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System review’ll address property market glut – Stakeholders

Real estate stakeholders say there is an urgent need for paradigm shift to resolve the challenges of affordability mismatch resulting in unsold and unoccupied developed houses, especially in major cities.

According to them, the paradigm shift should be a review of dynamics from market-driven pricing system to end user-driven pricing to ensure that houses are provided for those who need and can afford them.

The call for the review of systems was part of the resolutions reached at the 13th Abuja International Housing Show, and had been presented to the government and its several housing agencies for implementation, according to the organisers.

The documented resolutions, a copy of which was obtained by The PUNCH, also included a call for the creation of enabling policies around land title documentations, with government playing a larger role in assisting investors and supporting local building industries and materials.

Stakeholders also demanded a fast track of the passage of foreclosure bill into law to legally resolve default issues in the sector.

They called for the review of Land Use Act, the Federal Government Housing Loans Board bill, the Federal Mortgage Bank of Nigeria bill and the National Housing Fund bill.

They said there was a need for the Federal Government to advance the ongoing partnership between the Mortgage Banking Association of Nigeria and the Central Bank of Nigeria with regard to the underwriting standards which could increase housing and mortgage affordability for the masses.

Among other resolutions, they called for the adoption of high impact training that would support research and data generation by major stakeholders within the industry and building the right skill ecosystem through job-driven training programmes spearheaded by private sector industry participation for adoption of trainees.

They also called for the institutionalisation of collaboration and partnerships between large-scale industry players to enhance mass housing provision and affordability.

They equally called for the creation of standard data base in African countries especially in Nigeria that could be universally accepted to collate data, identify data gaps, integrate, optimise and expand knowledge set to meet current demands.

Source: punchng

MSMEs to get N154 billion credit facility from LAPO

Life Above Poverty Organisation (LAPO) microfinance bank is targeting N154 billion loan disbursement to support Micro, Small and Medium Enterprises (MSMEs) this year (2019) as against the N137 billion disbursed to them last year.

Godwin Ehigiamusoe, the Managing Director of LAPO microfinance bank, made this disclosure at the bank’s 8th Annual General Meeting (AGM) held in Lagos.

“There is a huge funding gap for Micro, Small and Medium Enterprises, so as a microfinance bank, committed to help bridge that funding gap, our major operation is supporting credit. We prioritise giving loan to those businesses. This has been our commitment right from when we were a non-profit organisation,” Ehigiamusoe was quoted.

Why MSMEs funding: The role of SMEs in enhancing economic growth and development has overtime been widely acknowledged globally. Economic wealth all over the world is created through enterprises and the expansion of their output.

SMEs contribute to the economy by creating value through the production of goods and services, thus enhancing the gross domestic product. They also generate employment by creating much-needed jobs in the economy as well as expanding the export sector largely through linkages with large firms that produce for the foreign sector.

Lack of adequate funding has been the major challenge Nigerian SMEs have raised concerns about. The SMEs stakeholders have overtime lamented the absence of adequate credit facility startups and business expansions.

About LAPO: LAPO is a microfinance bank that focuses on assisting the poor, especially the women, in raising their socio-economic status. It does not only act as a microcredit institution but also assists clients in overcoming problems beyond the lack of funds, such as illiteracy and environmental degradation (which often aggravates poverty).

The institution was founded by Godwin Ehigiamusoe while working as a rural co-operative officer in Delta State, Nigeria. LAPO started its activities in 1987.

Source: nairametrics

Why we must innovate now with housing to shape a better future

The world is an increasingly complex, rapidly changing and volatile place and people talk about the uncertainty of the future a lot.

However, there is a lot we already know about the likely themes of the future. We can’t predict all of it, but we can play our part in inventing the future by what actions we take now.

The future is not tomorrow, but starts today. Are we doing enough to innovate now to influence the future?

In practice, that means we will need to look more forensically at our existing and new homes, developments and places, and take action now to improve their sustainability and our long-term impact on the environment.

From enhancing energy efficiency and implementing new technologies, through to adopting innovative construction methods such as offsite manufacturing, there are many opportunities that we could and should pursue that could help to shape a greener future for all.

