Though the real estate sector in Nigeria suffered major shocks in 2021 as reflected in the meteoric rise in building materials prices and macro-economic issues, none of these was as deep as the collapse of a 21-storey building, still under construction, in Ikoyi, Lagos.
To experts and sundry stakeholders, that incident remains the sector’s biggest dent in the outgoing year, coming after the sector posted its highest growth since the 4.95 percent growth it recorded in Q2 ‘2014, making the impact not only deeper but also disappointing.
The collapse of that building means so many things for the luxury real estate market such that it has almost killed home buyers’ trust and confidence in high-rise buildings. This becomes more significant given the size and location of that building.
Gerard Road, where the building was located, is the heart of Ikoyi – the most high-brow and coveted neighbourhood in Lagos, Nigeria’s commercial nerve center. The thinking and fear in many quarters are that if that incident could happen in such a neighbourhood, it means nowhere is safe.
Though Tayo Odunsi, CEO, Northcourt Real Estate, does not see the incident affecting both supply and demand for luxury apartments in high-rise buildings but sees a significant increase in construction risk financing going forward.
He explains that financiers are going to be a lot more cautious and will be asking a lot of questions on developers’ antecedents before committing funds to a project, adding that buyers will be making demands from the developers on issues bordering on regulatory compliance and the kind of project partners they have assembled.
In the same vein, Adedotun Bamigbola, immediate past chairman, Nigerian Institution of Estate Surveyors and Valuers (NIESV), Lagos branch, does not see the incident affecting confidence in high-rise buildings because there are developers and companies with integrity and good track records in that kind of business.
This means there is a strong correlation between developers’ character and integrity and the products they put out on the market. This also means that to understand why the Ikoyi building collapsed, there should be an understanding of the person and character of the developer.
The collapsed building was being developed by Fourscore Homes Limited, a company owned by Femi Osibona who, until he died, was fondly called ‘Femi Fourscore’ by his friends and associates.
Femi Fourscore was an enlightened and highly exposed man having had his primary and secondary education in Ogun and Lagos, respectively, before proceeding to London for his undergraduate studies. He lived in London long after graduation.
Osibona was a man of many parts—a savvy investor and astute businessman, a socialite with high net worth individuals in his circle of friends. He was also an evangelist of the Celestial Church. From a humble beginning as a shoe seller, he rose to become a real estate tycoon.
But he was ruled by greed and a little bit of folly. He lived out the saying that “greed and fear control everything in investing.” He also epitomised experts’ view that “there is no amount of growth that can’t be destroyed by an investor’s temptation to grab too much of it.”
Ditto for the saying, “there is no opportunity so appealing that it will catch the eye of someone who refuses to look.”
Osibona was a successful real estate developer. In an interview he granted ThisDay Live in 2019, he was quoted as saying that he built over 50 projects in London and Manchester, and from there, went to South Africa where he built a number of estates.
With these feats, he returned to Nigeria, saw the opportunity but could not refuse to look, nor could he resist the temptation to grab. These were the reasons he went to the approving and regulatory authorities and got approval to build a 15-floor tower but raised it to 21 floors. Greed at play.
So, a combination of hubris, greed, and folly in him was the reason that the tower was being constructed without professionals on site. That also explained why he physically resisted regulatory authorities that came to seal the building site for regulatory infractions.
According to Morgan Housel, author of ‘Origin of Greed and Fear,’ greed begins with the most innocent idea that “you deserve to be right.” This explains why Osibona said in the ThisDay interview, “I don’t engage any builder; it is the same procedure in housing development and if you have done it in one country, then you can do it in another because it is the same principle.”
“You deserve to be right,” which is a product of greed, is also the reason Prowess Engineering Limited, the lead consultant on the ill-fated building, left in February, yet the building progressed until it collapsed nine months after.
That was also the reason the building progressed on a weak foundation and weak supporting pillars; on faulty structural engineering and ultimately came down like a pack of cards, claiming lives, destroying investments, and denting the integrity of a sector still smarting from recession and bad economy.