Smith Ezenagu: Rising Cost of Materials, Major Problem in Real Estate
The Managing Director/Chief Executive Officer, Esso Properties Limited, Dr. Smith Ezenagu speaks to BENNETT OGHIFO on the challenges facing the construction industry and the way forward. Ezenagu also speaks on the motives behind his firm’s latest project, Awele Residential, located in Awka, Anambra State, which he describes as a blend of modern luxury and culture
Inflation and rising building materials prices are said to be negatively impacting on construction sites such that some developers have abandoned their projects. What is your story; how are you navigating all these?
Rising cost of materials is a major problem in the real estate industry. Anywhere you turn now, you see developers pulling out of sites, everyone is waiting and praying to see what happens. If nothing is done to curb this and get things to a level of instability, we would face a very major crisis in the industry soon. I started a project in the Epe area of Lagos, October last year and I bought a trip of sand for sand-filling at N37,000. Three months later in January, I started a project in one of my estates in Ibeju Lekki, Emerald Garden Estate and I bought sand at the rate of N90,000. That’s almost 200% increase in price in just three months. This is the type we have not experienced before. It’s a major problem that must be tackled head long; else there would be serious problem. I can imagine developers that have collected money from clients with the hope that they would build and deliver in 2024. If you took money when sand was N37,000 per trip and now its N90,000, that means you may have to spend over 100% more than you budgeted to complete the project. It’s a challenging situation and something needs to be done as soon as possible.
As a player in the luxury segment of the property market where over 70% of the materials are imported, how is the crisis in the FX market affecting your operation?
The free fall of Naira is affecting everyone and everything, but we are hoping to come out of it soon. I also hope that in days to come our dependence on imported materials and stuffs should be revisited so that we can begin to mitigate some of these effects on the cost of living. Imagine the shock when you bought cement at N6,000 today and go back the next week to hear that the price is now N8,500 naira per bag. Personally, I have had to halt a lot of projects so that we can watch what happens. We are keeping hope alive seeing that the government is doing something about it and we hope they get a solution soon.
As a nation, I believe we need to do something to reduce our dependence on imported materials; our nation is not a dumping ground. The funny thing is that majority of these imported materials can be produced in Nigeria and exported abroad. The 70% you quoted in your question is actually too conservative, it is actually over 80% because we import over 80% of our building and construction materials. Imagine our doors for instance, we use largely foreign doors, we are the ones that export the timbers abroad, they develop the timber and produce doors, then we import into Nigeria to use. It’s funny. How can we be a nation that exports raw materials and import finished products? All we need to do is to make the environment right for local industries to spring up and begin to cover these gaps.
Cement has become the latest elephant in the house for developers. Government and manufacturers have set the price at N8000/bag. Tell us about this in relation to your business?
Cement is a very important ingredient in construction, hence whatever happens to cement as it were goes on to affect the entire real estate and construction industry. Apart from that, hardship is high and a lot of the guys on the street depend largely on the construction industry. Construction sites all over Nigeria employ a major percentage of these guys and with developers pulling out of sites, it means there is no job for them. Once there is no job for these guys, idle hands could be the devil’s workshop. Everybody is talking about cement alone but it’s not just cement because we have other materials like rod, sand, etc. In fact, if nothing is done to curb the current prices of building materials in Nigeria, we might get to a point where shelter will become luxury and not basic necessity. Apart from government stepping in like they are doing to curb these things, I believe this is the time we explore alternative buildings like wooden houses and others.
Can you elaborate on the inspiration behind the creation of Awele Residential and how it aligns with restoring the ancient eastern aura?
I am from the eastern part of Nigeria and whenever I visit the east and look at the kind of estates we are building. I realised that much more still needs to be done. We have very few estates and even the few we have are so normal, just the house and all. So, I decided to create the kind of estate that people will travel from a distance, even the Diaspora to come and see. Secondly, there are things associated with the Easterners. We have our unique architecture, unique style, unique taste and our way of defining luxury. So, while developing the concept of the estate, we decided to align it with our definition of luxury – hence restoring that ancient Eastern aura. What we want to achieve in Awele Residential is a perfect blend of modern luxury and culture. It is a very unique concept and the first of its kind in Nigeria. Anambra state is a take-off point for the Awele Residential, but it is not a project for Anambra state alone. We intend to have Awele in other Eastern states, including Abia, Ebonyi, Enugu, and Imo.
