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In this exclusive interview, Mrs. Sa’adiya Aminu, Managing Director/CEO, Urban Shelter Limited, speaks to Jide Akintunde, Managing Editor, Financial Nigeria, on the imperative of sustainable urbanization in Nigeria and how her company is leveraging innovation to drive affordable housing and other real estate solutions in the country.

Jide Akintunde (JA): Nigeria continues to have a huge housing deficit of between 17 – 20 million units, in spite of the commitments of stakeholders including Urban Shelter. Why is progress on access to housing still such a challenge in Nigeria?
    
Sa’adiya Aminu (SA): Firstly, Nigeria has never done a housing census to ascertain the level of housing deficit there is in the country.  The figure of 17 million to 20 million is arbitrary. But naturally, we appreciate that there is a substantial deficit. On average, approximately 100,000 new homes are being built across the nation.  The residential units do not include homes that are expanded and renovated to accommodate increasing number of families. So, likely, more than 100,000 Nigerians are moving into new accommodation.
    
A number of factors influence the level of supply of housing in the real estate market.  These are systemic challenges not just on the supply side but also on the demand side of the market.  For instance, supply challenges include land documentation, associated costs, time for approvals and permits, increasing cost of construction inputs, and limited quality of skilled workers. On the demand side, residential units being developed may still be inaccessible to individuals because there is a very shallow market for mortgages. There are limited financial products to enable Nigerians get onto the property ladder.  
    
All these factors and more undermine the objective of getting families into homes.

Urban Shelter did not just make commitments; we also delivered on that promise and are changing the landscape of Nigeria through every development we execute. We believe shelter is a basic human right and it is indeed captured in the Sustainable Development Goals.  At Urban Shelter, we have developed over 9,000 homes, creating communities and providing safe, aesthetically-pleasing sustainable environments for families to grow.

JA: Specifically, what are the areas in which private developers need assistance in rolling out housing units for Nigerians?

SA: My answer is not a conventional one.  On average, Urban Shelter constructs and delivers approximately 400–500 homes annually. We have the capacity to produce ten times that number per annum. However, we do not because there are less than 4000–5000 people today that can access loans from banks or primary mortgage institutions to procure mortgages that can enable them to purchase these homes.
    
Private developers, in my opinion, need the mortgage market to deepen. Upscaling our production in line with housing demand is easy.  What is far more difficult is people backing their desire to own a home with money.  
    
Mortgage level as a percentage of debt in the United States is over 70%; in the United Kingdom, it is over 60%. Closer to home in South Africa, it is 30%. Ghana is at 2% and Nigeria is at less than 1%.  This is a gross underperformance, considering the size of our population and growing middle class. Growing the mortgage market, therefore, allows more families to achieve home ownership.
    
Project finance is key. Few financial institutions appreciate the importance of project finance. Therefore, you end up with loan facilities that do not match project life cycle – short term loans with high interest rates.  Funding real estate development companies with proven capacity to deliver such as Urban Shelter would allow the upscaling process and housing delivery to increase exponentially.

JA: What are the key projects that Urban Shelter Limited has delivered in recent years and those close to completion?

SA: Urban Shelter has continued to grow both in sophistication of projects and geographically. Urban Shelter is a real estate development firm with expertise in project conceptualization, management & delivery. Our business operation encapsulates residential, retail, commercial and specialty projects.  
    
Our growth geographically has extended to Kaduna State, Lagos State and Niger State, while we have planned projects for Kano State, Enugu State and Abia State.  Projects we are launching in 2020 in Abuja include the Urban Shelter Tower – a 15-floor tower with 14,000 square metres (sqm) of lettable space in the heart of Central Business District and The Waterfront by Urban Shelter along Jabi Lake.  This is a speciality project, which when completed will provide a recreational destination for Abuja families.
    
Currently, we are operating on seven sites in Abuja, combination of retail and residential projects including BellaVue Residences Lifecamp, Urban Shelter Dawaki, Promeande Estate Lokogoma, Urban Shelter Estate Kyami, Sarauniya Estate Lugbe, Apo Urban Market and Brick City Kubwa.
    
In Lagos, we are live on two sites: Urban Shelter Estate, Ajah and Urban Shelter Living, Victoria Island.  In Kaduna, we are developing the second phase of Urban Shelter Millennium City –  a 16-hectare project. Further two projects in Niger State are also under development. Collectively, we are developing over 70 hectares of land.  

