[dropcap]R[/dropcap]eal estate in Nigeria is a very premature industry so there are a lot of issues, some of them based on government regulations while others based on financing. The market is an all-comer market.”
As Nigeria’s real estate sector continues to evolve, several challenges facing the sector have also hampered it from realising its true potential.

Despite the indecisive economy occasioned by the surge in inflation and naira crunch, serial entrepreneurs in the country have continued to make headways in their businesses leveraging various means and tools to find their niche and rise to stardom.
One such individual is Jerry Ofogu. He is a real estate developer who has stolen the hearts of existing property lovers with his commendable trajectory in the real estate industry throug his firm Jerry Jays JJJ Homes Ltd.

His efforts, which have paid off, have attracted potential clients both home and abroad, including entertainment personalities of high repute and deep pockets .

Subscribers to home ownership plans in the country have said the failure of the government to regulate the sector has put people seeking to own homes at the mercy of unscrupulous estate developers. But the developers have also noted challenges in the capital intensive sector. In this interview, Jerry Ofogu, the Chairman of Jerry Jays JJJ Homes Ltd, speaks with Grassroots Publishers Online crew Ike Philip Abiagom and Oby Obanya on the impediments in real estate development while recommending possible solutions. He also speaks on the company’s successes with its estates in Asaba and its environs as well as its challenges.

Q: Thank you very much for granting this interview but first and foremost, let’s start with introductions. Can you tell us a little about yourself, Jerry Jays JJJ Homes Ltd, what you do and how long Jerry Jays JJJ Homes Ltd has been in business?

A: My name is Jerry Ofogu. I’m the MD/CEO of Jerry Jays JJJ Homes Ltd ,real estate developer and business man from Ibusa, Delta State. We started Real Estate Business in 2019 to redefine the narrative in the real estate sector and we’ve been at it since then. I started with a plot of land (50ft by 100ft) and I was able to develop that plot into my first real estate project,that was how i started buying more lands,building lands and houses for sale.
I also noticed that many Nigerians at that time were reluctant to go into construction but i believed anything was possible with God on my side.Majorly, the bulk of our business is within the affordable sector; the mass housing sector really. However, we are taking it from the bottom if you put it that way.

Right now we are stronger or heavier with land stock meaning that we have a lot of landed properties around that we are selling out as site and service scheme for the bottom of the pyramid people as it were; low income earners but middle low income earners mostly. The next step to that is to take it on and start seeing how construction will start happening on those sites which is where we are right now.

Q: You’ve played in the market for close to four years going on now. How would you describe the housing market? What are the critical constraints particularly affecting housing deliveries and housing market in Asaba and its environs based on your experience as a set-up player?

A: I think majorly it is access to land. When I say access to land, I mean the landed properties are there but are always shrouded in some kind of controversy, mysteries and what have you. That makes it pretty difficult for an entrepreneur who wants to serve the affordable sector because you are left with dealing with landed properties that have assumed some kind of value because some level of value creation has happened in terms of documentation. And when you are taking land at that rate, it may be difficult for you to now put it into use as affordable housing or mass housing like we know it here especially again looking at the depth of financing which is another challenge.

So if I have to spend so much money to buy a small piece of land, the only option available to me as a mass housing person to make money from it is to probably go up. If I can’t get the funding that will enable me go up reasonably to make margins, then it becomes difficult to execute so I would either avoid doing mass housing and just do what people can order and buy and make some margin or I entirely find other purposes or uses for the landed properties that I have.

I can therefore say that access to affordable land devoid of these challenges is one of the major constraints. They are there but it’s quite cumbersome because you cannot verify things or say this is the right person and getting the property is about the highest bidder and even if you are being wronged, there is nowhere to seek help or justice, rather we go through the community head.

Another major issue is funding; the appropriate funding. There is money flowing everywhere but the right type of money is not available. Something that can really work for affordable housing can be akin to what the Federal Mortgage Bank has which cannot go round – have some people contribute so they can qualify for a loan that gives them less than two digit interest rate and have the developer as well get loan at a reasonable rate to do the developing. He does the development, gets a buyer who takes him out and continues with the building.

If the things I’m building cannot be taken off me, what’s the essence of building it? Of course, our bankers will say go and get off-takers but I ask, how do you get off-takers? If NHF says people should go and get off-takers, you will get easily because the rates are affordable but if the off-taker is there but is not empowered or you are giving him the wrong kind of empowerment (what I mean is you are giving him a mortgage that he cannot afford), he won’t show up. Like I said, funding is a major issue but I want to believe that they will find a way with this Pension Scheme.

