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Property prices worldwide up by 6.5%

Globally property prices in key locations increased by 6.5 per cent in the 12 months to March 2017, the highest rate of growth for three years, according the latest index.

Overall, 11 countries out of 55 recorded double digit price growth in the year compared to only four a year earlier, the figures from the Knight Frank global house price index shows.

According to Propertywire.com, Iceland led the index, recording average price growth of 17.8 per cent in the year to March 2017 while price growth in China slipped marginally to 10.3 per cent per annum with more than 45 cities having implemented home purchase restrictions.

Ahead of their 2017 elections France and the Netherlands saw price growth increase while in South Korea, the UK and Germany price growth slowed.

The data also shows that it is not simply that more countries are recording positive growth although that has played a part. While 43 countries recorded price rises in the first quarter of 2016, this has now risen to 48.

This rise has been accompanied by a concomitant increase in the number of countries seeing double digit annual growth rates. Kate Everett-Allen, head of international residential research Knight Frank, explained that given the uncertain global political landscape, the ramping up of cooling measures in large parts of Asia and the unravelling of stimulus measures such as QE in some parts of the world, growth is helped by economic growth.

She pointed out that the International Monetary Fund forecast global GDP to rise by 3.5 per cent in 2017 up from 3.1 per cent in 2016 and property’s reputation as a safe haven investment is also adding property price growth along with the greater availability of mortgage finance in developing markets.

Iceland, which leads the rankings for the second consecutive quarter, is heating up with average house prices rising by 17.8 per cent year on year with a dearth of new supply behind the accelerating prices. Iceland’s Housing Financing Fund suggests 9,000 new apartments need to be delivered over the next three years in Reykjavik alone to keep pace with demand.

Although China has slipped from seventh to tenth in the annual rankings this equates to a marginal fall from 10.8 per cent last quarter to 10.3 per cent this quarter.

“Despite various property market cooling measures, including home purchase restrictions and increased down payment ratios, residential prices continued to rise,” said Everett-Allen.

In Europe prices are up 12.6 per cent in Malta, up 11 per cent in the Czech Republic, up 10.7 per cent in Estonia and up by 10.5 per cent in Hungary. The report says that economic expansion and the Individual Investor Programme explain Malta’s rise, whilst historically low interest rates, wage increases and rising foreign interest are strengthening demand in the remaining three.

With the UK facing political uncertainty, the data suggests property prices continue to ease with annual growth reaching 4.1 per cent in the year to March, down from 5.3 per cent a year earlier. A brief look at some of the key elections in 2017 shows France and the Netherlands stand out as two key countries where price growth strengthened ahead of their polls.

Originally published in Punch Newspaper

RAINY SEASON: “Dos and Don’ts”

Rainy season is here again and it is very important to be aware of our environment in order to reduce or totally avoid mishap and casualties. Below are a few Dos and Don’ts.

Get your roof ready for the rains.

Inspect your roof twice per year to avoid costly problems that can escalate into tremendous cost.

  • Look for cracks along the ridge of your roof and where your shingles fold over to form the cap.

Take a look at your gutters to make sure that they drain well and don’t cause water to back up.

Also make sure that there are not a lot of little granules collecting in there. Granules in your gutter are a sign that your roof’s coating needs to be resealed.

Make sure that you don’t have any down pipe clogs.

Work from the inside out.

Inside your home, check out your ceilings to make sure that you are not experiencing signs of roof or other leakage. Be on the lookout for water rings, mold or wall or ceiling discoloration. Make any necessary repairs to fix the issue and prevent it from happening again during the upcoming rainy season.

Tackle your doors and your windows.

Make sure that both close and seal properly, and make any repairs or improvements as necessary.

Make sure that dead branches have been cleared from around your house.

This will reduce the risk that they will fall during the storm and damage your home.

Consider the use of sandbags to put into the low areas around your house to help keep flood water at bay.

MD/CEO, Afriland Properties Plc, Uzo Oshogwe, Speaks at JLL Masterclass

MD/CEO, Afriland Properties Plc, Uzo Oshogwe, recently joined other experts from diverse industries and markets to discuss ways to leverage Real Estate portfolio in achieving sustainable business growth, in a just concluded masterclass hosted by JLL.

