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What Investors Need to Know For Profitable Investment in Commercial Real Estate Business

…as Greystone Tower opens for home buyers, investors, corporate tenants

Investing in real estate is an interesting, yet very intricate and challenging business. It is all the more challenging if the investment is in commercial segment of real estate, especially prime office space.

This explains why a prospective investor needs to know a few things this kind of investment needs in order for him to make profitable investment. There is need also to understand what both the external and interior parts of the space should be, or look like.

Professionals and marketers in this space advise that a commercial prime office building must have a flexible and technologically-advanced work environment that is safe, well-designed, well-built, and accessible. It should accommodate the specific space and equipment needs of its occupiers.

Udo Okonjo is the CEO, Fine and Country West Africa International-a real estate marketing, advisory and consultancy firm. The company has been operating consistently at the luxury end of the Nigerian real estate market and is reputed for successfully closing deals on many high end properties in Nigeria.

Okonjo explained to BusinessDay that in building a Grade A prime office space, special attention must be paid to the selection of interior finishes and art installations, particularly in the reception, meeting rooms and common areas. She added that well-maintained restrooms, lifts, provision of cafeteria, gym, crèche, smoking patio’s (terraces) should also be considered.

There are different methods of classifying Grade-A and Grade-B commercial office spaces. Okonjo points out that within the context of the Ikoyi and Victoria Island commercial office space offerings, Grade A buildings, such as the Greystone Tower, are unique in their location (accessibility) with a simple but iconic design and high construction quality.

Greystone Tower is an iconic mixed-use development strategically located at the intersection of two major business hubs in Victoria Island, Lagos. The building, designed by Majoroh Partnership and being built by Dori Construction and Engineering Limited, is standing on 18-floors.

According to the project managers, it has five floors of parking space; one of the floors consists of 4units of 3-bedroom residential apartments; there is a ‘concessionary floor’ with Restaurants, Creche, Clinic, Café & Gym. “Greystone promises to be one of the finest developments redefining the Lagos city skyline with its organic and responsive warm and clear glass façade,” the project managers assure.

Okonjo disclosed that at the building’s ‘Open House’ held a couple of weeks ago, developers, agents and investors were educated on the kinds of facilities that were made available, the selling points of the tower and why it was a great investment for both commercial and residential use.

The finishing of Grade A prime office buildings is always of the highest standards and, like Greystone Tower, they are equipped with technologically-advanced building safety, mechanical, electrical, and communications systems. Grade-A buildings are not only highly rated within their local communities, but are known to compete with similar developments in developed countries across the globe.

They also incorporate sustainability features and are value-engineered from the design stage to be Green/Leadership in Energy and Environmental Design (LEED)-certified developments.

Any standard prime office building must have features such as meeting/conference rooms; cafeteria, coffee shop; reception; with state-of-the art visitor management/access-control systems, as well as information central location for building directory, schedules, and general information.

The building should also have a common space and lounges for informal, multi-purpose recreation e.g the entertainment lounge at the Nestoil Tower and the water-front lounge at The Wings In Victoria Island, environment functionalities e.g. pressurized and fire-rated stairwells, railings at the staircases of the emergency-exits etc.

Provision of adequate alternative power-supply systems e.g. power generators and ups systems is also important just is necessary to incorporate water and sewage treatment plants; accessibility to the building at any time of the day – weekends inclusive

Other important features include provision of information technology dedicated server-room for each office unit, drivers lounge and maintenance room, dedicated kitchen; raised floor systems; energy efficiency – motion-sensored lights and water taps, and air-recycling systems Lagos’ state-of-the art security systems with closed circuit television cameras (CCTV).

There should be technologically advanced fire-alarm and fire-fighting systems – NFPA – 13 implemented; temperature monitoring in the critical areas e.g. Panel, ATS, control rooms etc; installation of health, safety and

Provision of adequate alternative power-supply systems e.g. Power Generators and UPS systems is important just as water and sewage treatment plants; accessibility to the building at any time of the day – weekends inclusive, and provision of information technology dedicated server-room for each office unit.

There is also need for drivers lounge and maintenance room, dedicated kitchen, raised floor systems, energy efficiency – motion-sensored lights and water taps and air-recycling systems.

Source: businessdayng

Africa’s Real Estate Market Upbeat in H1’19 with Over $500m Transactions

…as Nigerian investors close deals, anticipate increased activities in H2’19

African real estate market never had it so good in the previous 24 months as it did in the first six months of 2019 when the market recorded over half a billion dollars in 10 significant transactions across multiple jurisdictions and sectors.

In Nigeria, after 12 straight quarters of negative growth that ended in the first quarter of 2019, the market has started waking up with investors closing deals and hoping to record marginal increase in activities in the second half of this year.

The last six months of the year have been the most promising period in the market and this was reflected in the high number of calls and inspections which the investors reveal they have been receiving for both residential and commercial properties.