We’ve not been able to raise so much of insurance money in this country but we’ve at least tried to raise a reasonable amount of pension fund. These are monies that are put into these kinds of uses anywhere in the world. We should find a way. It’s not enough to just be putting these monies in paper transactions and stock markets, it’s not enough! We should find a way by which it can work and find its way into the real sector and nothing can be more real than Real Estate so I think that will help.

The last but not the least is as concerning documentation; title, land users etc. and the amendments that need to be done so that it can become very tidy. The fact that it’s in the Constitution makes it difficult to amend but if that can be dealt with, it will help because there are funny things happening in the name of the Governor is holding land in custody for the people and can acquire for public interest and these things are not in the interest of the sector and are of course affecting deliverables.

Q: You mentioned that you played at the bottom of the pyramid; that is the lower income segment

A: (Cuts in) Not the low, low, low, low. You know you have the no income…

Q: No income?!

A:Yes! You have the no income, the low income, middle income so I can say that the bottom part of the middle income to the brim of the low income.

Q: So what informs that strategy? What informs your strategy to target that segment of the market? Why have you decided to do business there?

A: For us, that’s where the market will always be. Bubble burst market will always be there. It is bubbling, it will be bubbling. It is bursting, it will be bursting. People will be coming from everywhere to burst there so it will be really difficult, maybe a war situation or real crisis, for market to thin out within that boundary.

For us, that’s where the market is but the challenges too are enormous in serving those kind of people especially with the kind of funding structure we have available. They have to bring money from their pocket and they don’t have so much because it’s not as if what we are selling is any cheaper, that’s the truth, we are just trying to make it as affordable because there is no support to make it cheaper.

Q: That means you are putting your products out at the same prices but you are making it affordable?

A: Let’s say for example, someone still called me this morning. He’s going to buy something that will eventually cost him about 7 million but by our structure, what he needs to deal with first is 650, 000 so he will be able to raise that amount and funny enough, that’s secondary market. In the primary market, he can spread it in one to two years.

Real Estate provision is like divided into four chains – the land, documentation, infrastructure then the service and maintenance part of it and all of that needs to be paid for. We just say deal with the land, then documentation followed by infrastructure then maintenance. If you go to the Asaba and Ibusa area, you can buy a land for 10 million naira and that’s inclusive of everything and the buyer can drop it easily but here you will still buy the land at 10 million which is no joke but you know he can’t come up with that amount so you tell him to pay a part now then pay the rest later, spreading the payments.

Q: What informs the choice of locations you go to do your development and how does that affect the marketability and affordability of your projects in the long run?

A: What we generally look at is where development is going to not where it is already. We try to follow sometimes as much as possible the Growth Pole Theory in Real Estate so you find us in axis like Ibusa, Okpanam and ogwashi-uku axis where there are probably a lot of institutions or industries or a combination of some of these things. We try to follow the growth pole where there are things that can attract and bring people there except if we have enough money (when we start having such money) to now create the pole itself and make people come there.

Q: Would you say going into those growth pole areas has been marketable? What are your usual sales challenges like? What has been the response of end-users to your projects and to your developments?

A: Save for the bastardisation of that type of real estate products, I think it’s been well received. Lately however, you need to differentiate yourself because it’s an all commerce affair now so you find all kinds of people who don’t even have the intention of doing anything reasonable anywhere coming up to say they have something and of course, the market will compare them with you. Before they realize that these people can’t deliver, it will be too late and when they fail, it rubs off on your own image but apart from that, I think that the strategy has been good.

However, even though we follow where development is going to, the difficulty of having a reasonable time limit or frame by which development will actually get there is another challenge and that is a subject of governance and a lot of the way we do things around here. Documentation becomes difficult and you can’t say this is when I will get my C of O even though you’ve done everything in the books because the Governor might not sign for whatever reasons.

Perhaps you’ve estimated that a project is going to take a particular frame of time and yes, there are challenges but the project is taking a year or two years after the time you projected. You should be thankful the project is not abandoned and there’s still continuity.

Q: What are the specific challenges facing your company?

A: Like you rightly know, life is full of challenges, without challenges you will not move anywhere. Real estate in Nigeria is a very premature industry so there are a lot of issues, some of them based on government regulations while others based on financing. The market is an all-comer market.

