Ghana Real Estate Sector: Joseph Aidoo Presents Devtraco and Discusses Latest Residential Projects

Interview with Joseph Aidoo, Co-Founder and Executive Director at Devtraco Group

Let’s start by introducing Devtraco and its foundation.

Devtraco Limited was started by my father in 1993 as primarily concrete products manufacturers. In 1997, we moved into real estate development and quickly gained notoriety for developing projects on time and on budget. After that, I founded Devtraco Plus, which is geared towards the higher end of the market. We did well and gained notoriety again. Not too long after that, we acquired a majority stake in one of the largest construction companies in Ghana. Since then, we have been just building real estate after real estate. Our unique selling point is taking a market-oriented approach and designing something that the client wants. This makes it so much easier to sell. Real estate is about location, location, location, right? So over and above location, the next thing for our market is what they want, look and feel, and pricing. I think that has been our unique selling point.

Can you provide a specific example to make it easier for people to understand what you mean by a client wanting something specific?

The high-end property market is largely supported by expats renting properties. Prior to our entry into this market, most projects had units with a minimum price of half a million around 2010 and 2011, with mostly two-bedroom apartments. However, we decided to target the same expat end-user but with slightly smaller units, allowing them to purchase a two-bedroom apartment for $250,000 instead of half a million. This appeals to the Ghanaian investor who purchases the units 90% of the time. The rental company for expats is happy to rent a smaller unit at a lower price point because it is more profitable. This is just one example of what we are able to do for the investor buyer.

Regarding Devtraco, we have noticed some interesting residential projects that we can discuss. One visually interesting aspect is that you have introduced hotel apartments, isn’t it something new to the market?

We see ourselves as pioneers in the market, and I can confidently say that Devtraco Group was the first to introduce apart hotel apartments into the market.

What does it mean to bring apart hotels to the market? Do you think the market is ready for it? Why do you think this idea has only emerged recently?

Timing is crucial in business because having a great idea and launching it at the wrong time could lead to failure. I believe that the apart hotel market was aided by a circumstance that was unfortunate for the world and the people who were affected by the pandemic. It has been a significant factor in the rise of the apart hotel market. As a result of the pandemic, people were working remotely, and companies allowed their employees to work from home. People were leaving expensive cities such as London, Paris, and New York to come to Ghana where the cost of living was cheaper, allowing for longer stays and more savings. This need gave rise to the apart hotel, which is now becoming a big deal. The Airbnb market has also benefited from this trend.

Do you have any other interesting examples of things you do or are currently working on? We are currently sitting in Nova, which is another residential project for apartments. Is there anything specific you would like to share about Nova that sets it apart and makes it unique or new in the market?

We realized that 90% of tenants in inner-city apartments were expats due to the high price tag that the average Ghanaian cannot afford to live in the inner city. As a result, most Ghanaians had to commute for two hours in the morning to get to work. We decided to focus on quantity in terms of the number of units, and reduce the price points margin-wise. The average property on the market sells at about $2,800 per square meter, but we launched Nova at over $2,200 per square meter. The whole idea behind Nova was to enable Ghanaians to own inner-city apartments, rather than having to rent them, and to make it affordable for them to live in. This novel and new idea is what inspired the name Nova.

How many offers are currently available? Are they already available or when will they be launched?

In the larger context, Nova may not be a massive development, However, considering the development landscape in Ghana, Nova is considered a significant project. It comprises of 150 units, and the first phase is expected to be ready by November. The second phase, located adjacent to the first, will be completed by December, so they are expected to be completed around the same time.

Is there anything significant happening in the next few months that you would like to discuss?

In about a month, in May, we will be launching our latest development, which is our most ambitious project yet. It is likely to be the best development in Ghana to date. I cannot reveal much right now, but you will find out soon. Additionally, in September, we will be launching another project that is also very interesting. So keep an eye out for that too.

Can you provide information about the size of the company and the range of products available to investors? This is a fundamental question for potential international investors.

I believe what might be of interest to investors is that our current pipeline projects are worth over $800 million.

