Privewaterview Holdings Limited
In many African countries, a wide gap exists between housing demand and housing supply. In Nigeria for example, a backlog of 17 million plus housing units exist, and `developers are only able to supply about 100,000 units per annum (this covers government, corporate and personal construction; it has been projected that we require at least 700,000 houses per annum to be able to bridge the housing gap). Even now bridging the housing gap remains our paramount goal, however, we further see housing development as a social revolution, as we push to curb the wrong perception that affordable housing cannot be spoken together in the same breath as comfortable housing.
We have evolved from a company that helps build bespoke houses, where an individual customer determines almost all specific building items, design of the house, size of the living room, bedroom and kitchen, kind of tiles, design of POP (Plaster of Paris) for construction, kind of water closet etc., to building houses based on our categorization of the classes of potential customers. In other words, you would now most likely find us building houses that we feel the generality of our customers would appreciate based on existing surveys we have carried out in the past. As a company, we have also evolved, more like extended our customer base (previously only upper-middle and high income residential houses) to include lower-middle income earners. Also, when we began we did not consider doing business with government. We have had to revisit this policy, as government remains the biggest real estate investor, and we are on the verge of signing a number of real estate development projects with various government parastatals.
Primewaterview Holdings Limited was set up in 2015 to consolidate & harmonize all efforts (Real Estate & Non Real Estate), and provide the needed leadership and drive. Today the Primewaterview group is made up of the following companies:
Primewaterview Holdings Limited – Real Estate Development Company
PWV Management Services Limited – Facilities Management Company
Scott James Limited – Renewable Energy Solution Company
Oceanrise Construction Limited – Construction Company
Baron Rivers Limited– Trading Company
The Real Estate industry is not exactly known for uniqueness of products. A house built with the Brick and Mortar technology would be the same irrespective of the builder. The only difference would be the attention to detail in the construction and finishing methodologies that we apply coupled with the services we provide for residents of our estates. For us also, because of our experience over the years, and our boldness to go where others have chickened away from we have gained a lot of construction insight which has improved our quality and speed of our housing delivery. We started out with single units, mini residential estates, and after some years developing houses in the Lekki axis of Lagos State, we came to the conclusion that because of the huge Cost of Land, the only way forward is upward. As such high rise building solutions were driven, and Primewaterview became to be known as the high rise real estate company.
As a company our desire has always been to provide an integrated housing estate for our subscribers inclusive of efficient power and waste management solutions. When we started out also, very few if any at all were providing 24-hour power for their housing estates. We wanted to be different and set up the necessary machinery to deliver on power solution. Knowing how erratic the power provided by the public service company is, it has been no mean feat to continue to provide 24-hour power to our estates from the time we signed off on it to now.
Today we are looking to replace our diesel powered generators with Renewable energy solution for our major estates, and this is the solution we would also be deploying for our future projects.
All of these serve, to a large extent, to showcase our uniqueness in the industry especially within the Nigerian real Estate market.
Every potential purchaser must know/determine the following to make an informed buying decision:
1. Pedigree of Developer
There can never be a shortcut to experience, and so in making a choice on who to buy from it is important for potential purchasers to know what the developer or their principals have built in the past.
With a high (one too many) level of building collapse and abandonment, it is important to know if the project(s) embarked upon by the developer is (are)completed, if people are living in them. In some cases you may also want to know the level of occupancy because at times the poor state of the housing units might be a reason why the property is not substantially occupied.
Cost Per Square Metres
A number of times you see buyers who are misled by the typology of a house that they are buying without truly knowing the dimensions. You would hear a buyer say, I am buying a 3-bedroom apartment, without knowing the footprint of the building, the size of the rooms etc. Knowing the Cost Per Square Metres would be helpful especially when you need to make a decision when more than one offer is on the table.
Location of House/Resale Value of Property
The location of any property is a major decision for house purchasers especially when reconsidering the resale value of a house, or where you might need to use the house as security (collateral) for a bank loan.
Government plays a major role in determining the kind (residential, commercial etc.) and size (no. of floors) of house to be built at any location. These days some state governments would literally pull down housing structures that were built in contravention of the building permit for the area. So for every purchaser you need to know if the house you intend to buy has the necessary building permits that you can independently verify, so that you don’t wake up one day to be told that your house you bought with your hard earned money is lying on top of a gas pipe and would need to be demolished.
Government’s Developmental Plan
As part of the federal and state governments’ master plans some areas are earmarked for future development, and so it would be profitable, especially for housing speculators to take up position (purchase landed properties or housing units) preparatory to government opening up the area by providing infrastructure. For every purchaser it is therefore imperative to know what the plan for every area is. In a similar vein, this is also important because as a purchaser you do not want to buy your retirement home close to a location earmarked for commercial and industrial use.
The following are current trends that will shape tomorrow’s housing.
There is a general move towards the development of Affordable housing. Beyond the primary function of a house being to provide shelter, various African governments are beginning to see the need to invest in housing because of the multiplier effect. On the average about 70 persons are directly or indirectly involved in building a 3-bedroom bungalow. Imaging therefore 1,000 bungalows built across 36 states of Nigeria, a total of about 2.5 million jobs will be created. The fact that only about 25% of Nigerians own their own houses is a great incentive for the industry in Nigeria.
