The real estate industry is one of the sectors that have consistently posted growth in the country. While the demand has always been present, the changing shifts in how people acquire property mean that real estate developers are now assured of custom for their products in both the residential and commercial subsectors.
Into this auspicious state of affairs has come relatively new entrant, Vanguard Properties. The company has been in existence since 2006 when it put up the structures that house the headquaters of its parent companies – Vanguard Assurance and City Investment Company. Between 2006 and 2010, however, the company was in what can be described as hibernation until a decision was taken to revive it to ake advantage of improving working conditions.
Vangaurd life manages in excess of eleven thousand policies and when they noticed a trend of holders redeeming their policies to go and build houses, it was clear to them that the market was ready for their company to start serious business. A rejuvenation of the company was effected, which involved among other things, bringing experienced and competent hands in the industry to guide the new company to the achievement of its big and bold ambitions.
Among the new hands brought in was Managing Director, Kwabena Dapaah-Siakwan, who was then working at Trassaco as Director of Finance for some eight years. Prior to that, Mr Dapaah-Siakwan had worked at the Ghana Commercial Bank, ending his tenure there as Deputy Managing Director. Aside his experience, he has had a long held interest in the property business, dealing in the sector even as a student in the United Kingdom. Everytime he has built a house, he has been intimately involved in the process.
With this has come an obsession with quality that he says, is the hallmark of Vanguard Properties. It is this commitment to quality that the company believes will help it achieve its aim of becoming on of the leaders in the business in the medium term. Right now, the company is focused on ensuring that its first offerings are a testament to this commitment.
Vanguard also hopes to serve a broader spectrum of buyers than some of its competitors. While many concentrate on particular segments, Vanguard believes that it has the capacity and the will to serve lower and high-end buyers with the same commitment without sacrificing quality on any front.
“Our first development is the Vanguard Heights, the high end block of apartments. We also do low end, like the one we are developing at Amasaman at the moment. We are also looking to roll out some affordable houses in the Central University area – around USD 40-50,000. Of course, within those areas, we make room for those who will want bigger houses. We are making sure we deliver in the first ones that we are doing. The houses in the Amasaman development, for example, are around the equivalent of USD35,000 which we call promotional prices because others in the area are charging more for even less than the quality that we are providing.”
Price is of course, one of the touchier issues in the property sector in Ghana. Conversely, it can also be described as an issue of income levels, however and it is one of the headaches of property developers in the country.
“We also realised that there was a market, even though it could be argued that the market wasn’t backed by effective demand. By which I mean that there are a lot of people who need houses but many of them simply cannot afford it. So we have come in to try, based on the salary levels of the people, to build some houses that we think they can afford, epecially those on our books.”
Those on the books of Vanguard Assurance, not surprisingly if you take into account the factors that triggered the interest in the business in the first place, can convert their policies into down payments for the houses that the company is selling. For those who are minded to take out mortgages, policy holders or not, CAL Bank and Fidelity Bank are the mortgage partners. Plans are afoot, however, to set up a mortgage company in-house to deal help buyers acquire their desired properties. Mortgages typically require a fifteen-twenty per cent down payment with the rest of the payments spread over fifteen years.
Issues of price, however persist with some critics saying that properties in Ghana are vastly overpriced. Mr Dapaah-Siakwan believes that such criticism is unfair. Prices, he says, are pushed up by demand and the market. Also, he points out there is space in the market for various income levels. There is also the matter of quality, convenience, environment, the security, the infrastructure and other features of modern developments that have to be paid for.
“When you buy a house, you buy not just the blocks and stones but also the environment – the security, etc. Our developments, for example, will be managed. This is something the state companies failed at. Anyone who buys from us signs a contract that enjoins them to be part of the homeowners association. The homeowners association must employ a facilities manager to maintain the state of their investments. If you look at the Vangaurd Enclave that we are developing at Amasaman for instance, it is affordable but the environment is very good.”
The market must agree with him: the first forty-two 3-bedroom houses in Amasaman were sold out within two months, encouraging them to put up more to accommodate the demand.
All these are the moves of a company that is set to punch above its weight in a difficult market, aided by the experienced and competent team that Mr Dapaah-Siakwan leads. And of the difficulties, there are a few.
On the supply side, issues of land acquisition and finance can hobble even the most driven and well-intentioned operations. However, Vanguard Properties have some advantages. Been well born of two financial houses – Vanguard Assurance and City Investment Company – mean that money is not as much of a problem as it is for some of its rivals. Even then, they find that they also have to resort to the open market for occasional support.
Land acquisition and the unfortunate litigations that are associated with them are dealt with with a careful approach.
“Our strategy is to deal with only duly titled properties. Also, we generally do not buy land. We prefer to go into partnerships with the owners. We are very particular about these things because we also want to pass on genuinely titled properties to our clients.”
This and other approaches are not generally mirrored in the wider market, which can be a pain for buyers and even other developers who risk being painted with the same brush.
“The opportunities are there because everyone would love to own their own home. Unfortunately, a lot of the players are not credible. A lot of the companies have management challenges; they want to cut corners and in then end, that never works out well. And that is where we come in with Vanguard as a strong backing brand name. We don’t believe in that. You have the security with us that you will not have with some other developers, especially the one-man operations.”
With this view, Vanguard Properties’ mission is not only to seek its own good but also in doing so, make a difference in the industry.
“We want Vanguard Properties to be the preeminent property developer in the country. We want people to think of us first whenever they want to acquire property. We want to stand shoulder to shoulder with the Regimanuels and the Trassacos and even surpass them. Even in the short while that we have been around, we have come up strongly and we believe that in the next five years we will be on top. Right now, we want to establish ourselves and provide quality properties for all income brackets.”
For Mr Dapaah-Siakwan, his personal vision is to guide the company towards this goal while placing his personal stamp on the business and the industry. The business can deliver five hundred thousand houses annually, he believes and if this conviction is on its way to actualisation by them time he bows out, he will consider his work fully done. That and making sure that his successor is able and ready to take over from him by then.