Developers lament price surge, failing revenue

Bisola David
Bisola David
Developers lament price surge, failing revenue

Developers are worried about how growing building material costs may affect their bottom line.

The PUNCH stated that, during the launching of Kingsize Place in Oregun-Ikeja, Lagos on Saturday, they voiced their concerns.

Developers are facing difficulties due to the growing cost of construction materials, according to CEO of Hontar Projects, Deji Fasunwon.

He stated, “The loss of revenue, mostly as a result of the ongoing increase in the price of construction materials, is one of the main challenges we have faced as a result of the price surge in building supplies.

This dynamic poses a serious problem, as the project develops, our initial budgets frequently prove insufficient. By the time we are close to finishing, the costs have beyond our budgeted amounts, putting us either below breakeven or in the red.

“These difficulties are made worse by working in an atmosphere that does not provide enough assistance. Getting money turns out to be a difficult endeavour, therefore some of us look into other funding options.
However, these responsibilities would be substantially reduced if the government created more favourable conditions and made money easier to obtain, which would help contractors like us as well as the clients we serve.”

Similarly, the CEO of Magnificent Choice Services Project and Engineering Ltd., Jeremiah Akinsele, observed that the construction industry’s inflation was unusual and that clients were unwilling to renegotiate agreements.

He claimed, “Once the construction industry has finished, the re-negotiation process has resulted in a decrease in revenue, further exacerbating the situation where our budgets are insufficient to cover the property costs, once construction stops there will be an increase in crime.”

“Even though they are aware, clients are being stubborn when it comes to renegotiating terms, which could force developers to use inferior materials and possibly cause a building to collapse.”

In the meantime, Fasunwon highlighted how important integrity was to his business, emphasizing openness and conformity to established norms.

“We pride ourselves on keeping our word without compromising, especially when it comes to the quality of materials we use, our dedication to compliance is demonstrated by our stringent attention to testing and securing approvals prior to construction.

“We are currently working on a project that will result in three dwelling units totaling 32 four-bedroom townhouses and one detached five-bedroom house. Furthermore, there is a provision for play ground.
Despite our initial N85 million budget, the project has already grown to almost N170 million. The rising cost of materials and related charges is mostly to blame for this increase.”

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