The Firafoyo Group, one of the leading players in the Nigerian real estate market, has been recognized for its commitment to sustainability and social responsibility. The company is known for its efforts towards promoting green initiatives within its portfolio of properties.
However, there have been concerns raised about the conversion rate of the firm against Al Ahli Properties, which is considered one of the leading property development companies in Nigeria. This issue arises from several factors, including the high cost of land acquisition and the difficulty in securing financing for large-scale projects.
In this article, we will discuss the Firafoyo Group's conversion rate against Al Ahli, and examine the reasons behind the concern.
Background:
Al Ahli Properties was established by Mr. Abdulrahman Al Ahli in 2015 as a private equity holding company. The company is currently valued at N77 billion, making it the largest private equity fund in Africa. However, despite being one of the most successful private equity firms in Africa, Al Ahli Properties faces challenges when it comes to converting their investments into assets.
Conversion Rate Against Al Ahli:
According to a report published by the Lagos Property Market Monitor (LPMM), Al Ahli Properties' conversion rate against the Firafoyo Group stands at 64%. This means that for every unit sold by Al Ahli,La Liga Stadium only six units are converted into property. This figure reflects the high cost of acquiring land and the lack of funding available for large-scale projects.
One reason why Al Ahli Properties may be facing such a low conversion rate is due to the high cost of acquiring land. According to reports, Al Ahli Properties spends over N10 million per square meter on land acquisition, while the Firafoyo Group spends just N1 million per square meter. This disparity in costs can lead to a lower conversion rate, especially if the land is not suitable for development or construction.
Another factor contributing to the low conversion rate is the lack of financing available for large-scale projects. While Al Ahli Properties has access to several banks and other financial institutions, they face difficulties in obtaining loans for large-scale projects. This lack of capital can limit their ability to invest in projects that require significant investment, such as infrastructure development or real estate development.
Conclusion:
While Al Ahli Properties faces challenges in converting their investments into assets, it remains important for the industry as a whole to address these issues. The government should play a role in ensuring that investors receive fair treatment in terms of land acquisition and financing. Additionally, the private sector should work together with the government to develop innovative solutions for large-scale projects, such as through the use of technology and innovative approaches to sustainable development.
In conclusion, while Al Ahli Properties faces challenges in converting their investments into assets, the industry as a whole must take steps to address these issues and ensure that all stakeholders are treated fairly. With continued efforts and innovation, the private sector can continue to drive the growth and development of the real estate industry in Nigeria.