Economy
Global Investors Hunt for Yields from Africa’s Property Markets
By Modupe Gbadeyanka
With Africa’s resurgent economies and property markets increasingly viewed as a smart destination for investors, global business leaders are beginning to hunt for yields and growth from the markets.
On September 20 and 21, 2018, stakeholders in the real estate sector in Africa will gather in Johannesburg, South Africa on how to chart a new course for the industry.
During the two days, senior African property investors, developers and decision makers will be at the 9th API Summit & Expo.
This year’s Summit promises to be the most robust and optimistic gathering in recent years as more than 600 executives representing 250 companies from 30 countries seek to capitalise off 3-4% continent-wide GDP growth, rising commodity prices headlined by $70 oil prices and greater political stability in Africa’s major bellwether economies.
According to Summit host, API Events’ managing director, Kfir Rusin, “Africa’s resurgent economies and property markets are increasingly viewed as a smart destination for investors as global business leaders hunt for yields and growth.”
As he adds, “This year’s theme – Building a Smarter Future for African Real Estate – will build the platform for influential property stakeholders to connect with each other and discuss issues around optimal sizing and restoring global confidence, while also unpacking innovations in building, identifying new funding avenues, and fostering better market transparency.”
The innovative far reaching theme and achievable objectives have gained traction with some of Africa’s largest pan-African property brands. These include its largest bank, Standard Bank, Africa’s most active acquirer of diverse property assets, Grit – Real Estate Income Group, Africa’s largest multidisciplinary property services company, Broll Property Group, and Ethiopian Airlines signing up as this year’s official airline sponsor.
Noted for her bullish views on African investment and rapid acquisition of assets in multiple African geographies, Bronwyn Corbett, chief executive officer of Grit, says, “The most significant factor contributing to a smarter future for Africa real estate is a change in perception around Africa in general and Africa real estate specifically. In 2018, foreign direct investment, political stability and infrastructure improvements have all been catalysts for creating more depth in Africa’s real estate markets, and the world is slowly figuring out the opportunities present on the continent. Real estate has a big role to play in tapping into these opportunities.”
Accessing and ‘waking to the continent’s opportunities’ has been a business advantage and imperative for the Summit’s lead sponsor, Broll Property Group, whose regional and continent leaders attend each year to share insights, debate and network with their peers. As the group’s head of African operations, Leonard Michau says, “Broll is proud to sponsor what is recognised as the leading real estate seminar within sub-Saharan Africa. The API Summit & Expo is well organised, and provides a range of high-quality content, speakers, and panellists.”
The accrual of speakers and ability to interact is a crucial objective for one of Africa’s most exacting funders, Standard Bank’s head of real estate finance, Gerhard Zeelie, as he adds, “The API Summit & Expo achieves impressive high-level participation from attendees across the continent while providing an important platform for delegates to showcase the trends and themes driving opportunity in real estate.”
Global and regional trends and their relevance and learnings to the API’s Summit’s shareholders – Africa’s real estate stakeholders – is what positions the Summit at the forefront of innovation and driving Africa’s markets forwards by delivering new and relevant presentations and case studies, says Rusin.
“This year, from a new trends perspective; we have some of Africa’s leading innovators including Respublica, The Capital Hotel Group and the Zero Carbon Group delivering first time case studies to African stakeholders on student housing, serviced apartments and prefabricated affordable housing solutions, respectively.”
Additional case studies and presentations unique to this year’s two-day conference include presentations by the Washington State Investment Board, the UN General Council on the future of Africa’s cities, Mauritius’ Smart Cities, the first African Index Real Estate Index Fund and bespoke retail and consumer insights and panel discussions with Novare, Massmart and Sagaci Research.
With Africa’s consumer and retail market estimated to be worth over $1 trillion in two years, the evolving and growing sector is of major concern to the continent major moneymen and the overall economy. As Standard Bank’s Zeelie says, “We are seeing growing consumerism in Africa, with increased use of mobile. The retail market, for example, is rapidly evolving and responding to changed consumer behaviour.”
