Government Should Strengthen Regulations in Mortgage, Real Estate Sectors, Says Kuyebi

Ayo Olanrewaju Kuyebi, the Chief Executive Officer of GMH Luxury tells Bennett Oghifo that the government needs to strengthen regulations in the mortgage and real estate sectors for sustainable housing in Nigeria. The builder, and project management consultant of many years, discusses issues in the housing sub-sector of the nation’s economy and shares insight on his transition from an employee to establishing a thriving real estate firm with prominent projects located in Ikoyi, Victoria Island, Lekki, Gbagada and among others. He also gives an opinion on the high rate of building collapse in Nigeria, urging Nigerians to stop building on water channels

Poor mortgage system has continued to frustrate home ownership in Nigeria. What is the way out of the problem?

The poor mortgage system in Nigeria has long been a barrier to achieving widespread homeownership and effective home ownership and housing programmes. High-interest rates, limited access to affordable mortgages and a range of challenges have frustrated the aspirations of many Nigerians to own their homes. To address these issues and make homeownership a reality for a broader section of the population, a comprehensive approach is needed. To improve the mortgage system in Nigeria, the government can collaborate with financial institutions to offer more affordable mortgage rates. They can establish housing funds or subsidies to assist low-income earners with down payments. Implement credit scoring systems to assess borrowers’ creditworthiness accurately. They can also reduce bureaucracy and streamline the mortgage application process ; encourage private sector participation in the mortgage market. The government can strengthen regulations that govern the mortgage and real estate sectors. This includes creating legal safeguards, improving transparency, and ensuring that foreclosure processes are clear and efficient.

How are you able to carve a niche for yourself in the housing sector?

It’s by actually placing a premium on experience. As you know, there is a popular saying that the level of your training will determine the level of your reign. In 2006, I was actually given the opportunity to work in the bank as a teller but I rejected the offer. Instead, I joined an engineering firm for training purposes whereby I was not placed on any salary, but I walked away from a job where they would have been paying me over N200,000 as at that time. For me, it’s all about experience, because I knew exactly what I wanted to achieve there. It’s all about experience. To be the best, you have to learn from the best. When I was a young engineer, all I set out to achieve was to be one of the best to be reckoned with in the industry and that is the driving force. To be very candid, I wasn’t born with a silver spoon so I have to survive. I have been learning this since age 9, on how to survive. What I did differently was that, in the company, I was working then, they were training me on how to design, and there was a tutorial close to the office, so in the evening when I closed by 5 pm, I will go to the tutorial to do two hours that they would paid me N150 per hour and that was what I used to sustain myself on, couple with the little allowance I was getting from home. So after seven months, they placed me on a salary of N15,000 and I worked with the firm for two years. I later moved from the job. I went to work with another company, it’s a group of companies because I moved away from working with one man to a group of companies where they have a bit of structure. I just want to experience how structure works, because where I was coming from, we are the accountant, site clerk, store keeper. I want to work in a company where we have site engineers, others and to ensure I stay around and understand how a standard organisation operates, looking at the organisation’s organograms and all that. I worked with the firm for three years and to my surprise, when they interviewed me for the job, they placed me on a salary of N32,000 weekly allowances and I rose from being a site engineer to Deputy Project Manager. I was coordinating three projects at a time, one in Ilaje Bariga, Makoko and Agunlejika in the Cele area of Lagos and shuttled all these sites every day. At those sites, they were constructing different structures at that time. So, after working for a group of companies for about one and half years again, I also wanted to experience how it feels to work in a multinational company. I wanted more roles, and also wanted to see how multinational company looks like; what does it feels like to work in a multinational company, so I applied and as at the time I was applying, the available role was a trainee engineer. So, I accepted the offer but it was a massive pay cut for me but I experienced efficiency, specialisation at the highest level working with an organisation like that. And in 2010, I pulled out to form a company called Geostruct konsult Limited where we major in piling works. Why I want to be in the building sector is the fact that people rarely get value for their money in the sector, the majority of people get their fingers burnt, you promise this A and deliver Z. As at that time, pilling was very complicated, people doing it at that time don’t have the technical prerequisite to undertake such projects and rate of foundation failing at that time was actually alarming and I took it upon myself to venture into piling, promising myself to do something differently and ensure that every client get value for their money. In 2010, the little money I gathered was around N570,000. I used it to start up a company called Jostrut Consult Limited.  I put the money into the fabrication of what they called a dandle rig. It’s a smaller pilling ring locally manufactured and when this was done I called on people; the operators, we called them the riggers and they have many years of experience like me, so we formed partnership on this project. In 2014, Jostrut Consult has grown up to become a company that has over N500 million in both equipment and cash in the bank.

