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Business News

Union Homes REIT reveals real estate yields for properties in Ikoyi, VI, Abuja.

Union Homes Real Estate Trust (UH REITs) has provided their official rental yield data for their real estate properties located in Lagos and Abuja.

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Union Homes Real Estate Trust (UH REITs) has provided their official rental yield data for their real estate properties located in Lagos and Abuja. This was contained in a corporate action posted on the website of the Nigerian Stock Exchange.

The report indicates Real Estate Rental Yields of between 3% and 8% respectively for the month ended May 2018 (data is published monthly by the company). Union Homes listed properties in 13 locations with 10 located in Lagos and 3 in Abuja respectively.

See data for April 2018.

Real Estate rental yields are calculated by dividing the current rental income per annum of a property divided by the market value of the same property. Rental yields are a good indicator of property values and it is frequently used around the world as a proxy for determining property values.

Rental Yields Source: Union Homes REIT

Rental Yields
Source: Union Homes REIT

What we learnt from the data

According to the data, Union Homes REIT has a total property net asset value of about N12.8 billion with a combined delinquency rate of just 0.75%. The report also detailed occupancy rates for high brow areas like Victoria Island, Ikoyi and Apo Abuja. The age of the properties ranges from one year to seven years.

Lagos Properties.

It’s Locke Apartment property in Lekki Lagos which has 15 units has the highest rental yield of about 8% per annum with an occupancy rate of 80%. This is not surprising considering that the property is just a year old. Typically, rental yields reduce as the property ages. This is because property values in Lagos rise over time and more often than not rise faster than rental income. The lower the rental yield the higher the property value and vice versa.

Interestingly, one of the oldest properties at 7 years of age is located on Ikorodu road in mainland Lagos, a busy stretch of the expressway that is mostly dominated by commercial buildings. The company reveals the 153 Ikorodu Road property covers a land area of 3,075sqm and attracts a rental yield of about 7%.

The report also reveals that its residential properties located in Lagos produced the lowest rental yields. The properties are aged between 5 and 7 years with a significant number of units. This perhaps reflects the rising value of properties in high brow areas of Lagos, particularly Ikoyi and Lekki. In fact, the Ikoyi Properties had a rental yield of mostly 3%.

Abuja Properties.

As indicated above, the company listed only 3 properties in Abuja with one in high brow Apo in Abuja. The Apo property just like we see in Ikoyi had a rental yield of about 4%. Rental Income in Abuja is significantly higher than in Lagos.

Property Values.

Property Values. Source: UH REITs

Property Values.
Source: UH REITs

Why this matters

Real Estate Investment Trusts make money mostly from rental income and sale of properties (they also make money from interest on deposits). About 95% of their income is supposed to be distributed considering in line with their tax status. Income from REITs is not taxed.

Union Homes REITs booked a rental income of about N150 million for the period ended September 2017 and N81.9 million for the first quarter of 2018. They are yet to publish rental income for the year ended December 2017.

Investors looking for real returns (higher than inflation) may look beyond REITs or at least Union Homes REITs. For example, UH REITs has posted a return on average equity of not more than 5 %.

Jaiz bank

About Union Homes REITs

Union Homes Real Estate Investment Trust is a Fund incorporated under the laws of Nigeria and commenced business on February 3rd, 2009. The Fund is a hybrid REIT which provides Unit Holders access to investments in approved portfolio. It is governed by a Trust Deed approved by the Securities and Exchange Commission.

UH REIT is a close-ended Fund primarily involved in acquiring investment properties which are held for capital appreciation. Th Fund’s activities are managed by SFS Capital Nigeria Limited situated at Plot 287 Ajose, Adeogun Street, Victoria Island, Lagos. United Capital Trustees Limited are the Trustees to the Fund.

 

 

 

Nairametrics is Nigeria's top business news and financial analysis website. We focus on providing resources that help small businesses and retail investors make better investing decisions. Nairametrics is updated daily by a team of professionals. Post updated as "Nairametrics" are published by our Editorial Board.

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Coronavirus

Covid-19: WHO approves China’s Sinopharm vaccine

WHO has announced the approval of China’s Sinopharm vaccine for Covid-19 vaccination.

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Covid-19: First world nations oppose waiving intellectual rights for vaccine development

The World Health Organization (WHO) has announced the approval of China’s Sinopharm vaccine for Covid-19 vaccination.  The vaccine is reported to have 79% efficacy against covid.

This was disclosed today in a report by Reuters. The vaccine would also be the second Chinese-made vaccine after Sinovac vaccine and would be the first developed outside Europe and North America to receive WHO accreditation.

“This expands the list of COVID-19 vaccines that COVAX can buy, and gives countries confidence to expedite their own regulatory approval, and to import and administer a vaccine,” WHO Director-General, Tedros Adhanom Ghebreyesus said.

The WHO added that the easy storage requirements make it highly suitable for low-resource settings.

“Its easy storage requirements make it highly suitable for low-resource settings,” a WHO statement said while also disclosing that the vaccine has been approved for people above the age of 18 to receive two shots.

“On the basis of all available evidence, WHO recommends the vaccine for adults 18 years and older, in a two-dose schedule with a spacing of three to four weeks,” the statement added.

The vaccine was created by Beijing Biological Products Institute, a subsidiary of Sinopharm subsidiary China National Biotec Group, with an efficacy of 79% for all age groups.

The WHO however, admitted that few older adults (over 60 years) were enrolled in clinical trials, so efficacy could not be estimated in this age group.

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In case you missed it

The quest for vaccine efficiency got a major boost earlier this week as Nairametrics reported that the United States government announced that it supports the waiver of Intellectual Property Protections on Covid-19 vaccine development, in a bid to boost the fight against the pandemic, and says it will participate in the Okonjo-Iweala-led WTO negotiation to make it happen.

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Obituaries

“Mama Taraba”, Former minister and senator, Aisha Al-Hassan is dead

Ex-Women Affairs minister, Aisha Jummai Al-Hassan, popularly known as Mama Taraba is dead

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A former Minister for Women Affairs and ex-Governorship Candidate in Taraba State, Aisha Jummai Al-Hassan, popularly known as Mama Taraba is dead.

According to media reports she died in a hospital on Friday in Cairo, Egypt at the age of 61.

Al-Hassan, who was a former senator of the Federal Republic of Nigeria from Taraba North Senatorial District, was the All Progressive Congress (APC) Governorship Candidate for Taraba in the 2015 general elections.

READ: Abba Kyari’s last letter to President Buhari

She later contested for the same seat on the platform of the United Democratic Party in the 2019 general elections after resigning from APC and as a minister in the administration of President Muhammadu Buhari on July 27, 2018.

The former senator was born on the 16th of September, 1959 in Jalingo, Taraba State, to Alhaji Abubakar Ibrahim, Sarkin Ayukan Muri.

READ: Chad’s President Deby dies of injuries suffered on the frontlines, as son takes over

Aisha Jummai Al-Hassan attended Muhammed Nya Primary School, Jalingo and LEA Primary School, Tudun Wada, Kaduna before proceeding to Saint Faith College (now GGSS) Kawo Kaduna where she studied between January 1973 and June 1977.

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Details later…

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