- How Recession Revolutionalises Office Rental Business in Nigeria
Notwithstanding the effect of the nation’s economic downturn on investments in the real estate industry, the rental market has remained vibrant with the emergence of co-working space stations for businesses and entrepreneurs.
Before now, co-working space stations were considered alien to the Nigerian business landscape but experts said about 80 percent of Nigeria entrepreneurs and investors are now adopting the model in their rental needs.
With the recession, where both small and large -scale businesses are finding it difficult to find office spaces that could fulfill their needs without necessarily borrowing, the model is expected to become the new face of office rentals in Nigeria for decades ahead.
In some cases, the office spaces range between 15 square metres to about 21 square metres, while there is also one-man office, two-man office and four-man office.
Apart from its affordability and low cost, the model comes with payment flexibility and provision of some basic office facilities in a serene environment.
According to experts, more businesses are expected to adopt the model because of the several unique selling points it provides.
The Group Managing Director of Fusion Group Facilities Management, Ikeja, Mrs. Oluwatoyin Edun, said workspace station is a new innovation in Nigeria, which is quite popular in developed countries.
The concept, she said is based on the concept of shared services, cost reduction, enhanced efficiency.
According to her, the concept also allows clients to have offices whereby they own space dedicated to their company and a virtual services which avail companies to have operators address as their office address, get a dedicated phone line for their company and use the operator business lounge like an airport lounge with a professional environment to hold meetings with clients.
For the Chief Operating Officer of Workbay Co-working Space Station, Maryland, Mr. Oseni Olanrewaju, clients have the opportunity to get what is called the virtual office service that goes for as low as between N10, 000, N25, 000, N35, 000, with a virtual address to their business, reception support services but limited access to operators facilities and permit to come in when they only have a client.
“Once you are coming in, you have a dedicated seat and desk for yourself.
Our clients are also allowed to bring in their staff, but we emphasise to them that this is a co-working environment which requires serenity,” he added.
He pointed out that the business environment in the country is not supportive in terms of the basic infrastructure; constant power supply, high taxation, unwillingness of banks to grant loans to fund the business which requires close to N20, 000,000 to start, bad roads, low acceptance culture amongst Nigerians and to some operators it could be security in terms of location.
According to him, the recession in the country has badly impacted on the business as client’s patronage has declined.
“Clients who were supposed to pay for their rents complain of low patronage.
“A strategy for the business is that the more people for us, the merrier. The real secret to the business is to make it as affordable as possible, to drive in more patronage particularly in this type of economy.” He added.
Olanrewaju expressed confidence that the future of the business is bright as his company targets about 8,000 clients in the next five years. He noted that with the call for diversification of the economy, people are realising that the jobs are no longer there and so the need to create the job adding that co-working station which was considered alien, is a good platform to operationalise business idea by Nigerian entrepreneurs and foreign investors.
To the Founder and Chief Executive Officer of Capital Square Workspace Solution Limited, Lekki, Mrs. Modupe Odunyemi the whole model is based on flexibility unlike the culture of rent where you pay annually or for more than a year.
She explained that clients could pay monthly or even daily sometimes.
“People are now seeing the need for flexible model; to rent just what they need and for the time suitable for them. With the recession, some larger companies are scaling down, more people are working remotely and have smaller spaces”, she stated.
Portland Paints, Chemical and Allied Products Plc Agreed to Merge
Portland Paints and Products Nigeria Plc and Chemical and Allied Products Plc have agreed to merge, according to the latest statement from both companies.
In a statement released through the Nigerian Stock Exchange, the Board of Directors of CAP said we are “pleased to inform you that following discussions and negotiations, the Boards of CAP and Portland Paints have reached an agreement to undertake a merger between both entities (the “Merger” or the “Proposed Merger”).
Accordingly, we “hereby present to you the terms and benefits of the Proposed Merger for your consideration and seek your support and approval to effect the Proposed Merger.
“The Proposed Merger presents a compelling opportunity to create significant value for shareholders of CAP and achieve the company’s strategic growth objectives as a larger company with a broader product portfolio, more corporate owned brands and diversified revenues.