The masterclass which was organized in collaboration with The Harvard Business School Association of Nigeria (HBSAN), held discussions on Real Estate portfolio performance and importance on business strategy, balance sheet optimization to drive business success and the importance of the Corporate Real Estate function in upcoming trends.

Speaking on how Afriland Properties Plc. has been able to sustain growth, Uzo Oshogwe stated that, “Sustainability is not achievable without strategy. We have a five year plan which drives our decisions and policies.  Though strategy is crucial to business sustainability, you must also be flexible and innovative as events unfold. Recently, we reworked our mission and vision statements to our purpose; Improving lives by investing in the development and maintenance of world-class Real Estate offerings across Africa”.

Also on the panel was Ewout Holst, Head of Corporate Solutions, Sub-Saharan Africa, JLL; Rob Giles, Head of Retail Banking, Diamond Bank; Obinna Ekezie, MD/CEO, Wakanow and  Dr Ijeoma Nwagwu, Lecturer, Lagos Business School.

   

CBN picks eight microfinance banks for FG’s ‘My Own Home’ scheme

Brighter days may lie around in the corner for prospective homeowners, following plans to introduce a public private partnership initiative that seeks to increase access to housing finance in Nigeria through mortgage guarantee insurance and microfinance scheme.

The scheme, ‘My Own Home’ comes as an offshoot of the Nigeria Housing Finance Programme (NHFP) set up by the Federal Government and implemented by the Central Bank of Nigeria (CBN) with the support of World Bank’s $300 million loan.

NHFP is creating the enabling environment for strengthening the nation’s housing sector by setting up sustainable framework by mortgage originators to access long-term refinancing. The new scheme is expected to scale-up mortgage and housing finance awareness.

Under the ‘My Own Home scheme, eight micro finance banks have been selected to stimulate housing finance for low-income earners in the formal and informal sectors. They will benefit from a $15 million technical assistance, which LAPO Microfinance Bank is piloting in the housing sector.

Specifically, the eight micro finance banks are expected to facilitate access to flexible housing finance for low-income earners for incremental construction or home improvement. “It could be financing to buy a piece of land for building or laying foundation on an existing land and commence building stage by stage.

“After every stage of building, and with a good history of repayment, the microfinance bank keeps financing the customer until the building is completed. Housing microfinance is not a mortgage and is not for the purchase of homes.

“Housing microfinance is closer to our traditional sense of incremental construction. Not everyone has money to finance mortgage but under the microfinance scheme, a homeowner can stretch his building plan in such a way that he takes different tranches of loan as he builds,” according to Mr. Adedeji Adesemoye, CBN’s Head, Project Administration Team of the National Housing Fund Programme.

He revealed in Lagos that the technical assistance would be provided in partnership with the Frankfurt School of Management and AFC Consultants International, Germany. “The objective is to catalyse the growth of the housing sector through de-risking the housing finance value chain and improving access to finance,” he said.

Adesemoye stated that the programme is targeted at inspiring the younger generations of Nigerians on the need to key into mortgage process and start owning homes. “We need to educate our people that owning a home with a mixture of equity and debt is not a negative thing; having a home that you will live in the next 50 years does not require you to spend all your life savings,” he said.

Originally published in The Guardian

Top 3 Kitchen Design Trends

Here are some top kitchen trends you might want to consider:

gray kitchen

Gray is the New White

While white cabinets continue to be tops, gray is the shade to break white’s top spot. The right coat of gray might be all you need to refresh the look of your kitchen. It creates an atmosphere of style and luxury, relaxing yet exciting.

 

black and white kitchen

Classic Black and White Palette

The appeal of a black-and-white kitchen never dies. Combined, these two colors are an unstoppable force of interior design perfection for homeowners everywhere.

integrated kitchen living spaces

Integrated kitchen-living spaces

As home layouts continue to change in response to the times, the home design focus has swung significantly towards the open plan concept for sure.

