Laide Agboola is the Co-Founder and CEO, Purple Group, a real estate developer based in Lagos. In this interview, he speaks about this year, the impact in the real estate sector, and what Nigeria should do to attract more investments.
What have been the challenges for the business this year?
2020 has been a challenging year for businesses everywhere and Purple wasn’t left out.
The unique challenges faced in 2020 arose from the global pandemic and lockdowns to the unrest; specifically that affected Nigeria recently that have left several businesses grasping for survival.
This year has been a steep learning curve for many businesses as it has shown the survival instincts of businesses in the face of unexpected economic disruptions.
We have been able to test our products in the worst of market conditions both in 2016 and now in 2020. We continue to work towards maintaining our continuous confidence amongst our domestic and international alliances.
The questions have remained the same: How do we assure our investors their returns are achievable? And, how do we deliver on the proposed assets amidst lockdowns and a contracting economy?
Fortunately, our mixed use development products have been designed specifically for this market based on deep research analysis and as a response to the market both in 2016 and now validated as the appropriate product for our Nigerian market even in 2020.
Have the challenges affected occupancy rate at Purple Maryland?
At Purple, our relationship with our tenants/partners and the growth of their businesses remain paramount.
This has made those partners remain with us despite the several economic issues.
We have continuously prioritised brand awareness, our product and partner products awareness and marketing with an unusually lower priced rental regime derived from our lower priced building strategy supported by smaller fit for purpose spatial planning.
This has been our strategy in maintaining our 97 per cent occupancy level. This has not been without some sort of grant period in 2020.
It has been an unusual year and has required us to deliver unusual responses tailor made across our partners to arrive at sustainable businesses within our build environment going forward.
However, this year has also reinforced our belief in our mixed use retail strategy, focusing on essential services and domestic retailers, who are flexible and have shown adaptability to the peculiarities of the Nigerian market.
What is the firm’s direction next year?
We decided that improving the end user’s lifestyle and experience by delivering world standard real estate assets that continue to be viable and impactful remains essential.
Hence our enhanced focus on the lifestyle development of our consumers by accelerating our natural evolution from pure brick and mortar centres to include our online marketplace.
Our online market includes all our in-store retailers and a well curated selection of new vendors, who we have vetted and trust to deliver high quality products and services to our customers.
As an improvement to customers’ lifestyles, we have also launched new products like nano apartments that tackle some of the long held issues in the residential, short and long stay space.
We have commenced construction of these nano apartments in Lekki Phase 1 and would be delivering more to our mainland customer base starting in 2021.
What do you think is the future of real estate?
We’ve seen numerous shifts in the past few years, from the rise of shared spaces and services bringing about co-working and co-living to this year, which has also shown us the value of mixed use assets, but also a need for privacy and self-sustainability.
We believe there is a gradual shift towards smaller, mixed used facilities that give customers some sort of balanced, but affordable and flexible lifestyle.
This is the immediate future of real estate and it is what our purple nano product line brings to complement our purplelekki and eventually would complement our purplemaryland (formerly Maryland mall) product offerings.
What is your thought about the infrastructural gap?
There is obviously an infrastructural gap that can only be driven by investors. This is even more apparent now than ever with the collapse of the oil price coupled with the pandemic, we can feel the need for domestic players and institutions to back leading domestic players that have boots on the ground and neck deep in the development cycle of our dear country, Nigeria.
We are not a portfolio international company or investor. We are Nigerians and we are on the ground. Our focus is to develop Nigeria, but Nigeria must provide an investment climate that is evidently supportive of growth so as the domestic players and institutions do not shy away from investing locally especially at a time like this.
In terms of development and operations, we have found a way to work with the best of the domestic space we operate in whilst delivering at international standard levels fit for purpose assets.
We need to ensure we are not losing our best hands at all levels of the real estate value chain to the Diaspora.
Taking on international expertise at greater cost is at the detriment of the Nigerian real estate development industry and can only lead to stagnation if the best minds and artisans are brought in and never home grown.
What is your view about attracting more investors?
The recent economic and currency issues in Nigeria have made investors wary. The confidence level in the Nigerian policy environment and in the market needs to be rebuilt.
Fortunately, our product offerings work for our partners and our short, long and residential products are essentials. We have witnessed a significant off-take despite the turbulence associated with 2020.
For Purple, we continue to build confidence that our investors have in us.
Our plan is to continuously deliver value to them. We aimed to remain liquid prior to the pandemic whilst restructuring our books.
We are achieving that via a combination of a second round of equity investment achieved in the chaotic year of 2020 plus additional domestic debt funding for our expansionary activities within the essential space despite market conditions.
The firm restructured its brand and offered new products, how are these helping out?
The Purple values have always been perseverance, audacity, collaboration and transparency. Although these principles have guided us thus far, we have only just better defined these such that our end users feel the purple way.
We want to ensure our investors also remain very much at the centre of all we do as a business. With our new products, we are only ensuring that we offer our investors a diversified portfolio that enhances better returns.
Do you think your business is gaining higher acceptance?
Yes! We have seen a positive response to our products as our Lekki Nanos have pretty much sold out even during the uncertainty of 2020.
We only opened up for sale immediately after the lockdown was over and we have thus far achieved 75 per cent cash backed sale commitment.
This product is for everyone. If you do not have one in your portfolio then we really do not understand your investment philosophy. This gives us confidence that people understand the value of what we are building. Though we have achieved a lot within a short period, these businesses are still young and learning. We are optimistic that operationally we will continue to improve efficiency and speed in delivering for our customers and investors.