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Operators cut pension investment in real estate by N30bn

Despite a steady increase recorded in the total assets under the Contributory Pension Scheme, the Pension Fund Administrators reduced investment of the funds in real estate by N30.99bn between December 2016 and December 2017.

Statistics obtained from the National Pension Commission revealed that the total amount invested in real estate fell from N234.34bn at the end of 2016 to N203.35bn in 2017, despite recording a rise in pension assets from N6.15tn in 2016 to N7.5tn at the end of 2017.

According to the commission, as of the end of 2017, N5.29tn, which is about 70.4 per cent of the funds, was invested in the Federal Government of Nigeria’s bonds, which include treasury bills, agency bonds, sukuk bonds and green bonds.

Eight per cent of the money, totalling N672.2bn, was also invested in domestic ordinary shares.

The figures showed that N152.2bn amounting about two per cent of the funds was invested in state government securities.

Last year, the commission reviewed the regulations of investment of pension funds. And in the reviewed regulations, PenCom stated that the PFAs must offer a multi-fund structure for the Retirement Savings Account and that there would be a transition period of six months, effective from the commencement date of the multi-fund structure for all the PFAs to restructure their respective portfolios.

It stated, “The multi-fund structure shall comprise Fund I, Fund II, Fund III, and Fund IV (retiree fund). Funds I, II, III, and IV shall however differ, according to their overall exposure to variable income instruments.”

PenCom also said it would raise the pensions of retirees opting for programmed withdrawal and were being paid by the Pension Fund Administrators this month.

The Acting Director-General, National Pension Commission, Aisha Dahir-Umar, said this when the commission submitted a memorandum to the Senate Committee on Establishment and Public Service at the public hearing on a bill for an Act to amend the Pension Reform Act, 2014, to provide for definite percentage a retiree could withdraw from the RSA and for other related matters.

She, however, stated that some retirees would not be entitled to the increase due to low balances in their RSAs.

Dahir-Umar said, “Indeed, the commission has just concluded an exercise to increase the monthly pension of all retirees on programmed withdrawal due to the income earned on investing their pension assets.

“The outcome of this exercise showed that 30 per cent of the retirees would not benefit from the increase due to insignificant income earned on the small balances in their respective RSAs.”

Originally published in Punch 

‘How foreign capital aids Nigeria’s commercial real estate rebound’

Notwithstanding that real estate recovery has taken time to gain traction, foreigners are fueling capital injection in Nigeria and other Sub-Saharan Africa countries, with South Africa and United Kingdom investors leading the way.

Although, an oversupply of high-end property and limited access to finance have underpinned the market’s slow bounce back, prospects are looking up for the second quarter of the year.

According to a report from international brokerage, Knight Frank, the persuasive long-term investment case for Sub-Saharan Africa has drawn increased numbers of international investors to investigate opportunities within the region over recent years, albeit transactional activity has been restricted by the limited availability of investment- grade stock and the opacity of the markets outside of South Africa.

Interest in the sector remains heightened, despite the weakening of some Sub-Saharan economies over the last two years.

Two years ago, Investors’ appetite for Sub-Saharan real estate was highlighted by the announcement that the UK-based emerging markets specialist Actis had raised US$500 million for its third African property fund, Actis Africa Real Estate Fund 3.

This is the largest amount that has ever been raised for a private real estate fund focused on Sub-Saharan Africa outside South Africa, and it included a commitment from the Government of Singapore Investment Corporation (GIC).

The report revealed that Actis’ two previous funds, closed in 2006 and 2012, have been involved with some of Sub-Saharan Africa’s most modern commercial property developments, in countries such as Ghana, Kenya, Nigeria and Tanzania.

In recent years, Actis has exited from many of its first wave of investments, selling its interests in assets including the Accra Mall, Nairobi Business Park and Ikeja City Mall.

When Actis launched its first Sub-Saharan Africa fund over a decade ago, it was a pioneer entering a market largely untapped by global property funds.

However, its third fund will enter a significantly more crowded marketplace as a series of property investment vehicles have emerged in recent years targeting Sub-Saharan real estate.

