Mentoring - Learn from achievers

 “Housing for all” has been a beautiful phrase any day to both the rich and the poor in Nigeria. But how well has it been delivered? We sought the views of SIR PETER OKOLO, Chairman, Real Estate Developers Association of Nigeria, Abuja. 

Excerpts:

WHAT’S REAL ESTATE?

Real Estate from common man point of view is associated with people who deal in land and building. For those of us,  real estate surveyors and valuers who are with the institution of estate surveyor and valuers registration board we carry out valuation of jobs for banks, individuals, companies and among others. Quite a good number of us are in property development.  Outside property management we’re very well known for we also do property development. That also includes facility management and everything that touches land and building. Here you would readily find very knowledgeable real estate surveyors and valuers of which institution I belong and I cherish so much.

HAS THE BUSINESS ALWAYS BEEN KNOWN AS REAL ESTATE IN NIGERIA?

From time immemorial God Himself provided shelter for Adam and Eve and it hasn’t changed till date because each time any of us comes into the world basically, the way you need air to breathe and stay alive that’s the way you also need shelter to stay healthy on earth. So you can see that the issue of housing is quite necessary to keep life afloat. It’s for that reason that the business of providing housing will at no time ever go down; people will always want houses to live in. So, housing has been with us since the time of Adam and Eve. But the point is that things are changing all over the world now and people have to change with them. Why do Nigerians leave Nigeria and have to go and buy properties in Dubai. But here I can tell you that from Dubai also, they’re interested in properties in Nigeria.

BACK IN THE DAY IN NIGERIA WE HAD LANDLORDS AND TENANTS DO THEIR THING WITHOUT ANYONE HEARING ABOUT THE NAME ‘REAL ESTATE’. BUT TODAY VIRTUALLY EVERYONE WHO HAS ANYTHING TO DO WITH LAND AND BUILDING IS TALKING ABOUT ‘REAL ESTATE’. WHEN DID THE BUSINESS BECOME KNOWN TO US AS ‘REAL ESTATE’?

Before the war there was virtually nothing like ‘Real Estate’ because, it was only University of Nigeria, Enugu Campus that was offering a course in Real Estate Management under Professor Umeh. And it didn’t last long; the war broke out and those who were in the university before the war had to go back and finish up in 1973 and 1974. And after that, about eight or ten of them graduated. But gradually, that number has swelled up over a thousand now. So, ‘Estate Management’ is a young discipline that’s been practiced in Nigeria with only very few universities offering the course. But in the 70s, outside the University of Nsukka and University of Ibadan or so, there was no other university offering Estate Management and the population then in those departments was just between five and fifteen to the maximum. So, it has taken quite a lot of time and hard work for our pioneers to make this impact, and quite a good number of us joined way back in the 70s. I graduated in 1978 and we’ve been pushing up ever since. But now we have more people in the practice.  So, if you want to draw a pure dividing line, it’s difficult to do so because over time we have always oppressed like we’re moving now. And because of our progress quite a good number of those in other disciplines are jealous of what we’re doing, and that why they’re all intruding, and we regard such ones as ‘Quacks’ because they have not gone through the crucibles of being an Estate Surveyor and Valuer. So, it doesn’t have a clear-cut dividing line. But then, if you want that you could say – ‘pre-war’…No! ‘After the war’…Yes! You can talk about us from the year 1975.

WHAT’S THE SCOPE OF REAL ESTATE DEVELPOMENT AND PRACTISE ON A PROPERTY?

99.99% of the houses under construction or would have been built have been built by individuals, Estate companies Estate Developers. One could attribute less than 1% to Government. Quite a lot of impact on that. And we’re still pushing forward. The only regret is that Government is yet to create the enabling environment for the business to flourish like in other countries. And that’s the problem they need to surmount before the Real Estate sector can blossom; Government needs to put away politics.

WHO WOULD YOU THEN SAY QUALIFIES TO PRACTICE THE BUSINESS OF ‘REAL ESTATE’?

