By Nkiruka Nnorom
INVESTORS in Real Estate Investment Trust, REIT, have received a boost as Stanbic IBTC Holdings Plc has indicated its preparedness to support individuals and businesses interested in long-term investment in the real estate sector. The bank said that in doing so, the industry will play its catalytic role in driving growth and development of the economy. The bank made the declaration at the inaugural edition of the Nigerian Stock Exchange, NSE, Real Estate Investment Trust, REIT, conference in Lagos.
Themed “Real Estate Investment Trust in sub-Sahara Africa: The Role of the Capital Market,” the conference brought together policy-makers, regulators, government officials, private sector players, property developers, asset managers, dealing members, investors and thought leaders to share their experiences and explore growth potentials and opportunities in the real estate market in Nigeria and Sub–Saharan Africa.
Speaking at the event, Mr. Funso Akere, CEO, Stanbic IBTC Capital Limited, said in throwing its weight behind REIT and putting the sector on a stronger footing, the bank expects to see exponential growth through the inflow of much needed capital from both local and offshore investors.
Local and offshore investors
He said Stanbic IBTC and Standard Bank Group would continue to engage stakeholders at different levels to develop a viable REIT market in Nigeria. “Stanbic IBTC, given its deep experience and roots in Africa, has a duty of sorts to help highlight the huge potential in the real estate sector. By partnering with other stakeholders, we desire to create a win-win situation for all stakeholders by leveraging on our expertise and experience,” Akere said.
On his part, Niyi Adeleye, Head, Real Estate Finance (West Africa), Standard Bank, pointed out that a well structured and sustainable rental cash-flow is the most important driver of the value and quality of REITs and other real estate investments as opposed to the over-weighted attention on project construction cost, property appearance and perceived building quality. He noted that real estate offers impressive returns, and is quite helpful when an investor seeks to diversify, while also serving as a hedge against inflation.
Other speakers at the conference identified key areas that must be given priority to create investment grade in real estate assets in Nigeria to include valuation, securitization, liquidity, review of property and tax laws for equitable administration of the real estate sector, as well as instituting an efficient and transparent REIT legislation to govern the asset class. They highlighted that achieving these core structural elements will lead to a more efficient and liquid REIT asset class, and thus be attractive to local and foreign investors.