A property development firm – Veritasi group has advised investors to navigate inflation risks by investing in real estate as a pathway to maximise returns from properties.
The founder/Group Managing Director, Nola Adetola spoke at the sidelines of the firm’s African Diasporas Real Estate Expo in London, a forum which provided a platform for real estate enthusiasts to exchange ideas on the opportunities that abound in Africa’s real estate industry.
According to him, Nigeria has witnessed one of the most challenging economic environments over the years with the rising level of inflation, high interest rate, and the depreciating value of the naira. He cited National Bureau of Statistics (NBS) data that shows that prices increased to 33.69 per cent in April 2024, more than 3x the country’s target of single-digit inflation.
“But amidst these, there’s a silver lining: real estate investments emerge as a beacon of hope. In the face of inflation, real estate investments can hedge inflation risk as both rental income and the value of properties owned may increase with inflation,
“Nigeria’s central bank continued its hawkish stance in its latest MPC meeting, hiking interest rate by 150 basis points to 26.25 per cent in May 2024, the third rate increase this year after hikes of 200 bps in March and 400 bps in February. Yet, despite these tightening measures, the apex bank’s battle against inflation persists, hinting at further rate increases on the horizon, signaling that mortgage products might not be an attractive option,” he said.
He highlighted that there is potential for luxury property investments in Nigeria, future projections of ongoing investment projects locally, and the safest entry strategies into the real estate market.
Adetola said: “From luxurious property developments to smart investment prospects, we delved deep into the nuances of Africa’s real estate sector and the immense wealth waiting to be capitalised. Our conversations unraveled the present upsides to assess the substantial impact these investments are anticipated to deliver in the future.
The importance of value creation was highlighted as when value is created, it empowers you to benefit from the upside upon liquidating your assets and realising your equity from the project. Hence, there is a need to develop a smart roadmap for an exit strategy in the real estate market.
He expressed optimism for the future of the country despite Nigerian youths seeking opportunities abroad with the ‘japa’ syndrome. “I am laying the foundation that will outlive me for generations to come and leave an incredible mark on the fabric of our nation’s progress and prosperity.
“Veritasi’s remarkable growth is evident as the business became the first real estate development firm in Africa to earn an international B/Stable rating from Scope Ratings, Europe last year. Also, for the second consecutive year, we’ve been ranked by the prestigious Financial Times as one of Africa’s Fastest Growing Companies of 2024,” he said.