“We have seen movements in the market; we may not see what we had in 2008 nor the boom days of 2011 to 2013, but what we see happening now are increased activities and deal closures,” MKO Balogun, CEO, PFI Global, confirmed to BusinessDay on phone.

“Though the economy is passing through a slowdown, I don’t see that affecting real estate, unless something crazy happens which we don’t expect t,” Balogun said.

The growth and opportunity displayed by a diverse spread of international funds, Development Finance Institutions (DFIs), banks, institutional investors and others are evidence that despite apparent indifference to African opportunities in SA boardrooms, the continent’s real estate sector has evolved and become increasingly more liquid and provides value in key nodes and sectors.

Some of the most high-profile deals include well-known listed funds and global investors including Growthpoint Investec African Properties Investment Fund (GIAPF), Grit Real Estate Income Group, WeWork, Centum Real Estate, Nedbank, Standard Bank, the IFC and the UK’s CDC.

Due to subdued growth potential and earnings locally, Central and Eastern Europe become increasingly popular for South Africa’s property sector, but analysts are asking if such funds should not be investing closer to home.

Kfir Rusin, the host of Africa Property Investment (API) Summit, the most significant annual gathering of capital investors in African real estate, is particularly concerned about this growing trend.

API, already in its 10th edition, will be taking place on October 2 & 3, 2019 in Johannesburg. Its stakeholders have been more active in the first half of 2019 than in the previous 24 months.
“For investors and developers looking for data and partners experienced in African development or looking to sell prime assets, there are men and women responsible for structuring and executing these mega deals who will be at this year’s conference,” Rusin disclosed.

These include GIAPF’s managing director, Thomas Reilly; Grit’s CEO, Bronwyn Corbett; multiple senior investment officers from the IFC; Standard Bank’s head of Africa real estate, Niyi Adeleye; CDC’s Illaria Benucci; Centum’s RE MD, Samuel Kariuki, and many more in attendance.

“The market has moved forward in the past six months, and we’re thrilled that so many major dealmakers will be at the API Summit to transact and share their experiences with our delegates,” he said.

These high value transactions, while not a repudiation of the South African-listed sector’s muted view of the African opportunity, do provide a compelling narrative that the continent’s property markets are investable, but require nuance and insights. It’s not simply a copy and paste that what has worked here (SA) will work elsewhere, said Rusin.

According to real estate analyst Craig Smith of Anchor Stockbrokers, Africa’s top markets are “definitely a more attractive entry point than 18-24 months ago” but cautions that investors still need to exercise a “higher level of diligence” when investing.

And while deal many South African funds continue to look at Central and Eastern Europe for scale (sizeable transactions) and positive funding spreads, the transaction spread by API Summit’s investors point to a market that is expanding, which is in line with his view that “the opportunity set over the long term is immense”, said Smith.

“We’re witnessing sophisticated deal structuring in affordable housing; hospitality; logistics; office spaces and mixed use, across countries and regions,” said Rusin.

Top 10 real estate deals in the first half of the year into which billions of investable funds have gone include the Growthpoint Investec African Property Fund to acquire malls in Ghana and Zambia; Centum RE & Nedbank ±$75 million debt deal for their Two Rivers development project, and IFC investment in Hilton in Lusaka and Protea Hotel, both in Zambia.

Others are African Logistics Properties (ALP) which signed debt restructuring deal with Standard Bank; Shelter Afrique in Affordable Housing deal with Habitat International; Grit’s purchase of Senegal Club Med at $12.5 million with development plans of $28.8 million, and CDC’s commitment to mezzanine debt investment in Teyliom Hospitality with a deal size put at $30.7 million.

Within the period, WeWork opened its first of many African office locations in Johannesburg; Actis & Shapoorji launched affordable housing Joint Venture in Kenya with the deal size put at $120 million, while Westpark & Siemens are to build sustainable industrial park.

Regarded among local and international decision makers as Africa’s largest property gathering, the API Summit is recognised as a platform for investing, but it is also vital in developing deeper layers of transparency for investors looking to meet and understand the continent’s divergent and complex markets to avoid previous mistakes committed by SA developers.

“Africa’s markets are still relatively opaque, and it is vital that these markets continue with their efforts to improve transparency,” Smith said. “The experience of GIAPF is crucial in my view as this will provide evidence of performance to the SA market.”

Source: businessdayng

Amid Global Headwinds, does the Current Naira Policy Serve Nigeria well?

Rap star and Philadelphia native Beanie Sigel’s smash 2004 hit single “feel it in the air” about a man with dark foreboding signs of some negative event about to take place, reminds one of happenings in the global and Nigerian economy lately.

Escalating U.S.-China trade tensions threaten to worsen global growth after President Donald Trump threatened to impose additional tariffs against China, last week.