No, I wouldn’t want to be selfish about it. Even among the Doctors, you have the ‘Quacks’…among Lawyers, Engineers, you have ‘Quacks’…among Architects, you have ‘Quacks’. So also among Estate Surveyor and Valuers, you have ‘Quacks’ surrounding them. So if you choose to deal with a professional you know where to go. For instance, this company is registered under the law, recognized by law, and therefore if you want to deal with us on Real Estate issues you’re safe and sound. But if you decide to meet with somebody else who’s not a registered Estate Surveyor, of-course, you take what you get.

So, the right fellow to practice Real Estate Development is the Real Estate Registered companies which have

been grounded academically, disciplined and government recognized; the dos and don’ts of practicing the profession is there. So you need to go to such companies and seek assistance for whatever you need about land and housing.

HOW WOULD ONE EASILY DISTINGUISH BETWEEN QUACKS AND PROFESSIONALS IN THE REAL ESTATE BUSINESS?

Yes, a lot of people are answering Estate Surveyors. But you see our institution –the Institution of Real Estate Surveyors and Valuers has a registration board; when you go through the crucibles of graduating from a university or a polytechnic you also go through the period of tutelage in a registered firm where you’re taught the nitty gritty of practice. If you’re unable to go through that then you go for the real exam in the higher institution. If you’re lucky to scale through then you will be registered and then you can now practice as ‘registered estate surveyor and valuer.  And then when you’re authorized by the body to practice you’re given a stamp and seal with a registered number, and you would easily see the logo of the institution in any of our letter heads or even on our ‘To Let Boards’, or on any document that we would sign coming out from our office…you must see the logo of the Institution.

IS REAL ESTATE AN ATTRACTIVE AND LUCRATIVE BUSINESS FOR THE NIGERIAN YOUTHS?

Business is Business. Business means there’s profit attached to it. If you’re going to suffer losses and loss becomes your name you would look for something else to do. So Real Estate is business on its own just like any other business. But for us we offer special business in terms of making lands available to you, genuine land allocation and sorting out any problems you have on lands. We have the capacity to do that, building for you as Estate Developers, getting relevant disciplinaries of Architects, Engineers, Quantity Surveyors, Land surveyors,  you can pull them together in a consortium to do a particular project and supervise everybody, and in the end you’re the best material to do the facility management of that project. So, at the end, why shouldn’t you be happy with yourself?

WHAT’S THE COMPARISON BETWEEN RAEL ESTATE PRACTISE IN A DEVELOPING AND DEVELOPED CITY?

 A developing city has a great advantage of looking at the older city, seeing their mistakes and correcting them in the new one. Abuja is a developing city for instance and that’s why we have the hic-ups in the development of Abuja today. But more importantly, I wish to see a much stronger, definite professional leadership in the development of the city than having politics come- in between development of the city and the leadership. And so, the difference is always clear. If you don’t have the right place for the development of a city of course, you create more problems than envisaged because you don’t know it. It’s a matter of seriousness. What’s the priority of Government? Government is the prime mover, the brain box of any development of a city; she charts the course…she provides the enabling environment for the private sector to be part of it…it’s a matter of determination and priority of Government. Do you want to develop a first class city with little or no problems attached to it or do you want to play politics with it? Is it an area where contracts are given out to out wage or maintain your friends in politics or is it a city you want to see grow to become a real true developed city in the future? Those are the decisions the leadership has to take. So far in Abuja we have seen the good, the bad and the ugly. But we’re still moving on…still very determined to move on.

IF YOU MUST LEND A VOICE TO THE REAL ESTATE PRACTISE IN NIGERIA, ON WHAT WOULD IT BE?

Sadly, I don’t think I’ve seen any seriousness on the part of government to really, truthfully and honestly create housing for our people. It’s sad because the whole issue surrounding ‘housing for all’ has been tinted very seriously with politics, which shouldn’t be.