JA: Both analysts and the consumers speak of a mismatch between housing demand and supply. The low-income end of the market is hardly addressed by new residential projects, while many high-end properties are unoccupied in the major cities. What can be done about this generally, and what is Urban Shelter doing in the low-end of housing affordability market segment?

SA: Addressing this issue generally is a matter of individual companies’ corporate strategy by which each company determines what markets they want to operate in – whether it is high-end or affordable housing. What makes Urban Shelter unique is its ability to operate successfully in the full spectrum. Therefore, we have affordable projects, intermediate and high-end projects with pricing starting from N4 million to N250 million homes.  There is a price point to suit everyone.  Because Urban Shelter is passionate about getting people into homes, we have made it our singular goal to develop affordable homes without sacrificing on aesthetics, design or quality. These are homes that put the client at the very centre.  This is a segment of the market we have built expertise.
    
With our signature use of the burnt red bricks, we are able to produce homes at competitive rates. We have gone further to offer financial tools by offering 5-year payment plans, a pay-and-stay option as well as signing agreement with Nigeria Mortgage Refinance Company and three mortgage banks in order to offer mortgage loans at preferred interest rates, among other conditions and financing tools.
    
At the very bottom end of ladder you will need the intervention of the government. Here, there is a need for social housing, not affordable housing.  Social housing is subsidized and has been the hallmark of most developed nations for centuries – the UK has council homes, while the US has its public housing.  These homes are made available to specific vulnerable members of society.  

JA: Urban Shelter says it is mindful of environmental and social preservation in its project design and delivery. Why is this important?

SA: We are not inheritors of the world; we are caretakers for future generations. This knowledge comes with great responsibilities both for companies and the society at large. Sustainability, conservation and ensuring minimum carbon footprint are vital concerns in the way we operate. By putting nature and conservation at the heart of how we operate, we approach the design of each project with a view to conserving the greenery.  We have come across trees that are hundreds of years old.   
    
At each project, we reach out to nearby underserved schools to help in upgrading their facilities. Our most recent outreach was in Durumi Secondary School in Abuja.   
    
JA: Nigeria is fast urbanizing. What are your recommendations for policy reform to drive sustainable urbanisation in Nigeria?

SA: The UN estimates that Nigeria’s population is set to double to over 400 million by 2050. The population growth rate is currently estimated at 3.2% per annum. There is  increasing urbanization not just as a result of the high population growth rate but also due to internal migration from rural to urban areas, which is being driven by insecurity,  desert encroachment or economic reasons.  
    
Unfortunately, the supply of services, infrastructure (physical & social) are not meeting the growing demand, leading to creation of slums in larger cities and secondary cities.  Rapid urbanization is putting intense pressure on physical and social infrastructure, which include housing, power, transport, water, waste, sanitation services, education and health services.
    
Clearly, sustainable urbanisation goes far beyond housing; It seeks to address physical and social infrastructure. A multifaceted approach is essential, centred around, vision, planning, policy, execution and immune from political change.

JA: What is your vision for Urban Shelter in the coming years, and your outlook for the Nigerian housing sector?

SA: 2019 has been a year of recognition both locally and internationally. Urban Shelter received the BusinessDay/Nigerian Stock Exchange Next Bulls Award. We were included in the London Stock Exchange Companies to Inspire Africa 2019 report. We also received awards at the 13th Abuja Housing Show.
    
Our vision for Urban Shelter is to continue to be at the forefront of innovation in housing design and delivery. We will continue to champion affordable homes at the very bottom of the pyramid. Part of our vision is to create iconic destinations that become the identities of cities and to establish communities that become the fabric of society. We hope to continue to be leaders in the real estate industry, nationally, while also expanding into the West African region. Ultimately, our plan is to, one day, be listed on the Nigerian Stock Exchange.
    
I am an eternal optimist. I have great hopes for the Nigerian housing industry. I want the industry to be supported by the right type of finance both on the demand and supply sides. I want to see large upscaling of production, ease of access to mortgages and homes. There should be emphasis in the use of technology in property development and how we live.
    
While unrelated, I like to use every opportunity I have to encourage not just girl-child education, but also the empowerment of women. I like to promote mentorship of women in the corporate world, encourage more women in leadership positions and advocate the presence of more women in the political realm.