… ‘How developers are coping with 300% hike in construction costs’

By Olayinka Ajayi

Mr Olayinka Braimoh is the CEO of Hall Seven Real Estate based in the Federal Capital Territory, FCT, Abuja. In this interview, Braimoh speaks on the need for the Federal Government to align with private developers in addressing the challenges of housing deficits among other issues. Excerpts:

How do you describe your humble beginning?

I am from a polygamous home and, coming from a polygamous family, has with its own challenges. So, with that experience, I grew up with an independent mindset. I never depended on what others can do for me but rather what I can do for myself. I have trained myself never to depend on people. I rather depend on God and then on myself. I I have got an independent mindset which has really helped in reshaping the way I perceive issues.

So, what would you say was the turning point venturing into real estate?

I think it was when I took the decision to relocate to Abuja in 2004 for a project. It was a federal housing project that brought me to Abuja. For you to be able to see opportunities, you have to work on it. I took interest in real estate from the knowledge I got from reading about ‘four streams of income’.

Also, trying to think about having passive income, I realized that real estate is one of those investments that will give you passive income. You cannot be sleeping and expect money to flow. When the opportunity came up then, I came to Abuja from Port Harcourt. The business I was doing then, I sold it even though I didn’t get the money for the business till today. In fact, the first business I did when I came to Abuja, I started it without money.

How can people start businesses without money?

It’s possible. I tried to get people to understand that money is not the first thing. It is a fact. Money is not the primary thing to start a business. And when you go check, people that have the money to start a business, they lose a lot of money. The main thing, I think, should be knowledge.

How has Hall 7 fared since inception?

Our company would be nine years old this year from the day of registration, but eight years of active business. First year, we were really more into strategy and planning and all that but it will be 10 years after registration next year. We have done about one million square feet in terms of completed projects.

Our focus is actually the kind of environment we create, you know, so we don’t just build houses, we create an environment that is suitable for families to actually grow, to ensure that all the necessary facilities are there to ensure that as much as we can have an environment that people will be proud of that they live in and have the perception of pride. You know, it is not everywhere that you can see people post the pictures they snap in our estate online. What I can say is, today, there are a lot of people that live in our estate. They can post a picture and video there, we see them.

Could the issue be a people problem?

Right people exist, the only problem is to discover them. It is part of working smart trying to look for the right people. You may not be right all the time, but you have to keep searching till you get the right people. But the energy level which you exhibit would make you attract the right people. When you start a business, your energy level will determine the people that want to support you or people that want to work with you. The only thing you are selling is a vision. So, for someone to say, “Okay, this guy just started, would he really be able to pay my salary for the next three months?” That is when interest comes in.

In addressing the housing deficit in Nigeria, can government come in?

They know what to do. I think it is the political will that is lacking. For instance, for us at Hall 7, we have never gotten any direct land allocation in the Federal Capital Territory from government. Everything we have done in the past nine years, we have paid both in cash and property. In the last nine years, we have never gotten any direct allocation; it is not that we didn’t apply but it’s all efforts to no avail. So, what I think government can do in this regard is to identify a lot of developers in our category that have never been allocated and they have done their best to make the most of what is available or the stress of paying too much for land, and all of that whereas other people that get land are not developers.

So, what government can do is to ensure that developers that have proven track record they can see, to accord them by giving them direct allocation, that will help a great deal because the money they would have used for development, you end up using it to pay for land. Then you now start sourcing on how to be able to get development on the go. So, government should ensure that land is only allocated to developers with a track record that they can prove.

What differentiates you from others?

From inception, what we have tried to do is to ensure that our designs are functional and good enough for the target markets. Like I said, having it right is our top priority and we are intentional about everything we do from the parking lot to the landscaping, to the trees we plant and the walkways. We create a lot of that from our planning generally because that is where the customer satisfaction starts from. You are not choking an entire development with houses everywhere, you barely have the space. So, in terms of customer service, we are growing, and getting better, because it is an industry that has a whole lot of demands and expectations. You have to be on your toes to be able to meet up with people’s expectations. But over the years, I think we have done well.

Are you building luxuries?

What is luxury to you might not be luxury to me. Well, we are just trying to create international communities in Nigeria, communities that are functional.

How do you cope with the price of building materials?

I don’t think any developer escaped this aspect since the era of COVID and the spike that follows in construction costs. So, we have done as much as we could but the truth is that we just have to find a way to manage it. Some projects you get, no matter what, because of the spike in some cases wipe out the entire profit that is on the project, and we have some projects that you actually have to look at; because of the spike, NBS gave us statistics that tell you about 17% to 18% in terms of inflation rate. Interesting but, in reality, reinforcement went up to about 300%, inflation in cement went over 100% within 24 months. So, there is absolutely no developer that will say they don’t feel the effect of the spike in construction costs.

You can’t go back to start reviewing your prices, you just have to find a way to make sure you are still able to maintain the standard of what you deliver to your customers. And that is what we are committed to, and that is what we are doing, to show that we are able to do our best to serve our customers in some cases you have to take a loss, just to satisfy the customer and we have seen cases whereby we try as much as you can to see how we can negotiate with some customers to come. Some customers don’t even have the money to be able to adapt so what do you do?

What are your projections of the group in the next five to seven years?

Right now, our focus is actually to gradually move into resource development, as we grow because we will be able to make more impacts and create more jobs, also creating platforms for collaboration.