We have learned that there is no one-size-fits-all solution for people looking for a home.

To be sustainable, communities need a choice of homes in a mix of tenures and at several price points.

So our focus should continue to be on housing numbers, but also types and tenures.

This includes investing in shared ownership and starter homes to give people the extra support they need to get onto the housing ladder, regardless of their age, financial circumstances or background.

We also know that our population is ageing fast, so we must find ways to ensure there is sufficient high-quality housing for the older generation.

Developing retirement properties that can meet the changing needs and expectations of older people will make a positive contribution to the wider housing market as well as local communities.

Increasingly, that will require us to alter the way we plan our cities, towns and villages, including paving the way for more retirement villages that improve the quality and experience of later life.

“If we don’t take the necessary steps now, experiment and be more proactive in our approach to housing delivery, we could face risks and missed opportunities”

This and housing for young people is also part of the answer to regenerating our emptying town centres.

Addressing these types of challenges isn’t easy, and there is still a lot to learn and implement. But if we don’t take the necessary steps now, experiment and be more proactive in our approach to housing delivery, we could face risks and missed opportunities.

Ultimately, the future is largely moulded by our actions now, so we should not be surprised by what it brings, whether that is positive or negative.

That is why our focus must be on learning what we need to do now to shape the best possible housing outcomes, including environmentally sustainable developments and high-quality thriving places that can meet the needs of all generations.

We can all do our part to invent the future by starting now.

David Cowans, group chief executive, Places for People

‘Funds available to pay customers of collapsed 23 savings and loans, finance houses’

The Bank of Ghana (BoG) has given the assurance that funds are available to pay depositors of the 23 savings and loans companies and finance house companies that have been shut down.

“In line with the Government’s commitment to protect depositors’ funds, the Government has made funds available to enable the Receiver pay depositors after their claims are validated. The Receiver will in due course make an announcement with regards to when and where payments will be made,” a statement issued on Friday by the BoG said.

It said the Receiver, Eric Nipah would make known documents required from the affected depositors to facilitate the validation of claims and orderly payment of validated deposits.

The BoG revoked the licences of the 23 companies because they were highly insolvent.

The BoG also revoked the licences of two nonbank financial institutions, namely Express Funds International Ltd (remittance company) and Ghana Leasing Company Ltd (leasing company).

According to the BoG, the two entities have been insolvent and have been inactive for a number of years.

“This action is pursuant to Section 7 of the Non-Bank Financial Institutions Act, 2008 (Act 774), which mandates the Bank of Ghana to revoke the licence of a non-bank financial institution licensed under that Act if that institution among other things ceases to carry on business,” it said.

Thus, the BoG says it has completed the clean-up of the banking, specialized deposit-taking (SDI), and non-bank financial institutions (NBFI) sectors which began in August 2017.

“This follows the revocation of the licences of nine (9) universal banks, 347 microfinance companies (of which 155 had already ceased operations), 39 micro credit companies/money lenders (10 of which had already ceased operations), 15 savings and loans companies, eight (8) finance house companies, and two (2) non-bank financial institutions that had already ceased operations,” it said.

CBN Resumes OMO Auction with N150bn Offer to Investors

The Central Bank of Nigeria (CBN) on Thursday resumed Open Market Operation (OMO) auction offering N150 billion to investors in the secondary market, but the short and medium-term instruments were gripped with low patronage due to high rates.

OMO simply means the buying and selling of government securities, which enables a central bank to control the supply of money in the banking system.

Godwin Emefiele, governor of the CBN, said in London this week that the regulator would offer more OMO auctions to counter the upcoming maturities due in September/October. There have been fewer OMO auctions of late. In fact, there may be a requirement to increase yields a bit here to maintain Nigeria’s relative attractiveness to Egypt for fixed income flows (CBN argues Nigeria could remain attractive to Egypt on slightly lower yields given the FX stability).

Of the amount offered on Thursday, a total of N115.89 billion was subscribed by investors but the sum of N88.66 was sold.

