Estimated reading time: 18 minute(s)
Tunde Adeyemo is a real estate developer and the CEO Pelican Valley Homes and Property in Ogun State. In this interview, he x-rays real estate sector under the administration of Governor Dapo Abiodun, the challenges and opportunities in investing in real estate business. PLATFORM TIMES brings Excerpts:
How has real estate business been in the state in last one year, since the incumbent governor assumed office?
Let me first of all use this medium and opportunity to, on behalf of the management and staff of Pelicanvalley Nigeria Ltd., wish our listening and merciful governor, Prince Dapo Abiodun MFR. a happy Diamond Jubilee and one year in office. The governor might not know that he has consciously or unconsciously, but positively touched the life of an average real estate investor in Ogun state. His is unlike the immediate past administration which seemingly saw most of us as competitors in the sector.
The first move that the administration of Governor Dapo Abiodun made which really amazed me and most real estate investors in Ogun state, was to formally invite all the real estate developers in the state, through the Commissioner for Urban and Physical Development, to a meeting where we were asked about our challenges, how to collaborate with the state government on regularising of buildings approvals, layout approvals and others. This is the first time in eight years of my real estate practice in Ogun state that the government would invite real estate investors without threatening us with demolition notices and orders.
Would you say the incumbent administration in the state has put some measures in place to give a boom to real estate sector?
You know that when a government sees you as a partner in development, a reasonable real estate entrepreneur has no choice but to reciprocate the kind gesture by regularising his or other documents and pay all that is due to the government in terms of property gain taxes and all other dues to the government. Government cannot do it alone; government cannot provide free or totally subsidised housing, even if the government put all her annual revenue or budget on housing. This is because government has just the land. Would government subsidize labour? Would it subsidize iron rods? What about cement, sands and granites? Would government put all her budget on housing and neglect health, education, roads and other infrastructure? So, technically, government needs the private sector’s support to push affordable housing up on a long-term basis and create more conducive environment for operators to grow, not intentionally putting their land on acquisition or frustrating them.
Real estate is a capital intensive business and as a government, if you can’t encourage investors with a single digit loan interest, long term loan or infrastructure, don’t further frustrate them or create an unfriendly environment for them to operate. That is why you see some real estate sell their land and run away without any structure for the subscribers.
I witnessed a situation when an investor bought a land free from all known government acquisitions, paid all that was due to the government and got all title documents, but government or governor re-acquired the property for no just reason. Such act, to me, would cripple the real estate sector in the state and even the economy.
Also, when a government acquires a village land without making a provision for excision for the affected villagers, but go ahead to demolish such a village and disrupt the means of livelihood of the villagers without due and proper compensation plans, any project on such forcefully and defectively acquired land can never fly. That is the case of one of the estates around Kobape Area of Abeokuta. No estate whatsoever can develop in isolation. What the then government ought to have done was to develop the layout of the project alongside the villages. The movement of the people in and out of the villages would create a traffic that would kick-start the government project. Who will be the first to go and build his or her home in that thick forest? Even 200 houses at a time cannot kick-start that estate because of the landmass. So, a smart government should be strategic in its land acquisition plans; not just jump on someone’s ancestral land and bulldoze it all in the name of an unplanned acquisitions. I think this new government has learnt from all these defects and are so far acting accordingly. I pray that the incumbent governor is not misled or given wrong advice by some public servants and political sycophants.
As an entrepreneur, do you see a leap in real estate business, bearing in mind, the looming economic recession due to the global pandemic of COVID-19?
The best time to invest in real estate is now and Abeokuta, the Ogun Stat capital is the best place for such investment. The whole world is on the lockdown with economic recession looming; major businesses are down and stock market is badly hit. Investors are wondering where to invest in. Real estate sector, over the years, has been the most stable sector but investors do overlook it. Research has shown that the land asset is not depreciable, because it is considered to have an infinite useful. Furthermore, due to the scarcity of land, its value tends to increase overtime, as against the decline in value of most of other types of fixed assets.
Investing in real estate is a big bet of possible investment return in this hard time where recession is looming. Our property at
Pelican Valley is not just a name but a brand with a vision for construction of unusual homes. Our value has constantly increased in value over the years. Pelican Valley proximity to major landmark in Ogun State capital and its serene environment has made it the most unique place to build your homes or invest your capital.
Do you see a synergy between Real estate investors in Ogun and the state government?
Definitely, Dapo Abiodun is the ‘Prince of Hope’ to all real estate entrepreneurs in Ogun state. He has brought hope to us and we are now ambassadors of the state. I talk about Ogun state everywhere I go, even before saying anything about my state of origin. The concept is to get as many developers as possible into the state, the more the people, the more the taxes and revenue for the government. Just like a respected former Governor of the state, Otunba Gbenga Daniel would say: “Government has no business in business”! A smart government only needs to create a conducive environment for businesses to thrive, then tax them for revenue.
The Lagos-Abeokuta-Ibadan new rail speed terminal is an icing on the cake for this new administration, with a less than thirty minutes trip to Ikeja, Apapa, Ijora and Ibadan via the new ultramodern speed railway.
What roles are you (investors) playing in ensuring state government makes housing affordable for the people?
Once the business environment is conducive for investors, more investors would come in and bringing about healthy competition among operators, which would bring about fall in prices, just like the deregulation concept. It’s very easy.