from the 450 new classrooms under the project would have their education in jeopardy; 60 per cent of the uncompleted road and infrastructure projects in these areas will be abandoned.

  Besides, over 50 per cent of the water projects which will provide drinkable water for the over two million people are at risk and over two million people who are involved (60 per cent women and children) would continue to live in poverty and squalor, since all the social upgrading projects will be abandoned.
    Receiving the petition letter, the Speaker, Lagos House of Assembly, Adeyemi Ikuforiji pledged to intervene to ensure that the project, designed to upgrade the low level of human, social and infrastructural base of the communities, is not abandoned.

   Ikuforiji told the demonstrators that the House was concerned about the plight of slum dwellers and promised to engage the state governor and the World Bank to sustain the project

Stakeholders see future in real estate market, decry high cost of housing

Beyond the current 17 million housing deficit in the country, operators in the real estate sector of the nation’s economy have said there is hope for affordable housing in the nearest future.
They, however, expressed sadness over rising cost of housing, especially the government-built houses.
The view was expressed in Lagos on Thursday at ‘Real Estate Market Review and Projections 2013’ by Roland Igbinoba, president/CEO, Pison Housing Company; David Kpue, Ag. general manager, Federal Housing Authority (FHA); Femi Johnson, president, Mortgage Bankers Association of Nigeria (MBAN); Kayode Omotoso, executive secretary/CEO, MBAN; Tony

Monye, chief economist, Access Bank Plc; and Kojo Addo-Kufuor, COO, Ghana Home Loans, Ghana.
Giving an overview of the real estate market, Igbinoba said the sector faced a lot of challenges last year which ranged from infrastructure, funding, capacity building to high interest rate.

According to him, “Although funding is critical, there are a whole lot of other factors. If you bring in multi-million naira into the real estate market, it does not mean the problem of the sector will be over. But I think capacity building is a major challenge.”

He commended the Central Bank of Nigeria (CBN) for ensuring the stability of the exchange rate, adding that political stability in the country has, to a large extent, impacted positively on the
real estate market.
Igbinoba noted that there are good opportunities in the sector despite the seeming tough times.

“The market is tough, no doubt, but developers must be able to take the risk to invest in any category of the real estate they wish to involve in. The outlook for the market is good for 2013. The Nigerian environment does not know how to support your business, but it knows how to handsomely reward you,” he said.

In his presentation, Tony Monye, who spoke on ‘Global Economy and Real Estate Market/Macroeconomic Analysis of Real Estate Investment in Nigeria’, compared the local market with what goes on in the United States, China and Europe.
According to Monye, those nations were yet to fully re

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Nigeria: Towards an End to Property Demolition

The demolition of a housing estate in Abuja last year has remained a sore point for estate developers in the territory. While the affected developers are still trying to recover from the loss, stakeholders in the sector are of the opinion that more investment could be lost if conscious efforts are not put in place to checkmate these activities. Even though some stakeholder consider the destruction of such building as unnecessary since the country is faced with an alarming housing deficit, others are of the view that the government needs to put in place the right policies so that housing will be available for everyone. Evelyn Okoruwa writes Billions of money invested in property has been lost of recent to the demolition of such properties, often termed illegal by the authorities.

According to stakeholders in the housing sector, the ripple negative effect demolition of property has on the economy cannot be over emphasised as it cripples economic activities.
One of such negative effects is the resultant unemployment as workers employed in these demolished sites have been out of work.

The build industry employs labourers such plumbers, carpenters, iron benders, brick layers, masons, painters and professionals like architects, surveyors, engineers and other relevant professions.
Apart from that the transport sector has been greatly affected since people hardly move building materials from one point to another, this has invariable affected both the building materials sellers and the transporters. While in the mining sector only few aggregates are being bought, in addition to that, the developers themselves have lost the money invested in developing such sites.

An independent developer who craved anonymity told LEADERSHIP that he lost over N20 million during the demolition exercise and is yet to receive any compensation from the government.
He disclosed that he took ill when his site was demolished and is still yet to recover from the shock due to the money he lost, emphasizing that the money was borrowed and he is still trying to service the loan he took to develop the site.
Speaking on the issue, the President Real Estate Developers Association of Nigeria (REDAN), Chief Olabode Afolayan, noted it is really difficult to quantify the loss as millions of money have been lost in the whole demolition exercise.He disclosed that the exercise ha not only affected the housing sector but all other sectors that depend on it to strive.

"For a couple of months, Dangote Cement had to close its factory in Benue State because of drought. You can begin to itemise it that way. So the loss is really much. It is unquantifiable. I can authoritatively say that it has affected the GDP of the country by the time things are being put together at the end of the year."

However, the government has promised to forestall any future demolition. REDAN's Executive Secretary, Mr. Goke Odunlami, disclosed that members affected in the Lugbe demolition has agreed to take the advice of the chairman, Senate committee on the FCT, Senator Smart Adeyemi, to go into negotiation with the FCT Minister, Senator Bala Mohammed, instead of pursuing the court case.

He further disclosed that most of the affected members have agreed to opt out of court and negotiate with the minister, while reaffirming that the Lugbe crisis will soon be over. Rrecall that over 1,004 houses were demolished in Lugbe, Abuja, between August and October last year and it was estimated that property owners may have lost over N37 billion to the demolition of illegal structures.