“This is due to more attractive rates in the secondary market. Offshore investors have continued to take profit on their fixed income investments in Nigeria,” Ayodeji Ebo, managing director, Afrinvest Securities Limited, told BusinessDay.

The breakdown of the OMO auction shows that N20 billion was offered for 84-day tenor and it was undersubscribed by N5.89 billion. Investors’ bid range was between 11.79 percent and 12.68 percent, but there was no sale and no stop rate.

For the 175-day tenor, the CBN offered a total of N30 billion at a stop rate of 11.8 percent, although investors earlier sought to buy at a bid range of between 11.25 and 12.48 percent. The offer which matures on February 6, 2020 recorded a total sale of N0.69 billion.

The sum of N100 billion was offered for 364-day tenor but a total of N87.97 billion was sold at a stop rate of 12.88 percent after the investors earlier bid at a range of between 12.25 percent and 13.50 percent. The instrument was oversubscribed by a total of N106.27 billion and will mature on August 13, 2020.

The CBN on Wednesday, after the two-day holiday, conducted a Primary Market Auction (PMA), rolling over maturing bills worth N34.4 billion across 91-, 182- and 364-day tenors.
Ayodele Akinwunmi, head, research, FSDH Merchant Bank Limited, said over N9.6 trillion worth of government securities are expected to mature in the financial market between August and December this year.

A report by Afrinvest revealed that on Wednesday last week, the apex bank offered a total of N100.0bn across three tenors (85-, 183- and 344-day). However, the CBN did not allot any sale on the mid-term bill despite 2.9x oversubscription while the short- and long-term bills were both oversubscribed with bid-to-cover ratios of 1.2x and 3.8x, respectively.

“We advise investors to cherry-pick bills with attractive yields across the short-medium term space as the sell-offs may persist this week,” the analysts said.

The report indicated that last week, the secondary market for Treasury Bills started on a mildly bullish note as market players showed interest in short-term bills in the first trading session due to the high system liquidity (N191.7bn positive) on Monday.

This was, however, short-lived, following a reduced demand on mid- and long-term bills by Tuesday as investors awaited the OMO.

On Thursday, the bullish trend was reversed as offshore investors sold off big across all tenors pushing average yields up by 1.3 percent. Thus, average yield on the short- medium- and long-term bills advanced 177bps, 159bps and 94bps, respectively.

Source: businessdayNG


Politicians and Independence of the Central Bank of Nigeria

The presidential directive to the Central Bank of Nigeria (CBN) not to stop providing foreign exchange for food importation is worrying. It is a continuation of the now-established practice of the current administration to interfere and usurp the independence of the Central Bank of Nigeria (CBN)

The practice is not only dangerous and unlawful, but detrimental to the growth and development of the economy, and ultimately, the image of the country before investors and international financial institutions.

History has taught us – and scholars are now documenting the lessons – that a great deal of the difference between developed/prosperous societies and those that are not are traceable to the presence and quality of institutions. For instance, Daron Acemoglu and James Robinson – in their highly acclaimed book “Why Nations Fail” conclusively show that the reason why some nations are rich and others poor, is as a result of the quality of institutions in the former and its absence or weakness in the latter.

Take Korea – a remarkably homogenous nation – yet the people of the South are among the richest while those of the North are among the poorest in the world. The contrasting fortunes of the two Koreas are in the nature and quality of their economic and political institutions. While those of the South are open, encouraging innovation and full participation in the economy coupled with a workable political system that is fully accountable and responsive to citizens, those of the North are closed, dependent on individuals and unaccountable and responsive to citizens.

That is why countries that seek to build prosperous and sustainable societies anchor them on strong institutions rather than on personal rule or strong men. Institutions are impersonal and enduring and not subject to the whims and caprices of leaders. They outlive individuals and guarantee progress regardless of the people inhabiting them at any point in time.

And the literature on political economy has been quite clear: central banks have had the greatest impact in maintaining economic stability when they act independently and free from political interferences.

