Lekki Gardens Real Estate Company: “Luxury You Can Afford”

Interview with Richard Nyong, CEO of Lekki Gardens

What is your evaluation of the real estate sector nowadays in Nigeria and specifically in Lagos? What are the trends? How would you define it in 2016?

In Nigeria as a whole there is a sluggishness that has occurred because people are trying to balance their personal budgets. The sector is driven by people buying properties either by getting a loan from the bank or by using their savings to pay for it. There is a general sluggishness in all the markets at the moment because we are looking to the central government to make its commitments as to which direction the economy will go. That is affecting sales and growth of the sector. You have many people needing to buy properties so there is an effective demand. People want to buy. People have resources to buy properties. But because of the sluggishness of the economy and the inflationary trends you have people holding back in order to see which way the economy will go before they commit their money. There is a mixed reaction in the market place. There is the desire for people to make purchases; there are resources for people to buy properties. The challenge is to know which way the economy is going before committing your money. That is slowing the drive and the upward trend in the market.

Yesterday we heard of many more vacant properties on the island compared to the mainland. How would you define the real estate in Lagos specifically?

That is not entirely true. The island has a spectrum of opportunities that you need to understand before you make an overall conclusion. The same can be said for the mainland though the spectrum is smaller. On the island you have high end commercial properties around Victoria Island. For people looking at buying in those locations there is some sluggishness. Many people feel that those properties are overpriced except for a select few. If those select few are not ready to purchase yes, the market will slow down. You will have a lot of vacancies. It is high end luxury. So in Ikoyi and Victoria Island they are experiencing a lot of sluggishness. However once you get to Lekki, Chevron and Ajah which are also regarded as the island, you will find a lot of activities. It services the very middle class and lower end purchases of real estate. These people actually need to buy houses. There is a lot of traction there, whether you are selling land or building houses. There is a lot of traction from Lekki phase one down to Epe if you are thinking of the island, but if you are looking at the high-end luxury market of Victoria Island and Ikoyi you will find sluggishness. If you now look at the mainland, development is quite restricted. There is such a huge demand on the mainland such that whenever a small parcel of property that is developed properly is available, buyers key in to it quickly. Not necessarily because people want more properties on the mainland but because land use is more stifled on the mainland than on the island. On the island, there are many good properties with good titles and it enables businesses to flow much easier. There is a disguised demand on the mainland that makes people feel it is bustling but it’s not. The island is still the place to be. If you are in the commercial market whether your targets are on the low-end market or the high-end there is sluggishness. If you are in the residential market from Lekki to Epe then it’s a good place to be.

We are the brand that said we will approach the market from a different perspective looking for what people can afford to pay. Our slogan is “Luxury You Can Afford”.

How does Lekki Gardens step into all this? What do you bring into the market?

Lekki Gardens is a disruptive force in the residential real estate space. We have looked at the space critically and we felt that people deserved more value for their money. We have effectively crashed prices over the last three to four years. We have shown people that you can deliver houses that are more affordable than they used to be. We have always played around where there is an area of need. That has mostly been in the Lekki to Epe segment of the market. You have many middle class people trying to buy their first houses and make sense of their investment income. Most of the time, those are the people that we serve and we have effectively done that for over the last three to four years. In Lagos we are the singular player in the sector of low to middle class income housing around Lekki to Epe axis. We have more projects than any single company around that area. That is the part of the market that we have focused most of our energies in the last three to four years.

You said you have a number of projects in the area so what is the biggest event that you are up to? How do you differentiate yourself?

It is the way we go about selling. People understand that we care about their needs and that we care about their budgets. Nobody wants to pay too much for anything. We are the brand that said we will approach the market from a different perspective looking for what people can afford to pay. Our slogan is “Luxury You Can Afford”. We wanted to find out what people could actually afford to pay and not how much we feel we can charge. So we work from what people can actually afford to pay and create strategies and products around those needs. That gave us a huge difference in the market place. From the outset people have seen us as the brand that cares about their pockets.

Are there any projects you are currently working on? Anything you would like to promote or raise awareness about inside the company?

