The Chairman of UACN Property Development Company (UPDC) Plc, Larry Ettah, presented the company’s 2016 financial report at its annual general meeting held in Lagos yesterday. The figures were not gratifying as the company posted revenue of N4.99 billion as against 2015 revenue of N3.74 billion, while loss before taxation for the group stood at N1.78 billion. Thus, shareholders would not receive any dividends.
In an attempt to explain this loss, the Chairman listed a number of factors that have hindered the company’s growth. Among them are cumbersome and time-consuming processes for land acquisition, insecure land title and infrastructure deficiency and affordability for buyers. According to him, these challenges were reasons for the dismal performance of the company last year.
“Existing concerns such as underdeveloped mortgage market, paucity of medium to long term infrastructure and financial institutions with reasonable interest rates are areas the federal government would need to pay particular attention in the near future in order to move the sector forward.” Guardian quotes him as saying.
In spite of the challenges, UPDC announced that it will further its real estate investment, though it is repositioning the business to enable it deliver better returns to stakeholders and improve performance. To justify the decision, Ettah pointed out some reasons why continued investment in Nigeria’s real estate sector is still wise.
First, the company believes that Nigeria’s real estate market still presents substantial opportunities for property investors and developers. Specifically, Ettah noted that the Nigerian real estate sector is one of the significant drivers in the country’s non-oil economy, adding that the sector accounted for 7.5 per cent of total GDP in 2015 and grew by 2.1 per cent year-on-year in the same year.
Secondly, the housing demand in residential real estate has consistently exceeded supply, indicating the presence of a potentially huge market that the company can capture if the problem of affordability is cared for. For these reasons, UPDC says it will continue to invest in real estate despite the heavy losses last financial year.