Uzo Oshogwe, MD/CEO, Afriland Properties Plc, Joins Panelists at NSE Maiden REITs Conference

In unswerving efforts to accelerate growth and promote liquidity in Sub-Saharan Africa’s emerging REITs market, Uzo Oshogwe, MD/CEO, Afriland Properties Plc, joined industry experts, key decision-makers, policy-makers, government officials and  private sector players,  at the maiden edition of NSE REITs Conference, to dimension the current state of the Real Estate sector and the opportunities inherent in REITs.

The objective was to deliberate and propose changes on deal structuring, capital formation, valuation models, regulatory and tax issues as well as robust risk management framework in the sector.

Discussing one of the many ways to boost returns on REITs during the 3rd panel discussions, she stated that “while REITs have become an increasingly popular vehicle for real estate ownership, maintenance still plays a key role in increasing property value and reducing risk for the owner. Consistent income generation is a major challenge in this part of the world and we need to adopt best property maintenance practices in order to protect and preserve our investments”.

In a keynote address by Honorable Minister of Power, Works and Housing, Babatunde Raji Fashola (SAN), who was represented by Ayo Gbeleyi, former Finace Commissioner, he noted that “as we converge to explore the potential of REITs, investors will base their decisions on returns not loyalty”.

Also on the panel was Adeniyi Adeleye, Executive Director, Stanbic IBTC Capital Limited, who indicated that “clarity on tax rules, accurate assets valuation, transparent financing report and investor engagement are some of the ways to define, clarify and set corporate governance standards in REITs market”.

Other attendees include: Prof. Charles Inyagete: CEO, NMRC, Hakeem Oguniran: MD/CEO, UPDC Plc, Abimbola Ogunbanjo: First VP, NSE, Olanike James: Partner at KPMG, Tolu Sekoni: Investment Principal, Actis, Olumayowa Ogunwemimo: MD, FSDH Assets Management Limited and many more.

The conference was organized by The Nigerian Stock Exchange (NSE), in line with its strategic initiative to promote and create the enabling environment for sustainable development of Real Estate Investment Trusts (REITs) in Nigeria and Sub-Saharan Africa.

 

New body takes over architects lead roles in project management

With the application of knowledge and techniques to project activities expanding into a discipline, architects who played leadership role in building construction teams are losing out project management jobs to professionals in that area.

Statistics show that between 2010 and 2020, 15.7 million new project management roles will be created globally across seven project-intensive industries. Along with job growth, there will be a significant increase in the economic footprint of the profession; the project management profession is slated to grow by USD$6.61 trillion.

This seven-year enormous anticipated growth, along with higher-than- average salaries, has created growth in the membership of the Institute of Project Management in Nigeria and toast of professionals as well as job-seekers who want to build project management skills.

However, the advent of project management practice in Nigeria seems to have relegated architects to the bottom rungs of the project management ladder. Members of the institute have now taken over the job, insisting that architects do not posses the requisite knowledge to do the work.

But some architects have braced up to the demands of the job and taken certification in project management to meet global standards and requirements. The first woman President of Nigeria Institute of Architects (NIA), Mrs. Olubukola Atinuke Ejiwunmi, said it was more or less willful relinquishing what is the prerogative of architects, who used to be the one doing the job.

She stressed that architects were at the forefront until some expatriates practicing in Nigeria started project management.
According to her, many people will come and start contesting  with architects to be in control and because there are other things architects can always do, they let go of all these works.

“So what we are now telling ourselves that we should start the practice of project management. We know that architects cannot carter for everything but we should still be there to coordinate because as
architects we had some training in electrical, mechanical and other areas.

“When you are in charge of a building, you should be able to call in the plumber, the electrician and the air condition people to make sure that those facilities are in place”, she noted.

For  the Practice Chairman, NIA Lagos state chapter, Mrs. Ifeoma George-Ufot, the architects’ non-involvement in project management is a demonstration of how things had evolved, and architects are trained to respond to changes.

Although, Mrs. George-Ufot do not agree that the number of architects in that field has decreased, she stressed that what happened was that there are now institute of project management and most of the pioneer members behind it are architects, who decided to formalize the practice.

Contributing, NIA President, Tonye Braide said it is not true that architects are really shying away from project management but it is just that there are certain principles involved in the profession.