In 2023, how can we harness productivity with talent and good attitude, considering the current youths and numbers of graduates we have at the moment, where most of them cannot work for free, all that you have said on career growth, are they still relevant for today’s youth?

The problem is that some people have talents with good attitudes while some have good attitudes without talent. It’s a big problem for employers. Even the graduates that are being turned out yearly, are they employable? You still have to teleguide them to perform their duties. I think it is now our culture, mental laziness and sense of entitlement. When I was growing up due to the nature of my background I did not expect anything from anyone, anything that I cannot get on my own, I faced the music. I know what it takes to climb that pedestal,  anything I must get, I must earn it and go into what is called self development, I have worked on several projects pro-bono (free of charge) because the first thing is to deliver value then, I can now tell you what I am going to take. Majority of time you will be cheated, but one thing stands out, the experience you have garnered during the process, cannot be taken away from you. I have worked for free in several places, not only in Alimosho, I have worked for free in Banana Island. If you want to give me work in Alimosho and Banana Island, I will give consideration to the one in Banana Island, even if they are not going to pay me, because of the exposure and experience that I am going to gain there. To me delayed gratification is access to experience, because the quality of materials that you will be exposed to when you work in Lekki is not the same as when you work in Alimosho or when you work somewhere in Ogun State. Let me tell you, after turning downed the job as a teller in the bank, they gave me a job of building bungalow, I said that is not what I want, what I wanted is the ability to have the experience to be able to put up towers, to be able to put up 7 storey buildings, and to know when to call in a particular professionals on the job as at when due. It has always been my dream to provide shelter, giving people value for their money. I can say to you that we are the first development company in Lagos to actually have an apartment building on the mainland in Gbagada and we sold it out, even against all the feasibility study.

Real estate is a risk, how do people key into this, particularly people with low income?

Self development, emergency are created by laxity as a result of laziness. I want to go to Ajah and I am in Agege, and I faced Abeokuta, how am I going to end up in Ajah? Whatever you want to do, it has to come with a plan and purpose, you have to set your goals. Majority of my mates that went into the banking sector lost their jobs in 2008 when there was a crisis in the sector, nothing to fall back on after two years. They were well paid during those two years, but they left with no experience. I have a plan and purpose that was why I forfeited the banking for real estate. I am very frugal when it comes to money management, I have a portfolio of over N30 billion, you cannot see me with any escorts not that I can’t afford it but it’s not a priority. Everything I have to do, I have to set out a time and put a timeline for it. If you are an income earner of N90,000 and you have a dream of owning a building one day, what are you doing with your N90,000 and what value are you adding to it? They call a seminar of N5,000 you cannot attend, they call for a financial freedom seminar you cannot attend. How much are you investing in self-development because of a mental picture of what you don’t have in your mind; you can never live in it. It starts from the mindset. When I gave birth to GMH Luxury, I was at a site in Ilaje Bariga, that time, I don’t even have N300,000 in my savings and I wrote it down that by 2014, I am going to start my own development, though I could not start in 2014 but I started in 2015 by buying a land worth over N40 million. So, how was I able to manage the rigour? It’s a service mentality, mentality of rendering excellence service, when you have such mentality money will chase you. I have never seen anyone that chases money and makes money, but when you chase excellent service money naturally comes to you. What I did differently when I started my own company is that if you call me for piling, what I will do is to educate you on how you can do a soft check on your project site. I will explain to you what to look out for, when you get to the site, I will give you a cost implication to that effect and I will give all the information you need, even as a layman for you to know.

With the number of building collapses in Lagos and Nigeria, infiltration of developers and the cost of building materials, you have been able to distinguish yourself, what is your secret?

