Yakubu Lemu Hassan is General Manager Finance and Account, Urban Shelter Ltd. In this interview with Viewpoint Housing News in Abuja, he says dedication to quality work has saved his company the disgrace of collapsed building in its 25years of being. Rent-to-own scheme, he maintains is a very positive concept as it has recorded huge success under the organisation.
Viewpoint: Your buildings come with red bricks. What is the reason for this?
Hassan: Urban Shelter structures carry red bricks because it’s our signature. It’s good to differentiate yourself from some line of product. Most importantly, we have a brick factory in Minna [Niger State]. I’d call it Shelter clay product under the same chairmanship of Mall. Ibrahim Aliyu.
The factory has been in existence for over 10 years. Originally state-owned but at the time the state took decision to privatise it, our able chairman who’s vast in property development and has very good foresight purchased the brick factory and is doing well now.
Even in our high-end buildings, we always put the brick signature so that anybody that sees it knows that Urban Shelter is here.
Viewpoint: You purchased it from the Niger State government?
Hassan: Yes. They were three in Nigeria. One in Funtua [Katsina State] which we also have a stake in. The one in Minna we have full control interest. The other one is around Abeokuta [Ogun State]. I don’t know how it’s performing now.
Viewpoint: How old is Urban Shelter in business?
Hassan: It’s about 25/26 years.
Viewpoint: How many housing units have you produced?
Hassan: From inception, we’ve produced about 10,000 units of houses – residential and about 7,000 in commercial properties. We have three markets — one in Minna. The first one is Garki market [Abuja], well designed and built. We’ve just started another one in Apo. Our sister companies are doing one in Dei-dei [Abuja]. In all this, we have about 6,000 units of shops of various sizes ranging from warehouses, open stalls, lockup shops and the like. We have banking halls to take care of your money.
Viewpoint: One thing that dominates talk about housing in Nigeria is affordable housing. What has been your input in this national discourse?
Hassan: It’s very delicate because in all countries, there’s no way affordable housing can thrive without government’s full involvement. It’s good that this current administration has actually demonstrated the will that it wants to engage in affordable housing.
What we in Urban Shelter do is assist our clients through various means like giving them extended payment system. There’s what we call Stay and Pay scheme – you pay over five to seven years. At year two, three, we hand over the houses to you. The balance, you pay in the next three years.
We’re also in partnership with NMRC [Nigeria Mortgage Refinance Company] through their partner banks to provide 10 to 15-year mortgage at the rate of 16/17 [percent]. We’re trying to see if we can reduce it to between 10 and 12 so that a lot of people can come in. Currently, the Federal Mortgage Bank is doing 16 percent for NHF providers but it’s not enough because they don’t have enough funds. They’re even talking about recapitalisation – about N500 billion.
It wouldn’t be fully a social housing but you need a very vibrant mortgage system because the income bracket that you try to cater for is not strong, their purchasing power isn’t strong. Government needs to build a mortgage system that they can pay through the lifespan of their employment age.
Viewpoint: So developers aren’t building for the people that really need the houses.
Hassan: Affordability is relative. What’s affordable for Mr A won’t be for Mr B. The true sense of it is, if government wants affordable housing to thrive, government needs to be more involved. Profile developers you know are serious. Provide them with lands that they can access directly and pay minimum premium – not buying lands from third party.
And government has to come in to look for financiers that will assist these developers to access funds from Nigeria. You access funds from commercial banks at the rate of 25 percent. And this is three years maximum. It’s too high; the duration isn’t enough because in property, you need to enjoy a moratorium of minimum, one year. We don’t want a situation where we’ll have financial mis-match.
The cost of materials is another aspect. Government could also bring in very good policies that could ease movement of materials from offshore into the country or come up with policies that assist the minor industries that are coming up, with grants and the likes so they can compete.
We have the resources to produce the tiles that Spanish and Italians are producing. But the cost of production is very high to the extent that when these people bring theirs from overseas, you can see that our local producers can’t compete in price. We in the property industry, cost is very important. People assess products based on prices.
Viewpoint: Does Urban Shelter suffer this problem of unsold stock many developers complain about?
Hassan: No. Urban Shelter, we pride ourselves to making sure we provide what our clients need. We first do feasibility of our market properly. We also do market survey of what our customers want. The most important thing if you’re building for people is location.