“The resultant entity is also expected to benefit from enhanced distribution capabilities in addition to economies of scale and operational efficiencies.”
Tony Elumelu Acquires Shell, Total, ENI Stakes in OML 17
Tony Elumelu owned Heir Holdings Limited and its related company Transnational Corporation of Nigeria Plc on Friday announced it has completed the purchase of 45 percent stake in Oil Mining Lease (OML 17) through TNOG Oil and Gas Limited.
The acquisition includes all assets of Shell Petroleum Development Company of Nigeria Limited (30 Percent), Total E&P Nigeria Ltd (10 percent) and ENI (five percent) — in the lease.
It was further stated that TNOG Oil and Gas Limited will also have the sole right to operate OML 17.
The field presently has a production capacity of 27,000 barrels per day. Also, there are estimated 2P reserves (proven and probable) of 1.2 billion barrels and an additional one billion barrels in possible reserves — all of oil equivalent.
A consortium of global and regional banks and investors provided a financing component of $1.1 billion for the largest oil and gas financing in Africa in over a decade.
In a statement released on Friday, Shell said the completion was after all the necessary approvals have were received from authorities.
“A total of $453m was paid at completion with the balance to be paid over an agreed period. SPDC will retain its interest in the Port Harcourt Industrial and Residential Areas, which fall within the lease area,” the SPDC said.
Speaking after the completion of the deal, Elumelu said “We have a very clear vision: creating Africa’s first integrated energy multinational, a global quality business, uniquely focused on Africa and Africa’s energy needs. The acquisition of such a high-quality asset, with significant potential for further growth, is a strong statement of our confidence in Nigeria, the Nigerian oil and gas sector and a tribute to the extremely high-quality management team that we have assembled.
“As a Nigerian, and more particularly an indigene of the Niger Delta region, I understand well our responsibilities that come with stewardship of the asset, our engagement with communities and the strategic importance of the oil and gas sector in Nigeria. We see significant benefits from integrating our production, with our ability to power Nigeria, through Transcorp, and deliver value across the energy value chain.
“I would like to thank Shell, Total and ENI, for the professionalism of the process, the Federal Government of Nigeria, the Ministry of Petroleum Resources, and the NNPC for the confidence they have placed in us.”
Tony Elumelu is the Chairman of Heirs Holdings Limited, Transcorp and United Bank for Africa Plc.
Exporters Say CBN Pre-export Requirements is Frustrating Export of Goods
Exporters have said the recently introduced pre-export requirements by the Central Bank of Nigeria is creating unnecessary bottlenecks for exporters and the movement of goods out of the country.
Exporters, who spoke under the aegis of the Network of Practicing Non-oil Exporters of Nigeria (NPNEN), said the electronic Nigeria Export Proceed Form now required by financial institutions from exporters had come with so many challenges.
Ahmed Rabiu, the President, NPNEN, explained that the new policy had several requirements that often led to delays and loss of income on the part of exporters.
He said, “We acknowledge the CBN’s desire to ensure that all exports out of Nigeria are documented in order to ensure that the proceeds of such exports are repatriated.
“However, the reality on the field shows that the process is causing undue delays and consequently, encouraging corruption.”
According to them, in the new pre-export requirements, the Central Bank of Nigeria wants an export transaction to be initiated through eNXP processing on the trade monitoring system.
After which exporters are expected to have a pre-shipment inspection agent, the Nigeria Customs Service and other designated government agencies carry out their pre-export inspections.
The exporters said the pre-shipment inspection agent was expected to issue a clean Certificate of Inspection while Customs would issue the Single Good Declaration. All these they said takes time and delay goods from leaving the country on time.
Pointing to a recent report, they said about N868 billion worth of goods bound for export were stuck at the ports due to the new policy.
Speaking further Rabiu said, “For example, for the PIA to issue the CCI, the exporter is required to upload a certificate of origin as one of the supporting documents for the eNXP.
“The PIA is also required to upload the CCI to the TRMS(M) and until this is done, the Customs service will not issue the Single Good Declaration.”
He added, “After issuing the SGD, the customs is further required to upload it into the TRMS before the goods are allowed to be gated into the port and loaded on the vessel by the shipping line.”
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