Many of these are South African- controlled funds, albeit often registered or listed offshore in Mauritius.

A prominent example is RMB Westport, which was created in 2008 as a joint venture between Rand Merchant Bank and the Westport Property Group.

Its development projects were the Wings Office Complex in Lagos and Muxima Shopping Centre in Luanda. RMB Westport’s second fund, which has a target of raising US$450 million, has attracted commitments from both GIC and the UK investor Grosvenor.

Other real estate investment vehicles to have been launched in the last two years include a pan-African joint venture created by Growthpoint and Investec, which has the target of raising US$500 million.

Momentum Global Investment Management and Eris Property Group have also formed a joint venture, the US$250 million Momentum Africa Real Estate Fund, which has allocated capital to development projects in Ghana and Nigeria.

The Anglo-South African group Old Mutual signalled its intention to expand its African footprint by announcing a partnership with the Nigerian Sovereign Investment Authority.

This venture aims to raise US$500 million for a real estate fund, in addition to a US$200 million agriculture investment vehicle.

A further noteworthy event was the creation of Mara Delta, a pan- African real estate fund formed from the merger of Delta Africa and Mara Diversified Property Holdings.

During 2016, Mara Delta was one of the most acquisitive buyers of real estate across the region, growing a portfolio which currently includes assets in Kenya, Mauritius, Morocco, Mozambique and Zambia.

An estate surveyor and valuer, Mr. Akin Olawore who doubles as the president of Nigerian-British Chamber of Commerce (NBCC), told The Guardian that most of the commercial buildings standing today were financed and built by such investors.

“These are part of the sums that make up Foreign Direct Investments (FDI) to Nigeria, which is highest in the last five years in SSA.

“Statistics show that we have opportunities in those sectors and also have the strength of bringing in anchor tenants.

Also private equities need big assets to finance to be lucrative, a number of these assets may be bundled into REITS package to create exit for the investors to take over. “

A past Chairman of the Nigerian Institution of Estate Surveyors & Valuers (NIESV), Lagos State Branch, Mr. Stephen Jagun said that the returns are too juicy to be ignored.

“Get the right location and deliver a super product; and if possible pre-let or pre-sale to target audience. We also have the huge population to our advantage.”

For Mrs. Erejuwa Gbadebo, Chief Executive Officer, International Real Estate Partners (IREP) Nigeria said the foreign investors have not revived the real estate.

Originally published in The Guardian

AFRILAND PROPERTIES PLC REPORTS 233% INCREASE IN PAT

AS SHAREHOLDERS APPROVE N137.39 MILLION AS DIVIDEND PAYMENT

Afriland Properties Plc. has announced a profit after tax of N1.02 billion for the year ended, December 31, 2017, representing 233% increase compared to N307 million in the corresponding period of 2016. Total assets in the year under review stood at N19.8 billion which represents 17.9% increase over N16.8 billion recorded in 2016.

This was stated by the Board of Directors during the company’s 5th Annual General Meeting, which took place at the Banquet Hall of Lagoon Restaurant on Tuesday, March 27, 2018. The shareholders also approved the Board’s proposal to pay a sum of N137.39 million as dividend, translating to 10 kobo per ordinary share.

For the financial year ended 2017, Afriland properties plc. also recorded 11% growth in revenue from N1.1 billion in 2016 to N1.3 billion, while profit before tax increased by 96% to N1.06 billion from N0.540billion in 2016 financial year.

In her address, the Managing Director/Chief Executive Officer, Afriland Properties Plc, Mrs. Uzo Oshogwe, stated that “though the year under review was a period of unprecedented challenges and profound economic instability, our company was steadfast in our delivery and dedication to our clients while earning a good return for our shareholders. Our teamwork and intense focus reflects in the strong performance across our businesses.

“Our purpose to improve lives by investing in the development, management and maintenance of world-class Real Estate offerings across Africa, remains a driving force and we would continue to build our capabilities and investments in our people, systems and products.