Please, speak on the key amenities and facilities offered by Awele Residentials and how they contribute to enhancing the overall living experience for residents?
In Awele Residential, our key focus includes the Igbo pride, modern luxury, green spaces and community centers. We have residential space, commercial space and recreational areas. We will create rain water harvesting technology which is one of the known practices in ancient Eastern Nigeria for community use. Some of our buildings will have green roofs to help us achieve a completely healthy luxury living space. We will also create a strong sense of community by including features like farm market, community gardens, pedestrian friendly streets, well lighted walking paths, community pool, fitness centre, nursery and day care centers.
To celebrate our culture, we will have features like Community Theater for weekend cultural performances, museum and art galleries in the most luxury and modern way possible. In Igbo land, we like open space for evening friendly sit outs and we will have a botanical garden for evening sit outs, a mediation garden, and sports facilities in place. So, Awele Residential is a place built for the people that have taste for luxury in the Eastern style. Our green roof, solar system, green streets were all carefully designed to help achieve environmental and energy efficient standards.
Can you share insights into the target demographic for Awele Residentials and how the offerings cater to their specific needs and preferences?
Awele is built for anybody that wants to live above average. It is true that Easterners have a culture that celebrates work because we are the hardest workers in this continent. That’s why we also play hard. So, we want to achieve a relaxing, healthy, luxury community for the upper class, the Agba Ballers. We accommodate those looking for affordable housing with other average properties we have in the market like Summerview Estate, etc. but Awele Residential is for the Odogwu class. Everything we are planning to build in Awele will only be made possible with the use of technology. We have a feature called virtual inspection in Awele which enables those in the Diaspora whether United States of America, United Kingdom or Canada to inspect Awele in real time and tour the estate as if he is there live.
We want our brothers and sisters spread all over the world to have an estate of pride where they can buy their properties and feel safe and proud, or buy some of the buildings that will be coming up in Awele and be able to bring beck their friends and colleagues from any part of the world to come and experience. We have three purchase cycles for Awele Residential – Pre-launch purchase that started on the 26th of this month (February) where we gave people the opportunity to purchase Awele at almost half the price for just a few plots before the launch, and the post launch price which takes effect immediately after the launch of the estate on 23rd March 2024. In Awele Residential, class is important to us and we have created two classes or sections in the estate. The Odogwu plots which 1000Square meters is for the real ballers who desire more space to express their building designs and Ijele plots which is 500Square Meters for the Ijeles who are on their way to becoming an Odogwu.
How does Esso Properties ensure transparency and trust in its dealings with clients, considering the importance of trust in the real estate industry?
We have been around for a number of years and we have a policy in Esso Properties that we only sell what we have. We have a reputation as an organization and we are for sure the best real estate development company in south eastern Nigeria. The moment we launch our buildings for sale, we give our clients some form of guarantee. We are planning to partner with one of the major banks in Nigeria as our guaranteeing partner who holds the funds. Clients will pay to a designated account and the bank will release funds in tranches until we complete the building as promised. We created that to give our Diaspora market some major form of guarantee and trust to know we will deliver on our promise.
With the seeming insecurity in the South East, how will Awele Residential thrive?
Awele residential will have 24/7 security both smart and others. Infact, security is one of the things that will be celebrated in Awele residential as this class of people that would live in the estate is more particular about security. Aside that, the South East is not as insecure as the social media makes it look. We just celebrated Christmas and we didn’t hear of casualties, despite the mass number of people that came in to celebrate Christmas. It is safe in the east. Also, we are Igbos, and we believe so much in our homeland. We actually have a saying that, Aku lue uno, Okwuo Onye kpatara ya – which means, when wealth gets home, it will announce who owns it. No matter what happens, our home is our home and we cannot run away, I am calling on my brothers all over the world to bring our wealth home. It is safe here beyond what the social media shows us.