While stakeholders continue to groan over their loss, they lament the unseriousness of the government to provide housing for Nigerians considering the huge housing deficit which is widely acclaimed to be between 16 to 18 million. While noting that the housing deficit is much more than the estimated number, they lamented that rather than encourage developers, the government is making it difficult for them to help ease the deficit.
As part of the Federal Government's transformation agenda, it had on many occasions promised to deliver affordable housing to Nigerians.

However developers have argued that the federal government is not ready to provide housing and have implored Nigerians to know that their future is in their own hands in terms of housing delivery.
They urged Nigerians not to rely solely on the government but contribute their own quota, stressing that the implication of the government's laid back attitude to the housing sector is that for there to be adequate housing in Nigeria, the sector must be 99.9 per cent private sector driven but however urged the government to bring the right policies into play in order to move the sector forward. Stressing the importance of the right policies, the National Secretary General, Nigeria Institute of Quantity Surveyors, Mr. Akinpelu Adewumi, noted that any government policy that is not implementable, measurable or sustainable will not give any result.

He disclosed that if government is serious about mass housing, it must be seen to be driving the policy. He opined that one way the government can drive it is to provide infrastructure, noting that if developers are allowed to provide infrastructure for buildings, such houses will not be affordable.
Adewumi urged the government to provide infrastructure first and then see how to incorporate local materials into the production and as such the cost would be brought down drastically.
By encouraging our local goods, he said more jobs would be created in the process while building cost would also be reduced.

Intellectual Property Marketplace Analysis

As the areas of trademarks and patent continue to expand, there is increasing demand from stakeholders for firmer intellectual property protection. Counterfeiting remains a problematic issue, and lawyers are relentlessly arguing for improved regulation of IP protection and enforcement. Such reforms would reassure international corporations of the opportunities for growth that exist in the region. Our research recognises 19 practitioners who are leaders in their field.

Jackson Etti & Edu provides a wide range of services in the area, and sees three of its lawyers listed in this chapter. Uwa Ohiku leads the intellectual property department and is a “renowned specialist” in the field. Her expertise covers trademarks in particular, and clients include prominent blue chip international organisations based in the US and the UK. Lookman Durosinmi-Etti, a senior partner at the firm, comes widely recommended for his “wealth of experience” in the sector and continues to act as a valued consultant to UN development projects on IP in the region. The “superb” Koye Edu has a multifaceted practice and provides “expert advice” on intellectual property protection.

Three practitioners from Abdulai Taiwo & Co are selected for inclusion. Ladi Taiwo is an “outstanding innovator” in the field and clients benefit from his “in-depth knowledge” of the discipline. Ayo Kusamotu is recognised by peers for his “unique expertise” in intellectual property and the internet, whilst Abdul-Rasheed Sadiq has a practice which offers “real value” to clients.

Allan & Ogunkeye is represented by two lawyers in this section. Obatosin Ogunkeye receives widespread acclaim from peers in the field, and his abilities as a litigator in trademarks, industrial designs and patent matters are “hugely respected”. Marlies Allan is recommended as a “first-rate” IP practitioner and is currently the president of the Nigerian group of the International Association for the Protection of Industrial Property.

Mark Mordi of Aluko & Oyebode is an “excellent negotiator”, having developed a successful practice brokering out of court settlements in IP enforcement matters. In the same area, he is a “formidable litigator”, and has successfully represented an array of clients including multinational pharmaceutical companies. Joining him is Uche Nwokocha, a “vital member” of the firm’s IP team who is recognised by clients as a “foremost authority on various intellectual property issues”, ranging from patents and designs to technology transfer agreements.

Chief GO Sodipo & Co’s managing partner Bankole Sodipo is highly rated in our research, which reflects his status as a “true authority on Nigerian intellectual property law”. Sodipo is president of the Intellectual Property Law Association of Nigeria, which collaborates with the government and private sector in lobbying for reform of IP rights.

Olugboyega Kayode at David Garrick Kayode & Co is “vastly experienced” in Nigerian intellectual property law, having advised both local and international corporations on the protection, licensing and enforcement of their IP rights.

Lara Kayode is the founding partner of O Kayode & Co, and is well known for her “forensic attention to detail” in relation to IP disputes. She has a practice that covers all aspects of intellectual property law, with particular emphasis on industrial property, IP protection and mediation.

At AELEX, Theophilus I Emuwa is praised for “delivering commercially-focused solutions” to clients in the realm of IP law matters, and has a “dynamic” practice that includes advising multinational entities on IP enforcement in the pharmaceutical and biotechnology industries.

Mena Ajakpovi handles the intellectual property portfolio at Abraham & Co and is an “esteemed practitioner” in the field. Ajakpovi has a “stellar skillset” which covers IP registration and enforcement and he sits on a sub-committee on trademarks and trade names at the International Trademark Association.

Managing partner at Stillwaters Law Firm, Afam Nwokedi stands out for his “high-profile work” in the patent and design, trade marks and copyright sectors.

At Chuma Anosike & Co, principal partner Chuma Anosike possesses “industry-leading” expertise in the area of pharmaceutical intellectual property, and displays “admirable adaptability” in representing globally placed clients from multiple industries.

Adepetun Caxton-Martins Agbor & Segun’s Afolabi Caxton-Martins is recommended “without question” and is a “go-to name” for legal consultation on trademarks disputes.

Sam Okagbue of George Ikoli & Okagbue merits inclusion for his “steadfast commitment” to meeting clients’ needs in the areas of patents and trademarks.

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