Regimanuel Gray Limited prides itself for building houses for generations. Maxwell Akalaare Adombila of the Graphic Business (GB) caught up with the Managing Director, Mr Ibrahim Bah (IB), and first asked him if the company's properties were priced for high income earners.
IB: The answer is yes and no. As an estate developer, most of the construction costs have to be borne by us. Although things such as water, electricity and roads are to be done by the government, it has not been able to do that. This means that for us to be able to sell our houses, we will have to bring those facilities to the project sites at our own cost.
For us, we are aware that buying a house is one of the biggest decisions that someone makes. So, we make sure we put in a lot of technical expertise and resources into that house so that it does not end up being unfit for them to live in.
We make sure its fit for a generation and once we get to that level, cost becomes a matter and that means the customer will have to bear it. Therefore, if you say our houses are pricey, that is fair but we also want you to bear in mind that whoever owns a Regimanuel Gray house is the prudent owner because you will get value for money.
GB: What has been the market's response to this drive to offer value for money?
IB: Well, we have quite a lot of existing customers, who, because they are satisfied customers, continue to become our mouth piece. Having said that, there have been proliferation of other developers into the industry and so competition is really keen.
Now, for most people, especially first time home buyers, their cardinal challenge is one; money. Those people often end up going with our competitors and they buy houses that I do not need to elaborate on. But as the saying goes, 'the chicken will always come home to roast' and so they still know that they are not getting good quality and, therefore, knock at our doors and we serve them.
GB: How is business Regimanuel and the real estate?
IB: The market is a bit dull at the moment. Sales have been sluggish both because of competition and the challenges with the economy currently. You and I know the depreciation of the cedi has made the decision to buy a house a bit difficult but we still have hope that the economy will turn around and people will have the confidence to start investment in things like homes.
GB: Has Regimanuel noticed a drop in demand that is you can attribute to the current challenges facing the economy?
IB: I do not want to dwell much into that because it is a whole topic on its whole. When I talk about the economy, I am referring to both the Ghanaian and the economies abroad such as Europe and America, where our brothers and sisters are. There was a time when our diaspora customers accounted for about 60 to 70 per cent of our customer portfolio. Now, you can see that these economies are in bad shapes now and the first people to be disadvantaged are our black brothers.
These people do not have job security right now and so cannot easily take that decision to buy a house when they doubt if they can sustain their livelihoods. So, we have noticed that drop.
Also, the challenges with the cedi and others have created a lot of problems for both home buyers and developers. Having said that I must admit that sales is gradually coming back and that is why we organised our home viewing to help people differentiate a good house from a bad one.
GB: I understand you are constructing over 400 houses at Katamanso. Tell me about that project and the home viewing to the site.
IB: We have a flagship project at Katamanso just after the Old Adenta Barrier and we have a master plan to do 17,00 homes on a 1,300 acre of land. We have started with the first phase first which we call ‘Cluster A’ and that will comprise 472 houses by the time we finish. There are two and three bedroom homes with ample space for car parks and stuffs like that. So, we sent people to the site to see the work we are doing and see if they can buy. We had about 2,000 visitors, both old and prospective customers.
GB: How is the company funding this project?
IB: It is a combination of internally generated funds and bank loans and once we talk of bank loans, you can imagine how expensive the project cost will be. The finance cost is a major part of the construction cost and that will surely have an impact on the homes to be constructed.
GB: How easy is it accessing funds for your operations?
IB: It is one of the major challenges for the real estate industry. The thing about the funding is, even if a bank wants to provide some of the funding, they also have a cap on the exposure allowed for a single borrower and so they cannot give you a loan facility over a certain amount. Because of that, you cannot get funds for the whole project unless part.
The second thing is the tenure of the loans of the commercial banks is very short. They will not give you a loan that will take you from building to selling before you start repaying. Most of the times, the loans they give are two-year loans. What that means is once you take money from the bank and start using it, you should be able to start repaying. But you know that it takes us far longer to complete a project, mostly about five years or more. So, in other words, before you even start or finish the project, you have already started repaying the loan and that is a mismatch.
GB: What is your message to customers and staff of Regimanuel?
IB: We are grateful to them for honouring our invitation to the home viewing at Katamanso, where we showcased our quality and new product lines. We have taken note of the questions they asked and we will keep evolving to meet their needs.
To the staff; we are doing a lot of strategic planning within the company and we just want them to continue to do their best. They should continue to spread the gospel according to ‘St Regimanuel.’ We also want them to be part of the marketing team and be proud of being a part of this noble institution.