Economy
Commercial Real Estate Funding Rises in Francophone Africa
By Dipo Olowookere
The bilingual Francoreal Property Investment Summit taking place on October 16 & 17, 2018 in Dakar, Senegal is expected to provide a platform for the region and continent’s premier real estate investors and developers to gauge opportunities in one of the world’s fastest growing zones – known colloquially as Francophone West and Central Africa, organisers have said.
Providing macroeconomic and currency stability; through the West African Monetary Union (UEMOA) regional block, this integrated and increasingly developed region has multiple competitive economic advantages according to the Chairman of BHCI, JD Diabira, the region’s first specialist commercial real estate mortgage provider and local real estate advisor, Ivan Cornet of Latitude Five.
As two of 30 confirmed high-level speakers for the forum, the two-day conference has been brought to market in partnership with Teyliom, the region’s largest investor and developer in real estate.
For Cornet, who has spent the past decade driving the development of commercial property from his base in Abidjan, Cote d’Ivoire, this forum provides a platform for local, regional and international delegates to learn, network and strike deals.
“I’ve been sharing Francophone Africa’s story at African real estate’s most significant event; the African Property investment (API) Summit for the past decade. And now, they are hosting a high-value conference backed by the largest investor and some of the most high profile names in the region,” he says.
While Abidjan has been a focus for investors due to its role as the commercial port and gateway into Francophone West Africa, Senegal’s emergence driven by its investment into infrastructure and real estate has placed it on par with its larger neighbour explains Cornet.
“A few years ago, Abidjan was the only market for outside investors, but the two-billion-dollar plus investment into Dakar’s Diamiadio City, proactive government policy moves and robust GDP figures, makes it a very attractive and stable market politically.”
The opportunity to obtain 10% yields across different sectors has made Francophone Africa attractive for Cornet compared to Europe. Despite, his successes, he believes that rapidly improving fundamentals, and particularly access to funding, will lead to a measured climb in investment.
For specialist mortgage provider, JD Diabira of BHCI (CEO), who is part of a new wave of lenders providing tailored and suitable loan structures to mostly African developers in the region – the massive demand has been welcoming and overwhelming.
“The number of bankable projects is not a problem we are bursting with projects, and we have not even engaged in much marketing outreach yet,” he says, 80% of which are locally driven.
Adding that “While the market is still modest, it is growing at a faster clip than the rest of the world and we are also seeing local institutional investors shifting away from direct equity investments and into debt-funded real estate transactions. For me, that’s a sign of new market sophistication.”
While demand remains high, access to funding remains a challenge in the market; but the difficulty is not a result of what people think, as he explains. “The lack of capital isn’t the big issue it’s made out to be,” as he points to the number of significant successful capital raises in the market.
Rather, Diabira says “It seems to us the real problem is the willingness (or not) of lenders to lend.”
The reason, he says is that local lenders have had little reason to offer mortgages; which has been attributed to the high prevalence of government bonds in the market which banks have collected 6-7% for a “plain value zero-risk bond”, he adds.
And while this “1940 ‘s style French Prefecture culture” persists, Diabira believes specialist firms and new pan-African banks entering the market will be successful in their projects and also aid in deepening the market. “Fortunately this is not a problem specialist lenders, like ourselves, have. We lend because it’s what we do, and it’s the only thing we do,” he adds.
And while the local market continues to evolve and develop driven by demand and new skills, international developers are typically funded by their countries of origin says Diabira.
“We are a local lender (albeit with a small Canadian parent), run by Africans. We are local and are more interested in getting Africans funded across the UMEOA region.”
For the host of the Francoreal Summit, API Events Managing Director KfirRusin, the event is a uniquely high-level conference and the response has been tremendous.
“The local market, together with our strong base of multi-billion dollar pan-Africa funds, private equity partners and developers are excited about this region. We believe this bilingual event will result in new partnerships and a flurry of deal making across the region.”
By Adedapo Adesanya
Food Concepts Plc neutralized the gains recorded by three securities, returning the NASD Over-the-Counter (OTC) Securities Exchange into the negative territory with a 0.27 per cent loss on Thursday, December 4.
Yesterday, the share price of the parent company of Chicken Republic and PieXpress declined by 34 Kobo to sell at N3.15 per unit compared with the previous day’s N3.49 per unit.
This shrank the market capitalisation of the OTC bourse by N5.72 billion to N2.136 billion from N2.142 trillion and weakened the NASD Unlisted Security Index (NSI) by 9.57 points to 3,571.53 points from 3,581.10 points.
Business Post reports that Central Securities Clearing System (CSCS) Plc went down by 50 Kobo to N38.50 per share from N38.00 per share, FrieslandCampina Wamco Nigeria Plc gained 29 Kobo to sell at N55.79 per unit versus N55.50 per unit, and Geo-Fluids Plc added 5 Kobo to close at N4.60 per share compared with Wednesday’s closing price of N4.55 per share.
Trading data indicated that the volume of securities recorded at the session surged by 6,885.3 per cent to 4.3 million units from the 61,570 units posted a day earlier, the value of securities increased by 10,301.7 per cent to N947.2 million from N3.3 million, and the number of deals went up by 146.7 per cent to 37 deals from the 15 deals achieved in the previous trading session.
