Construction & Real Estate
From The Report: Nigeria 2017
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Following a difficult 2016 the Nigerian construction sector showed signs of stronger growth in the first half of 2017. The uptick in activity comes on the back of a low base, however, as the country’s first recession in 25 years affected private investment in real estate building and oil companies had to scale back investment plans due to lower global oil prices. The stabilisation of the naira, the utilisation of new contract structures and an increase in local suppliers are now helping to provide fertile ground for activity. While public sector tenders remain limited compared to the booming years of the 2000s, the increase of private development in the residential and commercial building segments offers promise. Nigeria’s real estate sector has traditionally been defined by an abundance of demand and relatively limited supply, whether in residential, commercial or retail space. Since 2015, however, the situation has changed for some segments. In the office market, for example, supply is beginning to catch up or even outstrip demand. The real estate sector continues to account for around 7% of GDP, but the return on investment for developers is far less than it was five years ago, as Nigeria’s first recession in 25 years hit in 2015. The government’s efforts to boost middle-income home ownership should bear fruit in the longer term.

This chapter contains an interview with Igbuan Okaisabor, CEO, Construction Kaiser.

Articles from this Chapter

Overview

On the rebound: Local contractors see a return to growth and increased use of domestic inputs
OBG
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Following a difficult 2016 the Nigerian construction sector showed signs of stronger growth in the first half of 2017. The uptick in activity comes on the back of a low base, however, as the country’s first recession in 25 years affected private investment in real estate building and oil companies had to scale back investment plans due to lower global oil prices. The stabilisation of the naira, the utilisation of new contract structures and an increase in local suppliers are now helping…

Analysis

Up and up: Climbing costs continue to weigh on progress
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When Nigeria’s economy was flourishing a decade ago, the country earned a reputation as one of the most expensive places in the world for construction undertakings. Strong demand for expertise, labour and supplies for major hydrocarbons projects pushed up prices and ensured hefty profits for construction firms. Yet while it may have slowed activity, even the country’s recent recession has not stopped the continuous rise of building costs. Scope Contractors across the industry agree…

Interview

Foundations of progress: Igbuan Okaisabor, CEO, Construction Kaiser, on how the sector is tackling housing demand
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Interview:Igbuan Okaisabor What role will public works play in the construction sector in the coming year? IGUAN OKAISABOR: The Nigerian government remains the largest client of construction companies because it undertakes the construction of many of the country’s key buildings and infrastructure, such as dams, roads, bridges, schools, hospitals, and water supply, sewerage and power systems. Furthermore, there was a rise in the government budget for the building of infrastructure in 2017,…

Overview

Changing direction: Profits from high-end properties are slowing, and middle-income housing is getting a more serious look
OBG
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Nigeria’s real estate sector has traditionally been defined by an abundance of demand and relatively limited supply, whether in residential, commercial or retail space. The boom in the country’s economy in the years following the global financial crisis of 2008 led to a surge of investment in Nigeria and attracted a range of businesses, leading to a shortage of grade-A office space. Although a flurry of construction activity ensued, supply could not catch up with demand, and rental prices…