Olive Court’ll open vista of opportunities in Oyo State – UPDC MD

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Mr Hakeem Ogunniran is the Managing Director of UACN Property Development Company Plc (UPDC), a company renowned for innovative property development in the country. In this interview with Chukwuma Okparaocha, he speaks on the prospect embedded in the Olive Court developed by the company in Ibadan, in conjunction with the Oyo State government; how the project will improve the lives of residents of the state and how it will ultimately be used as a tool by the state government to add value to the state and put smiles on the faces of its people, among other issues. Excerpts.

The property business in Nigeria is undergoing a lot of refocusing, what new area is UACN Property looking at?
For us at UPDC, we are sticking to our traditional business model  of developing premium residential estates in Lagos, Abuja, and Port Harcourt. But apart from this, we are also extending our geo-political boundaries across the length and breadth of this country by identifying new cities such as Ibadan, Asaba and Calabar, among others. Apart from residential properties and businesses, we are also opening more doors of investment opportunities in commercial and rental spaces. For instance, we have Festival Mall- a shopping mall which is currently being built in Festac, Lagos and with time, more of such malls will be built by us.

What is the direction of the partnership UACN has with the Oyo State government?
UPDC and the Oyo State government are currently involved in a joint venture that is meant and designed to create a win-win situation for both parties. We have created an SPV named First Restoration Property Development Company Ltd in which we are both shareholders. This SPV will midwife the development of Olive Court and other projects that we are looking at in the future.

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In what areas would that add value to the government’s asset stock?
Firstly, developments like Olive Court will complement the efforts of the state government in the area of infrastructural development. Clearly, the state has witnessed significant infrastructural development which are very visible and real estate typically follows infrastructure.

Expectedly, the state will begin to draw investors and people who will obviously need decent, comfortable and upscale accommodation.

Through Olive Court, we are creating a comfortable living environment for would be buyers and residents. We are convinced that the great city of  Ibadan is ripe for a premium estate with all the ancillary facilities.  We are creating a community of people in Olive Court  with access to the best of modern and state-of-the-art recreational facilities that will make life comfortable for all its occupants. These include, 24 hour power supply, swimming pool, gymnasium, club house, children’s playground, parking space, borehole and water treatment plants, standby generator, and alarm systems, amongst others.

Of course, this project will generate significant employment opportunities because we are leveraging on local skills and resources to actualise the project. The governor is particular about this and we will ensure that we actualise that objective.

Do you think the idea of a public-private partnership such as the one UPDC has with the Oyo State government in the interest of the Nigerian public, or is it just for the private developer alone?
By design, the entire venture will create a win-win situation for all parties involved – the Oyo State government, the Nigerian people and residents of Oyo State as well as UPDC. This is because each party brings something to the table that will be of immense benefit to the entire scheme.

For instance, the Oyo State government has made available land; not just any type land – but good titled land in a great location. But we all know that land in itself does not become money, and that is the special value that we also bring to the table. Under the JV arrangement, it is our responsibility to unlock value in the land – source the funds, oversee all pre-development activities, Thus our duty, that is what we are bringing to the table, is our efforts and professional inputs to develop those lands and transform them into an economic resource. This is the kind of picture a true PPP arrangement such as the one we have with the state government should have. In a PPP arrangement, two parties (government and private sector) always bring something to the table that will be of benefit to all, thus creating a win-win situation for everyone.

Does your company collaborate with other private individuals or companies?
This is actually the first time our company will be going into a joint venture with the government, but overtime, we have done joint ventures with other private companies. Such projects as Romay Gardens in Lekki, Salatu Estate in Abuja and Anchorage Estate in Festac, Lagos are examples of our past JVs with individuals and companies.

Many things have  been said about the Nigerian Mortgage Refinance Company (NMRC), do you think this new addition to the housing sector would help to reduce housing deficit in the country?
Clearly, by creating a market for secondary mortgages, the NMRC should  help to drive the demand for housing. However, what NMRC does is to try to address the problem of demand. But it hasn’t addressed the problem of supply because if you have mortgages, and don’t create the appropriate pipeline to roll out houses that will be demanded, there will be a problem. We need to solve the issue of title, we need to solve the problem of permitting an approval, and we need to solve all the problems inhibiting real estate development. So, if you solve the problem at both ends, you deal with the entire value chain and then we make real progress in the sector.

Talking about challenges, what are the challenges you face in the course of carrying out your responsibilities and what ways have you taken to meet such challenges?
Real estate is a very risky business. You always have the problem of uncertainty of titles. This can be considered as a major issue faced on daily basis. But what we try is to have a very robust, due-diligence framework in place and this helps to mitigate the problem. Though the problem keeps arising, we deal with them as they arise. There are also other critical issues facing the real estate sector such as the issue of infrastructure. Today, every developer is a local government on its own; you have to provide your own road, your own water, power, sewage treatment plant. All these add to the cost of development. In this country we don’t produce any finishing material; we import everything – which creates very complex supply chain challenges for the people in the sector. Long-term funding is not readily available, and when it is available, interest cost is so high; retail financing is a problem, and we don’t have a very effective mortgage financing in place.