According to him, some how, the subject matter had some managerial principles that architects need to imbibe.
“ We need to extend our training to include those principle because we are at the best frontline of being able to manage our buildings.

“We know what enters the buildings, even, when we look at the cost used in the building, it even affects certain materials that as architects managing it, the client will get some more effective solutions in the element of his business.

Braide urged architects to imbibe financial trainings to be more effective in project management.

“ What we are saying is that to be more effective, architects should add to their trainings some thing like training in financial management, which is the other aspect of management we are a bit weak”, he said.

But the chairman, Education committee of NIA Lagos State Chapter, Mrs. Ibitola Okuboyejo, believed that architects is the head of building construction team has the requite training to take care of buildings and therefore still remains the head of the team.

According to her, the project management is a fairly new professional in the industry. As far as we are concerned, the architect has the opportunity to take a course and certification to become a project manager, which makes him more qualified for the work.

Architects are trained as project managers to head the team of building construction. When there is a new profession coming, people tends to imbibe it and it is a fad, it is a new entry, when there is a new entry in an industry, the tendency is that it takes while for it to settle down.

But by and large, it is only the architects that can conceptualise a design and has the professional authority to sign practical completion certificate, and final completion certificate.

“The seemingly shadowing that is being cast is because of the new profession but a lot or architects had project management certification and a lot of them are being certified”, she added.

Originally published in The Guardian

FG to float N600bn bond to offset construction debt

Discussion have reached an advanced stage between the Federal Government and the Federation of Construction Industry (FOCI) to settle the outstanding debt of about N600 billion owed construction companies in the country.

Engineer Wolfgang Goetsch, the Managing Director of Julius Berger dislosed this at the company’s annual investors forum held recently in Lagos.

Goetsch said: “The whole construction company is ruining under the heavy burden of debt. The entire equity and free funds of this companies are lying with the Ministry of Finance or the Federal Inland Revenue Service (FIRS) as outstanding payments on contract or tax refunds.

“The government today understands that if these past due obligations are not paid, these companies cannot inject new funds in any project awarded today.” He further disclosed that, the government has agreed that the old debt payment would also bear interest since most of the companies took loans to finance these constructions and have continued to pay default interest on the outstanding amounts to the banks.

He said: “Under the leadership of FOCI, we are having fruitful discussion with the Federal Government and in three months, we should finalise, so that bonds can be issued. We had same process in 2005 and 2011.”

The government would likely issue a 5-10 bond to the construction companies which are expected to have a positive impact on the balance sheet of the construction companies. ‘‘

Originally published in Daily Trust

PFAs invest N216.8bn in real estate

The Pension Fund Administrators have invested a total of N216.8bn of the increasing funds under the Contributory Pension Scheme in real estate.

Latest figures obtained from the National Pension Commission indicate that this amount represents 3.4 per cent of the total N6.2tn assets under the management of the pension operators.

The commission also stated that substantial funds had been invested in domestic and foreign ordinary shares, the FGN and state securities, among other investment portfolios as of the end of February.

The Chairman, Pension Fund Operators Association of Nigeria, Mr. Eguarehide Longe, who spoke with SUNDAY PUNCH on Friday, said the pension funds were active in different investment portfolios.

He said the bulk of the funds had been invested in government bonds, adding that some governments that had taken the money invested it in infrastructure.

Ideally, he explained that money borrowed for a reasonably long term should be used for long-term assets and not to fund recurrent expenditure.

“We are there to invest in a way that the funds will not be lost,” he said.

According to him, if the funds are used for infrastructure, this can have significant impact on the economy.

Longe, who said some investors had been approaching the operators to access the funds, noted that the real sector was not a place where they could just invest huge amount, adding that sectors such as agriculture were areas that needed to be well understood before investing the funds there.

The Pension Reform Act was enacted to provide a contributory scheme for the payment of retirement benefits of employees in both public and private sectors.

The Act mandates every employee to open a Retirement Savings Account in their name with any Pension Fund Administrator of their choice and notify their employers.

Employers, according to the law, are required to deduct eight per cent of the workers’ monthly emolument and add another 10 per cent, which should be paid into each employee’s RSA not later than seven days after the salary is paid.
Originally published in The Punch

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