Lagos-based real estate firm, Messrs Bricks and Beyond has called on federal and state governments to double efforts at improving investment in infrastructure to mitigate rising real estate costs and boost industry growth.
It observed that despite the economic challenges plaguing Nigeria, including the surge in inflation and soaring cost of living, the real estate industry remains resilient, offering promising avenues for growth and investment.
Speaking to journalists in Lagos, the Managing Director of Bricks and Beyond, Mr Babatunde Sopein, emphasised the pivotal role of strategic government infrastructure investments in alleviating the escalating cost of real estate development, particularly in Lagos area.
He said despite the surge in urbanization witnessed in locations such as Epe and Ibeju-Lekki in recent times, transformative projects like the Dangote Refinery and the construction of a new international airport have not only spurred economic growth but also attracted significant population influx, driving heightened demand for residential, commercial, and industrial properties.
“Drawing from this extensive experience, it underscores the importance of targeted infrastructure investments in reducing development costs for real estate. Statistics show that for every one per cent increase in infrastructure spending, real estate development costs can decrease by up to 0.5 per cent.
“This highlights the significant cost-saving potential of strategic infrastructure investment. Investing in infrastructure not only enhances the livability in communities, it also reduces development cost for real estate developers, driving demand and ultimately fostering growth in the sector,” he said.
He advocated a holistic approach to infrastructure development, encompassing transportation networks, utilities, and public amenities, adding that this would not only enhance livability but also increase the attractiveness of real estate investments, drive demand and ultimately lower development costs.
Sopein further stressed the need for regulatory reforms to streamline bureaucratic processes and provide certainty for investors. “A recent survey revealed that 70 per cent of developers cite regulatory hurdles as a major impediment to real estate development.
“This underscores the role of developing policies in this area. We need innovative measures to address the affordability crisis in the Lagos’ real estate market. Government can implement tax incentives, subsidies and public-private partnerships to encourage the construction of affordable housing, as practiced in other climes.
“By prioritising strategic infrastructure projects, streamlining regulatory processes, and implementing supportive policies, policymakers can create an enabling environment for sustainable growth and affordability within the real estate sector,” he added.