We have a huge restructuring going on in the business at the moment given the fact that we have experienced some challenges in the last three months. We had a major setback and it made us look back at our whole process so that we can revamp and improve on how we deliver our projects. Our mantra is this; we want to deliver peoples home needs in a quality way in a safe and affordable manner. Affordable isn’t just the standard, It must be delivered in a safe and quality way so that people can be assured that our business cares beyond selling them an affordable house. We want to sell them a house that is safe and of a good quality. We have quality thinking from the onset of the sale of any of our houses.

Is there anything specific you would like to talk about? Do you have any message for potential investors?

It is important for people to know that there is opportunity within the real estate sector and mostly in the residential sector. People want houses in Nigeria. There is a huge demand for houses in Nigeria especially around Lagos. Abuja and Port Harcourt are also key places that people should look at. We work in those areas too. Ogun state is also moving forward strongly and we are playing there too. However the ability to fund that gap and that demand is still a big issue in Nigeria. The structure for funding whether it’s the financial sector or partnering with development will enable us to deliver high quality homes that people can actually afford to pay for. It’s not just that the houses must be affordable. People should be able to pay for these houses for five to twenty years comfortably without worrying about the money they spend on the house. That’s key and that is where all eyes should be focused in trying to resolve the housing issues that we have in our country.

What is your short term strategy for your country? What would you like to see in a years’ time?

One year is quite short for the kind of business we have built. We have always taken a very long-term approach in making our investments for our customers. For us one year means that we want to turn our business around from the position it was. We want to bring our company back to its position of unmatched leadership in this sector where people know that if they want to buy a house they can come to us. We want people to be excited about our business again. We want people to feel safe about the investments they made with us and we are working assiduously towards that. We are putting in everything we have to ensure that feeling. Projects are being reopened. Plans are being put into place to deliver quality houses in a safe way. That will show in the next year.

What channels are you using to keep in touch with people to get the right message to them?

Our first focus is people who have already done business with us. It’s a one on one communication with us focusing on them individually and telling them that we know this crisis has affected them and asking them to give us time to work on it.  We have so much to do with our existing customers. When we have completed that stage we will come up with a PR strategy to rebrand the entire business. However that is not our first goal. The first goal is to work on the mechanics of delivering high quality affordable and safe houses for our customers. For the next five years we still want to deliver 250,000 houses across Nigeria. We want to be the company that does that. We are the company best positioned to do that, brand wise, focus wise and team wise. We can take those types of huge projects across Nigeria. In terms of investors, we have grown from non-existence to being the most recognisable and foremost brand in the residential real estate space in the whole of Nigeria and around West Africa. People know the Lekki Gardens brand all around the world. If you are in Nigeria and you are in diaspora they boast about what we do. It’s all over the world. We’ve actively played in one part of the market, the 8 to 50 million Naira bracket where most of the housing need in Nigeria is. That market is not a hype. That market is real. Based on our analysis, that market is worth billions of Naira. That’s four to five hundred million dollars. It is the market with the most demand for real estate. It’s not the high-end market. It’s not the half a million to one million dollar market. We are not targeting that market. The market we are targeting is the 50 million Naira market. The customers who want a house for their family. They earn a decent amount of money, they have good goals and they are conscious of their budget. That is the market we are attacking because that market requires help, focus and creativity. Those in that market segment that want a house, a well-designed house. They are looking for an affordable option in a great location. In the last four years we have taken on fifty-one projects. Under our purview we want to deliver up to 20,000 houses. We have the land bank for it. We have delivered 6,000 houses already to customers and we have commitments from people for up to another 12,000 houses since we started in the last four years. We take delivering houses in this area very seriously. The vision is that we will have prospective partners thinking about Nigeria and see us as the premium brand to key into. We want to be visible to them. We want to show the quality of what we have done with the little resources we have had available. We are not unnecessarily exposed to the banking sector. If you look at our books you will see we carry no debt and that is important to us. It makes us a very attractive company to do business with. The financial side of our business is beyond sound. When it comes to our ability to continuously engage with our customers, we have that too. If the market is going to be served and effectively reached, our brand has the capacity to do that and for someone looking to come into Nigeria and play, it’s the best. For now our focus over the next five years will be to continuously deliver for our customers within their budget and care for them. That will be the space we will play in.

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