Economy
Property Experts to Brainstorm in Lagos at WAPI Summit
By Dipo Olowookere
November 15 and 16, 2018 have been fixed for this year’s West African Property Investment (WAPI) Summit, the region’s most prominent and largest real estate investment and development conference, slated for Eko Hotel and Suites, Lagos.
According to the summit’s host, API Events’ Kfir Rusin, this year’s theme: RE-Calibrating Supply and Demand for Sustainable Growth, is a natural evolution of the previous year’s theme, Changing the West African Narrative, which aided more than 400 delegates representing over 200 companies to reposition the sector in a region sparked to a growth footing by Nigeria’s exit from recession.
As Rusin expands, “The market has undergone a shift, which is most evident in the changing retail and office occupier market. To help our 500 delegates unpack these changes – we’re pleased to announce that we’ve secured more than 60 well-known regional and international thought leaders to speak at #WAPI2018. These include, Broll Nigeria’s CEO, Bolaji Edu, regional legal authority, Olasupo Shasore (SAN), Ali Djire, Fraym’s Country Manager and PwC Nigeria’s Chief Economist Andrew S Nevin.”
As the head of one of the region’s largest multi-disciplinary commercial property services providers, Broll’s Bolaji’s Edu, position provides him with a unique position to gauge how the market has re-calibrated post-recession.
As Bolaji says, “If we analyse the grade-A office market in Lagos and the overall retail mall market following the economy entering a deep recession in 2016; take up dropped by approximately 40% (offices) and 55% (retail) between 2016 and 2017. However, as the economic recovery strengthens, we have seen numbers flatten out, and we expect to see an increase over the whole of 2018 from the low point of 2017.”
And while Bolaji argues that the drop-off proved challenging it did enable the market to strike a balance, especially at the height of investment – with property values reaching sky high levels. This boom, he says can be attributed to the post 2007 global recession economy whereby investors fuelled by low interest rates entered emerging markets aggressively searching for high yields.
As Bolaji explains, “We don’t expect to see the same level from the institutional international investment community, which lead to emerging market currencies being too strong and artificially inflated the size of the economies and the size of the middle class in USD terms.”
A More Sustainable Market
Following this inflation and subsequent re-adjustment, Bolaji believes that the market is now on a more long-term stable footing. Commenting that: “The market has begun to rebase itself down from a level where rent levels and capital values in parts of Lagos were comparable to the wealthiest cities in the world such as New York and the out skirts of London.” For him, this is most evident in the reducing rates in the commercial and retail sectors, which are now at “more sustainable levels,” he says.
One of the most striking results of this re-calibration are the new strategies employed by developers to cater to demand and not “copy & paste” and a change in the demographic of international retailers drawn to the market’s demanding and aspirant middleclass.
“Developers and investors in the market are examining building size and design that better reflect the target market. It is important to entertain best practices and the latest trends from around the world, but we need to tailor our projects,” says Bolaji, adding that the region’s market size and growing demand from the middleclass means that retailers and companies still wish to establish a presence in Nigeria.
“However, they are looking at this more strategically taking into consideration both the potential risks in addition to the incredible upside opportunities. International investors and retailers are seeking more partnership opportunities.”
Market Trends
As the market continues to evolve, Broll has deduced several key trends emerging within the local retail space says Bolaji. “We see local retailers driving demand for retail space especially in secondary locations, while international retailer demand is predominantly driven by retailers from Europe and the Americas, whereas historically, Asian brands were the most aggressive,” pointing out that the biggest demand driver in existing malls is food and beverage.
As the market continues to evolve and re-calibrate in line with economic development – Bolaji has noted the demand continues to be driven by the high end and budget segments. “These are the two areas that we see most enquiries from both investors/developers and retailers and corporates.”
Rising Oil Prices
While the rising oil price continues to be of benefit to overall regional GDP growth, Bolaji believes that one market seeing un uptick from oil’s surge is the office sector with occupier demand being driven by the oil and gas sector. While this may not reach the highs of previous eras, especially as many of the new firms are local oil servicing firms. The trend he believes is driven by the fact these local companies can enjoy shorter timelines when closing transactions compared to their international counterparts.
Rusin concludes sharing Bolaji’s views, “We’ve witnessed continued development across Africa and Nigeria, and as an African bellwether economy – what happens in Nigeria sends ripples across the continent from an investment and trend perspective. I believe Bolaji’s presentation and together with other leading panellists will aid us in achieving our key objectives of: identifying the critical shifts in consumer, occupier and retailer demand, and how these changes will shape the future of the industry.”
By Adedapo Adesanya
President Bola Tinubu on Friday presented a budget proposal of N58.47 trillion for the 2026 fiscal year titled Budget of Consolidation, Renewed Resilience and Shared Prosperity to a joint session of the National Assembly, with capital recurrent (non‑debt) expenditure standing at 15.25 trillion, and the capital expenditure at N26.08 trillion, while the crude oil benchmark was pegged at $64.85 per barrel.