At the close of business, Infrastructure Credit Guarantee Company (InfraCredit) Plc was the most traded stock by value on a year-to-date basis with the sale of 5.8 billion units for N16.4 billion, trailed by Okitipupa Plc with 170.4 million units worth N8.0 billion, and Air Liquide Plc with 507.5 million units valued at N4.2 billion.
InfraCredit Plc also finished the session as the most traded stock by volume on a year-to-date basis with 5.8 billion units transacted for N16.4 billion, followed by Industrial and General Insurance (IGI) Plc with 1.2 billion units sold for N420.2 million, and Impresit Bakolori Plc with 536.9 million units traded for N524.9 million.
By Dipo Olowookere
The upward trend witnessed at the Nigerian Exchange (NGX) Limited in recent sessions continued on Thursday as it further improved by 0.10 per cent.
This was despite investor sentiment turning bearish after the local equity market ended with 23 price gainers and 28 price gainers, indicating a negative market breadth index.
UAC Nigeria gained 10.00 per cent to finish at N88.00, Morison Industries appreciated by 9.94 per cent to N3.54, Ecobank rose by 8.53 per cent to N36.90, and Coronation Insurance grew by 8.47 per cent to N2.56.
On the flip side, Ellah Lakes depreciated by 10.00 per cent to N13.14, Eunisell Nigeria also shed 10.00 per cent to finish at N72.90, Transcorp Hotels slipped by 9.95 per cent to N157.50, Omatek shrank by 9.23 per cent to N1.18, and Guinea Insurance dipped by 8.46 per cent to N1.19.
Yesterday, the All-Share Index (ASI) went up by 152.28 points to 145,476.15 points from 145,323.87 points and the market capitalisation chalked up N97 billion to finish at N92.726 trillion compared with the previous day’s N92.629 trillion.
Customs Street was bubbling with activities on Thursday, though the trading volume and value slightly went down, according to data.
A total of 1.9 billion stocks worth N19.2 billion exchanged hands in 23,369 deals during the session versus the N2.3 billion valued at N21.0 billion traded in 21,513 deals a day earlier.
This showed that the number of deals increased by 8.63 per cent, the volume of transactions depleted by 17.39 per cent, and the value of trades decreased by 8.57 per cent.
For another trading day, eTranzact led the activity chart with 1.6 billion units sold for N6.4 billion, Fidelity Bank traded 31.0 million units worth N589.3 million, GTCO exchanged 28.3 million units valued at N2.5 billion, Zenith Bank transacted 27.1 million units for N1.6 billion, and Ecobank traded 21.9 million units worth N744.3 million.
By Adedapo Adesanya
The Naira marginally depreciated against the United States Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEM) on Thursday, December 4 amid renewed forex pressure associated with December.
At the official market yesterday, the Nigerian currency lost 0.01 per cent or 18 Kobo against the Dollar to close at N1,447.83/$1 compared with the previous day’s N1,447.65/$1.
It was not a different scenario with the local currency in the same market segment against the Pound Sterling as it further shed N15.43 to sell for N1,930.97/£1 versus Wednesday’s closing price of N1,925.08/£1 and declined against the Euro by 20 Kobo to finish at N1,688.74/€1 compared with the preceding session’s N1,688.54/€1.
Similarly, the Nigerian Naira lost N5 against the greenback in the black market to quote at N1,465/$1 compared with the previous day’s value of N1,460/$1 but closed flat against the Dollar at the GTBank FX counter at N1,453/$1.
Fluctuations in trading range is expected to continue during the festive season as traders expect the Nigerian currency to be stable, supported by intervention s by to the Central Bank of Nigeria (CBN)in the face of steady dollar demand.
Support is also expected in coming weeks as seasonal activities, particularly the stylised “Detty December” festivities, will see inflows that will give the Naira a boost after it depreciated mildly last month, according to a new report.
“As the festive Detty December season intensifies, inbound travel, tourism spending, and diaspora inflows are expected to provide moderate support for FX liquidity,” analysts at the research unit of FMDA said in its latest monthly report for November.
Traders cited by Reuters expect that the Naira will trade within a band of N1,443-N1,450 next week, buoyed by improved FX interventions by the apex bank.
Meanwhile, the crypto market was down as the US Federal Reserve’s preferred inflation gauge, core PCE, likely rose in September—moving in the wrong direction. However, volatility indices show no signs of major turbulence.
If the actual figure matches estimates, it would mark 55 straight months of inflation above the US central bank’s 2 per cent target. The sticky inflation would strengthen the hawkish policymakers, who are in favour of slower rate cuts.
Ripple (XRP) depreciated by 4.5 per cent to $2.08, Solana (SOL) went down by 3.8 per cent to $138.11, Litecoin (LTC) shrank by 3.1 per cent to $83.23, Dogecoin (DOGE) slid by 2.5 per cent to $0.1463, Cardano (ADA) declined by 2.1 per cent to $0.4368, Bitcoin (BTC) fell by 0.9 per cent to $91,975.45, Binance Coin (BNB) crumbled by 0.9 per cent to $899.41, and Ethereum (ETH) dropped by 0.7 per cent to $3,156.44, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) closed flat at $1.00 apiece.
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