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Oil dependency and Real Estate Investment

These are trying times for the economy, especially with the crash in oil prices. The ripple effect, for a country like Nigeria that is 90 per cent dependent on oil, is that the monthly federal allocation to states has dwindled in the last three months.

For instance, between last October and December, the net earnings from the federation account for some states showed that Lagos got N5.8 billion, N6.7 billion and N5.9 billion. Ogun, N1.4 billion, N2 billion and N1.3 billion; Kano, N4.2 billion, N4.8 billion and N3.9 billion; and Imo, N2 billion, N2.7 billion and N1.9 billion.

For proactive states, one area that they have been able to capitalise on as a buffer is investment in real estate. This serves a two-way prong approach for the state’s development- urban renewal and revenue drive.

One state that has keyed into this is Ondo. The ‘Sunshine State’ as it is referred to, is a predominantly civil service state, accounting for its low revenue earning from economic activities. But that is set to change now.

This comes on the heels of its over N10 billion investment in an event centre, known as the Glass Hall Event Centre. This is the second phase of yet another edifice, that is, “The Dome”, which is said to be about 77 per cent completed.

The Glass Hall Event Centre was designed and built by Messrs Groupo Systemso of Spain. It sits on a 36.05-hectare of land. It is built of combined steel and glass materials, with little cement works. Besides, it consists of two galleries, with the bigger gallery having a capacity of over 2, 000 and the other with a 420- sitting capacity; large screen for multi-media purposes and  a car park of 1,000 vehicles at a time; fire-fighting equipment, such as smoke detectors, sprinkler and toilet facilities as strategic locations.

Others are two units of 1250KVA and one unit 750 KVA of generators; 100, 000 cubit feet water storage; chalets, amongst others. On completion of the complex, at the roundabout entrance, a dancing fountain, said to be a replica of the one in Dubai, would be sited. This is expected to also generate a lot of revenue for that country.

The property is located at the Alagbaka Government Reservation Area GRA, Akure Township, and is said to be constructed to meet the unexpected high demands by the public. When fully operational, the centre is expected to generate an average of N45 million monthly from hall rentals alone. This is outside the use of other facilities that will attract revenue.

The Director, Planning, Research and Strategy, Ministry of Housing & Urban Development,  Joseph Babalola, noted that based on the unfolding realities in the state, there was need for event centres that are of international standard. This reasoning may not be faulted given that at the Nigerian Society of Engineers’ conference held in Akure last year, accommodating over 5, 000 delegates was an issue. This is why the state now plans to develop a five-star hotel directly opposite the centre.

“Apart from that, we discovered that the week-long event overstretched the available hotels in Akure, thus, forcing participants to look for accomodation in the adjoining cities, such as Ado Ekiti, Owo, Ondo and other places. It was this reality that made the government to conclude the plan for a five-star hotel that would be sited opposite the event centre,” Babalola said.

The ripple effect of this centre, whose conception started in 2010, is the new wave of urban renewal activities in the city. For instance, the location of Shoprite in Akure was said to have been influenced by its proximity to The Dome complex. This has also been complemented by infrastructure provision, such as road expansion and construction. For instance, from the centre to Shoprite, and also to Idanre Hill, and the 18-hole golf course golf in Ilara, it all falls within 30 to 35 km, that is 15 to 20 minutes drive from the farthest point from the centre.

“Because in a situation where we are having a programme that will accommodate like 5,000 participants, there will be a need to provide at least 5,000 beds, apart from the drivers and the aid that will come with those people. The multiplied effect will be telling a lot on the economy of the land. It will be increasing the economy that it will become more buoyant. The hotel that people will lodge in will get paid, other services will also be affected, the caterers and even recharge cards sellers; so it is a huge turnover of business,” Babalola, who is also the Project Director, explained.

Plans are afoot to employ a facility manager for the project.

In Ogun State, as part of its urban renewal programme, the government last week relocated villagers at Itoku-Elewe Irepodun on the Sagamu-Abeokuta Expressway to a new settlement in the area, where it has built 96 modern houses for them.

The Secretary to the State Government, Mr. Taiwo Adeoluwa, explained that the relocation of the villagers became necessary as the Governor Ibikunle Amosun-led administration opened up the area with a housing estate as part of its urbanisation initiative.

“There were 46 mud structures with small wooden box windows inhabited by the villagers who are mainly farmers on that land.

Source: The Nation

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