Rental Stability, Forex Volatility and Nigerian Investor
One of the fundamental principles of investment is to never make permanent decisions based on temporary situations. A perfect example is the current economic recession that hit the country, watering down many investment portfolios. Some investors, who do not understand the dynamics of investing in the 21st century, joined the bandwagon of naysayers and hedged their investment on the weakness of the Naira. They have their pockets to blame, and they are now lamenting as the Naira went from 530 to 380 in less than 5 days.
Before now, the Nigerian economy was almost grinding to a halt; especially with oil being our major source of revenue. The anticipation of a recession made lots of people make permanent investment decisions over temporary situations. Some wives left their husband for greener pastures. Some companies had to lay off their best hands as they were unable to foot the running cost of the organisation. Things went from bad to worse. However, with the vision of the President Muhammadu Buhari-led administration, and a great political driver like the Vice President, Yemi Osibajo and his economic team, the country is gradually showing signs of improvement as the Naira gradually gains weight against the Dollar.
Big brother OPEC didn’t make things easier either. The militants graduated from oil bunkering to pipe bursting. Those who invested heavily in oil saw their investment crumbling by the day. The stock market also took a downward plunge with investors recording massive losses. Interest rate skyrocketed, with interest on fixed deposit remaining FIXED. (Who is benefiting? Bankers or customers?). Unlike other investment portfolios, the real estate and property market was slightly affected but properties in the Ikoyi axis, especially in Banana Island, have enjoyed great stability as their prices have consistently held value.
At Sujimoto, the foundation of our success is guided by three fundamental principles, which are effective in attracting clients and property investors. These are Location, Price And Quality. Our only mission is always to exceed our customers’ expectations by providing exceptional real estate at an affordable price.
If you want to learn how to bake bread, you speak to a baker, but if you want to know about luxury real estate, speak to Sujimoto. The same rule applies when you want to learn about investment, you need to consult someone who has amassed substantial wealth and successes by investing in several businesses. Andrew Carnegie, an American industrialist who led the expansion of the American steel industry in the late 19th century, and is identified as one of the richest Americans, said; “More money has been made in real estate than in all industrial investments combined.” This same industry giant was once quoted saying; “90% of all millionaires become so through owning real estate.”
One vital lesson Investors need to learn from this is that those who depend on the weakness of the Naira will have their pockets to blame, as Real Estate has proven to be the safest investment portfolio that guarantees the best ROI, and it is secured. “No one can carry a house from Lagos to Ibadan.”
While some may opine that there are lots of empty apartments as a result of the recession, many of these empty apartments are substandard and were built on the principle of profit maximisation, rather than quality creation. The prolonged economic recession and the crash of the forex market have forced Landlords and Caretakers to reduce the prices of their apartments.
Recently, a client commissioned us to help look for a good property and we realised that there are lots of extremely expensive Terraces and apartments, with terrible finishing. It is like offering a Toyota for the price of a Bentley. This shocking realisation prompted us to set up a small project somewhere in Banana Island-Ikoyi. With this new project, which is 100% sold out; we have been able to bring 3 major principles of real estate into one space: incredible location, great finishing, and exceptional price.