President Trump also added for good measure on Friday that planned talks with China next month could be called off.

As the showdown between the U.S. and China persists, investors and emerging to developed markets, are struggling to gauge the likely outcome on the global economy and potential impact on asset prices.

Oil prices have already entered a bear market (defined as a 20% drop from recent highs), while global stocks have also sold off. Gold often seen as a safe haven however, is being bid as well as its digital counterpart Bitcoin.

Some countries are choosing to shoot first and ask questions later.

Three central banks across Asia Pacific delivered surprise interest-rate cuts decisions last week as policy makers took aggressive action to counter a worsening global economy.

The Reserve Bank of India lowered its benchmark rate by 35 basis points to 5.4 percent, its fourth cut this year.

New Zealand reduced its rate by 50 basis points to 1 percent; economists had forecast a 25 basis-point reduction, while the Bank of Thailand’s cut rates by 25 basis-points to 1.50 percent, the first in more than four years.

The U.S Federal Reserve’s rate cut last week paved the way for much of the easing by Central Banks in Asia, even as markets are pricing in the chance of another cut by the Fed in September.

So why are these Asian countries so eager to have weaker currencies implied by the rate cuts?

For Thailand its surging currency brought about by a deluge of portfolio inflows, is hurting exports and tourism as the Thai baht (currency) has gained about 8 percent against the dollar in the past year.

In India, the fiscal authorities had earlier called for “significant” policy easing from the central bank to help revive growth, while New Zealand’s policy actions were in response to weakening domestic demand amid global trade tensions that threaten to curb exports and commodity prices.

Conventional monetary policy would suggest the Central Bank of Nigeria (CBN) would be in lock step with its Asian counterparts and begin an easing cycle in earnest given all the headwinds described so far.

However like with all things Nigerian, it is not quite so simple.

The CBN is strongly committed to a stable Naira policy, and as such has: kept its benchmark policy rate elevated at 13.5 percent, tightened liquidity through the cash reserve ratio (CRR) which is at 22.5 percent, and periodically sold Open Market Operation (OMO) bills at high yields to mop up excess liquidity and attract foreign portfolio flows.

In essence a mirror opposite of what the mentioned Asian countries are trying to engineer/achieve.

To understand the dilemma of the CBN it will help to pay attention to the structure of the 4 economies.

Exports of goods and services as a percentage of GDP in Thailand was reported at 68.9 percent in 2018, New Zealand 27.6 percent, India 19.7 percent and Nigeria 13.2 percent, according to the latest World Bank data.

In essence Nigeria had the lowest export base among all four countries and even at that its exports are the least diversified with a single commodity oil responsible for some 95 percent of all export dollars earned.

So in essence Nigeria is using the proceeds of a single export commodity (whose price is becoming increasingly unpredictable amid a supply glut), to prop up its currency (the naira), in a battle it surely will not win in the long run, but clearly cannot afford to lose.

Perhaps it may make more sense to begin to nudge the country into becoming an export base for global manufacturers, which would probably entail a free floating naira trading closer to its Real Effective Exchange Rate (REER).

If that were to be the case then the CBN would not find itself in the current situation where it has been stuck in a tight monetary policy stance for much of the past 5 years, even as Nigeria entered and exited a recession, while remaining trapped in a low growth trajectory.

Larry Summers, a Harvard professor, and former U.S. Treasury secretary and White House economic adviser during the global economic crises of 2007/2008 sees a less than 50/50 chance that the U.S. enters a recession in the next 12 months.

Such a scenario if it comes to pass would likely clobber commodity prices from copper to crude, with a negative fallout for emerging markets like Nigeria.

In the last verse of “Feel it in the Air” a clearly paranoid Sigel asks “Can you feel the grim reaper floating’?”

For Nigeria, which is perhaps in a worse fiscal and monetary shape since the last recession in 2016, perhaps it’s time for the authorities to get paranoid, and begin to pull out all the reform policy stops.

Source: businessdayng

Paint Makers Shed N94m in Revenue as Adulteration, High Cost, Bite Harder

Nigerian publicly quoted paint manufacturers felt the backlash of adulteration of products by smaller industry players and high production cost on their mid-year earnings numbers, evidenced by weaker sales and dwindling margins.

Between January and June 2019, Berger Paints, Chemical & Allied Paint (CAP), Premier Paints, Portland Paints and Meyer generated a combined sales revenue of N7.42 billion, which is some 1.3 percent or N94 million lower than N7.51 billion made a year earlier.

A report titled ‘The Nigerian Paints & Coating Market’ published by Frost & Sullivan, an American consulting firms with presence in six continents including Africa, cited high energy cost, government neglect, product debasement and high cost of raw materials as major woes that has been facing industry players over the years.

These challenges, they say, hurt margin of players and in some cases compel them to lower prices to the competitive nature of the market.