In Nigeria however, though our law books guarantee the independence of the CBN, politicians (more particularly the Buhari administration) usurp its powers and determine monetary policy.

Early in the life of this administration, the president made it quite clear who was in charge of monetary policy decisions.

The President has voiced his ignorance of economics, and unconvinced of an “economic explanation” for devaluing the naira, shown his displeasure for the D-word. He has pointedly said devaluation is not good for a country that imports toothpicks. Despite the shortage a rigid administration of available dollars and multiple exchange rates has caused. Consequently, the preoccupation of the CBN has been to tailor all its policies to the disposition of the president.

The results of all these interferences in the economy have been negative. They portray the CBN as a rudderless institution that relies on the body language of its political masters for important decisions. Decisions that are normally the exclusive preserve of professionals.

This administration must realise that prosperous and sustainable societies are built on strong institutions not the whims of a strong man. It never works!

Source: businessdayng

How Executive Interference Erodes CBN’s Independence

…as FG order on FX for food imports may be illegal

President Muhammadu Buhari’s directive to the Central Bank of Nigeria (CBN) to stop providing foreign exchange for importation of food into the country is a trampling of the independence of the apex bank, according to leading Senior Advocates of Nigeria (SANs) who spoke to BusinessDay on the matter.

The President had on Tuesday said he had directed the CBN to stop providing foreign exchange for importation of food into the country, claiming there has been a “steady improvement in agricultural production and attainment of full food security”.

“Don’t give a cent to anybody to import food into the country,” Buhari said, according to Garba Shehu, presidential spokesman, in a series of tweets.
But the legal luminaries faulted the Presidential directive, saying it amounted to usurpation of the powers of the CBN.

“As things will be, perhaps unknown to the Presidency, the law no longer allows executive control of the CBN. Indeed, the President has no constitutional, legal or executive powers over the CBN that enables a directive as to the operational activities of the CBN – in the way he has over his general staff,” said Konyin Ajayi, a professor and Senior Advocate of Nigeria (SAN).

Ajayi explained that it would be a usurpation of powers if the statement credited to the President is seen other than as an opinion or desire in his overall view of government’s position on exchange controls of monetary policy.

“As the courts are, for instance, granted independence, so has the CBN by virtue of the CBN Act which the President is under oath to uphold,” he noted.

Another SAN, who does not want his name mentioned, agreed with Ajayi.
“Legally, the president cannot order an independent entity like the Central Bank of Nigeria to do what he wants even if that which the President wants done might be a good thing to do,” the SAN told BusinessDay.

He, however, added that the CBN might be to blame for the development.

“But we have a dilemma here. The CBN may have made itself amenable to supervision by the president by its foray into the fiscal space, the political space – on account of the demonstrable incompetence of the executive branch. So the president may now begin to see the governor of the bank as he sees one of his ministers and think he can order him around,” he said.

Even though the constitution empowers the President to appoint a CBN governor subject to approval from the Senate, the CBN Act of 2007 provides the apex bank with the autonomy that makes it free from direct political or government interference in the conduct of monetary policy.

The monetary authority is usually in charge of attaining price stability by managing the interest rates as well as the total supply of money in circulation and is controlled by the central bank of a country, while a country’s fiscal policy is determined by the executive and legislative branches of the government, charged with the responsibility of influencing economic activities through taxes and government spending.

Osaro Eghobamien, another Senior Advocate of Nigeria, said it was necessary to understand the context in which the President’s directive was given; whether “the directive issued was one that relates to fiscal policy (a statement to achieve full employment, price stability and sustained growth in the economy, with the intention of stimulating local demand) or whether it was one that relates to monetary policy (the mechanism for controlling the total supply of money in circulation)”.

“If categorised as a statement tending towards fiscal policy, undoubtedly the President has the powers to make such directives regarding economic policies just as the Minister of Finance would do. The complexity is that the Central Bank is not created to execute fiscal policies. The situation is different when dealing with issues relating to monetary policy in which case the President will not have the powers,” Eghobamien said.

