Otunba Yemi Lawal is a big player in the
Real Estate Sector. He is an accomplished Real Estate Developer. His company,
Seagle Property Development Company Ltd has developed a lot of housing projects
around the Oniru and Lekki axis, in Lagos.
He is the CEO & Founder of Seagle
Properties. Otunba Yemi Lawal has revealed how Covid-19 pandemic has
negatively affected the real estate sector. “Covid-19 has led to a sharp drop
in the sale of houses and apartments”, he explained.
“There is no doubt about it that the Covid-19 Lockdown set many real
estate players back, because there was not much activities going on in that
sector during the lockdown period.
For now, the strategy should be survival
rather than making money. The main strategy at a time like this should be
survival, stability and continuity, not profitability. All real estate players
need to restrategise. We must all go back to the drawing board. Everybody has
to be IT literate. Everybody should take advantage of social media. for now, the
strategy should be survival rather than making money.”
“Lately, we have noticed that many people
are going for 1 & 2 bedroom apartments. The demand for 1 bedroom and 2
bedrooms is more than 3 bedrooms. We now cater more for the middle class. That
is where the demand for housing is coming from. We have just started work on a
new project of about 35 units of 1 bedroom apartments in Victoria Island, Lagos
and it is already oversubscribed. Over 80 people are interested. We can’t even
meet the demand for 1 bedroom & 2 bedroom apartments. As a company, we
believe it will give us a lot of income.
How has the lockdown affected the real
estate sector?
“Like any other business, throughout the world, the Coronavirus
has really affected the way of doing business now. In the Real Estate sector,
things are not the same and we don’t expect it to be the same. All stakeholders
have to change their strategies. For instance, doing property is no longer the
same because everybody is scared and nobody wants to die. People are now using
their IT Technology such that most of the time when you want to view any
property it has to be done via virtual. That is in terms of marketing for sale.
It has affected sales. Sales have really gone down. But we have also noticed
that there are some kind of movements in terms of rents. The locations that are
very very prone to Coronavirus, in Nigeria people are moving away from there to
where the attack is very low. We also noticed that in the industry.
As it is now, there is nothing bad in
investing in Real Estate because the Return on Investment is still the same.
The return is not that bad. People are moving funds into it. The opportunity of
transferring money outside the country has become so tough and difficult and
Return on Treasury Bills has really gone down. Real Estate is still the place
to invest your money. However, one has to be very careful, because we don’t
know how long it will take us to get out of the pandemic, which is also a
serious concern, so, one has to be careful in making any investment decision
now in terms of the development of new project.
We also noticed an improvement, an increase
in the demand for 1, 2, bedroom apartment. It is now a Buyer market. That is
what is happening in the market in summary”.
Does he think all these will change or
improve as the government eases the lockdown?
“Doing business in the world now is
going to be a different thing. With Zoom we realise that you don’t have to go
to anybody’s office to hold a meeting. I can now sit in the comfort of my
office to hold a meeting with my staff or clients, just like this Instagram
Live Chat. No 2, there is no doubt
this situation will affect employment
because you can no longer continue to carry the member of the staff we used to
carry before. You have to make use of IT more. Things have changed and
everybody has to be IT literate now to have advantage. Any business that really
wants to grow must take advantage of the IT system”. How does all these work
out with the bad economy and the Oil price has dropped!
“Oil price is also improving gradually and
coming up gradually, but it is just that it is still very low. If we look at
the parameters of our budget it is still not the same. For now, the strategy
should be Survival rather than making money.
Hotel business has been closed. Event
centres have all closed shop for the past 3 months now. What will happen to the
investors in this sector? What will happen to employees? What will happen to
their staff.
As some businesses are going down, some
will be springing up, for smart people who can take advantage of the situation.
There will be a multiplier effect because it will affect the staff, laundry
services.
Covid-19 will change our lifestyle. It has
changed our love for parties and owambes. We need to return our lifestyle. In
the last 3 months, I have not attended a party and I love attending parties.
That is also a kind of savings for those who love to go to parties. People are
asking why they need to spend money on lavish parties. It is going to affect so
many industries. This will lead to increase in crime rate. And also a lot of
mental illness because people will go through depression. It will also affect
marriages. Some will crash. Some are beginning to review the need for side
chicks.
We have just realised that some of the
things we struggle to buy we don’t need them, they are just vanity upon vanity,
all is vanity”.
What are the strategies that we have to
adopt to cope with the reality? “The reality is we have to face reality. You
have to stay safe and ensure that you are well protected, maintain social
distancing. We have to reduce our expenses. Try and live within your means. And
reduce your expenses.
The main strategy should be a survival
strategy. You have to struggle to stay alive. Don’t do more than your capacity
or ability. For most companies, the strategy should be survival, stability and
continuity”.
What is Seagle Properties up to right now?
“We are just starting another project now. I can tell you for free that we are
doing about 35 1-bedroom apartments in Victoria Island and already it is over
subscribed. That is what I call Restrictive Strategy.”
“I got some young guys and I asked them to
comb the environment. They are very brilliant undergraduates. They did the
research and they found out that there is so much demand. As I speak to you, we
have over 80 potential buyers for the new project. What we are doing now is to
get approval and start construction immediately.”
I see an
opportunity in that area. We cater to the Middle Class. In terms
of demand, the demand for that is more, than the demand for 3 bedroom
apartments. We can see more of that Post-Covid.
No matter what, Real
Estate is real business and that is why it is real
estate.
There is no
billionaire in this world, or, wealthy man that does not have investments in
real estate. So it is still the key investment you can make that you won’t lose
money. In terms of rental income, 1 bedroom or 2
bedroom are good. They will give you a good source of income. A lot of young guys
are tired of staying with their parents. They want to move out.
And we cannot even meet the demand. The
plan was to do 3 bedrooms before now, but we are
converting them to 1 bedroom because we saw the opportunity in that.
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