Of the five companies considered, only CAP, Nigeria’s biggest paint maker by market capitalization, saw positive revenue growth of 3 percent in the review period.

Sales of Berger Paints, Portland Paints and Meyer slumped by 1 percent 5 and 15 percent respectively, with Premier Paints bottoming with 24 percent contraction in top-line.

Generally, listed paint makers did not fare well in terms of profitability as two of five saw betterment in after-tax profit.

Berger Paints, the second biggest player by market value, led the pack with some 19 percent improvement in profit to N145.6 million, while CAP came a distant second with some 6 percent growth.

Post-tax profit of Portland Paints plunged 26 percent, while Premier Paints and Meyer saw losses reducing to N14.3 million and N29.6 million in the review period from N36.4 million and N93.9 million incurred last year.

To some analysts, cash flow generated from operating activities is the best metric to assess a firm’s ability to survive. This is because without positive cash flows, a firm may have to embark on borrowing, raise additional equity or quit operation.

A dive into the companies’ cash flow statement revealed that the five listed paint makers are cash-strapped as money earned from operations trended downward.

CAP generated N530 million from operations in H1 2019, to clinch the first spot, albeit this is 34 percent lower than N802 million realized last year.

Berger and Portland got N63 million and N14 million respectively from operations, representing a massive contraction from N106 million and N245 million earned a year earlier. While cash deficit of Meyer slowed to N40 million from N52 million, that of Premier Paint worsened to N3.3 million from N534, 000.

However, having negative cash flows for a time might not be a bad thing, if a firm is building another plant for example, could pay off in the end if the plant generates more cash.

Paint makers, for long, have been grappling with inability to source raw materials locally, as about 60 percent of inputs are imported and subjected to multiple levies, which further takes a toll on performance.

Despite this, three of five paint makers – CAP (52%), Berger (54%) and Portland (63%) were cost efficient in the first half of 2019 given their relatively low direct cost to revenue ratio.

Premier Paints saw cost margin trended slightly higher to 72 percent, with Meyer bottoming with 76 percent margin, a tangible upscale from 57 percent last year.

A cursory look at performance on the Nigeria Stock Exchange (NSE) revealed that leaders – CAP & Berger, have returned losses in excess of 20 percent year long.

The Nigerian paint industry can be broken down into two segments namely

Decorative Paints, Industrial paints and coatings.

The Decorative coatings comprises a majority of the Nigerian paints & coatings market representing an estimated 71percent of total volume and about 60percent of market value, while, the Industrial coatings accounted for about 29percent of total volumes in 2012 at an estimated $80 million.

Total sales volumes were an estimated 37 million litres. This segment can be broadly categorised into Industrial protective coatings, Marine coatings, Wood finishes, Coil coatings, Powder coatings, and Auto refinishes.

The Nigerian paint market is highly fragmented largely due to the low barrier of entry.

Major drivers of the industry are high demand for real estate properties, growing construction market, however, rising costs, growing competition coupled with activities of substandard and adulterated products has eroded the profit margins of most companies.

It is projected that sales value in the industry will reach an estimated $400 million in 2020, a Compound Annual Growth Rate of 9.01 percent.

If well protected, the paint industry looks very bright although this depends on economic recovery in the real estate sector which is still sluggish and big tickets projects. The Standard Organization of Nigeria must also ensure that only brands that meet standards are allowed in the Nigerian market.

Source: businessdayng

Guides To Effective Land Acquisition In Nigeria

The general title of the Land Use Act itself shows the intention of the drafters as targeted mainly to deprive land owners of their claims to land in any part of Nigeria. Little wonder then that it is “an act to vest all land comprised in the territory of each State solely in the Governor of each State, who would hold such in trust for the people and would henceforth be responsible for allocation of land in all urban areas to individuals resident in the State and to organisations for residential, agriculture, commercial and other purposes …”.

As can be seen from this piece of very inelegant drafting, the short title of the Act has given it away, namely a smart venture by government to ‘steal’ land from the people. The motive behind the Land Use Act itself can be for another day, in so far as the drafters have by now succeeded in smuggling it into the Constitution, as a way of protecting their deals.

Legally speaking, land is a kind of real estate, or the solid surface of the earth that is not permanently covered by water and includes the natural resources therein. Part of the reasons why land ownership has become very fundamental is because of the legal principle of quid quid plantatur solo solo cedit, which means that ‘whatever is affixed to the ground belongs to the ground’.

This maxim was applied under Roman law to determine that trees and crops were sold with, and formed part of the land. In a country like Nigeria where so much dependence is on mines and minerals, including gold, oil and gas, there has been a lot of disputes and court cases on ownership of land.

