UPDC strategises to leverage emerging opportunities in housing market
assures shareholders of long-term value creation
The UACN Property Development Company (UPDC) plc says it has put in place strategies to enable it take advantage of emerging opportunities in the housing market.
To this end, it assures its shareholders that it is focused on long-term value creation with their investment and also for their customers.
Larry Ettah, chairman of the company, who gave this assurance at the company’s annual general meeting (AGM) in Lagos recently, said the Nigerian housing market remained attractive as there were significant untapped potentials in the residential segment coupled with numerous opportunities in the hospitality, retail, commercial and industrial segments in the near term.
He, however, pointed out that the challenges being faced by the industry in terms of title uncertainties, high cost of funding, inadequate mortgage financing and poor infrastructure were expected to persist in the medium term and would continue to prevent effective demand in the low and medium residential market segments.
According to him, despite the challenging business environment, the company had an impressive outing in the year ended December 2014, posting revenue of N10.08 billion (Group N11.70bn) up from a N9.33 billion (Group N11.29bn) posted this period in 2013.
“Profit before taxation (PBT) was N2.04 billion (Group N3.54bn) as against N4.38 billion (Group N3.71bn) in 2013,” he said, adding, “in the light of these results, the board of directors hereby recommends for your consideration and approval a dividend of N859,375,000, representing 50 kobo per ordinary share held by members as at August 14, 2015.”
The shareholders at the meeting approved the recommendation.Commenting
on the operational environment, Etta said that in recent years, foreign private equity firms had invested millions of dollars in the Nigerian real estate market, attributing the interest in the country’s market to huge demand driven by increasing urban population and changing shopping culture among the expanding middle class.
“The real estate market is gradually rebounding and has experienced reasonable growth and performance in the last few years. This performance is largely driven by the re-emergence of the middle-class and the increasing demand for decent residential and commercial facilities by high net-worth individuals, corporate organisations and key players in the retail segment of the economy,” he said
He noted further that the upturn in economic activity experienced from Q4 2011 to date, had led to an increase in demand and supply for commercial and high-end residential developments, particularly in the key cities of Abuja, Lagos and Port Harcourt.
He revealed that UPDC continued its ongoing developments in 2014 and commenced some new ones.
“Our strategy for 2015 and beyond includes deleveraging the business through equity capital injection, disposal of the surplus stake currently held in UPDC REIT (21.5%) to generate liquidity and re-creating our products portfolio to include more commercial and retail offerings, which have proven to be more resilient revenue sources in periods of depression,” he said.