GMH and the Cost of Keeping its Promises
As it marks its eleventh anniversary, Vanessa Obioha looks at how the real estate company has navigated rising construction costs while maintaining customer confidence When the naira began to lose
In 2023, Nigeria's real estate developers encountered a significant challenge as the naira depreciated substantially. For developers selling off-plan properties, the issue extended beyond rising construction costs to include how to handle homes already sold at pre-currency depreciation prices. GodMade Homes Limited, or GMH Luxury, found itself in this predicament across eight developments.
Construction materials, labor, and other project costs all rose due to the foreign exchange rate. However, customers had committed to these properties based on earlier prices. GMH had to choose between passing additional costs to customers, reducing project specifications, or absorbing the difference. The company opted for the latter.
Over the period of 2023 to 2025, GMH refunded over N4 billion to customers who decided not to continue with their payment plans. The company chose not to revise terms for customers who had already committed, instead allowing those unable to continue to withdraw and receive their money back. This decision came at a cost, as GMH borrowed money to meet its obligations while continuing construction on the eight affected developments.
However, GMH prioritized maintaining the quality of homes already sold rather than adjusting delivery timelines or lowering standards. GMH's Managing Director and CEO, Ayoolanrewaju J. Kuyebi, noted that facing weaknesses could lead to strengthening. The company's strategy allowed all eight developments to remain active, albeit with extended timelines.
Two projects, in Lekki and Ikoyi, are currently scheduled for delivery. This episode underscores the difficulty of fixing property project prices in an economy where construction costs can change drastically within months. GMH's approach of absorbing immediate pressures rather than transferring them to customers was a test of customer confidence in a market where buyers are increasingly cautious. By honoring agreements, GMH demonstrated the importance of reliability in a long-term investment.
Written by urgent.news from This Day's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