This is the spirit behind the theory of compulsory acquisition of land, where government has perfected the style of divesting traditional ownership of land from the people and then turn around to re-allocate same to others, under the guise of overriding public purpose, which has now been extended to commercial development of estates. This is what the courts must tackle and resolve on the side of the people, as any purpose that does not bear general utility value, such as land acquired for building schools, roads, hospitals or such other public infrastructure, should not in any way count as ‘overriding public purpose’.

How do you take over land, acquire it compulsorily and then turn around to allocate the same land to a private company, who then develops a layout plan and begins to sell the same land to members of the public, who are not part of the land-owning family? The original land owners and their coming generations are then thrown into the streets and at times rendered completely homeless. It is injustice of the highest order, which must stop. How do you rob Peter to pay Paul?

Suffice it to say that presently, the principles governing the determination of ownership of land are fairly well settled under Nigerian law, at least from the decisions of the Supreme Court in the cases of Idundun v Okumagba, Ogunleye v Oni and Abioye v Yakubu.

Indeed, it has been suggested that part of the method of decongestion of cases in the Supreme Court is to stop land cases from proceeding to the apex court, except where there is a landmark request to depart from the known principles. The summary of my foray into the origin and operation of the Land Use Act is to emphasize the point that the best land in Nigeria today is government land, that is land allocated directly by the government. For in such allocation, there is no dispute as to traditional ownership, government having ‘stolen’ the land from the original land-owners.

So, if you want to buy land and you have the resources, search out for direct government allocation. Following that is land with global title, such as gated estates, properly laid out and allocated strictly based on the lay-out plan. It becomes very rare to run into individual crises in such acquisition. In these cases, the land is expensive but with assurance of good title. Then again, verification of title is easy, as title documents are properly kept and documented with the relevant government agencies and the process of approval becomes fairly predictable and easy.

That then leaves one with land covered by customary title, in which case the vendor is relying on traditional history of the family to market the land. In some States, this has become like a gold mine for land-owners, due mainly to some kind of collusion with some government officials. As far as the government is concerned, virtually all land in the State has been acquired compulsorily, with minor cases of excision of few portions to the hapless land-owners.

On the other hand, the land-owners themselves have perfected the style of denying any compulsory acquisition, with court cases upon court cases. In most judicial divisions in Lagos State, at least about 70% of the cases relate to and disputes, principally by land-owners to challenge government acquisition. To determine title in such circumstance becomes extremely difficult, as most land-owners go far beyond the excised portions or even sell the acquired portions outrightly, with all manner of claims of pending allocation.

So, if you want to acquire land therefore, the first issue you must determine is the title of the vendor, as every other thing depends on that factor. Title is the beginning and ending of land ownership, being the foundation of any claim to land. A quick guide in this regard is to avoid land transactions laced with subtle pressure, as where land-owners claim competing multiple interests by many supposed buyers.

If such were to be the case, the land should have been sold ever before you got there. So, you don’t give in to self-induced urgency of land-owners, but rather take your time to visit the relevant organs of government to confirm title. Where the title is registered, then your next assignment is to visit the appropriate Land Registry, to confirm ownership and the existing transactions on the land, to search out for any possible encumbrance, such as pending mortgages, etc.

You then proceed to the office of the Surveyor-General, to determine the actual location of the land. In some cases, the survey plan attached to the title document is in a totally different location, as many of the so-called ‘surveyors’ engaged by land-owners are not the licensed surveyors and they just cook up land from nowhere. The Lagos State Government has developed a new style of confirming the authenticity of certificates of occupancy upon payment of a token fee, as many certificates have been cloned in the past, leading to huge loses. The other commendable aspect is the online search for land with pending court cases.

When you are satisfied with all these, you then conduct a ‘social search’, by going around the neighbourhood to secretly investigate the land, through security men, market women, shop owners, Community Development Associations, vigilantes, etc, who all have the history of the area and will reveal a lot to you that may not be contained in any land registry.

When you have satisfied yourself with the title and other searches, you then discuss the price of the land and agree on a figure. Thereafter you will engage your own competent and licensed surveyor to take the accurate measurements of the land to produce a survey plan, as you cannot claim to buy land without its clear identity, as to its accurate size and location. The surveyor will also help to determine that the land being offered is within the land owned by the vendor, so that you don’t end up paying for another person’s land, unknowingly. If you are satisfied to proceed to payment, then you must perfect all documentations, as to purchase receipt, contract of sale or deed of assignment, as appropriate. At the point of execution, you may do well to engage photographers and even video recording of the event, at times just for record purposes.

You must proceed to the point of possession immediately, by gathering your workmen to commence immediate development of the land, such as clearing it, erecting a shed or store for building materials, security house, fencing the land, or such other make shift developments that will show clearly that the land has been acquired. In practice, possession of land is classified as constituting 90% title, as once land is developed and occupied, you need a court order to evict the occupier, even though he is a squatter or trespasser.

