The Managing Director of the company, Adetokunbo Ajayi, stated this at the
10th Annual General Meeting held in Lagos. According to him, “With exit from advisory offering, the company is currently
holding a significant stake in PG Readzon Services, a real estate and allied
services firm.”
The Propertygate boss made it clear
that the country recorded a GDP growth of 1.93 per cent by the end of 2018.
That was an improvement compared to 0.82 percent growth recorded in 2017. The
year also ended on a positive note with a GDP growth of 2.38 per cent in the
last quarter of 2018.
According to Ajayi, the real estate
sector recorded a negative annual real GDP growth of -4.74 per cent for the
year; a further decline compared to -4.27 per cent recorded in 2017. Quarter
four result was equally negative, with a real GDP growth of -3.85 per cent. Its
overall contribution to total real GDP for the year declined to 6.6 percent
compared to 6.85 percent in 2017.
Ajayi noted that the last few years
have been very challenging for the sector. It recorded negative real GDP growth
for the last three consecutive years (-6.86 per cent in 2016, -4.27 per cent in
2017 and -4.74 per cent in 2018).
He said, “Unfortunately,
many of the factors accounting for the struggle of the sector are still much
with us. Many operators in real estate development and services space have been
hard hit by the lingering slowdown in the sector. They have suffered from acute
revenue shortage to severe liquidity crunch. These have had devastating impact
on many operators, even threatening their business continuity.”
He revealed that the company operated a
disciplined business and financial operation within the year under review, with
concentration on its on-going projects.
While admitting that operators in the
sector are still facing myraids of challenges, he said that some of the
challenges are systemic in nature. Ajayi said, innovative thinking and actions
is required on the part of operators. The need for diversification of revenue
should be taken very seriously in view of the experience of the last three years.
In his own words: “Having a mono income source can put an operator in a severe
strain when the business climate of the income source begins to falter.
Operators may also have to rethink their business structure and other
operational strategy issues, products and services offering, funding mechanics
and other fundamental issues critical to corporate success.”
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