“Though the operating environment may not change significantly, we are confident that our strategies will yield even better results in the coming years. We are closely monitoring various policy measures being taken by the Government to further sustain the gains made in 2017.”

Commenting on the results, the Chairperson of Afriland Properties Plc, Erelu Angela Adebayo, stated that “the strong performance and increase in growth is attributable to the development and disposal of properties in the year. While we faced diverse challenges in the operating environment, the company commenced and completed a number of projects. Our flagship project for the development and disposal of residential building was a huge success.

“The market remains challenging, but our strategic priorities are clear and we will continue to adapt our business accordingly. The core of our growth strategy remains directed towards broadening our real estate offerings to the market and ensuring that we consistently deliver value. We have also evaluated our strategy and refined our goals and priorities to ensure we work for the long-term benefit of our shareholders.”

About Afriland

Afriland Properties Plc is a property management, investment and development company, offering end-to-end services along the real estate value chain, from management to joint-venture investments.

With a portfolio size of over N15 billion and one of the largest land banks in Nigeria, Afriland is pioneering the opportunities presented by an institutional approach to real estate, serving niche markets throughout Africa.

We bring innovation to the real estate sector in Nigeria and other African countries by drawing on experience, new competencies, and technology to achieve continuous improvement in service delivery to our clientele.

Countries adopt measures to calm property prices

While solid economic growth is expected to spur demand for global prime properties in 2018, its pace will be impacted by more stringent cooling measures in most countries, according to the Douglas Elliman/Knight Frank Wealth Report 2018.

“The outlook for 2018 is that economic growth will continue to support prices, but performance could be tempered as more central banks start to raise interest rates,” said Kate Everett-Allen, head of international residential research at Knight Frank, in the report.

Coincidentally, the U.S. Federal Reserve announced last week it would raise short-term interest rates by a quarter of a percentage point.

Looking back at the 10 years since the 2008 global financial crisis, Knight Frank found that the pace of growth in prime property prices might have peaked in 2013.

The Prime International Residential Index 100, which tracks the performance of the world’s leading prime second home and city residential markets, was in negative territories in 2008 and 2009, with an annual decline of 0.2per cent and 5.5per cent, respectively. Growth picked up pace slowly, and peaked in 2013, with the index gaining 2.8per cent.

Last year, against all odds, the index gained 2.1per cent, with two-thirds of the locations tracked in the index reporting positive annual price growth, which reflects the expansion of global economy, according to Knight Frank.

The best-performing cities over the last decade have been in Asia, accounting for seven incidences out of 10. China’s Shanghai topped the list for three years while Guangzhou landed the first place in 2017, with home price increasing 27.4per cent year-over-year.

“Tighter macro prudential regulations introduced by the government have achieved their goal of deterring speculative activity and curbing price inflation across large parts of China,” Ms. Everett-Allen said. “Shanghai and Beijing registered growth of just over 9per cent and almost 7per cent respectively; lackluster by recent standards.”

Cooling measures have been spreading in Asia and elsewhere in recent years, as governments try to balance capital inflow and housing affordability, according to Ms. Everett-Allen.

In 2010, Hong Kong, China’s mainland and Singapore began to introduce measures to deter speculative investment as home prices flew at an annual rate of 50per cent approximately, which would potentially cause a housing bubble in very short time.

Other countries have followed suit, including Malaysia (stamp duty increase), the United Arab Emirates (cap on mortgage lending, transfer fee doubled), the U.K. (changes to stamp duty) and Australia (foreign buyer fee, stamp duty and land tax changes).

The provincial governments of British Columbia and Ontario in Canada, have imposed a 15per cent foreign buyer stamp duty on purchases in parts of Vancouver and Toronto, according to Mansion Global.

Originally published in The Guardian

FMBN to remove equity payment in estates

In its determination to guarantee affordable housing to Nigerian workers, the Federal Mortgage Bank of Nigeria (FMBN) has vowed to remove equity payments in its completed estates across 10 states that would be used as a pilot project for soon to be launched rent-to-own scheme.

The managing director of FMBN, Ahmed Musa Dangiwa, an architect, stated this in Abuja while receiving eight-man delegation from the Nigeria Institute of Management (NIM) led by its president, Prof. Olakunle Iyanda.

