By Modupe Gbadeyanka
The African real estate narrative has shifted and evolved over the last 2 years with the impact of geo-political and economic challenges changing the property landscape. Moving forward, investors have come to realise that a more measured approach may hold the key to reaping long term rewards in Africa.
In order to address this new reality, API Events is hosting the 8th annual API Summit & Expo in Johannesburg on August 24 and 25, 2017.
“Africa is facing a new reality, but what does this mean for investors and developers looking to expand their growth and uncover new opportunities? Not only do we need to better understand this new reality, but also how best to approach it, realigning development strategies and investment models, all the while working together with new players in order to continue to develop and enhance Africa’s future property market,” says API Events Managing Director, Kfir Rusin.
Alongside this new era for the African continent comes a divergence in growth paths for two groups of economies. On one side we have Africa’s oil exporters, who have experienced sharp declines in growth, while Africa’s more diversified economies have continued to accelerate their GDP expansion. Despite these differing growth patterns from an economic point of view, the shift in real estate capital flows have yet to fully move over to East Africa, with long term investors still seeing the likes of Nigeria as a key market.
These changing fortunes, together with strict central bank regulations within individual countries, and the volatility of local currencies against the US dollar, have, however, made real estate funding a lot more complex.
“With modest recovery expected in sub-Saharan Africa (SSA) economies, prospects for improved real estate funding would increase where there are strong domestic governance policies and strong risk management practices. Attracting capital flows into SSA depends on the ability of individual nations to improve sovereign risk and growth prospects”, said Klaus-Dieter Kaempfer Barclays Africa’s Head of Commercial Property Finance.
The geography of opportunity within Africa has also evolved with French-speaking West Africa, particularly Ivory Coast, Senegal and Cameroon piquing new interest from an investment point of view, while East Africa continues to lead as Africa’s most stable frontier.
In this regard, companies like Mara Delta continue to focus on the long term fundamentals rather than short term volatilities, as seen with their own sustained and increased investments into countries such as Mozambique and Zambia over the last 2 years.
Bronwyn Corbett, Chief Executive of Mara Delta commented: “In addition to taking a view on political and currency risk, key considerations for us are the ability to conduct business in hard currency, the repatriation of funds, land tenure and the ability to raise debt. Based on these considerations, we have identified Uganda, Rwanda, Tanzania, Botswana and Ghana as potential territories for expansion. Our nodal expansion in-country depends on tenant demand, as you need some level of concentration in an area or region to make it economically viable.”
Looking ahead, there will be a definite shift in terms of sectors of interest and asset sizes. The office market has suffered a steady decline across the continent, while the retail sector is expected to continue to move towards convenience retail and smaller, more tailored retail centres across Sub-Saharan African cities.
Elaine Wilson, Divisional Director for Research at Broll Property Group says: “Some investors are getting wary of investing in the continent because of currency volatility especially in the retail sector due to dollar based rentals. East Africa is seeing an increase in formal retail space, however, financially strained consumers will still frequent informal traditional markets.”
On the other side of the spectrum, the demand for bigger and better warehousing space has increased significantly, with mega distribution warehouse projects kicking off in cities like Lusaka, Nairobi and Tema.
In terms of infrastructure on the continent, LAPPSETT, West African rail network and The Grand Ethiopian Renaissance Dam are expected to further influence the direction of Africa’s future going forward, boasting huge potential in unearthing new real estate opportunities across the continent in the current year.
The 2017 API Summit and Expo promises to delve in-depth into each of these topics, and more, with participation from over 35 countries, 600 delegates and 250 companies, providing insights, thought-leadership and solution-focused tools.
“Our understanding of Africa has changed over the last decade, and developers and investors alike are now ready to take a more measured approach to the continent, with a specific focus on attaining sustainable growth in the years to come. With this new understanding in mind, it has become vital for all industry players to come together, to learn from their peers, share their own on-the-ground experiences and forge new avenues for real estate growth in Africa,” Rusin says.
NGX Upgrades Price Stock Group of Eterna
By Dipo Olowookere
The price stock group of Eterna Plc has been moved upward by the Nigerian Exchange (NGX) Limited, Business Post reports.
In a regulatory notice on Monday, the bourse noted that it upgraded the stock category of the energy company from a low-price stock group to a medium-price stock group.