These are the problems, but we have created a business model that helps us to meander through this problem and minimise its negative impact on our business. We work very closely with our customers and we empower them from time to time. We create products and services which speak to what our customers specifically ask for. For example, we have taken a careful look at Ibadan; we have done our research and we understand the customers preferences at this time, which underpins the development of Olive Court.

The property business in Nigeria is undergoing a lot of refocusing, what new area is UACN Property looking at?
For us at UPDC, we are sticking to our traditional business model  of developing premium residential estates in Lagos, Abuja, and Port Harcourt. But apart from this, we are also extending our geo-political boundaries across the length and breadth of this country by identifying new cities such as Ibadan, Asaba and Calabar, among others. Apart from residential properties and businesses, we are also opening more doors of investment opportunities in commercial and rental spaces. For instance, we have Festival Mall- a shopping mall which is currently being built in Festac, Lagos and with time, more of such malls will be built by us.
What is the direction of the partnership UACN has with the Oyo State government?
UPDC and the Oyo State government are currently involved in a joint venture that is meant and designed to create a win-win situation for both parties. We have created an SPV named First Restoration Property Development Company Ltd in which we are both shareholders. This SPV will midwife the development of Olive Court and other projects that we are looking at in the future.

In what areas would that add value to the government’s asset stock?
Firstly, developments like Olive Court will complement the efforts of the state government in the area of infrastructural development. Clearly, the state has witnessed significant infrastructural development which are very visible and real estate typically follows infrastructure. Expectedly, the state will begin to draw investors and people who will obviously need decent, comfortable and upscale accommodation.  Through Olive Court, we are creating a comfortable living environment for would be buyers and residents. We are convinced that the great city of  Ibadan is ripe for a premium estate with all the ancillary facilities.  We are creating a community of people in Olive Court  with access to the best of modern and state-of-the-art recreational facilities that will make life comfortable for all its occupants. These include, 24 hour power supply, swimming pool, gymnasium, club house, children’s playground, parking space, borehole and water treatment plants, standby generator, and alarm systems, amongst others.
Of course, this project will generate significant employment opportunities because we are leveraging on local skills and resources to actualise the project. The governor is particular about this and we will ensure that we actualise that objective.

Do you think the idea of a public-private partnership such as the one UPDC has with the Oyo State government in the interest of the Nigerian public, or is it just for the private developer alone?
By design, the entire venture will create a win-win situation for all parties involved – the Oyo State government, the Nigerian people and residents of Oyo State as well as UPDC. This is because each party brings something to the table that will be of immense benefit to the entire scheme.
For instance, the Oyo State government has made available land; not just any type land – but good titled land in a great location. But we all know that land in itself does not become money, and that is the special value that we also bring to the table. Under the JV arrangement, it is our responsibility to unlock value in the land – source the funds, oversee all pre-development activities, Thus our duty, that is what we are bringing to the table, is our efforts and professional inputs to develop those lands and transform them into an economic resource. This is the kind of picture a true PPP arrangement such as the one we have with the state government should have. In a PPP arrangement, two parties (government and private sector) always bring something to the table that will be of benefit to all, thus creating a win-win situation for everyone.

Does your company collaborate with other private individuals or companies?
This is actually the first time our company will be going into a joint venture with the government, but overtime, we have done joint ventures with other private companies. Such projects as Romay Gardens in Lekki, Salatu Estate in Abuja and Anchorage Estate in Festac, Lagos are examples of our past JVs with individuals and companies.

Many things have  been said about the Nigerian Mortgage Refinance Company (NMRC), do you think this new addition to the housing sector would help to reduce housing deficit in the country?
Clearly, by creating a market for secondary mortgages, the NMRC should  help to drive the demand for housing. However, what NMRC does is to try to address the problem of demand. But it hasn’t addressed the problem of supply because if you have mortgages, and don’t create the appropriate pipeline to roll out houses that will be demanded, there will be a problem. We need to solve the issue of title, we need to solve the problem of permitting an approval, and we need to solve all the problems inhibiting real estate development. So, if you solve the problem at both ends, you deal with the entire value chain and then we make real progress in the sector.

Talking about challenges, what are the challenges you face in the course of carrying out your responsibilities and what ways have you taken to meet such challenges?
Real estate is a very risky business. You always have the problem of uncertainty of titles. This can be considered as a major issue faced on daily basis. But what we try is to have a very robust, due-diligence framework in place and this helps to mitigate the problem. Though the problem keeps arising, we deal with them as they arise. There are also other critical issues facing the real estate sector such as the issue of infrastructure. Today, every developer is a local government on its own; you have to provide your own road, your own water, power, sewage treatment plant. All these add to the cost of development. In this country we don’t produce any finishing material; we import everything – which creates very complex supply chain challenges for the people in the sector. Long-term funding is not readily available, and when it is available, interest cost is so high; retail financing is a problem, and we don’t have a very effective mortgage financing in place. These are the problems, but we have created a business model that helps us to meander through this problem and minimise its negative impact on our business. We work very closely with our customers and we empower them from time to time. We create products and services which speak to what our customers specifically ask for. For example, we have taken a careful look at Ibadan; we have done our research and we understand the customers preferences at this time, which underpins the development of Olive Court

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