Delivering value in facility management in Nigeria
1004 Estates Limited is a wholly indigenous real estate firm that was established by a group of investors to acquire 1004 Estates in Victoria Island, Lagos from the Federal government of Nigeria. The Managing Partner of the organisation, ESV Samuel Ukpong is a seasoned and unassuming professional who is focused on delivering value in the industry with emphasis on living, working and recreating innovatively in all their new developments. He spoke on the Focus of a CEO in this interview with Nnamdi Nwokolo and John Sylvester.
Housing development outlook for 2017:
The year 2016 was a very challenging year as that was the time the exchange rate changed dramatically from an average of N200.00 to N350.00 to a Dollar in the history of the Nigerian economy. What this has simply done is that it has depressed demand. The cost of building suddenly shot up and property values became unaffordable. But don’t forget that the business is basically driven by the success of the economy. The demand for the lower end of the market has remained consistent because the supply is low, so the rate is not galloping as the high end of the market. The effect also is that there is a shift in the kind of houses being built. In 2017, people are getting cautious and mentally adjusted to the realities on ground. Unfortunately, mortgages have not really worked and it is a very big challenge to the industry. The mortgage refinance corporation should put structures in place to enable people to deposit 20% of the housing cost and spread the balance over the years. We are hopeful that things will pick up in 2017.
What can government do differently to help the industry?
You cannot solve a problem with the same mindset it was created. To solve a problem, you need a higher level of intelligence to get it resolved, but what has happened in the country over the years is that we keep trying to solve a problem with the same level of intelligence. What I find most interesting is that during the economic crisis of 2008, the American government dismantled all the known economic theories in the world and the government took over huge corporations like General Motors, banks, and government sponsored mortgages with a view to shielding the economy from total collapse. The most exciting part is that they reduced their interest rate to 0.1% for ten years but the reverse is the case in Nigeria. We need to change our mentality first of all by changing the way we build houses. The average housing need of a family in Nigeria is a three bedroom apartment but there is much emphasis on building big apartments. The role of government in all of this is to provide infrastructures so that the private sector can provide the needed housing to bridge the deficit in the industry. The property output in the country in the last ten years has been the efforts of the private sector, so the government should formulate policies that will encourage more investments in housing development.
Facility management is an emerging trend in the industry, what is your assessment of the industry? The very first point I will like to make is that we lack maintenance culture in Nigeria. It is unfortunate that the current state of most corporate and private real estate assets in Nigeria leaves much to be desired in terms of service and operating conditions. Consequently, many organizations are seeking professional facility management services to help them reduce operating cost, increase operational efficiency and improve bottom-line performance. We identified this need quite early and decided to pursue it vigorously in all our operations. As a people, we tend to concentrate on the big issues neglecting the small things that we need to do consistently to make things more functional.
How far has the issue of the management takeover of 1004 flats been resolved?
I strongly believe that having tasted our contribution the Home owners as well as the residents will be able to appreciate the value that we offer. What most of them did not understand was that as a professional company that is built on integrity, we made sacrifices to provide the services even when majority have not paid their service charge. The takeover will give them the room to compare our services with what they are being offered right now. We are an innovative organisation and we bring in new ideas to bear on how to improve the facilities that we manage. 1004 Estates Limited boasts of a robust portfolio built on our reputation in managing high profile facility management consultancy and delivery projects.
With our strong focus on a preventive maintenance programme, we were able to minimise frequent breakdown of plant and equipment and guaranteed higher reliability of the systems. The actions and inactions of the law enforcement agents especially the police in the saga leave much to be desired. It will interest you to know that we ran the estate seamlessly that power, water, security, and all other services were constant. We ensured that we had 24 hours in house competencies and committed management to guarantee constant comfort of our residents and return on investments of landlords. The estate cannot be run as a part time volunteer (after close of work) venture. The management and supervision learning curve is steep and the estates maintenance issues are an entirely different “live animal” on a daily basis. We rebuilt the estate and have managed it at a high standard above all the facility companies ever employed. Many of the back end issues were usually handled without stressing residents. We just had no cooperation from their former leaders. Our resource knowledge is deep and invaluable and many residents and landlords have been calling us on how to quickly find a way to end the suffering on the estate and avoid the learning curve of reinventing the wheel with all these frequent changes.
What has been the biggest challenge of running this organisation?
There are several challenges facing Facility Management practice in Nigeria including limited industry knowledge and experience among clients and contractors. A lot of people do not know how facility management should be run. There are also challenges regarding appreciation of the value we offer. This is particularly a major issue in Nigeria because people hardly appreciate when you prevent problems from happening; they would rather pay someone to fight a fire and don’t understand why they should pay someone to prevent it from occurring in the first place. We work from a model of preventive maintenance and it is disheartening to find that many people are reluctant to pay the right rates for that level of expertise with a view to delivering value in facility management. However, we defy the odds to recruit the best hands and we pay them well, so they are motivated to do their work well.
I have put in enough resources both human and financial towards sustaining the standards in the management of 1004 estates and this is borne out of my passion as an investor as well as a professional to make things work. Unfortunately, a group of people felt they can handle it better, not realizing that facility management is a skill that should be given its right place in the built environment. At 1004 Estates Limited, we have a framework in place with our rules and practices to ensure accountability, transparency and fairness in our company’s relationship with all stakeholders. We have a strong drive for growth at the individual, company and industry level. There is no right way of doing the wrong things. For me, in all of this, passion to do the right thing is the driving force.