Signum Development: Construction, Real Estate and Sustainable Housing in Ghana

Interview with Joseph Biga, CEO of Signum Development

What is your assessment of the real estate and construction sector in Ghana? What are the latest trends?

What is required now in this sector is government policy and intervention in the key areas of land acquisition and financing. In the construction sector specifically, most of the big companies are struggling now because of the cost of borrowing, which has had an impact on their growth. They are struggling now to go beyond their current status because the value of the city and the cost of borrowing will not change anytime soon. So, the government will probably have to help in that sector. A more important and major issue is land acquisition. That is a big challenge and one of the biggest impacts on our business currently. The government has acquired most of the land in this country from chiefs and other people and then there are separate lands owned by families, etc. The land tenure system here is a little different. Basically, these lands are owned by families and the process of acquiring them is a bit of a challenge because the same land can be sold two or three times to different individuals. As a result, you might have all the documentation, but then you go to the land and find out that there are challenges on it. Our first year, we acquired land, went through the normal process, did our search and check, bought the land, got the documentation, then when we went on the land, a third party came in. That issue is still unresolved and we have devoted a lot of money to it. Our best avenue is to go to JVs where people own the lands, they have documentation, they have presence on the land, and we just bring our expertise and our clients.

Why are the real estate and construction companies not doing the same thing?

Some of the big ones, like Regimanuel, do this with chiefs, but they still have challenges. With Transaqua, even though they had a large area of land, they still had people trespassing. But, you can at least reduce the total risk impact on yourself when you have a third party who has some documentation and some presence on the land.

What are your competitive advantages?

We want to know how we can use local materials to be sustainable and ensure that we can move faster, build faster, and provide at the lowest cost for people.

Our competitive advantage is the competence and the capacity that we have. We do not see ourselves as a construction company. We are essentially a project management firm. We have the expertise of civil engineers, environmental engineers, quantity surveyors, and architects. We are solution driven and we look at niche markets and individuals. In addition to JVs with people who are building and making developments, there are currently a lot of individuals acquiring their own land with their own ideas of what they want to develop. We basically come in, provide the expertise, and then develop for them. We bring in the project management skills to achieve their vision.

What are some of your recent achievements and projects?

It has been quite exciting for us recently. In 2016, when we started in September or December, we sold 6 units. 2017 was a bit challenging because that was when we had the land issues. Even through that, we were able to do about 17 units. At the beginning of this year, the vision and the goal was 60 units. As of now, we have done about 32 signed contracts. We have at least another 14 which have people showing commitment, and then we have the 60 units from this institution that wants us to develop for them. For us, the growth has been phenomenal.

Are these units on several properties and different areas or are they in the same area?

We use our consultant who is a specialist in marketing to look at niche markets. We are not like the other developers who find land anywhere and develop. We look at needs. We know that there are a lot of people still working in the city center struggling with living outside the city center. The first and most important thing is to find locations within the city center that are competitively priced so we can give these people some kind of service. The option is the Labone Cantonments where you can get a two-bedroom from 200-400 thousand dollars up to 1 million dollars. We give them the option of something they can afford. For families, with their combined income of 60-70 thousand dollars per year, paying between 100 and 150 thousand dollars for a house within the city center makes sense. So, our focus is the niche market, those with a need that will pay good competitive pricing for that solution. Our concentration now has been the Trade Fair, which is a relatively good development, very close to town, and competitively priced. We are doing JVs in a few other areas such as West Legon, which is not too far, and another one near Teshie. The focus is on meeting a certain bracket.

Are you also interested in replicating what you are doing at the moment, which is to work directly with companies that can commission you to build 70 houses? What is your strategy towards that?

Our current strategy is to build internal competence and capacity to meet the needs of the market. For a small company that is just two years old, we spend a lot of money on ensuring that the staff we have now meet training requirements. We get more people onboard but put them on standby.

Are you present abroad? What experiences have you had outside the country? How do you want to develop yourself internationally?

We, at Signum Development, see housing as part of a person’s basic needs, like food, clothing, and shelter. For us, our focus is how we can use research and development to develop across the region and globally to meet specific needs. The people at the bottom of the pyramid have the greatest need. We want to find out how to use research and development and local materials and indigenous materials to be able to meet the needs of those people. For example, I just visited São Tomé, and it was quite interesting. For the first three days, I tried to understand the people there. São Tomé is a former plantation where they are trying to promote tourism. If you can have a roof over your head, have your daily bread, and can afford to go to school, then you are not in the class of poverty. But when I went there, I found that everybody lived in a house and the basic issue had to do with the land tenure system. They had a small piece of land from the government to develop and they were using local materials such as wood, timber, and bamboo, etc. and they were comfortable. We want to know how we can use local materials to be sustainable and ensure that we can move faster, build faster, and provide at the lowest cost for people. For us, sometimes we joke in the company that we want to build houses and sell them like selling rice and sugar, ultimately, because rice and sugar are basic needs. For every person, having a roof over your head is also a basic need.

What is the next step? Do you have to convince different governments to go along with you?

For us, the drive would be to understand the materials that exist in most countries, how we can work with the government, research and development, understanding and improving technologies to help in land acquisitions, and ensuring that we use local materials and local resources for development. Currently, we do not build ourselves, we grow local competitors. We have taken people with some level of education and construction experience and we encourage them to register their business. They do the construction and we provide the project management services and the supervision. We grow local competence. We give local people the opportunity to learn and develop.

Project yourself two to three years’ time. What will the company be if everything goes according to plan?

God willing, wherever we set our footprint, the brand should stand out. The opportunity to provide sustainable housing, the opportunity to partner with governments to ensure that we can help in that area, and the opportunity to develop local competency should also stand out.

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