Scot Murray, Founder of Denya Developers, Reveals his Perspectives on Real Estate Opportunities in Accra

Interview with Scot Murray, Founder of Denya Developers

What makes Accra such a popular and appealing real estate market?

There are many reasons why Ghana, and more specifically, Accra, is a great place to live. That special combination of excellent weather, a relaxed and upbeat culture, a safe and fun place to live, a strong track record of political stability – there are many things that Ghana has going for it. But when it comes to the real estate market, I often encourage people who are excited to buy to take their time and do their homework. While it can be profitable if you get it right, it remains a complicated place to purchase property. That’s in part why our company, Denya Developers, has been so popular. We take many of the uncertainties out of buying real estate and act as educators helping people understand from a due diligence perspective what they should be looking for before they buy.

Why is buying a home in Accra so complicated?

It’s a combination of factors. Every neighborhood has nuances in the way the land tenure system works. Osu, for example, is Stool land – meaning that the freehold ownership of the land originated from the Osu community and chief – whereas Airport Residential, Ridge, Cantonments, prime East Legon, these are all Government lands. When it comes to Government land, it’s typically easier to come to a firm understanding of who owns the land. With Stool and Family lands, the prices tend to be cheaper, but then the risks are higher. Once you get past the land purchase, there are also significant differences in build quality across developers and contractors which are challenging for a non-construction professional to recognize. People often state that apartment prices are expensive in Accra due to high land prices, but that’s not typically the case.

What drives up the cost of homes then?

More than anything else, it’s quality materials, which are expensive in Ghana compared to other countries. Since Ghana is not at the stage where high-end materials are produced locally, it’s all down to importing. We get many of our materials from Germany. The quality is superb and will last for a very long time, but on top of the unit costs we have to calculate in additional costs for shipping, import duties and VAT. It gets expensive quite quickly. As a developer, you have the choice. Do you adhere to high standards that buyers might not appreciate or do you cut costs to ensure that a project will be sufficiently profitable? It is fairly easy to hide low quality builds – any building can look great in marketing brochures or for the first year or two after completion – but there are dramatic differences that become apparent after the first few years. As a buyer, you should move slowly and ask a lot of questions to make sure that you’re purchasing something of quality.

If you were to advise people on the greatest possible real estate investment in Ghana, what would it be?

I don’t know that there is one definitive answer, but there are a few contenders. The first question is buy prime versus buy on the outskirts. My general take on this is that if you know that infrastructure is coming to a certain area and if you can buy land, for example, before a new road comes, that is often one of the best trades in real estate. But it is high risk, high reward. If the city doesn’t grow into your direction or if that road doesn’t come next year, but in ten years, you can really get hammered. Buying centrally has less chance for massive upside, but it’s more predictably profitable. So for the average person in the diaspora who is looking to buy in Accra, I often suggest that they buy as prime as they can afford and get quality. Take advantage of the rental yields that Accra offers and over time, with increasing traffic and commuting times, these prime neighborhoods will get even more prime. The ultimate asset, if you are fortunate enough to have the resources, would be to own 0.25 acres in Cantonments and build an incredible house. The yield, were you to rent it out, would be relatively low, but I think there is no greater upside trade over time that has less downside than a home in Cantonments.

So why isn’t Denya Developers building individual houses in Cantonments?

Good question. We’d rather focus on democratizing access to Cantonments by offering apartment homes that are priced lower than the million dollar plus micro-market of individualized homes. The key for any business is finding a repeatable formula and for us that is delivering superior quality apartments that we can sell for less than our competitors. If we can continue to sell for twenty percent less than the perceived value of what we produce, I think we have a wonderful future ahead of us.

What are you most excited about looking forward?

Most of our developments are only a few years old, but I think with time people will recognize that the quality of our homes is one of the best, if not the best, in the market. That is one thing I am looking forward to. We also have a number of transformational projects that are in the design phase. I think one of the keys is improving life experiences – apartments that are more fun, more convenient, have better amenities – and in order to achieve that you need to create scale without sacrificing privacy and intimacy. That’s been an interesting challenge to contend with. We’re also planning on getting into the holiday-home market and we have a project outside of Accra that, once we get going on it, could be very exciting. That said, I prefer to commit only when we’re absolutely sure that we can deliver. So we take our time and plan in considerable detail before we announce a new development.

How does the global economy and its effect on Ghana impact your decision to launch a new development?

It’s always challenging to deal with uncertainty, but if your business model relies on blue skies and no clouds to succeed, then you probably should find a new business. Generally, we don’t borrow any funds and we model out multiple scenarios so that we’re ready for whatever macro environment we encounter. Our focus is always on doing what we do even better and more efficiently. If we get the timing right and there is a strong tailwind, we’ll reap the benefit. If the timing is off, those efficiencies mean that we’ve built in enough buffer to breakeven while still handing over a great product. For us, it’s about ensuring that when we commit to doing something for a customer, we do exactly what we promised.

Any final thoughts that you want to share with our audience?

Only that we really do enjoy connecting with people who are actively looking for prime real estate. If you’re thinking about buying in central Accra, send us a message on our website or reach out by Whatsapp (+233 (0) 268 315 111). There’s a lot of information that we readily share that can help you during your search. Whether you end up purchasing from us or not, we want to make sure that your experience is a good one, so get in touch and always ask a lot of questions.

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