Real Estate Business Plan Example for Developers in Nigeria
All names and business details in this post are fictitious and are for illustration purposes. They do not represent real people or businesses.
If you are looking to start a real estate development company, real estate agency, or any real estate related business in Nigeria, then this business plan may come in handy.
This structure of this business plan follows the template highlighted here.
Executive Summary
Hare Bricks is a real estate development company based in Abuja Nigeria, we develop real estate properties for commercial purposes such as retail and food outlets to office blocks, hotels, petrol stations, banks, etc.
We bring our 20 years of experience developing real estate properties for business clients in Nigeria and abroad.
Our focus is helping businesses develop real estate properties that fit their brand and commercial needs.
We are open to various funding and management options such as lease to own, instalment, buy to let, etc.
Business Description
We are focused on developing some of the best real estate properties money can buy.
We want to target commercial clients due to our mission in helping businesses build and own real estate properties in choice locations where their business can thrive.
We've developed some landmark properties in Lagos, Abuja, Accra, and Abidjan.
The popular Zamzam Plaza at Wuse, Abuja was developed by us for Eleganta PLC in a direct funding deal.
Business Model
We are focused on helping business and corporate customers build and own real estate properties in locations that give them the most visibility.
We also want to help businesses who have the need to develop uniform real estate properties across different locations simultaneously, most especially, commercial banks.
Our business model is to provide adequate flexibility for funding commercial properties so that businesses do not have to spend the bulk of their capital on fixed assets.
We utilize our strategic participation in the building materials business to ensure cost-effective real estate development that fits clients of all sizes.
Product Pricing
Our pricing is not one size fits all, as we deal with clients on a project by project basis.
Usually, we expect to make around 25% of the total project cost in the form of real estate consulting services, legal services, architectural services, real estate supplies, and loan fees.
Industry Background
The real estate development industry in Nigeria is key to public infrastructure development and the stimulation of commercial activities.
According to Statista, the real estate market in Nigeria in 2024 is worth $2.42 trillion.
Discounting residential real estate, the market, which includes commercial real estate is valued at $340 billion.
It is expected that the whole market will grow by more than 7% annually to reach a value of $3.41 trillion by 2029.
Competitive Analysis
The competition for commercial real estate development in Nigeria is a very intimate one, with the major players enjoying strong relationships with the biggest clients in the industry.
The top 3 competitors are MaxBuild, a German-owned developer; XXB Construction, a veteran real estate development company serving across all verticals; and Coverstone, a government-partnered developer popular for developing market complexes across the major states in Nigeria.
Competitor SWOT
Strengths
The biggest strength of our competitors, which seems to be an economic moat, is the strong relationship between them and the biggest clients which includes government, commercial banks, and top industry players.
Weaknesses
While our competitors don't seem to have any significant weaknesses, they seem to operate a less flexible model in their real estate development.
For example, they major in serving the biggest clients in the industry mostly on contract basis, which leaves private clients and other instructional players underserved.
Opportunities
Our main competitors could expand their offerings to accommodate more clients in the industry, who mostly have special funding needs.
This mostly includes private individuals and partnership associations looking to invest in commercial real estate.
With their large pocket and deep industry connection, they could create sustainable funding models that serve their business needs while still keeping the customer satisfied.
Threat
Our competitors' current clientele do not build often enough to generate consistent cash flow.
Also, they run the risk of contract termination when serving the government, in cases where there is change in government tenure.
Market Analysis
Target Market
We are targeting private businesses, corporates, and associations looking to develop real estate properties either for personal use or for commercial purposes.
These target groups are mostly non-governmental, and are focused on quick turnarounds.
We are especially looking at hotels, malls, and trading complexes.
Expected Annual Customers
We intend to have an average of 5 customers annually across the states where we operate.
Marketing Plan
We have a business development team that is tasked with reaching out to potential customers across our target verticals to find deals.
We also have a brochure website where we advertise our outstanding portfolio and industry record over the years.
SWOT Analysis
Strengths
We are positioned in several complementary businesses that have direct contact with potential customers. Our building materials businesses across the country have proven to be a strong lead magnet for getting new real estate development deals.
Also, we have assumed leadership in the niche where we serve, with many repeat customers and direct referrals.
We believe we have a strong hold on our target niche which serves hotel owners, mall and supermarket owners, and other large individuals business owners.
Weaknesses
Our financial power connection might not be enough when compared with our competitors.
We have not been able to get real estate development contracts with the government due to the strong relationship our competitors' enjoys with the government.
Opportunities
We are seeing a lot of opportunities with developing real estate for businesses looking for more flexible funding options.
The biggest opportunity area is in the lease to own, which we are capitalizing on to spread the word about our mission.
Threat
We are competing against a few big real estate developers who have connections with the government.
This makes us susceptible to being affected by changes in law, if our competitors are able to convince their friends in government to enact laws that help them monopolize the market.
The Team
The team comprises our business development team, legal team, survey and compliance team, development and construction team, and sales team.
Kunle P is the head of our business development team, Maria MM is the head of our legal team, Sam PK is the team lead for our survey and compliance team, Kaykay is the head of our development and construction team, and Emmanuela Eko leads our sales team.
Financial Plan & Forecasts
Expected Annual Revenue
We expect to get an average of 5 real estate development deals per year, worth at least 200 million Naira each and at least 1 billion Naira in total.
If we get a minimum 25% profit margin, our annual revenue will be 250 million Naira.
Production Cost
Our production costs are mostly covered by the project funding, but we have a few expenses that we incur, which includes:
Fixed costs:
- Workers welfare and wages - 10,500,000
- Business development - 5,000,000
Variable Costs:
- Logistics - 5,000,000
- Site security - 3,000,000
- Total Annual Costs - 23,500,000
Profit Margin
Our expected profit margin is 250,000,000 - 23,500,000 / 250,000,000 X 100 = 90.6%
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