I will tell you this, have I failed before; I will say yes, because failure inspires winners and deceives losers. In my career progression, I suffered a fatal failure where I lost a lot of money; I had to demolish 11 units of terrace houses in Magodo due to construction on the major canal, the canal lane was blocked. If you know Magodo and Magodo brooks, what separates the two, is a canal, some people said it’s land and they blocked the canal and our project was at the receiving end. Because I know the force of nature, how water behaves, we had an option whether to pull down the building or to ensure the canal stays. And since we don’t have control over the canal, we pulled down the buildings; in the process we lost about N370 million. We lost the money but none of our investors lost because we relocated some and refunded some. Truth hurts, but we are not going to deliver a project that cannot stand a test of time. We will not pass on a project that would not last, we would rather cancel it. And in the cause of our eight years of running, we have had to cancel two projects as a result of environmental and foundation failures. These are the reasons why we have incessant collapse of buildings because they are trying to patch it up and mend it; nobody is going to give you what they don’t have. And as far as building collapses are concerned, if you look at the collapse in recent times, it follows the same pattern. Gone are those days that there was housing collapse only in the rainy season, now we have multiple structure housing collapse. It’s the high level of quacks allowed into the building profession that is bringing about the collapse, an accountant wants to be an engineer.

It seems you have built trust, did this pay you? Some people would have sold the structure instead of pulling it down.

Trust has taken us this far, it has paid off. How can you grow from N570,000 in 2010 to having a portfolio of over N30 billion in 13 years? That can only happen with trust and impeccable reputation. It has to be on the foundation of empathy. For instance, in 2020 I started a project; COVID-19 came in, Naira devaluation and then inflation. When I finished, I went back to the subscribers. I told them, there is no way what you have previously paid can finish this project, so I have added a certain percentage based on the economic realities and they paid, because we didn’t cut corners.

The Issue of money laundering is being associated with real estate and tell us about Nigeria’s housing deficit. What is the way forward?

Combating corruption and money laundering through real estate is a complex system. What we do is to ensure that we receive money through appropriate channels. If you want to buy into our project you have to pay through the legal and transparent manner. With us there are legal ways of making payment, anything after that we will not be involved. Going into housing deficit, the gap is huge, we have seen what India was able to do in 2017 to 2022. They were able to deliver over 17 million housing units and how did they do it, by giving subsidized loans to their citizens. The same thing was done in Brazil in 2009, even the same was done in South Africa. How can real estate be cheap when the facility available to the developer, even the private investors, is at 30 percent and can it be cheap when the cost of approval is growing? We also have massive Naira devaluation and 90 percent of finishing materials for real estate is actually imported. And the current Dollar rate is nothing to write home about. So it is a sector that the government really needs to pay attention to. The infrastructure available at the moment is over stretched, so the government needs to create new towns and consider the population, because there is no provision for population expansion.

Problem of getting title documents and land grabbing has continued unabated in Lagos State and other parts of the country, what is your advice to the government on this?

To address the problems of title documents and land grabbing, the government can consider the following steps: The government must simplify land registration, streamline the land registration process to make it more efficient and accessible to the public. The government must also digitize land records. They should use technology to create and maintain an up-to-date digital database of land records to reduce the likelihood of land disputes. The other one step is land regularization, the government must regularize land ownership, especially in informal settlements, to provide legal titles to residents. They must strengthen security, improve the security of land documents and increase law enforcement efforts to prevent land grabbing. 

Lagos State Government came up with a rent to own initiative to make housing accessible and affordable to many Nigerians. Is it a good move and are you also thinking in that direction in some of your GMH Luxury housing schemes?

Rent-to-own initiatives can be beneficial for increasing housing affordability. It allows individuals to gradually acquire property while living in it. Whether it’s a good move or not depends on the specific details and implementation. Such initiatives can help the middle class and low-income earners, provided they are well-designed and transparent. As good an initiative as this is, GMH isn’t considering rent to own for now.

Are your housing schemes for the super rich, middle class or low income earners and where are they located? 

GMH Luxury caters to both the middle class and super-rich earners. We offer various payment plans that accommodate different financial capacities and our properties are strategically located in areas that cater to these demographics. We have properties on the Island in Lekki and Ikoyi.We also have properties on the mainland, in Gbagada. This approach reflects our commitment to serving a range of income groups with diverse housing options.