Ogunleye: We Strive To Build Affordable Properties in Prime Locations
The Chief Executive Officer of Denaro Properties, Jide Ogunleye talks about their target to build affordable homes in prime locations where prospective owners can live close to where they work
One can safely say that Denaro Properties belongs to the generation of real estate firms that are young but with strong footprints. Tell us about this company and what you do
Denaro Properties Limited is a solution provider in the housing sector. We do real estate development and housing construction in particular. We also do development and management of properties. We opened for business in 2009, but started full operation in 2011. So, this year is our 10th anniversary. We started with site and service schemes in Lagos and in other states. In terms of housing construction, we have done quite a number of projects. We have just commissioned block of terraces in Nomad Grandville Court in Ilupeju, Lagos, which is a joint venture project between us and Nomad Investment and Properties Limited. In joint ventures, some entities own the land while we come in to build. We also provided funding from conception to finishing. In Allen, Ikeja, we did fully detached duplex which we have sold out and handed over to those who bought. In Agege, we have a project that comprises three-bedroom apartment. In Magodo, Isheri, we have Victoria Court which is a semi-detached development. For our site and service schemes, in Ogun state, we started with Mayflower Gardens in Ofada, Silver Sand in Agbara and Fairfield in Simawa. In Lagos we have Victoria Park, Grand Park and Downtown Park in Ibeju Lekki. In Silversand Agbara, we have Grand Apartments where we have built two-bedroom bungalows for rent-to-own scheme. People are allowed to deposit N1 million, move in and start to pay by installments for four years. The interest on this scheme is so affordable and competitive that it can stand against what the mortgage banks offer. Our goal in this scheme is more to provide solution than targeting profit. So, on the mainland, we have done pockets of developments that are meant to fill empty spaces for people who cannot afford to build in such locations where land alone may cost up to N90 million per plot. We are focused on the Lagos mainland as we believe we are rebranding the face of the Lagos mainland. We go out looking for houses or land that are not well developed and we move in and build something that can attract people and are yet affordable. What we do essentially is gentrification. Through this model, we are changing the face of Lagos Mainland, bringing in new ideas, new concepts, and new structures.
Where are your areas of focus and who constitute your target audience?
We strive to build affordable properties in prime locations because our target is people who can afford them and would like to live near to their work places in the city centre. On the mainland, we focus on areas close to Alausa in Ikeja. On the Island we look at places close to Ikoyi and Victoria Island which are the centres of business activities. Areas like Sangotedo and Awoyaya are also good locations for our kind of projects.
Looking back 10 years, what impact have you been able to make on families and the economy?
In terms of providing housing solutions, our client base is over 1000. We have done quite a number of schemes and a lot of people have benefited from what we have done. When you talk about impact, it does not consist in selling houses alone as almost 100 artisans work on a single building project. These people are also impacted. We also do property management for clients. We have expatriate clients who have taken Nigeria as their home. We offer after sales service in which case we sell and also manage the property for clients. We do our best to ensure that residents don’t complain of anything that is necessary for their comfort.
Now, of your estimated 1000 clientele base, what percentage of them is in the low income bracket?
When we started, it was all about mass housing. It was later that we graduated to taking care of people who are in the middle and high income class. In terms of categorization, those in low income constitute about 70 per cent of our clients. The mid-income group makes up 20 per cent while high income earners are 10 per cent. The low income earners are in the majority and you cannot ignore them, else you miss out.
You have been involved in joint venture projects. Who are your partners—corporate bodies, individuals or governments?
We have done mostly with corporate bodies and individuals. The concept of the joint venture we have been involved in has to do with land owners. We believe that if you have land that is not being used, it is dead capital, especially if it is not yielding anything for you. The same way, if you buy a property, rent it out and tenants are not paying, the property could also be regarded as dead capital. This is why we advise land owners to look critically at their property and see what they can do with it profitably. So, what we do is to approach land owners with our capital, technical know-how and marketing strategy and agree with them on how to share the properties that will come out of the land. We can agree on 60:40 or 70:30 per cent sharing ratio depending on the value of the land and the kind of property built. We can even market their own share for them and that becomes a win-win situation. The challenge here however is that a lot of land owners are still struggling to understand the concept.
In the last four to five years, how many of such joint venture projects have you done?
We have done about five in different locations and with different land owners under different MoUs. In Ilupeju where we have the Nomad Grandville Court, the landowner is Nomad Investment and Properties limited. In a joint venture, what ties the developer to the project is an MoU where all the requirements, agreements and clauses pertaining to the project are spelt out. Everything is spelt out including the duration of the project.
This is different from an arrangement where two developers pool capital to do a project. In that case, a special purpose vehicle (SPV) is formed. A joint account may be created for the purpose of the project.