What type of investment are you looking for? Are you seeking investment only or are you also interested in partnering with someone who brings experience to the table?

To answer your question, as experienced real estate developers, we understand the value of having a partner who can bring additional expertise to the table. While we welcome partners who can provide both capital and knowledge, However, we are equally happy to have partners who prefer to provide funding and let us do what we do best.

Regarding the expansion of the real estate sector, you previously discussed the trends and challenges. What is your overall perspective on the sector itself?

The real estate sector has experienced tremendous growth and activity in recent years, driven by factors such as urbanization, population growth, and an increase in middle-class incomes. However, significant challenges still exist within the sector, such as access to affordable financing and a problematic land tenure system. To be successful in navigating this terrain, developers must adopt creative technologies to improve efficiency and drive down costs, passing those savings on to the end user. This will be key to success in the future.

Tell us about your expansion plans.

Currently, our expansion plans are focused on geographic expansion within the West African sub-region. Our target market consists of the 350 million people within this economic zone. So, our priority is to identify the markets within the West African sub-region that have the appropriate demographics for our business. Once we are successful in this, we will then consider other areas where our services are needed.

Given that you will likely partner with local companies, what criteria are you considering when expanding outside of your current market?

When moving to a new market, we prioritize partnering with someone who has deep understanding and knowledge of the market. This is more important to us than having a financial partner. We seek someone who truly understands the market and has relevant experience and expertise. Market knowledge is paramount to us.

Can you share a success story that you are proud of and that represents your company’s philosophy?

Devtraco being the first real estate developer to gain ISO 9000 certification in Ghana is a unique one that represents our philosophy of quality. Also, winning over 10 international and local awards, including the CNBC International Residential Property Award, is another testament to our brand and group’s achievements.

Where do you focus your efforts on in terms of social responsibility?

I am glad you asked that question and I hope that my answer will inspire viewers to reach out and help others. As you grow, it is important to remember that if you eat alone, you fight alone. That is why it is essential for us to reach out and help the less privileged in society. We established the Devtraco Group Foundation to focus on offering support in various ways to those less privileged in our society. Some of our activities include providing assistance to orphans, widows, and underage children. We also conducted several drives during the COVID-19 pandemic by distributing protective material throughout the country. Recently, we renovated a dormitory for special needs kids. We completely refurbished the 22-bed dormitory, provided food, and funding to feed 200 odd kids and teachers. We have committed to supporting their needs, and these are a few of the things we have done. Hopefully, this message reaches out to partners and successful individuals, encouraging them to look around and see how they can make a positive impact on others.

Are you taking into account the impact on the environment in the real estate industry when developing new projects, particularly in relation to energy and water? Are your new projects addressing these issues to meet the growing demand for environmentally conscious options among consumers?

It is a good question and I have to be honest with you, we have not achieved great success yet. However, we have instructed all our professionals, including architects we work with, to increase our green footprint with each successful development. Our goal is to ensure that all our buildings are truly green within the next five years by achieving EDGE Certification and then gradually improving each building one at a time.

In the medium term, let’s say three to five years, what is your vision for the company? Where do you hope to take your company, and what will be your guiding force if everything goes according to plan?

In five years, I see Devtraco as a company that has made significant progress not only in terms of successful developments and profits, but also in its CSR programs. Our focus will be on reaching out and supporting the less privileged in the region, rather than just being known as a developer. I envision that when you hear about Devtraco, it will be synonymous with our efforts to positively impact the community and society.

What motivates you to continue building this amazing company?

To be honest, it is difficult for one person to change the world, but if that one person can influence those around them, and in turn, those people can influence others, then the world can become a better place. What drives me is the ability to positively impact the lives of those in my circle, so that they can in turn positively impact the lives of those in their circle. One person at a time, we can make the world a better place. And for me, that is what matters most. It is also important to me that everyone else can sleep well at night, knowing that they have contributed to making the world a better place.

Is there anything else you would like to add?

I would like to convey a message to all entrepreneurs, young or old, who are still seeking success. I cannot guarantee that success comes easily, but I can assure you that it is not impossible. My own journey is a testament to this.

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