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🇳🇬 Nigeria /Economy & Trade

GMH Luxury Absorbs Billions in Costs to Uphold Promises Amidst Naira's Fall

From ThisDay · () English

Translated from English, summarized and contextualized by DistantNews.

At a glance

In-depth Named sources Context piece
  • GodMade Homes Limited (GMH Luxury) faced challenges in Nigeria's real estate market due to the naira's depreciation in 2023.
  • The company absorbed over N4 billion in costs, refunding customers rather than increasing prices for off-plan properties.
  • GMH prioritized maintaining home quality over delivery timelines, extending project completion dates to uphold customer confidence.

Nigeria's real estate developers grappled with a significant challenge in 2023 as the naira's value plummeted. For companies like GodMade Homes Limited (GMH Luxury), this meant confronting the dilemma of how to handle properties sold off-plan at pre-depreciation prices.

GMH Luxury found itself in this situation across eight developments. The cost of construction materials, particularly those tied to foreign exchange rates, surged. Labor and other project expenses also climbed. However, customers had committed to purchasing homes based on earlier, lower prices.

The company faced a critical decision: pass the increased costs to buyers, compromise on the quality of the homes, or absorb the financial hit. GMH Luxury states it chose the latter. Between 2023 and 2025, the company reports refunding over N4 billion to customers who opted out of their payment plans. Instead of altering terms for existing agreements, GMH allowed those unable to continue to withdraw their funds.

This strategy came at a considerable expense. GMH indicates it secured loans to meet its financial obligations while continuing construction on the affected projects. The company also prioritized maintaining the quality of the homes, deciding that if any compromise was necessary, it would be on project timelines, not specifications. This meant extending delivery dates rather than substituting materials or lowering promised standards.

"It’s in the moment that you face your deepest weakness that you receive the chance to forge your greatest strength," stated Ayoolanrewaju J. Kuyebi, GMH's Managing Director and Chief Executive Officer. This approach highlights a broader issue in Nigeria's off-plan property market: the inherent difficulty in fixing prices for long-term projects within an economy marked by rapid cost fluctuations. While absorbing these increases can strain developer cash flow, buyers face the risk of unaffordable investments if prices are revised.

It’s in the moment that you face your deepest weakness that you receive the chance to forge your greatest strength.

— Ayoolanrewaju J. KuyebiGMH's Managing Director and Chief Executive Officer, commenting on the company's approach to rising costs.
DistantNews Editorial

Originally published by ThisDay in English. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.

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