Nigerians have been urged to embrace real estate cooperative society and co-investment models in the built environment sector to resolve the high cost of capital and reduce potential risks in the real estate business.

According to them, the concepts provide opportunity to negotiate for fund, ensure efficiency in the use of capital and enhance effective delivery in housing through the expertise of members.

The President, Bersama Multipurpose Society, Mr. Akin Olawore who made the call at its first annual general meeting in Lagos, said real estate requires large capital, especially fund that is not readily available hence, the need for people to co-own and engage in joint ventures by pulling funds together to save the cost of financing projects.

Bersama is a real estate cooperative multipurpose society that provides members with secured, vetted, yield-driven real estate investment portfolios. This is achieved through investment in diversified real estate projects and asset classes, working with partner developer.

Olawore who is also the president, Nigeria-British Chamber of Commerce said, “Cooperative is a model the society needs because the cost of capital is high and you can’t just, sit down and say capital is high, individuals must do something by getting involved in cooperatives to solve their housing problems. However, people in cooperatives must share the same value and have deep understanding among members to get along”.

Speaking on its activities in the last one year, he noted that the association has recorded progress with about 56-membership increase and 100 still in waiting. He said the cooperative has set a target of 500, 000 members and 10,000 shares by the end of the year 2020.

“We have about 82 shares and so we are going to leverage on a lot of technology and social media in driving it. We started in 2018.

“This has been a learning call for us. We will continue to encourage our members to be able to take loan for renting houses. We are encouraging members to invest in shares so that the association can go into real estate development and acquisition. The greatest challenge is building membership and we have learnt a couple of things that we need to do”.

Making a presentation at the forum, an estate surveyor and valuer, Samson Agbato emphasized that co-ownership/ investment is an efficient and cost effective investment vehicle that give investors a direct interest in real estate and allows for participation in capital-intensive market that would be impossible, impractical, or less desirable for individual investors.

“Benefits of co-investment include; it help managers build stronger relationship, helps investors achieve their goals and assists manager to execute deals. The co-ownership/investment is structured as a trust whereby one of the co-owners holds the legal title in trust for the remaining co-owners who are beneficial owners entitled to the receivables from the land”, he said.

Contributing, the registrar, school of estate, Lagos Mr. Debo Adejana said the association has put in place strategies to increase its share base particularly through the Barsama landlord initiative.

Adejana who is also an executive of the association said, “By December 2020, we ought to have been able to attain an investable fund of about N1billion to be able to do parental income investment such as, joint ventures and others within the real estate industry. To achieve that, we will need to grow our membership as a cooperative”.

Over the past few years, investment in the real estate industry has been challenged by paucity of funds, which has worsened home’s affordability. However, experts say adopting real estate cooperatives model with alignment of interest and co-investment strategy would go a long way in mitigating the problem as well as improve business portfolio in the sector.