This action, according to the exchange, was necessitated after the stability in the price of the company’s equities within four of the last six months in the new price category, in line with its price methodology framework.
“Equity securities of quoted companies on the exchange (NGX) are classified into three stock price groups or categories; high-priced, medium-priced, and low-priced stocks, based on their market price.
“In this regard, securities must have traded for at least four out of the most recent six-month period within a stock price group’s specified price band to be classified into the category.
“Accordingly, a review of Eternal Plc stock price and trade activities over the most recent six-month period provides the basis for reclassifying the security from the low-priced stock group to the medium-priced stock group.
“This reclassification also necessitates the attendant change in the tick size change from N0.01 kobo to N0.05 kobo, in line with Rule 15.29: Pricing Methodology, Rulebook of the exchange, 2015 (trading license holders’ rules),” the statement from the platform stated.
Unlisted Securities Investors Gain N18.29bn in Five Days
By Dipo Olowookere
It was another positive week for unlisted securities investors in Nigeria as they smiled home with N18.29 billion last week on the floor of the NASD over-the-counter (OTC) Securities Exchange.
This was buoyed by the 1.98 per cent week-on-week growth recorded by the alternative bourse in the country during the five-day trading week, which had five stocks closing on the gainers’ chart, with none on the opposite table.
Data harvested by Business Post indicated that FrieslandCampina Wamco Nigeria appreciated by 10.44 per cent to settle at N69.00 per unit. UBN Property Gain 7.14 per cent to trade at 75 Kobo per share, Niger Delta Exploration and Production improved by 6.95 per cent to N200.00 per unit, Geo-Fluids rose by 6.12 per cent to N1.04 per share, and Central Securities Clearing System (CSCS) increased by 3.85 per cent to N13.50 per unit.
In the week, the volume of trades declined by 35.51 per cent to 24.5 million units from 62.6 million units, the number of deals went down by 12.82 per cent to 66 deals from the preceding week’s 71 deals, while the value of transactions increased by 122.48 per cent to N96.6 million from N87.6 million.
The most active security for the week by volume was Geo-Fluids, with the sale of 20.0 million units, followed by UBN Property with 3.4 million units. FrieslandCampina traded 581,021 units, CSCS transacted 375,512 units, and VFD Group exchanged 111,104 units.
However, the most active equity by value for the week was FrieslandCampina, with a sale of N38.5 million. VFD Group recorded N27.2 million, Geo-Fluids traded N20.7 million, CSCS transacted 5.1 million, and UBN Property traded N2.6 million.
Data showed that the NASD unlisted securities index (NSI) increased in the week by 13.92 points to 717.15 points from 703.23 points, as the market capitalisation grew by N18.29 billion to N942.35 billion from N924.06 billion.
Nigeria’s External Reserves Shed 0.14% to $37.020bn
By Aduragbemi Omiyale
In one week, Nigeria’s external reserves depreciated by a marginal 0.14 per cent to $37.020 billion from $37.070 billion in the preceding week.
Data obtained by Business Post from the Central Bank of Nigeria (CBN) disclosed that the balance in the coffers was as of Thursday, February 2, 2023.
The FX balance in the country’s purse was supposed to expand during this period when prices of crude oil were relatively stable, but this has not been the case because of low production.
Nigeria relies heavily on the sale of crude oil to earn forex, which is currently scarce in the country, putting the Naira under pressure.
The federal government has blamed low crude oil output on the theft of the commodity and has promised to make efforts to address the issue.
Recall that in August 2022, Nigeria’s crude oil production plunged below one million barrels per day (972,394 bpd), the lowest ever in several years.
However, according to the Organisation of Petroleum Exporting Countries (OPEC), the output improved by 171,000 barrels per day in November to 1.186mbpd, though about 700,000 barrels per day less than its quota for the month.
The Minister of Finance, Budget, and National Planning, Mrs Zainab Ahmed, said the federal government plans to improve the country’s crude oil production to 1.6 million barrels per day by the first quarter of 2023.
It is believed that this would boost the FX earnings of the nation and bolster the reserves and the local currency in the foreign exchange market.
Last week, the Nigerian Naira depreciated against the United States Dollar on a week-on-week basis by 25 Kobo or 0.05 per cent to N461.50/$1 compared with the preceding week’s N461.75/$1.
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