According to him, “They (beneficiaries) will enter into the house as a tenant, while paying the rent and it will become  theirs over the years”.
He noted that the bank has continued to sponsor it’s staff to NIM professional development programmes yearly and would continue with the trend in order to enrich the bank human resources.

The MD revealed that the bank was established by an act to provide affordable mortgages that would boost home ownership among Nigerian workers particularly the low and medium income earners that constituted over 80 percent of the population.

“Its been done through the National Housing Fund (NHF) scheme into which  workers mostly in public and private sector contribute 2.5 percent of their monthly income into the fund”.

Dangiwa emphasised that the bank has continued to provide affordable mortgages to workers and construction  finance to some developers for housing development through the scheme.

He was optimistic that the NHF which he described as individual mortgage loans are granted at 6 percent interest rate,  considered as the lowest and most affordable in the country.

“We have the FMBN home renovation loan with liberalised conditions for easy access by workers which is being run now of which workers are given a minimum of N1million to renovate or upgrade their homes”.

The MD urged NIM members to take advantage of the banks mortgage products so as to act as good ambassadors of FMBN.

He was hopeful that the institute would continue to uphold the standards for which it has been known over the year even as he assured of FMBN commitment towards the sustanance of mutually beneficial realtionship between the two organisations.

Responding, the president of NIM, Prof. Olakunle Iyanda said that the institute is ready to contribute its quota towards enhancing the success story of the bank  through the training programme offered to FMBN staff.

He however invited FMBN to join NIM as a corporate member just as he appealed to the bank to pay the annual subscription of its staff who are members of NIM.

“We want to establish the mutually beneficial relationship to participate in the training of your staff periodically either as nominees to various training programmes that we run or as facilitator for your internal programmes for selected group of staff in the bank”, he concluded.

Global house prices increase by 4.6 per cent

House prices worldwide increased by 4.6per cent in 2017, led by Iceland and Hong Kong, but their rate of growth has slowed while European housing markets are rising up the rankings, the latest global index shows.

Overall some 85per cent of the 59 countries tracked by the Knight Frank global house price index saw mainstream values rise and seven European countries now sit within the top 10 while Russia, Peru and Ukraine registered the weakest growth in 2017.

“The latest house price rankings provide a glimpse as to where the world’s housing markets are in relation to their property market cycles, as the era of economic stimulus comes to a close and rate rises occupy the minds of policymakers in several key western markets,’ said Kate Everett-Allen, head of international residential research at Knight Frank.

She explained that while 2017’s growth of 4.6per cent was lower than 2016’s 5.3per cent, it was still a reflection of steady growth, tied primarily to the fact the global economy registered growth of 3.7per cent in 2017.

“That is not to say there aren’t headwinds. Rising interest rates in the US, UK, and Canada as well as the withdrawal of stimulus is influencing buyer sentiment, and with over 13 countries pegged to the US dollar, further rate rises by the Federal Reserve will have repercussions beyond US shores,” she pointed out.

Indeed, the index’s more moderate rate of growth is reflected throughout the rankings. The gap between the strongest and weakest performing housing market has narrowed from 27 percentage points to 20.

Iceland and Hong Kong still occupy first and second position but their rates of annual growth have slipped from 20per cent to 15per cent and from 18per cent to 14per cent respectively since the previous quarter. Mirroring a trend seen in the prime residential markets, European countries are rising up the rankings.

The Czech Republic and Ireland were in equal third with price growth of 12.3per cent, followed by Turkey at 11.2per cent and Serbia at 11per cent, Hungary at 10per cent, Latvia at 9.5per cent, Bulgaria at 9per cent and Malta at 8.8per cent.

The UK is ranked 24th with annual growth of 5.2per cent, Portugal at 31 with price growth of 4.5per cent, France at 35 with 3.9per cent, Germany at 38 with a rise of 3.6per cent, Spain at 43 with 3.1per cent and Italy close to the bottom at 53 with a fall of 0.8per cent.