Having successfully doubled its property investment and development conference portfolio across the continent in 2018 from four to nine conferences due to investor demand and sector activity, the interest in African real estate development is rising and reflects a changing view of the continent’s emerging markets, as Rusin concludes. “Our team’s experience and personal equity with international and African property decision makers has enabled us to attract executive delegates, speakers presenting new data and case studies from across the continent and internationally and we look forward to laying the foundation for a Smarter Future for African Real Estate.”
Economy
Seplat to Boost Nigeria’s Oil Production With Mobil Assets Acquisition
By Adedapo Adesanya
Seplat Energy Plc will revive hundreds of Nigerian oil wells laying fallow after completing the acquisition of Mobil Producing Nigeria Unlimited (MPNU) from ExxonMobil.
The company said it aims to lift oil output to about 200,000 barrels a day, a move that will help boost Nigeria’s oil production levels, as it aims to reach 2 million barrels per day next year.
The transaction, according to Seplat, “is transformative for Seplat Energy, more than doubling production and positioning the company to drive growth and profitability, whilst contributing significantly to Nigeria’s future prosperity.”
The completion of the Seplat-ExxonMobil deal has created Nigeria’s leading independent energy company, with the enlarged company having equity in 11 blocks (onshore and shallow water Nigeria); 48 producing oil and gas fields; 5 gas processing facilities; and 3 export terminals.
Recall that the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) in October approved the deal as part of a series of approvals, while it blocked Shell’s asset sale of up to $2.4 billion to the Renaissance consortium.
The acquisition of the entire issued share capital of MPNU adds the following assets to the Seplat Group: 40 per cent operated interest in OML 67, 68, 70 and 104; 40 per cent operated interest in the Qua Iboe export terminal and the Yoho FSO; 51 per cent operated interest in the Bonny River Terminal (‘BRT’) NGL recovery plant; 9.6 per cent participating interest in the Aneman-Kpono field; and approximately 1,000 staff and 500 contractors will transition to the Seplat Group.
MPNU adds substantial reserves and production to Seplat Energy; 409 million barrels of oil equivalent (MMboe) 2P reserves and 670 MMboe 2P + 2C reserves and resources as at 30 June 2024 and 6M 2024 average daily production of 71.4 kboepd (thousand barrels of oil equivalent).
Business Post reports that Seplat will be part of the payment this year, and will defer some to next year,
Speaking on the transaction, the Chairman of Seplat Energy, Mr Udoma Udo Udoma commended President Bola Tinubu for supporting this transaction and appreciated the support and diligence of the various ministries and regulators for all the work to reach a successful conclusion.
“We are delighted to welcome the MPNU employees to Seplat Energy. We are excited to begin our journey in a new region of the country, and we look forward to replicating the positive impacts we have achieved within our communities in our current areas of operations.
“Seplat’s mission is to deliver value to all our stakeholders, and we treasure the good relationships we have developed with the government, regulators, communities and our staff.”
On his part, the chief executive of Seplat Energy, Mr Roger Brown, described the acquisition as a major milestone, adding, “I extend my thanks to the entire Seplat team for their hard work and perseverance to complete this transaction.
“MPNU’s employees and contractors have a strong reputation for safety and operational excellence, and I welcome them to the Seplat Energy Group.
“We have acquired a company with one of the best portfolios of assets and related infrastructure in a world-class basin, providing enormous potential for the Seplat Group. Our commitment is to invest to increase oil and gas production while reducing costs and emissions, maximising value for all our stakeholders.
“MPNU is a perfect fit with our strategy to build a sustainable business that can deliver affordable, accessible and reliable energy for Nigeria alongside attractive returns to our shareholders”.