Again, know what the customer wants. Our projects, we don’t sit and design. We listen to design. We listen to what our customers are saying. We improve on our products year in, year out.
A lot of developers are price adjusters while we’re price takers. To come into the market, they try to reduce the price as far as practicable. In doing that, they forget if you hit yourself you can’t stand – you’ll fall. In reducing the prices of their products, they also compromise the quality.
Customers would say yes, their prices are cheaper but give them two, three years. Once they’re in, they start finding faults.
The quality that we pride ourselves on and we keep challenging ourselves at the management level — this is what we preach down the ladder. The company owners are fair to all staff and all staff’s hands are on deck to make sure that the success of the company is kept.
Honestly, there are times we run out of stock. People come; they want to buy houses that are ready. We started making ourselves right from day one—we do what we call Competitive Discounted Prices for our customers. Everybody that shows you trust should have premium for the trust. We have a long time of payment. Minimum, you have three years to pay. Maximum you have five, seven years to pay.
Viewpoint: Rent-to-own is becoming popular. How does it work with you?
Hassan: From the beginning of the project, we advertise. We tell our clients this is what’s happening. You show interest by purchasing a form. There’s due diligence we do because seven years in Nigeria isn’t small. Virtually every year, things change. Economy is very volatile; inflation keeps fluctuating, currency fluctuating.
We don’t call it Rent-to-own. We call it Stay-and-pay because of the issues that are associated with rent. We don’t have foreclosures in Nigeria. There’re legal documents you sign from day one. If you can’t continue, we calculate it on the basis of rent – how many years you have lived and if there are excesses we refund if you’re already in the house. We don’t want a situation where you default and we keep going back and forth.
Viewpoint: What’s your experience with it? Is it positive?
Hassan: It’s very positive.
Viewpoint: How many years?
Hassan: Three years now. We even have a case of an organisation where about 200 [offtakers], by the end of this year, we’ll hand over the houses to them. You will give an undertaking which makes payment of our fee first line charge on your salary. We’re not a mortgage organisation. The person will give us an undertaking. It’s a very flexible payment system. You can pay monthly, quarterly, annually.
Our pilot scheme is at the Kubwa and Lokogoma houses. But we also do a little bit on our Evergreen with a few customers. They’re inside now and they’re enjoying it. If you want to key in, you can come and submit application.
Viewpoint: When you move round the city and you look at where you have done projects with those red brick houses, how do you feel?
Hassan: There’s one thing we call ownership pride [laughter]. Urban Shelter in the past 25 years, we’ve never had a case of collapsed building. Fine, you may have plumbing issue which you may come back to rectify but our buildings, you’ll never have structural defect.
Viewpoint: How do you achieve this?
Hassan: It’s a quality thing. We pride ourselves on quality delivery of whatever we do. We’re fair to our customers. We make sure everything, as we promised we deliver. It’s better to under promise and over deliver than over promise and under deliver.
We always ensure we pay serious attention to details. If we tell you the mixture rate that makes a concrete – this is what we’re going to do – from our contractors to our supervisors, this is what we preach. The project managers, this is what we preach. The GM Project, this is what we preach down through the line. And our chairman is an economist but you’ll be surprised, a lot of people ask me whether he’s an architect or an engineer. I say far from all this. He’s an economist but he has the passion. And this is what’s driving the company. It’s a driving force.
Viewpoint: So when you hear of incidents of buildings falling down, how do you respond?
Hassan: It’s surprising to us! How does it happen? There’s no way a building will collapse without…either a shoddy deal happens or you hired a quack engineer – somebody that doesn’t know the process of building. Because they want to short-change their customers – they’re looking for cheap labour.
Honestly, a lot of these developers in the market don’t have passion. They hear somebody say the property business is highly profitable and they venture into it. A lot of them take their profits upfront. In the end they abandon the project. They build substandard projects and products people can’t forgive them for.
For Urban Shelter, our customers are our marketers. The clients that we sold houses to in the past would tell their friends, relatives to buy houses from Urban Shelter. There’s never a time we collected money from somebody and never gave him his product. It might take two, three or four months – that’s the maximum. You’ll surely get your product. And we don’t have cases of double allocation.