Q: How would you describe the regulation of real estate in Nigeria?

A: Well. Real estate business is not regulated in Nigeria. There’s no established rules for players in the market. That’s why I said it’s an all comer market. Everybody can establish himself and get into the market. But the coming of the Real Estate Developers Association of Nigeria (REDAN) has helped to register competent developers especially here in Delta State. But there are still a lot of quacks in the market. And with quackery, you know what you get in terms of quality and in terms of delivery. Also in terms of genuineness, business and intention.

Like I said, if there are basic regulations there, the mortgage industry will be very sound. Apart from the mortgage, there will be some specific government intention to deliver quality houses by providing some level of financing for real estate developers. Like you know, the economy of Nigeria isn’t stable and building materials are skyrocketing everyday and that makes construction expensive. And that’s why houses are expensive too.
In that case, you will have stock of houses with few buyers. The willing public are there but there is no financial backing. So in as much as the government is providing mortgages, the government should also provide the medium to regulate building materials.

Q: What is the future of real estate in Nigeria?

A: The future is real estate, certainly. Just like the government is picking interest in agriculture, they should also pick specific and special interest in real estate because that is where the future is.
Even the most developed countries in the world are into housing so why not Nigeria. Real estate should be part of our development plan and aspiration.

Q: What is the future of real estate development in Nigeria?

A:I believe the future is very bright, if the Government gets it right. We need to start from the basics, If the Government performs better in terms of providing the much needed infrastructure, it will attract more foreign direct investments and the sky is the limit.
Most people wish to own a land but lack the zeal and determination to acquire a property, probably because they are threatened by the activities of “EGODINOSHA” and fraudulent realtors. Why not partner with Jerry Jays JJJ Homes Ltd and get as much property you desire with full indemnity to your land.

Q: Yes! What is affordable right now? What would you say is an affordable low income development right now?

A: I will tell you the truth, there is no affordable right now. Apart from The NHF Scheme, affordable does not exist. What I mean by that is a lot of people who would want to do something along the axis we are talking about cannot do it if they really want to live in these areas we have developed because it then becomes a problem for them in other areas, even cost wise.

This is because whatever cost they are saving in owning their own property will be spent in transporting themselves, taking care of themselves medically because of the wear and tear and taking care of the tow their commuting will bring so they tell themselves they are better off staying in a rented apartment and retaining their sanity than owing a house by all means and then having a problem.

Q: How many units or housing have you put in the market in the last three years?

A: Like I said earlier, we are just about reconstruction now.Land sales and service is more or less what we do.

Q: So what are your usual sources of finance?

A: Self finance.

Q: (Surprised) Totally equity?

A: Totally! It’s been absolutely, totally equity otherwise you won’t have met me here.

Q: Outside financing land issues, there are still some components that are involved in housing production like for example the building materials and also labour. What would you say about the building materials market? What are prices like and how does it impact on the final product and how does that impact on affordability?

A: The challenge with this country generally is that our things are one of the most expensive in the world.

Q: In terms of building materials?

A: Our cement is one of the most expensive in the world.

Q: Cement?

A: Yes! Our cement is one of the most expensive in the world; I am not too sure about the iron steel. A lot of things come to the head in this country such that the cost of getting things done is usually very high. However, the main other challenge with building material is getting genuine materials and specifications that you require. A number of products in the market are adulterated and sub-standard. Professionalism and labour is another challenge because the good hands we have are very few; very, very few.

This is a country where more than ninety per cent of our structures if not more than that are not well finished. If a painter paints for you, it’s a shoddy job. When bricklayer cements or a tiler lays for you, anything anybody does for you in this country is very shallow.

Finishing is very important and we don’t pay attention here. It’s either we are too much in a hurry or don’t know what we are doing or don’t pay attention to quality or excellence. At whatever level, everybody deserves their level of quality. A lot of people who do these things don’t even know what they are doing because they don’t have enough expertise so we have challenges in those ways; materials and labour.

Q: So do they impact on the cost and affordability?

A: Of course they impact. There are people who sell little for so much and even deliverables at times is dependent on money. If you can’t get your project turned out at the appropriate time as planned because of the lackadaisical attitude of your workmen, your rate is counting in the bank. When you are through, your core structure will include your rate so the longer your project stays, the more expensive your project becomes.

Thank you very much for your time, it’s been very insightful