Joint venture initiatives are, increasingly, gaining traction in the real estate market. Individuals, institutions and even governments generally enter into joint ventures to share risks, integrate potential and/or contribute equities. But Lifecard International Limited has taken it a step further. In this chat, OFURE CHRISTOPHER IBBAKHOMU, the company’s managing director, explains how they have been able to make housing a lot affordable, cutting construction cost by as much as 30 percent. An astute real estate manager with over ten years of hands-on experience in the real estate industry, Ofure, also speaks on the easiness of owning homes and earning income on ‘idle’ properties. She speaks with CHUKA UROKO, Property Editor. Excerpts:
Tell us about your business
We are into real estate joint venture cooperative. Over the years we have been able to use the power of joint venture to give people real estate that is genuine and cheaper. As a company, Lifecard International Limited is an established and fast expanding real estate investment company specialized in managing clients’ investment funds, project financing and creating residual income through the purchase and resale of residential and commercial properties.
We believe there is power in number and collaboration. Most times people don’t know this and so don’t have the opportunity. We have discovered that a lot of people who have land don’t have the money to develop and those who have money don’t have land. House prices are outrageous in the market because the price of land is also high. Again developers collect money from the banks and so when they want to sell, they put the interest on the bank loan in the price of the houses they have for sale.
So, what we are doing in this initiative is to bring together the land owners and those who have money into a joint venture so there is a direct link between them. This initiative automatically removes 30 percent of the cost of construction and, by extension, reduces house prices.
How does this initiative work?
What we have is a joint venture club where people come together with what they have. Those that have land bring the land while those that have money bring same to the club. Money is contributed and houses are developed on the available land. When we finish developing, we decide with the land owners how they wants their money back. It could be through rental income or monthly salaries that will enable them to be earning income from their property.
We are like a family. We have saved people the headache from developers who keep shifting delivery dates of their developments. But if you look at their action critically, you find out that it is not the fault of these developers because, in subscribing to an estate, some people pay one year installment, some three years, and others for five years. All these people are lumped together in one scheme and because money is coming on irregular basis, the development drags. The developer does not have everybody’s money the same time.
This is the kind of mistake we are out to correct. In our model, we segment our subscribers according to how they want their development. Those who are for one year will be in a different scheme from those who want theirs in three years or five years so that no one will draw another back. This is what we have done in our schemes in Lekki.
What are the benefits of your cooperative?
We as Nigerians should begin to collaborate and live like a family. When you collaborate, you see people who will encourage you to do something and also you have buying power. Big cooperatives in Shell or Mobil are doing big things because they have the number which gives them the buying power. But it does not mean that people who are not working in those places should not have real estate and that is why we are in this business.
What house-types do you develop?
Because we want it to be affordable with luxury, we are developing mainly apartments which come in different configurations of 1, 2,3,3 or 4-bedroom. One advantage that we see in apartments is its capacity to bring families together, especially now that Nigeria needs unity.
Most people like buying from estates because of the facilities, but that comes at a cost. You have to pay estate development levy, facilities management charges, security, etc. But apartments have their own facilities such as security and light. You don’t have to pay for other infrastructure like roads which are supposed to be the responsibility of government.
How many projects have you done so far?
We have already done some projects which have been completed and occupied. We have a project called Spring Apartments. Spring apartment is a well planned, hotel-styled and fully furnished apartments aimed at attracting young millennial who desire affordable luxury serviced apartment for a Pay As You Go (monthly) package on an extended stay basis.
We have another project which is a joint venture with Lagos State government. It is called Iconic Tower. This will be a block of apartments comprising 2 bedroom and three-bedroom. This project is in Victoria Island. Anybody can key into this project.
Who are your target audience/market?
Our target is everybody because we have projects for all of them. There are people who are buying land in Ibeju Lekki, Mowe, Agbara etc. Such people can come together, build an apartment block and start living there instead of waiting for when they get all the money to develop their own individual houses. People can use this type of scheme to help and show love to other people.
Investors should be a part of problem solving. If because of you a young school leaver is able to rent a house where he will be paying monthly rent, that is a show of love and help to the needy. To say that one is successful means looking for a need and reaching out to meet that need. So, an investor can also reach out to solve the problems of those in need.
How do you work with challenges in the market?
We have really seen that there are so many houses waiting to be let or sold. That is a huge challenge, but we are saying that owners of such houses should come and talk to us. We will tell them the secret of how to sell or rent out those houses. With this our model, we will ensure that in five months, there will be no more empty houses in those locations and money will start coming to the owners.
There are many people who want to own houses, yet there are many empty houses. The reason is that many of the empty houses are overpriced. But in our case, we want to make real estate affordable to whoever wants it. With our joint venture initiative, houses can be affordable even in Ikoyi. We can do our project in such a way that you can build your house with up to 30 percent lower cost.
Looking into the future, what do you see?
We want to have 1,000 developers in our club because we are making people developers. We are targeting monthly rents which nobody is doing at the moment in Nigeria. This is because we have put in place structures that will make that possible. You don’t blame those who charge advance rents because they collect money from the banks and they have to pay back. But that is not the case with us because ours is a joint venture cooperative. We have the land and raise the money from among ourselves.
What message do you have for Nigerians?
We are telling Nigerians that it is possible to own a home that is affordable with all the luxury yet they don’t have to break the bank to make that happen. They have to work with people that can help them. For investors, we are saying that it is also possible to put a smile on people’s faces by developing houses that can be given out on monthly rents and we guarantee them that they will not lose their money.