At the bottom is Ukraine where prices fell by 5.1per cent, while in Peru they fell by 4.2per cent, in Russia they were down 3perc ent, in Saudi Arabia down 2.2per cent, in Finland down 1.5per cent and in Poland there was a fall of 0.9per cent.

In terms of the world’s largest economies, the US with growth of 6.3% has overtaken China at 5.8per cent. The index report says that in China, although tighter capital controls are limiting cross border flows, policy levers at home are having some success stemming its tide into domestic markets.

The strong performance of the US and Canada at 8.9per cent means North America outpaced all other world regions in 2017, recording average price growth of 7.5per cent. “With a raft of new measures announced to curb Vancouver’s price Inflation and further rate rises mooted we may see Canada shift down the rankings during 2018,” said Everett-Allen.

Originally published in The Guardian

Lagos begins audit of buildings’ plan permits

Fresh moves are being made by the Lagos authorities to restore sanity to the built environment and further curb cases of building collapse and its attendant loss of lives and property in the state.

Under the new initiative supervised by the Lagos State Building Control Agency, (LASBCA), the agency is carrying out post construction audit exercise on all existing building to ascertain their status and determine the validity of development permits.

The government has already begun the circulation of letters to residents associations. The letter urged all owners/developers to forward their development permit to the nearest LASBCA office in their respective locations.

The letter signed on behalf of the General Manager of LASBCA by Olalekan Shodeinde, warned that any owner/developer that fails to submit the development permit within two-weeks of the notice will be served due statutory notices and compelled to obtain the development permit in line with the Lagos State Urban and Regional Planning and Development Law 2010.

The State Government had earlier last week officially announced granting a six- month grace period to allow property owners and developers, with existing developments or those wishing to commence construction but are yet to perfect their land title, obtain planning permits and approvals, without penalty.

Speaking on the development, the Chairman, Lekki Residents Association, Lekki Phase I, Prof. Ajose Olumide said; “What is the government recertifying for? We don’t understand what the government is after”, he said.

He lamented that many issues have come to the association at the same time. For instance; he said the question of the land use charge, the toll gate, and the post construction audit exercise.

Prof. Olumide stated that government needs to educate the people more about what it’s doing before issuing out ultimatum, adding that the association was trying to address the issue of the land use charge through an ad-hoc committee but not through with that, the issue of post construction audit exercise came up.

Speaking to The Guardian on the issue, the agency’s Public Relations Officer, Mrs. Titi Ajirotutu explained, “Even if your building is 50 years old, the letter serve an avenue for those who do not have their building approval to obtain it.

The Governor has given an order that the Lagos State Planning Permit Authority (LASPPA) should not collect penalty fee for sixmonth. Before now, if you have built your house before approval, there is a penalty for it but it has been waved so that everybody will have the opportunity to do the needful”.

She added that; “Those whose building are very old, we also be asked to go for stability test to get assurance that the building can still last for a particular time or otherwise.

Any building that is still okay will be left alone and the owner will be asked to go for only approval. Lekki is a development site, those who have not done their permit; the wave of penal fee for six months, the wave of title document for six month for those who do not have is an avenue for them to do their building approval. LASBCA is not punishing anybody for now.”

Originally published in The Guardian

FMBN issues N20.2b mortgages to NHF subscribers

To assist Nigerians buy their own homes, the Federal Mortgage Bank of Nigeria (FMBN) has issued 2,724 mortgages worth N20.237 billion to subscribers under the National Housing Fund (NHF).

Minister of Power, Works and Housing, Babatunde Fashola who made this known at the inauguration of newly reconstituted board of the Federal Mortgage Bank of Nigeria (FMBN) and Federal Housing Authority (FHA) in Abuja, charged them to shun infighting but rather bring to bare their various wealth of experiences to reposition the agencies.

He said the Federal government has commenced a pilot Housing Programme in 33 States of the federation to validate and test what type of housing design responds to Nigeria’s diverse cultural, climatic and religious needs, as well as to ascertain what is acceptable and affordable.

