As the effects of COVID-19 are felt around the world, real estate business in Nigeria is certainly having its share of the consequences, and this is raising a major concern for operators as to how to remain in business in the face of the current lockdown.
Reacting to the effects of COVID 19 on real estate sector, Mr. Adetokunbo Ajayi, Managing Director, and Chief Executive Officer, Propertygate Development and Investment Plc, said the real estate sector is definitely not operating in a traditional manner during this coronavirus pandemic, pointing out, however, that “For operators, this is when strategic thinking, liquidity and cost management, crucial information gathering and analytics, speed, innovation among others are needed more than ever.
Ajayi added that “There is also a need to manage anxiety and take a long-term view on matters. While it may be difficult at this moment to predict the full impact of the pandemic and its associated effects on the Nigerian real estate sector, it may not be pessimistic to say there will likely be losers.
“Notwithstanding, operators must hope for the best while doing all that is needed to continue in business.
According to Propertygate boss, “The Nigerian real estate sector has not had a good performance since 2016. It recorded negative quarterly growths from 2016 to 2019. Year 2019 appears to be a turnaround for the sector with a positive growth recorded in one of its quarters and ending the year with a growth rate of -2.36 per cent, the best since 2016.
“Better than -4.74 per cent in 2018, -4.27 per cent in 2017 and -6.86 per cent in 2016. Excitement was high and hope of a positive full year growth was predicted for the sector in 2020. Now came COVID 19. With the lockdown, real estate construction activities are halted with potential negative consequences for delivery time lines, costs and other deliverables.
“Even before the full lockdown in Nigeria, stress was beginning to show on procurement of building materials in terms of sourcing and pricing. With manufacturers in lockdown mode across the globe including Nigeria, we may not be able to tell the full implications for supply chain when production resumes.
“Finance servicing will be impacted as real estate operators’ revenues will most likely be negatively affected during this lockdown. This will undoubtedly put strain on loan servicing. The sector is a major employer, directly and indirectly of Nigerians earning daily income.
“With the lockdown, the impact on these people can only be imagined. With the health pandemic predicted to have devastating impact on global and national economies, it will be hard to see how the sector will escape unscratched”, Ajayi noted.
Source: Vanguardng
