Header Ads Widget

How COVID-19 Changed The Way we Do Real Estate Business – Otunba YEMI LAWAL

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.

Post a Comment