We also envision that to drive this development we would require appropriate technology that is fast and affordable, utilizing materials that are locally available and acceptable. This would require indigenous real estate firms to be very proactive. We are also working on perfecting a building technology. In the past foreign companies have come to market to us various building technologies, which eventually do not see the light of day because of the high exchange rate for the importation of equipment or raw materials, or as basic a challenge as the building materials used not being acceptable to the local population. This is one area that government would need to do some work, in terms of enlightenment campaigns, to make Nigerians understand that a house is not anything less if it is not built with the brick and mortar method.
While Affordability is paramount, there is a clarion call for sustainable development. Real estate is a focal point for any form of urban development, and since the rural urban drift has been on the highest than any time in human existence, it would continue to consume physical resources, and the resultant is the high level of emission we find especially in very populated cities. Real estate is therefore central to the goal of creating an environmentally sustainable future. So developers who want to remain relevant for tomorrow’s market are constantly questioning the source of their building materials, their designs, technology & construction methodologies. For us we also pride ourselves in providing an integrated housing solution which encompasses provision of renewable energy and waste management solutions for our self-sustaining estates.
In furtherance of this, as a real estate company we are already thinking of how we can explore the benefit of Carbon Credits on our projects that we manage, especially post construction period.
Coworking which enables independent companies share a working environment is likely to revolutionize the commercial real estate industry. For a country like Nigeria with a high SME profile, coupled with the fact that a sizable number of workers run their own private practice, we envisage that having coworking environments where these SMEs & entrepreneurs can rent “pay as you go” office spaces would be a success for its investors in future.
Technology disruptors are here to stay. It is no longer business as usually in the Transportation industry because of the likes of Uber, while in home rentals and short letting, the likes of Airbnb are holding sway. We envisage that technology would be impacting main stream real estate very soon. Already 3D printed houses are on the increase, and ways of commercializing the various forms are being considered. We also envisage that technology would be an enabler for would-be purchasers to see and interact/have a tangible feel of what living in a house would be like.
The following are challenges facing the industry at the moment.
High inflation – recently the prices of construction materials have skyrocketed.
There remains a bureaucratic and frustrating process of land registration, which could see registration of a property take between 3 months to 1.5 years.
Taxation is another problem Nigeria’s real estate sector is saddled with.
Practitioners are made to pay all forms of taxes and levies including income tax, land use tax, development levy, building plan approval levy, property tax etc. In some states you can even be taxed for wanting to renovate your property.
Devaluation of the Naira – The Nigerian real estate industry is very import dependent on raw materials and equipment, and this recent devaluation of the Naira has had some adverse effect.
Omo-oniles or land touts remain a challenge. Developers have to be careful not to fall into the hands of fake land dealers, and even when they conclude the land aspect of the transaction, these people if not properly handled can disrupt the construction stage of a project resulting in undue downtime.
Increasing collapse of buildings is a growing problem. These days it would seem that more developers are cutting corners, and in the housing business one has to be careful. Unfortunately, a number of these developers cut all kinds of corners and begin to brag about how cheap their houses are compared to yours, and invariably you would see potential customers drift towards these developers to the detriment of a developer that follows strictly to the required standard.
A lack of competent builders, inclusive of the fact that the average workman, especially those involved in finishing works like “tilers”, always seem to be in a hurry to finish their work; maybe because there might be another job out there, that they fail to exert their expertise on the job at hand.
Limited source of funding remains a major challenge in the industry. Local bankers generally are more interested in short term projects like trading business that they can turn around 3 times in a year than to “tie their funds down” in real estate.
Of course access to mortgage loans comes into this mix as we truly cannot develop a thriving real estate industry without an effective mortgage system, and presently the mortgage industry in Nigeria is almost inexistent.
As a company we have been able to build close to 1,000 homes. We built our flagship high rise development (Primewaterview Gardens 1) made up of 107 units of housing within 15 months. We pioneered indigenous high rise developments. Before then, residential high rise development was the forte of foreign developers. When we built Primewaterview Gardens 1, people said it was a fluke. We went ahead to silence them by building Primewaterview Gardens 2, with 348 units of housing, which is three times the size of Primewaterview Gardens 1. To date our high rise building make up about 90% or more of the high rise buildings that adorn the Lekki-Epe express way, which is the real estate hub in West Africa.
We started out to provide 24-hours power supply for our Primewaterview Gardens 1 & 2 projects (In a country like Nigeria, where power supply is erratic, this is a challenge). While we have not done this 100% since 2009, as we have had some downtime, I think we have wrapped ourselves in glory for what we have been able to achieve these eight years, since Primewaterview Gardens 1 came on stream.
Recently, in line with the Paris Agreement of 2015, to reduce emissions as part of the method for reducing greenhouse gas, we established a Renewable Energy company (working in conjunction with established Renewable Energy solution providers) to provide power, to some of our existing estates that we currently manage, and all our projects in the pipeline. This way we are assured of providing a better quality life for our customers.