Part of the problems being faced in the quest for genuine land acquisition is the probative cost of free land, which factor has turned many into victims, leading to huge loss of money in some cases. From all that I have discussed above, it becomes clear that to successfully acquire land, you need the services of experts, like a lawyer, a surveyor or an estate agent, be ready to pay for their fees and then allow time for proper search and due diligence. Whereas the Lagos State Government is commended for all efforts to simplify the process of land acquisition through seamless search procedure, the solution is to release all acquired land to their owners and allow them to freely dispose of or negotiate transactions genuinely.

Land ownership is mostly historical and it constitutes some form of customary heritage for the people, so they should not be robbed of their customary inheritance, only to pass same to others for a fee. Government should help regulate the process of sale and charge some fee thereafter, but the current regime of total and absolute acquisition cannot be of help to anybody, at least judging by the volume of court cases pending against the government by land-owners, who are bent on recovering their heritage.

By Ebun Adegboruwa (SAN)

Houston, Atlanta Among 15 U.S. Cities to Buy Affordable Homes

Although real estate is becoming increasingly unaffordable for the typical American, there are still places where its possible to become a homeowner on an average income.

A report compiled by CNBC’s Make It identified 15 cities where the qualifying income to purchase a home with a 10 per cent or 20 per cent down payment is an annual salary of $60,000 or less, based on data from the National Association of Realtors’ Metropolitan Median Area Prices and Affordability index from the second quarter of 2019.

The data assumes a 4.1 per cent mortgage rate for all areas and a monthly principal and interest payment limited to 25 per cent of a resident’s income.

The report listed Cleveland, Ohio; St. Louis, Missouri; Lincoln, Nebraska; Baton Rouge, Louisiana; Atlanta, Georgia and Philadelphia, Pennsylvania among the 15 cities where you can become a homeowner while earning $60,000 a year or less Also listed were three cities in Texas which are Houston, Dallas and San Antonio. Others are Jacksonville, Florida; Spokane, Washington; Charlotte, North Carolina; Nashville, Tennessee; Orlando, Florida and Milwaukee, Wisconsin.

Source: dailytrust

Pension Fund Assets Grow 10.28% to N9.33trn in Six Months

The National Pension Commission (PenCom) has revealed that the total pension fund assets as at June 30, 2019 stood at N9.33 trillion.

Business Post gathered from a report released by the agency that from the figure moved from N8.46 trillion in January 2019 to N9.33 trillion in June 2019, indicating an increase of 10.28 percent in the period under review.

From the data, the pension fund assets recorded an inflow of N21 billion from pension contributors in the second quarter of this year, with government securities making the highest contribution of 69.55 percent, largely dominated by 47.60 percent of FGN bonds and 20.77 percent of treasury bills.

Another big contributor to the pension fund assets were local money market securities with 11.21 percent and the domestic equities contributed 5.76 percent, while foreign shares made a meagre 0.70 percent.

Business Post observed from the data that in the second quarter of 2019, investment in FGN securities dropped to N6.49 trillion in June from N6.55 trillion in April, while investment in corporate debt securities increased in the same period to N505.82 billion from N474.32 billion, with investment in local money market securities rising from N947.34 billion in April to N1.10 trillion in June.

However, investment in mutual funds decreased to N23.67 billion in June 2019 from N24.52 billion recorded in April 2019.

Source: businesspost

Housing Microfinance Can Help Poor People Build Better Homes

But it comes with high interest rates

Whenever michael jjoga earns some money from his welding business, he buys a bag of cement. Brick by brick he has built a two-roomed house for his family on land he cleared himself in Wakiso district, in central Uganda. Another house stands half-finished nearby until he collects enough iron sheets to make a roof. Across the glade a chorus of bleats drifts from a crumbling hut, shaped from thatch and earth. He used to live in it; now it shelters his goats.

By 2025 some 1.6bn city dwellers will be living without decent, affordable housing, according to consultants at McKinsey. Many more people lack adequate shelter in the countryside. While governments and private developers fall short, people like Mr Jjoga are building houses themselves. They construct in stages, over years or even decades, preferring to buy a stack of bricks than to put money in a bank. Some move in well before completion. Lenders long overlooked this self-help model, but financed it unwittingly: perhaps a fifth of microloans to businesses are thought to be diverted into housing.

Now some lenders are starting to target this market directly. Conventional mortgages are rare in developing countries: in Uganda, which has 40m people, there are only 5,000. Instead, banks and microlenders offer smaller housing loans, paid back over shorter periods of 1-3 years. A family might borrow for a cement floor, and then for an extra room. Two-thirds of the firms offering housing microfinance entered the sector in the past decade, according to a global survey in 2017 by Habitat for Humanity, a non-profit organisation.