“The CBN is in control of the mechanism that regulates the FOREX and as a result there is some overlap in its functions. Under the law, whereas the CBN has the powers to hold FOREX, it is the executive that has the powers to decide the sector to which the CBN may allocate FOREX. The intricacy inherent in this issue is demonstrated in the intervention role that the CBN is performing. It is pertinent to note that the CBN has in the past assumed the role of allocating FOREX and it is must be presumed that it takes directives from the President in that regard,” he said.

Eghobamien said the CBN is independent and its independence is in relation to its stated objectives.

“These objectives are as stated in the CBN Act including: (a) ensure monetary and price stability; (b) issue legal tender currency in Nigeria; (c) maintain external reserves to safeguard the international value of the legal tender currency;(d) promote a sound financial system in Nigeria; and (e) Act as banker and provide economic and financial advice to the Federal Government. (see section 2(a) of the CBN Act 2007),” he said.

He said the provisions of section 1(3) of the Central Bank Act, 2007 must be viewed from that perspective and that if the President had made a directive in connection with any of the above objectives, it would be undermining the independence of the CBN.


“We do not consider that the President’s statement undermines or relates to any of these objectives. Instead, the statement relates more to enhancing the agricultural sector, boosting employment and using the allocation of forex to re-enforce the enhancement of the sector.

“Whilst it is readily conceded that the function of maintaining external reserves to maintain the value of the legal tender (ascertain exchange rate) is a matter for the CBN, we take the view that the question as which sector is permitted to purchase the scarce resource is for the executive and not for the CBN to decide,” he said.

“On a final note, the CBN ought to be seen as an independent institution and as such the President ought not to convey the impression that he controls the CBN. This is notwithstanding the fact that his comments were more of general economic policies. After all, the CBN is not statutorily mandated to execute fiscal policy. Better still such pronouncement should be left to the CBN governor after consultations with the President,” he said.

Previous administrations had one way or the other meddled in the affairs of monetary authorities. While former President Goodluck Jonathan removed the then CBN governor Sanusi Lamido Sanusi, late President Umaru Musa Yar’Adua stopped Chukwuma Soludo from implementing some monetary policies.

Source: businessdayng

CBN to Disburse Lower Currencies to Micro-Finance Banks

The Central Bank of Nigeria says it has released guidelines for the disbursement of lower denominations of the Naira through micro-finance banks across the country.

The bank’s Director, Corporate Communications Department, Mr. Isaac Okorafor, made this known in a statement in Abuja on Thursday.

Okorafor said this development was contained in a circular issued by the Director, Currency Operations Department of the bank, Mrs Patricia Eleje, in Abuja on Thursday.

He explained that the circular indicated that all microfinance banks must have a Composite Risk Rating (CRR) of above average in the most recent Risk Based Supervision (RBS) target examination before they were considered for the scheme.

He explained that the measure was to ensure that only MFBs with good corporate governance practices took part.

“Meanwhile, the participating MFBs must be willing to accept a mixture of new and other banknotes, and that the MFBs shall give 20 per cent of any withdrawal in lower denomination notes subject to a maximum of N50,000.

“Where beneficiaries withdraw more than once in a day, the circular said that disbursement will only apply to one transaction per day.

“Similarly, the MFBs are allowed to exchange notes subject to a maximum of N50,000 for customers with bank accounts and N10,000 for customers without bank accounts.

“In that situation, the banks must not exchange for same beneficiaries more than once a week,” he added.

According to him, MFBs are to maintain a register of amounts received from the CBN through their correspondent commercial banks.

Okorafor said the MFB must also maintain another register of the beneficiaries of the lower denomination notes as well as ensure that withdrawal teller slips contain breakdown of the denomination of the currency to customers with accounts.

“The circular also warned MFBs against hawking, hoarding or using of funds obtained under the intervention for any other purpose.

“It also instructed the banks to put in place effective control measures that will ensure that banknotes disbursed to customers with or without accounts are not sold.

“Furthermore, the circular directed the banks to render weekly and monthly disbursement return to CBN branches where the intervention would be monitored periodically, and appropriate sanctions applied to erring MFBs,” he said.


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

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