Lack Of Transparency In Real Estate Transaction In Nigeria, Bane of Dependable Data – Akinlose | Independent Newspapers Limited
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Lack Of Transparency In Real Estate Transaction In Nigeria, Bane of Dependable Data – Akinlose

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Posted: Oct 4, 2016 at 5:48 pm   /   by   /   comments (0)


Cambridge trained Rotimi Akinlose is the founder and Chief Executive Officer of Residential Auction Company (RAC). He speaks with NKASIOBI OLUIKPE on his biennial Lagos Outlook report and some of the setbacks of real estate market in the country. Excerpts:



For how long have you been publishing the “Spotlight on Lagos Housing Development Market”- Outlook Report?


I have been publishing the report for the past 6 years and it’s a biennial report, once every two years.


What informed your publishing it and how reliable would say the report has been, even with the recession on ground?

Hmmm!!! Well, for me it was clearly a case of lack of data and reliable information on the real estate market in Nigeria.

I worked abroad for a top property consulting and surveying firm, Savills, in London in the residential research department and this is where I got first-hand experience dealing with data on the real estate market and for me I was amazed at the amount of data that was publicly available at just a click of the mouse. I returned back to Nigeria in 2009 and did my national youth service with a property development firm in Lekki and was intrigued about the housing development market in Lagos in general. So I started collecting data on new residential developments across Lagos.

Initially, it was just something I did without any real thought process to it but gradually over time I started seeing a trend in the data I was collecting and this led me to the idea of writing a report.

The fantastic thing about data is that it tells you a lot and gives you an insight into trends and patterns which ordinarily you would not see or take note of. So in 2010, I wrote the first “Spotlight” series report and this years’ was the fifth publication in the series.



I guess I read in your 2015 edition that 2016 will still be bright for the real estate industry. Do you still stand on that?

First of all, the report was published this year 2016 based on the market activities of last year and the preceding years.

Secondly, I would like to correct you there. You misquoted me by what you just said.

I never said the real estate industry will still be bright. If you go back to read the report and towards the end under the development pipeline section I had made mention about the current economic atmosphere in the country and how it was most likely to affect the number of units that would be delivered for this year and for real estate developers being wary of the times ahead with the likelihood that there would be a sharp drop in potential house buyers meaningless spending. For me it was just a case of the signal already on the wall.


None availability of dependable data has been reported as the bane of foreign direct investment in the real estate sector in Nigeria. How do you think this can be tackled?

One of the major reasons why there has not been dependable data is simply due to the fact that there is no transparency in our real estate market. The lack of transparency on real estate transactions has hindered the market in large volumes. It has restricted a lot of opportunities that are open to the market and has scared off investors.

Foreign investors will not invest in a market where there is just no transparency. I have written on this issue in the past and I keep saying it.

Now, the reason there is no transparency is because agents are reluctant to give out information on prices from transactions, I am speaking from my own personal experience. This may be because some transactions are done under the radar or for some other reasons which I do not know of.

Now I do not mean to wrong or speak negatively about real estate professionals in the country because we have a lot of respected and renowned agents that are members of the professional body, National Institute of Estate Surveyors and Valuers (NIESV), but I think the body needs to do more especially in the area of developing research and encouraging agents to be transparent with transactions and not hoard important information that can help to push the industry forward.

The professional body needs to move with the time we are in. Right now the world is all about data. I am not just putting the entire responsibility on the professional body but the government also needs to be involved in the process.

Ideally, aside dealing with land issues, the Lagos State Land Registry should also have a department within that will record all real estate transactions involving sales of real estate assets such as houses and land so that data will be collected to monitor and identify trends and patterns in transaction size and volume as well as house prices.

By doing this, it would also help the government to drive revenue. The most important thing in all of these is that we need to cultivate the habit of keeping records and being more open to the idea of research. The ability to have research in any area will simply make it easier to plan ahead.


Why is your real estate research work limited to Lagos alone?

For me Lagos is a key market for any foreign investor that wants to invest in Nigeria. Simply said, Lagos is the heart of Nigeria. If the heart stops beating the entire body will die.

This is just to illustrate the importance of Lagos as a strategic point of entry for any investor.

Lagos has been my home since birth and it is a place I love and very passionate about; although we all know how hectic it is to live in the city. All the real estate sectors here are very active and vibrant with demand and supply; be it residential, office, retail, leisure/hotel and industrial. They are all well represented across Lagos.

But I will not exactly say my research is limited to just Lagos alone. I also collect data on the Abuja housing market although it might not be as robust as Lagos but I started off with Lagos considering its where I live and I am very familiar with. But with time I plan to extend my coverage.


On your Global Property Guide website, you disclosed that wealthy mansions abound in Nigeria, while the poor go without housing. What do you think is responsible for this anomaly?

The report on Global Property Guide was not written by me. It was a Global Property Guide report. They only made reference to one of my past reports “Lagos Residential Rents Report – 2013 Outlook” in their report.

On the issue of wealthy mansions, I think it’s evident to all that the bulk supply of new housing units in most of the urban parts of Nigeria like Lagos, Abuja and Port-Harcourt are concentrated in highbrow locations where the high income earners reside. The low end of the market is suffering from low supply of new housing units.


The over 17million housing deficit is supposed to be a good business opportunity for the real estate developers. How well do you think they have been utilising this opportunity?

To start with I believe the current housing deficit figure that has been brandished over the years in my personal opinion is grossly underestimated and obsolete.

Nigeria’s population has increased considerably over the years and this would have created more households that require housing units which is bound to add pressure on the housing deficit.

I think if we were to be more realistic the real current housing deficit would be nearly double what it is now. I did a presentation on this in an event I was invited to last year. I believe in a few years the World Bank or United Nations will tell us what it is (Chuckles).

On the issue of real estate developers utilising this opportunity; I think real estate developers have done very well to push growth in the housing development market across the country with very little or no assistance from the Federal Government. They operate in a very challenging environment especially with regards to infrastructural development such as roads, electricity, water and essential public facilities which are lacking in many areas.

Some developers have had to carry these burdens over the years in providing them to assist the government which should not be the case. The government needs to do more to help real estate developers by providing infrastructures and also creating a conducive and enabling environment for real estate developers in the country.