Business Post reports that the Brent crude grade currently trades around $60 per barrel. It is also expected to trade at that level or lower next year over worries about oil glut.
At the budget presentation today, Mr Tinubu said the expected total revenue for the year is N34.33 trillion, and the proposal is anchored on a crude oil production of 1.84 million barrels per day, and an exchange rate of N1,400 to the US Dollar.
In terms of sectoral allocation, defence and security took the lion’s share with N5.41 trillion, followed by infrastructure at N3.56 trillion, education received N3.52 trillion, while health received N2.48 trillion.
Addressing the lawmakers, the President described the budget proposal as not “just accounting lines”.
“They are a statement of national priorities,” the president told the gathering. “We remain firmly committed to fiscal sustainability, debt transparency, and value‑for‑money spending.”
The presentation came at a time of heightened insecurity in parts of the country, with mass abductions and other crimes making headlines.
Outlining his government’s plan to address the challenge, President Tinubu reminded the gathering that security “remains the foundation of development”.
He said some of the measures in place to tame insecurity include the modernisation of the Armed Forces, intelligence‑driven policing and joint operations, border security, and technology‑enabled surveillance and community‑based peacebuilding and conflict prevention.
“We will invest in security with clear accountability for outcomes—because security spending must deliver security results,” the president said.
“To secure our country, our priority will remain on increasing the fighting capability of our armed forces and other security agencies by boosting personnel and procuring cutting-edge platforms and other hardware,” he added.
By Aduragbemi Omiyale
The deadline for the recapitalisation of the Nigerian pension industry has been extended by six months to June 2027 from December 2026.
This extension was approved by the National Pension Commission (PenCom), the agency, which regulates the sector in the country.
Addressing newsmen on Thursday in Lagos, the Director-General of PenCom, Ms Omolola Oloworaran, explained that the shift in deadline was to give operators more time to boost the capital base, dismissing speculations that the exercise had been suspended.
“The recapitalisation has not been suspended. We have communicated the requirements to the Pension Fund Administrators (PFAs), and we expect every operator to be compliant by June 2027. Anyone who is not compliant by then will lose their licence,” Ms Oloworaran told journalists.
She added that, “From a regulatory standpoint, our major challenge is ensuring compliance. We are working with ICPC, labour and the TUC to ensure employers remit pension contributions for their employees.”
The DG noted that engagements with industry operators indicated broad acceptance of the policy, with many PFAs already taking steps to raise additional capital or explore mergers and acquisitions.
“You may see some mergers and acquisitions in the industry, but what is clear is that the recapitalisation exercise is on track and the industry agrees with us,” she stated.
PenCom wants the PFAs to increase their capital base and has created three categories, with the first consists operators with Assets Under Management of N500 billion and above. They are expected to have a minimum capital of N20 billion and one per cent of AUM above N500 billion.
The second category has PFAs with AUM below N500 billion, which must have at least N20 billion as capital base.
The last segment comprises special-purpose PFAs such as NPF Pensions Limited, whose minimum capital was pegged at N30 billion, and the Nigerian University Pension Management Company Limited, whose minimum capital was fixed at N20 billion.
By Adedapo Adesanya
Three securities weakened the NASD Over-the-Counter (OTC) Securities Exchange by 0.68 per cent on Thursday, December 18.
According to data, Central Securities Clearing System (CSCS) Plc led the losers’ group after it slipped by N2.87 to N36.78 per share from N39.65 per share, Golden Capital Plc depreciated by 77 Kobo to end at N6.98 per unit versus the previous day’s N7.77 per unit, and FrieslandCampina Wamco Nigeria Plc dropped 19 Kobo to sell at N60.00 per share versus Wednesday’s closing price of N60.19 per share.
At the close of business, the market capitalisation lost N16.81 billion to finish at N2.147 billion compared with the preceding session’s N2.164 trillion, and the NASD Unlisted Security Index (NSI) declined by 24.76 points to 3,589.88 points from 3,614.64 points.
Yesterday, the volume of securities bought and sold increased by 49.3 per cent to 30.5 million units from 20.4 million units, the value of securities surged by 211.8 per cent to N225.1 million from N72.2 million, and the number of deals jumped by 33.3 per cent to 28 deals from 21 deals.
Infrastructure Credit Guarantee Company (InfraCredit) Plc remained the most traded stock by value with a year-to-date sale of 5.8 billion units valued at N16.4 billion, followed by Okitipupa Plc with 178.9 million units transacted for N9.5 billion, and MRS Oil Plc with 36.1 million units worth N4.9 billion.
Similarly, InfraCredit Plc ended as the most traded stock by volume on a year-to-date basis with 5.8 billion units traded for N16.4 billion, trailed by Industrial and General Insurance (IGI) Plc with 1.2 billion units sold for N420.7 million, and Impresit Bakolori Plc with 536.9 million units exchanged for N524.9 million.
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