 And because it’s intended with politics the policy decisions are politicized and therefore unimplementable and with that, the enabling environment is not there for people to invest. Hence, we’re back to square one where nothing is happening. People are just moving around in circles and pretending to be working and the rest of it, and that’s also one of the reasons why we have these high rentals and arguments. There’re two sides of the argument – as a Tenant I would argue that the rents are high – Yes! The rents are high and nobody can run away from it. It’s true. As a Tenant will I accept high rents? No! I’ll want to see it come down. I want to see it come down drastically. As a Tenant, will I want to live in a good house? Yes! I want to! Will I like to make payment of my rents affordable or make affordable rental? Yes! When the Landlords increase it exorbitantly, what do I do? Of course, I frown and complain and curse them. As a Tenant, yes, I would do that. The other side of the coin –as a Landlord, I have to buy my land for 500million naira…I go to my Bankers, they loan me money at 30% to build six flats of three bedrooms…I go to the building market, I buy things at exorbitant prices…in transporting them back to my site I pay through my nose because at various check points I have to pay demurrage, and of course the various demands at the site comes in; when you add up these costs and I complete my six flats, and you come to pick it up at #200,000.00 or #100,000.00 or #50,000.00 a year, from the Landlords point of view he would say ‘No!’, and you would do the same if you were the Landlord. You would say ‘No! pay me M1 naira!’, as if M1 is #1. So there’s a stand-off between tenants and landlords. And everybody boils for a fight. But there’s somebody who could have made things much easier for both parties -the Government. They have a big role to play…much bigger role to play. Like the issue of Rent Edict – with what would rent edict do to force a landlord to give out his house? You could do those laws, Yes! But you’ve not taken away the rites by a landlord to lease his house to anybody…he could say ‘No!’ to leasing out his house. And there’s no law that says he must say ‘Yes!’. At some points there must be ways of circumventing these laws and stay within the law. But is that the best solution? No! The best solution in my own opinion with all great sense of responsibility is for Government to be very bold about it…solving the housing problem is not a political decision…it must not be tinted with policies that are politically inclined. What should they  do specifically?  Make land available at virtually no cost to serious developer. And like I’ll always say, how much did Government pay to God to create the land that they are charging for?...charging one million naira, two million naira, two thousand naira per square metre…how much did you pay God per square metre? You paid nothing. And you’ll never pay anything to God for the land you’re charging. As government you could provide the infrastructure under social basis; your contribution to the welbeign of your citizen by putting in those infrastructures and charge nothing for those lands. But then get in serious developers to put up those lands and then theses rents will crash like nothing; make the cost of building materials affordable by removing some of those double custom duties and the rest of it, and the rents would crash, and people would have more access to funds to even build their own houses because, they would source land easily without paying through their nose. The banks are the worst culprit…it’s good business for them; charging 30%, take a million naira, you pay them #300,000.00…you get a hundred million naira and you pay them M30 naira…my God! What business is that? But that’s what we’re seeing. And then the guy pays you M1.00 naira…he borrowed M100.00 naira, pays you M30.00 naira; he adds it up and expects you to make profit for all the effort…yes! So at M150.00, he puts his house at M1.5 – what’s your problem with that? He wants to recover and make some profit – fine! 90% of that cost is off to paying money to those he borrowed money from…I’m not talking of the terrible cost of land and even the payments to Government  where you pay M24.00, M34.00, M50.00, M150.00 as ground rent… Is that creating the enabling environment? There’s a lot Government could do- crash some of these things because it’s not the only way of making money for Government. Nigerians have no houses. We’re in deficit of over 16 million housing units. So with the crises in the housing sector, will the Central Bank or Federal Government collapse if they pumped in six hundred billion naira into the housing sector? No! They’ve done it for the Banks and it paid off. And the Government is still moving on, even  trying to give them more money. 