He said: “We are at different stages of construction in different states, and we have recommended these designs to FHA, without imposing them.

“Our decision is informed by the evidence of previous housing initiatives that people did not take up and empty houses that still abound in almost every state of Nigeria. These houses, and the deficit of housing, suggests to us that the untaken houses are either unacceptable or unaffordable or both.

“We see housing as a product, and we take the view that before they can be delivered to market, we must know what the people want and what they can afford.”

“As for the financing side, this is critical to affordability and it is as much the function of FHA in cost management and delivery as it is that of FMBN in delivering mortgages of affordable tenures and costs.

The 13-member board of FHA has Senator Lawal Shuaibu as chairman, while Mr. Adewale Adeeyo chairs the eight-member board of FMBN.

Originally published in The Guardian

FMBN issues N20.2b mortgages to NHF subscribers

To assist Nigerians buy their own homes, the Federal Mortgage Bank of Nigeria (FMBN) has issued 2,724 mortgages worth N20.237 billion to subscribers under the National Housing Fund (NHF).

Minister of Power, Works and Housing, Babatunde Fashola who made this known at the inauguration of newly reconstituted board of the Federal Mortgage Bank of Nigeria (FMBN) and Federal Housing Authority (FHA) in Abuja, charged them to shun infighting but rather bring to bare their various wealth of experiences to reposition the agencies.

He said the Federal government has commenced a pilot Housing Programme in 33 States of the federation to validate and test what type of housing design responds to Nigeria’s diverse cultural, climatic and religious needs, as well as to ascertain what is acceptable and affordable.He said: “We are at different stages of construction in different states, and we have recommended these designs to FHA, without imposing them.

“Our decision is informed by the evidence of previous housing initiatives that people did not take up and empty houses that still abound in almost every state of Nigeria. These houses, and the deficit of housing, suggests to us that the untaken houses are either unacceptable or unaffordable or both.

“We see housing as a product, and we take the view that before they can be delivered to market, we must know what the people want and what they can afford.”“As for the financing side, this is critical to affordability and it is as much the function of FHA in cost management and delivery as it is that of FMBN in delivering mortgages of affordable tenures and costs.

The 13-member board of FHA has Senator Lawal Shuaibu as chairman, while Mr. Adewale Adeeyo chairs the eight-member board of FMBN.He reminded them that their appointment offer Nigerians the opportunity to participate in the decision making process that affects the lives of millions of people who are expected to benefit from the services being rendered by the agencies.

 Originally published in The Guardian

3 Interior Design Trends You Should Know

Interior design and decoration is like giving a place it’s own personality. A particular space would never look the same with two different color combination options. As a matter of fact, you could have two extreme results.

While trying to achieve a more aesthetically pleasing environment, we are often saddled with the responsibility of planning and coordinating the process, especially if we just moved to a new place or just got tired of the old look and feel.

Some have a really great taste without even trying, while some don’t and have to do a lot of research and ask so many questions. Whichever group you belong to, these 3 interior design trends you should know, would keep you in the loop on what’s gaining a lot of attention in the world of interior design.

Tastefully Go Bold

Neutral colors are taking the back seat in 2018. Whether through little details, furniture, artworks, accessories, wall paints or papers, infuse your home with vibrant colors like emerald green, sapphire blue or ruby red.

Every color has a psychological value and bold colors have a tremendous impact on mood. Homeowners and professional interior designers are venturing outside the comfort zone of muted colors and are tastefully going bold.

 

The Retro Dark Wood

Glam dark wood and vintage furniture are trending this year against the pale bleached woods. Dark oak, mahogany, maple, walnut, pine and fiberboard are some very interesting examples. Old-fashioned furniture are looking modern again, especially if used sparingly.

The retro glam dark wood can give a neutral room a much needed spark of color. This indeed is a timeless trend.

 

 

Monochrome

Color combination is one of the first choices you make when setting up your home and sometimes you just want to keep it simple.

This interior design technique and classic combination made it into the top 3 design trends. You simply take one basic color and play with the various tones, shades, and tints. One of the benefits is not having to coordinate too many colors.

 

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