The Chief Operating Officer of Northcourt, a real estate investment solution company, Mr. Ayo Ibaru, has disclosed that the outbreak of the coronavirus is delaying a lot of real estate transactions.
Ibaru, said this during an online interview with Businessday.
According to him, residential real estate remains the core of real estate transacting in Nigeria even though several transactions are presently stalled.
He said land transactions remains the most resilient.
Speaking furthermore, he noted that healthcare investment has been brought to the forefront of investment in Nigeria’s real estate market with pharmaceutical and redevelopments leading the way.
Hospitality is the hardest hit as business travel and meetings have been cancelled, he said, adding that hotel chains are having to remodel their businesses.
In addition, he disclosed that retail real estate operators are having to reduce their overheads to manage outflows as significantly reduced footfall has led to reduced income per store.
“Covid-19 has stressed the need for technologies, specialisation and partnerships within the real estate market. Logistics and mid-sized warehousing is in higher demand due to increased demand for delivery service.
“The office market is yet to get back on its feet from the 2018 recession and co-working will have to readjust its operations to succeed. Many homes will continue to double as offices.
“The market for the forseeable future will emphasise strong advisory capabilities,” Ibaru added.
According to him, initially, when the pandemic started, everyone went into panic and different people were saying different things about the real estate market.
“But as we have spent weeks under the Covid-19 circumstances, we are beginning to see market corrections, which we had seen even coming in from the last recession. And again, we now see that some opportunities are opening up.
“But investors are now a bit more cautious.
Business travel is down to zero and 98 per cent of events have been cancelled and zoom and other tools have shown themselves as the viable alternative.
“So, I think the hospitality industry have been badly hit even though a few of them are beginning to evolve new business models. And I suspect that without a strong bailout for the aviation sector, down to hospitality, the sectors would struggle to find it feet.
“So, without some form of strong government involvement, it would be difficult for business travels to get back on its feet.
Again, there is retail. The problem with retail is that because the economy has been badly hit, people now do essential spending. Everyone is very careful around what they spend money on,” he added.