So because the housing issue is beign politicized, Government has not taking up the housing sector seriously; they’ve not looked at it as a crises zone…they’ve not seen it as a problem. They need to; there’s a simple solution to it. The United States’ recession started two-three years ago because there housing sector had a problem; people not been able to payback their mortgage. And it did not only track down the US economy but the entire world… housing! Nothing more than that… not  exportation – not manufacturing, ..No! If you pull up housing, you create jobs. If you ignore housing, you keep wallowing in all sorts of rhetorics and political jargons. If you take up housing, you talk-less about unemployment. Take a three-bedroom bungalow/boys quarter for instance – how many people will you see doing that bungalow? At least a minimum of two masons…the carpenter and his helper, plumber with his helper, tiler with his helper, painter with his helper…I’m not  talking of those moulding blocks outside the compound, the Tipper Man with his motor boys going down to the river to bring sharp sand, the quarry site that is on – crushing so that we can take some stones, the factory producing paste, nails…I’m talking about  just a three-bedroom boys quarter, how many people put in their effort in building. What if you then have one thousand, one million, ten million of such houses going on? It’s very simple. But if you continue to talk politics with housing, we may still be where we are. I keep hearing this every election time, ‘housing for al’… ‘we shall provide jobs’ – which jobs? Take housing, and half of the problem is solved. Somebody came to me, a very young man and said ‘I need #6,000.00 to pay for my driving liscence’. I looked at him…I said ‘you’re a very young man’. ‘yes!’, he replied. I said ‘you’re very healthy’. ‘Yes!’, he replied again. I said ‘you need six thousand naira from me…I’ll give it to you. But this way – come to my site, you would serve my Mason for six days, you’ll be paid #1,000.00 and in six days you’ll have #6,000.00’. And he came, he served the Mason for six days, got his #1,000.00 per day and ever since then he has refused to go and get his driving lisecense…but he has also refused to leave the site…and  he’s no more talking about driving…he doesn’t need the Driver’s lisence anymore. So leave politics, take up housing and the problem of unemployment of our youths is solved. And don’t  forget, if you decide to do a property development of say an estate of 200 units, you’d have an office, buy computers, engage graduates in the administration, also you’d buy cars and you’d need drivers…you can see the ripple effect. And then, on site you’re building 200 houses, do you know how many Masons you’d have on site? Do you know how many helpers you have on site? Do you know how many Carpenters you’d have on site? Do you know how many Plumbers you’d have on site? Do you know how many Tillers you’d have on site? Most of our youths are roaming about doing nothing because, the enabling environment hasn’t been created. But it can be created by just one stroke of the pen; funding the housing sector. And half of Nigeria Youths Problems would be over.

WHY WOULD ANYONE CHOOSE TO DIE FOR THE BUSINESS OF REAL ESTATE?

Well, if it’s not profitable I won’t be there. If it’s not profitable, I won’t have quacks scrambling with me. It’s a profitable venture because it’s something thatis driven by need. And the demand is so high, the supply is too little. And that factor alone is a natural factor that drives profit. So no-matter how, there’s some margin of profit attached to real estate development. And that’s why it’s business. And that’s why people are in there. There’s no quack or registered firm that has left the business that I know of; rather you have more quacks and more professionals coming into the profession.

WHAT ADVISE WOULD YOU GIVE TO THE NIGERIAN YOUTH INTERESTED IN ‘REAL ESTATE’?

I’ll prefer to tell them to come into the practice, not as quacks; but go to any of the universities or polytechnics and get yourself well groomed in Estate Management.

 After which you come down and go through the nitty gritty of getting elected by this institution and being recognized, and then start-up some practice. But in practice, what you must hold to your heart is the discipline of being extremely honest and straight forward with your business partner without which you would just fall like a pack of cards.

IF YOU MUST USE THIS MEDIUM TO SAY A THING OR TWO TO YOUR COLLEAGUES IN THE BUSINESS, WHAT WOULD IT BE?

My colleagues, I’ll like say let’s pull our resources together, and time and pressure and tell the incumbent Central Bank Governor to claim the housing sector as in crisis…as a dangerous specie roaming around Nigeria that needs to be curtailed. But as at today I don’t think the Federal Government has realized that yet. So I’d need our people to come together to be a pressure group to get the Government, especially the Central Bank to realize how ser ious this issue is. And the gain for putting the housing sector on a good pedestal,  the gain is unimaginable to Government. But one thing I must commend Government for is that they’re have just set up the Ministry of Housing and they must give them all the tools to work with. And to my colleagues, I wouldn’t want them to forgo all the effort they’ve put in so far – we need to continue to forge ahead, be very determined, more than determined to forge ahead and press home this issue of providing houses for everybody through Government creating the enabling environment for it, and are making funds easily affordable an d available for serious Real Estate Developers. With that we would be able to make a difference in the economy of this country  and for Nigeria, so that Nigerians will stop sleeping under the bridge.