Over the years, several reports from industries and academic institutions have been pointing out the need for improving housing provision in Nigeria. Some of the reports note that Nigeria’s housing deficit ranges between 17 and 20 million. While debate on housing paucity rages on, rent payment remains one of the significant issues stakeholders, especially landlords and tenants have had course to resolve on a number of times. Nigeria is one of the countries in Africa where tenants are mostly paying house rent yearly. This is quite different from what is obtainable in countries such as Benin Republic and South Africa, where rent is being paid monthly or every six months.
Having analysed impact of the yearly mode of payment of tenants, in 2011, Lagos State government enacted Tenancy Law 2011. The Law states that “it is illegal for a landlord or his agent to demand or receive rent in excess of six months for a monthly tenant, or one year from a yearly tenant. It is also unlawful for the sitting tenant to offer or pay rent in excess of one year for a yearly tenant and six months for a monthly tenant.”
Over 8 years on, many tenants in Lagos are still paying yearly despite the law provision. While many tenants feel the impact of coronavirus pandemic, report indicates that the country’s long-term rent payment system saves landlords from COVID-19 crisis. There is no doubt, in time of crisis, the current payment mode gives landlords more chance to capture monetary value, while tenants only get the needed value from facilities provided by the landlords (if any).
As stakeholders in the industry and other sectors in the built environment continue discussing possible solutions that can enhance value capturing by the landlords and tenants, Alpha Mead Group with her Real Estate Development subsidiary appears to have the right answer. The unit recently launched Rent4Less, a product that allows tenants to pay rent monthly. Olusesan Ogunyooye, Head of Marketing and Communications sheds more lights on the product and its benefits.
Tekedia: Like Call2FixIt, your group recently introduced Rent4Less, what does this mean for Total Real Estate industry?
Olusesan: Like you’ll see in our press release, new product development is a responsibility for us at Alpha Mead Group. We’re constantly innovating to bring solutions to the Market. Leadership comes with a lot of responsibilities and we’re not shying away from ours.
So, what it means for the industry is that we have pushed the frontiers again. As a Total Real Estate Solutions Company, we’ve opened the conversation around rent and demonstrated that it’s possible to pay rent monthly. We’re not saying people should not pay annually if they can afford it and it makes business sense for them, we’re saying those who can’t afford annual rent or who will rather put the bulk of their money in other investment assets rather than in annual rents should have the opportunity to do so. It will positively impact the total real estate industry in terms of interests, investment and choices.
Tekedia: Who are the targets of the new product and how do you believe they will get the needed value considering the fact that governments are yet to make provision for monthly rent payment in Nigeria like what we are having in some African countries and developed ones?
Olusesan: Well, our position in Alpha Mead has always being government have no business in business. Government’s role is to provide the enabling environment through things like infrastructure, policies, regulations, etc. Once that is done, it’s is easier for the private sector to thrive.
As for the target of the product, our focus at Alpha Mead Development Company remains the middle-come Nigerians. If you look at it, they are the ones who can’t essentially cut a cheque for large rent or home or real estate purchases. So, everyday at AMDC, we’re thinking of how to make the living experience of these people affordable, comfortable and quality.
Tekedia: How soon people in other states will benefit from the product?
Olusesan: As it is with everything, one step at a time. For this product, it is one city at a time. But you know that one thing that we have capacity for in Alpha Mead is to scale. We’re present in all the geo Political zones in Nigeria and 11 countries across Africa. So as soon as the pilot proves successful, you see us on a massive roll out even beyond Nigeria.
Tekedia: Within two years of declaring your company as one of the companies that will inspire other businesses in Nigeria and Africa in general, you have introduced new ways of creating and delivering value, can you walk us through the reasons?
Olusesan: If you read the press release of our announcement, we made it clear that we consider the recognition by the London Stock Exchange, a huge responsibility. You can’t be named a company to inspire the entire Africa and you’re not really inspiring. So, I’m sure you’ve seen truly inspiring innovations from us since then.
We have taken on the challenges of capacity building and substandard jobs in the building repair sector by innovating with tech. That is the root of Call2Fix. We’ve come to the market with a home ownership scheme that gives mortgage at 6% for 20 to 25years. That’s phenomenal.
This, Rent4Less, is another one that is focused on making rents easy for people. Imagine how much you can make if you can lock your rent money in an investment asset and you’re using the monthly yield to pay your rent. And, we’re not resting. You will see more in the property management, facilities management and training space in the months to come.