Lagos begins valuation exercise for state-owned assets after EndSARS mayhem
Report predicts higher risk premiums for real estate
Following the mayhem that trailed the protest in Lagos, authorities have begun a verification and valuation exercise for state-owned property.
The primary objective of the exercise is to identify and locate all Property, Plants and Equipment (PPE) assets of the State, ascertain their condition, determine their economic worth in monetary terms and proffer recommendations for optimising usage of such assets.
The Director, Lagos State Valuation Office, Adekunle Awolaja, said the exercise would end on November 30, 2020. He revealed that the valuation of government assets is in compliance with global best practices, International Public Sector Accounting Standards (IPSAS), International Valuation Standards (IVS) and International Financial Reporting Standards (IFRS), all of which have been adopted locally by the State.
Awolaja, therefore, solicited for the support of all Ministries, Departments and Agencies and enjoined them to provide the necessary information and assistance to the agency’s staff, which have been assigned to their offices.
Meanwhile, experts have reacted to the state’s circular issued by the Office of the Head of Service for the processing of indemnity for properties damaged in the course of the mayhem.
The circular signed by the head of service, Mr. Hakeem Muri-Okunola, urged Ministries, Departments and Agencies (MDAs) to cooperate with the Insurance Department of the Ministry of Finance in collating list of all properties, items and valuables, of affected organisation, to enable the government obtain indemnity from insurance companies.
But the president, Association of Registered Insurance Agents of Nigeria (ARIAN), Mr. Kunle Odewunmi said insurance companies are ready for such disasters.
He stressed that although the incidence is a litmus test for insurance firms, there is no cause for alarm as the insurance firms have the capacity to meet the demands.
Odewumni said insurance firms are already meeting on the issue at the moment even with the shifting of the on-going recapitalisation of the insurance industry till next year.
According to him, it is an eye opener to most people, because only 10 per cent of the shops in Surulere were insured.
Corroborating, the Director General, Nigeria Insurers Association (NIA), Mrs. Yetunde Ilori, said insurance companies are well prepared to indemnify those who have proper cover as they were created to manage risks.
She said although the loss may look enormous and huge not all the properties are insured, adding that those insured would be compensated.
Mrs. Ilori said the incidence was a big lesson for the insuring public, as people should see insurance as a necessity. Also, the Chairman, Lagos State Branch of the Nigerian Institution of Estate Surveyors and Valuers (NIESV), Dotun Bamigbola, said, in terms of valuing the damaged properties, you may not be able to value a loss, if you have not valued it before the loss.
“Public assets were damaged and destroyed some by arson, some by breakages, vehicles burnt, which can easily be valued even though it will not take into account each specific vehicle considering the condition of these vehicles at the time they were damaged or destroyed. It is difficult but definitely, there was a huge loss”, he added.
He said the chapter is working with the state government, especially the state valuation office in collaboration with other built environment professionals.
IN a related development, a real estate advisory firm, Northcourt noted that there will be higher claims and potential busts as some insurers may be unable to carry the weight of big-ticket claims as well as higher premiums.
The firm stated this in its latest report titled: “Cause and Effects: Impact of Recent Vandalisations on Property Investment and Development”, but stressed that higher risk premiums for property insurance would be expected.
It also stated that there will be greater emphasis and demand for residences within gated estates that enjoy communal living as this offers security services and leverages the experience, expertise and network of both the estate management company as well as the residents’ group.
In the report authored by the company’s Chief Executive Officer, Tayo Odunsi and Chief Operating Officer / Director of Research, Ayo Ibaru, the report said there will be opportunities for new businesses in the security field from physical personal security, cyber security, natural surveillance, security lighting, alarm systems and sensors to video surveillance, electronic access control systems, identification systems, and private military services.
These new and changing requirements, the report said, will change what space users demand and how developers build. The report further projected a rise in local investment in commercial real estate to fill the gaps left by foreign investors who have repatriated their capital.
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