With commercial real estate market impacted by major disruptions, including the global financial crisis and the COVID-19 pandemic, property valuation jobs are becoming hard to find among professionals.
The sector has also been slowed down by uncertainties in the market and turbulent Nigerian economy, especially monetary and fiscal policies.
Besides, the market has also been hit by the rise in building materials, especially cement, rods and sanitary wares that made it impossible for investors to delve into commercial real estate developments, while facility managers tripled their charges due to energy and other maintenance costs.
For instance, a 50-kilogramme bag of cement earlier sold for N4, 200 has shot up to N4, 700 in some locations. A set of sanitary wares now goes for N50, 000, against the earlier price of N45, 000 and a tonne of iron rods climbed to N500, 000 from N490, 000.
The total value of global commercial property fell by five per cent in 2020, to $32.6 trillion, at a time when global economic output contracted by more than three per cent.
In Nigeria, especially Lagos, commercial real estate sector declined by 14 per cent in 2022 compared to 2021 amid currency challenges and rising inflation. Interestingly, office demand remains within the premise of either quality or affordability.
Notably, the office market continues to exhibit varying levels of occupancy across different grades. The B+ grade segment appears to have the highest occupancy level at 78.36 per cent, while the A and B+ grade segments have 71.35 per cent and 75.35 per cent occupancy levels respectively.
Estate Intel said the office sector in Nigeria recorded a decline to 16 per cent of total stock from the 25 per cent recorded in 2022. However, it stated that the sector has continued to remain resilient in terms of occupancy rates despite pandemic headwinds and leasing activity still being driven by relocations.
According to Savills World Research, the value of all the world’s real estate reached $326.5 trillion in 2020, a five per cent increase on 2019 levels and a record high. Growth was driven by residential, which is by far the largest real estate sector, accounting for 79 per cent of all global real estate value. It saw its value increase by eight per cent over the year, to some $258.5 trillion.
The world’s most significant store of wealth, real estate, is more valuable than all global equities and debt securities combined, and almost four times that of global Gross Domestic Product (GDP). The value of all gold ever mined pales by comparison at $12.1 trillion, at just four per cent the value of global property.
For instance, International Monetary Fund (IMF) said tighter financial conditions tend to have a direct impact on commercial property prices by making it more expensive for investors to finance new deals or refinance existing loans, thereby, lowering investment in the sector.
They could also have an indirect impact on the sector by slowing economic activity, reducing demand for commercial property such as shops, restaurants and industrial buildings.
Estate surveyors and valuers, who confirmed the decline in commercial real estate in Nigeria, however, said the sector is currently peaking up again. “The major challenge is lack of commercial spaces as investors shy away from developing commercial real as part of fall out of COVID- 19 challenges.
“Now that businesses are coming back to traditional offices, we have gaps that will take some time to fill,” according to the Chairman, Faculty Plant and Equipment Valuation, Nigerian Institution of Estate Surveyors and Valuers (NIESV), Mr. Kevin Ofili.
He admitted that the decline in commercial real estate transactions have affected valuation jobs. “Naturally, because of void earlier created by COVID-19, valuation jobs as it relates to office buildings dropped significantly since 2020, but studies for developing new office buildings is picking up again,” he said.
Ofili said government is spending less in capital-related expenditure and Central Bank of Nigeria (CBN) continuous increase in Monetary Policy Rate (MPR) is a major challenge to valuation and other services-related jobs in Nigeria.
“Once business activities reduce in any society, valuation assignments will reduce couple with continuous rising interest rate in Nigeria and world over,” he said.
Ofili called for special incentives from government, such as tax incentives for developers and to lower property-based taxation for uses in the short to medium term. He also suggested compulsory valuation by government in dealing with excise duties assessment among others like compulsory insurance valuation for government premium payments.
For the Chairman, NIESV, Valuation Professional Group, Gbenga Ismail, the market is stagnant and not many new developments in the pipeline and valuation instruction has reduced, as main valuation instructions are for mortgages commercial loans and financial reporting. “So, if mortgages are reducing definitely valuation instructions will reduce,” he said.
He also pointed out the main issue is advancement in technology. “It is becoming easier to determine valuation process coupled with this is policy. If policy does not insist on valuation then no corporate will do it. So, policies like financial reporting are expected to increase valuation.”
Ismail, who is also Vice Chairman, NIESV Lagos, said the good old days have gone, like in Asset Management Corporation of Nigeria (AMCON), when the process required that valuations be done before a transaction is concluded.
“Government should also request valuation under Bureau of Public Procurement (BPP) rules before any real estate procurement is done.
“All valuation reports are financial reporting instruments. The purpose of the report is to guide before any major decision is taken. What the valuer does is to provide market intelligence through the report to add to what you already know,” he added.

Experts have advised incoming administrations at federal and state levels to pay greater attention to housing as a Experts have advised incoming administrations at federal and state levels to pay greater attention to housing as a poverty alleviation tool in the country.
The Chief Executive Officer, Eximia Realty Company Limited, Mr. Hakeem Ogunniran, said housing, as one of the economic variables, could be deployed to lift people out of poverty in the country.
The Chief Executive Officer, Eximia Realty Company Limited, Mr. Hakeem Ogunniran, said housing, as one of the economic variables, could be deployed to lift people out of poverty.
