Facilities Managers (FMs) in Nigeria are optimistic that the projected positive outlook for the Real Estate sector in 2018 would dovetail into their young industry by creating new market opportunities for operators to explore.
New opportunities would likely spring up in the commercial and corporate segment of the property market as Real Estate developers and investors look to restore their confidence in the economy by commencing new projects and resuming work at some sites where work was suspended at the height of the economic recession.
Analysts are optimistic that the retail and residential segment of the Real Estate sector will experience traction in some neighbourhood, while growth might be slow in others over the next 12 months.
The Nigerian FM market has seen its significant growth in the last decade slowdown in recent time as the country grappled with 13-month economic recession induced by economic uncertainty, falling oil price and double digit inflation.
However, with the country exiting recession and the macroeconomics indices swinging to the positive end, market watchers have predicted a modest growth in the Real Estate sector this year.
“The parameters that characterise the era of economic uncertainties as we have seen in the last two years are speedily easing off and this simply implies that sensitive sectors such as Real Estate will begin to gain traction,” Engr. Femi Akintunde, Group Managing Director, Alpha Mead Group said.
“Once the Real Estate sector gathers the desired momentum to attract active participation from local and foreign investors, I’ll expect business activity across the entire value chain of the sector to peak,” Engr. Akintunde further added.
With FM being an integral component of the Real Estate value chain, market analysts say FMs would certainly find pockets of opportunity to explore as the property market rebounds.
“These opportunities would however be explored by FMs who devise innovative approach to navigate major challenges such as service charge pricing, high cost of providing power supply and high lending rates which significantly impacted the bottom-line of most operators in the last 24 months” a prominent industry player who preferred anonymity said.
According to him, FMs who employ this strategy will easily become frontrunners in exploring opportunities across the various segments of the Real Estate market, as the pipeline for Grade ‘A’ office space for 2018 remains visibly strong coupled with the increasing likelihood that Real Estate developers will come to the market with new residential projects.
Damola Akindolire, Executive Director, Real Estate Development, Alpha Mead Group agrees, explaining that with the Federal Government’s treasury bills looking to hover around between seven and eight percent for the better part of Q1, investors’ appetite for Government’s instrument will likely weaken, thus preference for other sectors of the economy such as Real Estate would spike.
Akindolire however noted that while this might not necessarily lead to a reduction in interest rate, it will significantly speed up the sector’s growth. For him, the residential segment (land sales), hospitality services and industrial warehousing will witness strong demand.