Commercial office developers pre-recession plans coming to life now on better FX

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The plans by real estate developers to construct office properties which were initially thrown under the carpet are beginning to see the light of day owing to stable exchange rate, and exit from recession, industry players have said.

Nigeria’s macro economy experienced significant impulses over the last few years. The Gross Domestic Product (GDP) of Africa’s most population nation nosedived into the worst recession in 25 years.

Affected by the plunge in crude oil prices, decline in oil production, and the reduction in non-oil exports, Nigeria’s economy entered its worst phase in 2016 and as such resulted to the scarcity of foreign exchange.

The real estate sector, among others, was hit the most during the contraction period when naira-dollar exchange rate reached its peaks in the history of the country’s existence.

“Any new project that you see now is not fresh development that people are executing as a result of high demand; rather they are projects that have been on hold”, Dolapo Omidire, Founder of Estate Intel, a real estate research firm, noted.

“The new project you are seeing now is a result of past years of planning just that they are beginning to execute the projects and it is not as a result of resurgence of large commercial activities, Omidire said.

A recent survey by BusinessDay revealed that almost 80 percent of the materials used by real estate developers in constructing  properties are sourced from outside the country, which is why most developers  were  unable to carry on with their projects when the naira weakened against the dollar.

Omidire’s views were shared by Olurogba Orimalade, Chairman of the Nigerian Institution of Estate Surveyors and Valuers (NIESV), Lagos State Branch, who said that the commercial offices that are being developed now were conceptualised 3-4 years ago … Read More...