He observed that leaders need political will and policy shift by rethinking the underpinning philosophy of housing as a right and social good, adding that government policy must differentiate between affordable and social housing.
Ogunniran stated this at the 17th yearly leadership seminar tagged, “Closing the Poverty Gap through Housing: Issues, Challenges and Solutions” organised by Harvest Fields International Church, Lagos.
He said: “Housing constitutes an important part of people’s living conditions and makes a contribution to their life chances. The significance of the links between housing and poverty, and material deprivation deserves greater attention. The interaction between the two can have a big effect on the numbers of those defined as ‘living in poverty’, who they are and the implications for policy.”
According to him, the sector needs direct intervention from government by creating institutions that will deliver low-cost and social housing for the people.
He said the government should create policies to drive social and housing benefits that will subsidise cost of housing and partner with the private sector to create a collaborative platform to deliver houses at affordable prices.
“We need to build a coalition of critical participants in the housing value-chain such as the government, landowners, financiers, developers and off-takers. Government should create a solution that straddles the demand and supply side of the housing ecosystem.
“Government needs to work on an enabling environment that will help people to deliver housing. We must commodities housing, start to buy and sell houses the same way we buy and sell other commodities. We have to industrialise the process of housing delivery.
“Today, we are still building houses but we have to start manufacturing houses and standardise the processes to deliver houses in large numbers, lower the prices and make housing more affordable to the people,” Ogunniran said.
He said the incoming government needs to understand why the previous attempt to improve housing has not worked and create a policy that addresses issues of housing demand and supply.
The former managing director of UAC property development company said: “ Housing has become more of a poverty aggravation tool, the new government has to change that narrative and convert housing to poverty amelioration instrument.
“We have a National Housing Policy, particularly the 2011 policy, which touched on every element of housing to make it more affordable and accessible but the government decided to implement the easiest part of the policy, which was on housing finance by creating the Nigeria Mortgage Refinance Company (NMRC). We need a policy that will enhance mortgage creation and before you create mortgages, you have to build the houses.”
He called for special a window to secure building approvals, wavers for building material import and land provision at concessionary rate. He added that the Land Use Act of 1978, whose provisions, he said, needed review would make land accessible for housing.
Ogunniran challenged churches and other faith-based organisations to go beyond competing for building large auditoriums, but convert lands to building affordable housing for their members.
The General Overseer of the church, Reverend Akinola Abraham, lamented that some institutions in Nigeria like schools and other projects have not been well managed since the military regime to the present civilian administration.
He urged Christians to rise up to the occasion and restore the lost glory of the country as God has great interest in Nigeria.
Abraham charged christians to make an impact in the real estate sector and other fields of endeavor, as well as imbibe the culture of excellence in all activities.

The Managing Director of Kemsan Acres Global Limited, Mr. Oluwaseun Owoseni, has called for support from government at all levels toward tackling the problem of housing deficit in Nigeria.
Owoseni stated this during the company’s activities to mark its fourth anniversary celebration in Ibadan. The company, a real estate firm, had distributed food and clothing to no fewer than 500 less privileged as part of its Corporate Social Responsibility (CSR).
He said the real estate industry was an important sector in Nigeria that needed government attention. “The real estate industry is a sector that the government at all levels should look into. We have the problem of housing deficit in Nigeria.
“We are appealing to the government to provide enabling environment for real estate industry to thrive in the country. We need the basic social amenities such as good road networks and stable power supply,” he said.
Owoseni urged the people to trust the company in terms of integrity, genuineness and transparency, saying the CSR was a way of giving back to the society.
He said that the company had in the last four years, been converting rural areas to habitable urban settlement.
“We believe that if one gives to the society, the person would get back from the society. What has brought us this far is what we have received from the society. We believe that the basic need of everyone is food, clothing and shelter.
“As real estate firm, we provide shelter and we are here today to give food and clothes. We are reaching out to over 500 persons,” he said.
Owoseni explained further that the firm would launch Abuja branch this week, stating that they have branches in Ibadan, Ado-Ekiti, Akure and Abeokuta.
“One of the major challenges of the real estate industry is that the people believe that it is a scam. Our company sells real value of people’s money. It is actually a big challenge for us in the industry because people believe that real estate firms allocate on paper without getting the value of their money,” he said.
The Chairman of the planning committee for the fourth anniversary, Mr. Faith Oyebanji, said the firm’s achievements have been massive, as it provided accommodation for over 20,000 residents in Ibadan.
He said that the company had been establishing strong relationships with governments in every state they have branches. “We have experienced tremendous improvements in our services in the last four years. We started so little but our tentacle has been extended to both Nigeria and abroad.
“We have been able to provide accommodation for over 20, 000 residents in Ibadan. We don’t defraud people as we give 26/36 months planning payment for people,” he said.
“We have been associating with the state governments of where we have our branches. We can’t do without them,” he said.
An actor and ambassador of the company, Mr. Kolawole Ajeyemi, said he accepted the offer to be the brand ambassador of the firm because he knew Owoseni and trusted him.
“I don’t want to tarnish my own image. I don’t involve in anything fraudulent and I have been working with them for a year. I remain committed to the brand and I advise them to maintain their integrity,” he said.