Ayo Alonge, [email protected]
The Chief Executive Officer of Suru Group, Edward Akinlade, is of the view that amid the COVID-19 pandemic, businesses in the real estate sector have been worse hit with affordable housing as the panacea for business survival.
In this interview, he also talks about the hospitality sector, while recounting the challenges his company faces with the Asset Management Corporation of Nigeria (AMCON).
Affordable housing is still bundling along. This is a housing plan that falls between N1 million to N30 million. The middle class is also struggling to stand as it depends on buyers’ capital investments or equity investments. This is how realtors get funding to develop properties in a considerably developed areas. The price range for middle-class housing plan is between N30million to N60million. Things are happening in the middle income but one has to convince prospective buyer to run together. Suru Group, for instance, has about 32 flats in Ketu and bungalows at Mile 12.
The novel coronavirus has taught us many lessons in the last four months and in most areas of the real estate sector. As of now, the most affected in the real estate is the luxury market. Sales have monumentally gone down. Most real estates who deal only with luxury housing plan are most hit.
We tell our buyers to invest 15 per cent and we will cover the rest, while the buyer spreads his balance across 24 months. This is how we have been able to adjust to the effect of the COVID-19. If there are functional mortgages in Nigeria, things won’t be this bad. And if you ask whom I am holding responsible for that, I will tell you it is PENCOM. We are also building hospitality structures within Lagos at a very considerably affordable cost. We are bringing standard facility to Ketu, for instance, at a relatively cheap price, yet classy for the price. We are also bringing quality housing and hospitality business to Ogolonto, an outskirt of Ikorodu.
We have been able to invest more on the low income and middle income earners more than ever before because of the effect of the COVID-19. You can see many high-rise buildings are now empty. People don’t go to work regularly as they used to. Even at Suru Group, our staff don’t have to come to work to deliver on their respective job description. We have reduced office activities to Mondays, Wednesdays and Fridays. We have learnt that we don’t have to be in the office to do our works. So, you see, to an extent, it will affect the need for more office structures.
Private realtors could have done more, but we need the immediate intervention of the government to support us. I should commend this administration for the initiation of the intervention fund of N300billion for real estate companies, and the single digit interest rate of 9 per cent which will go a long way to boost the real estate sector. It will also allow us build enough low cost housing estates that will be affordable for most low income earners.
We are particularly dissatisfied with the blatant disregard for the rule of law, displayed by a highly revered agency such as AMCON, being a mechanism in the temple of justice that ought to respect and uphold the tenets of law rather than disrespect the court. It started in 2010 when we were banking with Ecobank. N13billion fund was cancelled after we had drawn N10billion. About this time, we had already bought our hotels at Ikeja GRA and Opebi. We were servicing our loan, until our performing loan was sold to AMCON. AMCON was not supposed to buy a servicing loan. So, we sued Ecobank for selling our loan, and this case is still at the Federal High Court. AMCON counter-claimed our case and said we have owed N26 million. It was later discovered that Ecobank had sold loan to AMCON for N8.3billion, without notifying us. We want it to be on record that we never took AMCON to court. This is because we believe we have no business with AMCON but the bank who sold our active loan to the agency. As we speak, all the cases we had and won, were filed by AMCON and the three different suits were all won by Suru Group. AMCON has currently exalted the matter before the Supreme Court. So, when AMCON wrote the letter on September, 2, 2020 stating that our IKEJA GRA property has been sold, we wonder under what power? AMCON has no power to sell a property that has been sealed by the court.