Many borrowers lack land titles to use as collateral. Swarna Pragati, an Indian microlender, gets around the problem by establishing de facto ownership through village meetings. Select Africa, which operates in east and southern Africa, offers unsecured housing loans to salaried workers, deducting repayments from their pay cheques. Centenary Bank in Uganda accepts untitled land as security. Robert Canwat, its microfinance manager, says attachment to home makes the whole family monitor repayment. “Everybody becomes your recovery officer,” he smiles. Most lenders report that housing loans are paid back more reliably than other products in their portfolio.

Houses built incrementally by local artisans are often shoddy. Some lenders try to improve them by providing technical support, such as sample plans or an engineer’s advice. Others help borrowers buy appliances such as solar panels and water filters. One promising innovation is iBuild, an Uber-like app in parts of Africa and Asia. It connects households to builders and suppliers, allowing them to compare quality and price as well as to apply for loans.

Finance also comes directly from suppliers. cemex, a Mexican cement giant, offers credit through its Patrimonio Hoy programme. Customers pay a weekly fee. In return they get technical advice and advance delivery of building materials. The scheme has reached 600,000 households and extended more than $300m of loans since 1998.

Unlike business loans, which can be paid back out of greater profits, lending for housing creates no obvious income stream. But home ownership frees borrowers from paying rent. And some borrowers use loans to build rental units, shops or even schools. “Think of the house as a place from where the household earns money,” says Kecia Rust of the Centre for Affordable Housing Finance in Africa, a think-tank.


Habitat for Humanity recently commissioned two evaluations of microfinance products it had developed with lenders in east Africa. In Uganda, the likelihood that a household had a separate kitchen rose by 22% after taking out a loan. In Kenya, borrowers upgraded their roofs and walls. In both cases satisfaction with housing rose, though stress levels and school attendance were unchanged. Repayment rates have been high. “We’ve proved there’s a business case,” says Kevin Chetty of Habitat.

Microcredit is expensive, because lenders must assess risk and monitor repayment on even the tiniest amount. Housing loans are usually larger than business ones, so processing them is proportionally cheaper. But they also have longer maturities, which means lenders must chase scarce long-term funding. Throw in ponderous law courts and weak competition, and annual interest rates typically reach 20-35%. Some homebuilders are certainly eager for credit. But until such structural problems are addressed, others will keep doing things the old way—even if that means waiting longer to put a decent roof over their heads.

Source: amp-economist

Inside Multi Billion Naira Kano Economic City of Brains and Hammers Ltd

Phase 1 ready by Dec 

Developer The first phase of the Kano Economic City (KEC) project has reached 85 per cent completion, making the December, 2019, deadline for construction work to be completed realistic.

Conceived about 12 years ago by the administration of a former Kano State Governor, Malam Ibrahim Shekaru, and estimated to gulp about $461m, the project faced a major setback when the parties involved could not reach a balance in the financial agreement involved. KEC is strategically located along the Zaria-Maiduguri Road, just a 15-minute drive from Kano Town. Under a Public-Private Partnership (PPP) agreement, the KEC project was expected to be implemented in three phases spanning five to seven years under a joint venture partnership between the Kano State Government and a foremost indigenous real estate and infrastructure development company, Brains and Hammers Limited.

Upon completion, the project will be developed under a Build, Operate, Own and Transfer (BOOT) arrangement. The city was designed on a 117.2-hectare to provide over 80,000 Square Metres (sqm) of mega wholesale and retail warehouses and 10,000 shops and stalls targeted at harnessing product value-chain opportunities, as well as to improve economic growth. KEC is designed to accommodate a World Trade Centre (WTC), a wholesale and retail market comprising state-of-the-art warehousing facilities totalling over 80,000sqm and over 10,000 wholesale and retail shops, an education institute, light factories/industries, a conference centre, banks, an office complex, a health center, police station, fire station, international coach station, a five-star hotel, among other modern facilities

. The developer, Brains and Hammers Limited, said the central components of KEC included, but was not limited to trailer and passenger motor parks, amusement park and petrol stations. However, the project was said to have been abandoned for some years until the present Kano State Government under Gov. Abdullahi Umar Ganduje resolved to complete it under its bid to reassert the state as one of the leading economic centres in the country. Gov. Ganduje made a commitment to see that the project comes to reality.

After mobilising the co-partners to site, the governor recently visited the Phase 1 site of KEC; which when completed will house mega GSM and pharmaceutical markets. He said, “My administration is particularly interested and determined to make a global city in Kano that can compete with other business cities in the world in order to have full and better economic potentialities and opportunities for the benefit of all.”

The Head of Design and Project Coordinator of Brains and Hammers, Arch. Muhydeen Afolabi, said his company would secure hybrid funding for the project, coordinate technical development and construction of the market, market various products, as well as services of KEC and discuss off-taker financing models with prospective financiers. Arch. Afolabi added that the Kano State Government on the other hand, would provide land as equity contribution to the project, policy formulation and enforcement in respect to trade and commerce which would accelerate and support occupation of KEC.