Economy
PenCom Projects N22trn Pension Assets for 2024
By Adedapo Adesanya
The National Pension Commission (PenCom) is projected to close the year with over N22 trillion in pension assets impacted by challenges like inflation and monetary policies.
This is according to PenCom Director-General, Mrs Omolola Oloworaran, at a press conference in Abuja on Thursday.
She said as of October 2024, the Contributory Pension Scheme (CPS) had 10.53 million registered contributors and pension fund assets worth N21.92 trillion.
Speaking at the conference-themed Tech-driven Transformation Shaping the Pension Landscape, which showcased PenCom’s strategic commitment to innovation, she said that the numbers reflected the agency’s unwavering commitment to fund safety, prudent management, and sustainable growth.
She explained that the pension environment was impacted by the wider economic challenges facing the country, noting that the sector battled multi-year high inflation, Naira devaluation, and the lingering effects of unorthodox monetary policies by the Central Bank of Nigeria (CBN).
Business Post reports that the apex bank hiked interest rates by 875 basis points this year alone to tackle persistent inflation which peaked at 33.8 per cent as of October.
She said that these challenges eroded the real value of pension funds and impacted contributors’ purchasing power.
“To address these issues, the commission has initiated a comprehensive review of its investment regulations.
“It is focusing on diversifying pension fund investments into inflation-protected instruments, alternative assets, and foreign currency-denominated investments.
“The goal is to safeguard contributor savings and ensure resilience against future economic volatility,” she said.
She restated the commission’s commitment to expanding pension coverage, particularly through the advanced micro-pension plan designed to encourage participation from the informal sector using technology.
“This initiative will make it easier for everyday Nigerians to save for retirement, aligning with our vision of inclusive growth and financial stability for all.
“The backlog in retirement benefits for retirees of the Federal Government’s Ministries, Departments, and Agencies (MDAs) will soon be settled.
“The federal government recently disbursed N44 billion under the 2024 budget to settle approved pension rights.
“We are collaborating with the Federal Government to institutionalise a sustainable solution to ensure retirees receive their benefits promptly, eliminating delays,” Mrs Oloworaran said.
She said that PenCom’s technology-driven transformation aimed to make the CPS more accessible, reliable, and sustainable.
“From data management to seamless contributions and regulatory supervision, we are paving the way for a future where the pension industry serves all Nigerians effectively,” she said,
Mrs Oloworaran also said that the e-application portal for pension clearance certificates has replaced the manual processes and enhanced the ease of doing business in the sector.
“Since its deployment, 38,528 pension clearance certificates have been issued. This initiative ensures compliance and secures the future of Nigerians working in organisations that interact with the government,” she said.
Economy
NASD OTC Securities Exchange Closes Flat
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange closed flat on Thursday, December 12 after it ended the trading session with no single price gainer or loser.
As a result, the market capitalisation remained unchanged at N1.055 trillion as the NASD Unlisted Security Index (NSI) followed the same route, remaining at 3,012.50 points like the previous trading session.
However, the activity chart witnessed changes as the volume of securities traded at the bourse went down by 92.5 per cent to 447,905 units from the 5.9 million units transacted a day earlier.
In the same vein, the value of securities bought and sold by investors declined by 86.6 per cent to N3.02 million from the N22.5 million recorded in the preceding trading day.
But the number of deals carried out during the session remained unchanged at 21 deals, according to data obtained by Business Post.
When trading activities ended for the day, Geo-Fluids Plc remained the most active stock by volume (year-to-date) with 1.7 billion units sold for N3.9 billion, Okitipupa Plc came next with 752.2 million units valued at N7.8 billion, and Afriland Properties Plc was in third place with 297.5 million units worth N5.3 million.
Also, Aradel Holdings Plc remained the most active stock by value (year-to-date) with 108.7 million units worth N89.2 billion, followed by Okitipupa Plc with 752.2 million units valued at N7.8 billion, and Afriland Properties Plc with 297.5 million units sold for N5.3 billion.
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