There is no doubt saying that with the huge deficit of 17.45 million units of housing (2013), emerging opportunities in the commercial and retail categories and partnership opportunities in the areas of housing technology and finance, the sector continues to hold exciting promise for the future.
Against this backdrop, UACN Property Development Company plc (UPDC), a company listed on the construction/real estate sub-sector of the Nigerian Stock Exchange believes that there is good reason for optimism.
The implication is that the spill-over effect of fortune the business opportunity holds for UACN UPDC will translate to higher returns on investment to its investors at the stock market.
The company’s optimism results from its capability and zeal to surmount challenge, mitigate risks, take advantage of profitable opportunities, sustain its pedigree, and surpass achievements year-on-year.
For real estate development, analysts expect that the revised guidelines for Primary Mortgage Banks (PMIs) and a fully operational Nigeria Mortgage Refinance Company (NMRC) will provide a wider scope of activities and opportunities for estate developers, and ultimately result in affordable mortgage and increased home ownership for middle- and low-income earners.
With a share price currently trending next to that of construction giant – Julius Berger, which is also listed on the same sub-sector, UACN Property Development Company in 2013 delivered a solid performance, which is consistent with its pledge and promise to its shareholders, customers and the investing public.
“Our growth momentum has increased and reinforced our standing as a market leader,” Larry Ettah, chairman, UACN Property Development Company, told shareholders at the company’s 16th annual general meeting.
The company, which successfully completed the floatation of the UPDC Real Estate Investment Trust (REIT) last year on a capital value of N26.7 billion, of which UPDC currently holds 62.2 percent, plans to reduce its holding to 40 percent in line with its strategy.
In the financial year ended December 31, 2013, UPDC posted revenue of N11.29 billion, against N12.04 billion in 2012. Profit before taxation (PBT) was N3.71 billion against N2.45 billion, while profit after tax (PAT) stood at N3.16 billion. Following the approval of the shareholders, the board of directors paid out N962.5 million worth of dividend, representing 70 kobo per ordinary share held by members as of May 5, 2014. This is in addition to a bonus issue of 1 for 4 shares to shareholders who are on the register of members at close of business on May 12, 2014.
While reviewing the Nigerian real estate industry, Ettah noted that it was largely characterised by the same prevalent issues of lack of adequate long-term funds, high interest rates, regulatory bottlenecks and inadequate linkage of housing finance to the capital market.
Amid all these, Ettah noted that: “In the luxury residential category, we completed and delivered to buyers the prestigious 32-unit ‘Cameron Green’ Ikoyi. Phase 1 of Metro City, Abuja, comprising of 88 units of mixed residential apartments, was also completed and is being gradually handed to buyers, while construction work on Phase 2 has commenced. We also took advantage of the lack of a formal retail channel in the Festac axis of Lagos State by undertaking the ongoing Festival Mall development, which is expected to open to customers by end of 2014.”
He noted further that “the hotel arm of the business, Golden Tulip Festac, also performed well in 2013, with room occupancy averaging 44 percent, an increase of 91 percent over 2012. With five international airlines currently utilising the hotel’s facilities and continuing upward trend in residential conferences by blue-chip corporate customers, the hotel is set for improved performance from 2014. We plan to develop the adjoining Block B of the hotel into residential apartments in 2014.”
He also spoke on the outlook for the real estate sector, saying: “For real estate development, it is expected that the revised guidelines for Primary Mortgage Banks (PMBs) and a fully operational National Mortgage Refinance Company will provide a wider scope of activities and opportunities for estate developers and ultimately result in affordable mortgages and increased home ownership for middle- and lower-income earners.”
Iheanyi Nwachukwu