Afolabi further revealed that the state government would lead the sensitisation of traditional rulers and the general public, as well as joint facility management of the market complex for a period of 25 years with an option of a renewal. He said, “We have gone far on it, and as you are aware, the Kano State governor was here some time ago and he saw how far we have gone. The December deadline is realistic as all construction works have reached 85 per cent.”

Afolabi further said KEC had been designed to have 10,000 shops in Phase 1, 38 world class warehouses, 280-trailer capacity parking space, among other services needed in a world standard market, adding that the project also had provision for an agricultural hub that would house grains, a space for large and small scale industries, a leather processing unit, a meat unit and other commodities, with an up-to-date ICT centre, a hospital and offices for regulatory and security agencies.

Source: dailytrust

Liberia: Atlantic Ocean Washes Away 72 Homes in West Point

West Point, Monrovia – When Patricia Siryon woke up Wednesday, July 31 at 2 am to use the bathroom, her children were covered in water. She screamed to seek her neighbors’ attention but they too were struggling to take their belongings from the water.

“I had no idea that the water took away the houses before me, till I came out, I was so confused and just told my children to get through the other door for safety while I helped my neighbors,” Siryon explains.

Pointing to her disarray and extremely wet room, the single mother of five said she was worried that the Atlantic Ocean would make her family homeless.

Sea erosion remains a serious threat for residents of West Point – Monrovia’s biggest slum – as hundreds of homes have already been washed away in the last couple of years.

The National Disaster Agency says safe drinking water, food, mosquito nets, water guide, and blankets are now needed to help the victims.

Wednesday’s disaster saw 72 homes destroyed by sea erosion, and there are also concerns that three fishermen who went on expedition did not return that day.

Seven persons were injured when a wall collapse. They were later rescued by officers of the Liberia National Police (LNP).

Many residents in West Point are fishermen or fish sellers. Siryon canoe was destroyed and she’s now worried about feeding her children and sending them to school.

She raised over L$ 5,000 (USD$25.00) but with the damaged canoe, she’s now clueless about her next move.

Fayiah Johnson and Betty Lamin are also worried. Like Siryon, their eight-bedroom house was wiped away by the sea erosion.

Betty’s shop, which was attached to her house, was washed away. She lost all of her goods while Fayiah’s money exchange-abox and personal effects were lost in the water.

“We don’t have no way to stay; we are presently residing with my mother, the house is small but that is the only way we have for now,” Fayiah said.

“Our concern is to protect the children from the sea because we foresee the taking away this old Kru beach [community].”

The Ministry of Public Works has promised to extend the government’s coastal defense project to the community as a similar project makes an intervention in Popo Beach, New Kru Town.

But in West point, Janet Toe’s home, which was marked by the MPW after the government promised to use rocks as coastal defense, was destroyed on Wednesday.

“My house was marked and now it is gone, I don’t know what my family will benefit most when everything is wiped away,” said Toe, who is now displaced in the community school building.

“My whole house went; my children are safe but all our belongings went except for the bed.”

Thomas Joemah accuses the government including current representative Solomon George of ignoring the plights of dwellers.

“We don’t expect this from this Government because District #7, mainly West Point voted this government hugely. I don’t want to talk about Solomon George because he is not seeking the interest of the district,” said Joemah, whose home was also destroyed by the angry waves.

“If the water takes your home away, people here only keep you for a month and they expect you to leave and move on with life.

“My family is surviving by the grace of God – yesterday, we ate farina because that was what we could afford.”

Rose Granery, a mother of 10 children, lost her second home to the sea erosion on Wednesday. She was already recovering from the loss of her four-bedroom home in last year’s erosion.

Rose and her children are currently residing in a church near the debris of her home. The church building is also under threat from the sea erosion as cracks on the building widen.

Rose said she sold dried fish before the latest disaster. Unfortunately, she couldn’t save her dryer from been taken away by the waves.

Daniel Grant of the Disaster Victims Association of West Point says the organization has been working with many victims but stressed that minimizing disaster requires more awareness.

Grant urged the Government to begin the coastal defense to protect more homes from destruction.

Prince Nagbe, Director of Communication at Ministry of Public says the marking of the homes were in consultation with residents who consented.

According to him, the marking was done to break down homes to connect waterside with West Point.

Meanwhile, National Disaster Management (NDMA) & National Public Health Institute of Liberia (NPHIL) Joint Rapid Assessment of West Point have found that the sea is fast advancing on Power Plain, Kru Beach, and Fanti Town – the three communities where the 72 homes were washed away by sea erosion.

The NDMA says hundreds of people are currently internally displaced and are squatting in the homes of relatives and friends and community dwellers are apprehensive over the delay of government to construct the coastal defense.

Source: frontpageafricaonline

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