Sales of Luxury Apartments Drop
The sale of luxury properties across the country has dropped significantly, stakeholders in the housing sector have said.
Real estate developers, who spoke with our correspondent, said most brokers, who used to sell as much as 10 high-end buildings in one year, ranging from N100m upwards, could hardly sell one presently.
The National General Secretary of the Real Estate Developers Association of Nigeria, Mr. Akintoye Adeoye, said the stock of unoccupied luxury apartments in Lagos, Abuja and Port Harcourt had risen significantly in the last few months.
According to him, only the sale of regular houses with mortgages has been fairly consistent among first- time home buyers.
He said, “The sale of property within N5m to N25m bracket where people can still get mortgages or where developers have to come up with plans that include paying gradually are not doing badly, they still sell but the sale of high-end properties has been very slow since the onset of the economic downturn.
“People are more careful about how they spend money now and even those who have the money are not willing to spend it. Unlike before when one person can buy about 10 luxury houses and keep the keys.
“Most of the people who buy houses now are first-time buyers who have no means to buy luxury apartments. Of course, there are some who still buy up to N45m worth of homes with mortgage but they are mostly those who work with blue-chip companies.”
Adeoye added that the situation had forced developers to reduce the prices of such apartments to woo buyers.
“But even with the drop in prices, people are not interested. There are some developers that can’t even sell one in a whole year because there is no mortgage for this group of properties. Those who buy them get money from other sources but those sources are no longer available,” he said.
The Principal Partner, Bode Adediji Partnership, Mr. Bode Adediji, said apart from the economic downturn, some of the reasons for the drop in sales were oversupply and insecurity especially for expatriates who were mostly the target for such buildings.
Adediji, who is also a former President of the Nigerian Institution of Estate Surveyors and Valuers, said, “There is no doubt that the recession is particularly evident in the housing sector especially the luxury apartment end.
“The reasons for it are understandable; there is oversupply and the employment regime where employers bring in people from abroad and put them in luxury apartments has been phased out. They rather put them in a hotel and when they are through with their job, they leave. They also don’t bring their family because of security issues.”
An estate surveyor and valuer, and former President of NIESV, Mr. Emeka Eleh, said take up of luxury apartments, particularly in Ikoyi where there are several unoccupied buildings, had dropped significantly in recent times.
“The real estate market is a representation of the overall economy; if the economy is not doing well, the sector won’t do well,” he said.
Unilever Nigeria to Reposition Products For Expansion
A renowned consumer goods manufacturer, Unilever Nigeria Plc has disclosed plans to reposition its products and expand its business for sustainability.
Unilever Nigeria Plc produces and markets consumables that include foods, household, beauty, cleansing amongst other goods, Investors King reports.
In a corporate notice signed by its Secretary, Abidemi Ademola sent to the Nigerian Exchange Limited, the company stated that its home care and skin cleansing markets will cease to exist while a rebranding takes place for increment in profit.
According to the company, the change in its business model became expedient to fast track the organisation’s growth and further satisfy the needs of their customers, employees, shareholders and other stakeholders.
Ademola explained that the new strategy would involve digital measures to simplify the business process while chances of devaluation will be avoided and reduced in the market upgrade.
The company had already visualised the extinction of the home care and skin cleansing categories in 2023 for the general growth of the firm and particularly to build a sustainable business.
The statement read in part, “this will involve repurposing the portfolio by exiting the home care and skin cleansing categories to concentrate on higher growth opportunities.
“Strengthening business operations with measures to digitise and simplify processes; and focusing more on business continuity measures that reduce exposure to devaluation and currency liquidity in our business model.”
NGX: 16 Companies Fined N779m Between 2020 and 2022
No fewer than 16 business firms have been penalised by the Nigerian Exchange Limited (NGX) for market-related offences between 2020 and 2022.
Investors King gathered that the total sum of N779.5 million was imposed as fine on the erring companies that cut across manufacturing, food, insurance, consumer goods, technology, banking industries amongst others.
The penalty was as a result of non-compliance with some of the rules and requirements of the exchange for the timely filing of results and accounts by the company.
The NGX data shows that in 2022, fourteen companies were fined the sum of N170.6 million. They include: ETI, FBN Holdings Plc, Union Bank of Nigeria Plc, Honeywell Flour Mills Plc, Unity Bank Plc, Presco Plc, Ardova Plc, C&I Leasing Plc, Coronation Insurance Plc, Royal Exchange Plc, PZ Cussons Nigeria Plc, LASACO Assurance Plc, Mutual Benefits Assurance Plc and Omatek Ventures Plc.
While in 2021, seven companies were sanctioned N586 million and in 2020, the sum of N22.9 million was imposed as fine on three business firms.
Breakdown of the trade offenses and fines for the companies indicates that Coronation Insurance was fined N14.9 million, C & I Leasing was fined N11.6 million while a fine of 9.7 million was imposed on Ardova in 2022.
The NGX fined Presco N5.1 million, Honeywell Flour Mills N1.2 million for failure to submit third quarter 2021 result and account before the deadline.
For the erring financial companies, in 2022, ETI was sanctioned N3.2m; in 2021, FBN Holdings was fined N8.1m, Union Bank of Nigeria got N1.2m fine, Fidelity Bank Plc was fined N1.6m while Unity Bank Plc was sanctioned N4.2m.
An Information and Communications Technology firm, Omatek Ventures got a fine of N537.2m in 2022 for refusal to present audited results and accounts for 2015–2018 to the investing public.
LASACO Assurance was penalised N29.2m between 2020 and 2022 for not complying with some post-listing requirements. In 2022, N5.3m was levied for failure to submit its 2021 audited financial statement to the investing public, while in 2021, N15.1m was fined for not presenting the audited 2020 result and accounts.
The company was also sanctioned N8.8m in 2020 for failure to submit audited 2019, first quarter 2020 and second quarter 2020 financial results.
Investors King learnt that the sanctions on the listed companies have discouraged investors from trading in their stock due to the huge fines.
Naira Scarcity: Manufacturers Decry 25% Sales Decrease, Urge FG’s Urgent Intervention
Manufacturers Association of Nigeria, MAN has lamented the effect of naira scarcity on its members, saying that sales of manufactured goods dropped by 25 percent.
The association called on the federal government to urgently and permanently put an end to the challenging situation caused by the introduction of new naira notes and its scarcity.
This was contained in a statement signed by the Director-General of the Manufacturers Association of Nigeria, Segun Ajayi-Kadir expressing the plight of manufacturers.
The manufacturers noted that their businesses had been badly hit by the current cash crunch, adding that it affected the turnout of workers which brought about low output and more than 25 percent decrease in income.
Investors King learnt that the Manufacturers Association President, Otunba Francis Meshioye had last month warned against the impending negative effect of the naira scarcity on manufacturers.
He mentioned that the sales of manufactured goods will significantly drop which is presently playing out.
Speaking on digital banking services, the MAN president said online transactions including the use of point of service, POS has not been working effectively thereby making the sales process slow.
Meshioye stated that the nation’s economy has also been negatively impacted which may scare present and potential investors from investing in the country as they are particular about what their resources would yield.
“I want to assume that this is a very short-term problem. It is general. Even if you want to do e-banking, there are some things you cannot do at the moment. We have problems. PoS is not working.
“There is no way the scarcity of something that is essential to the consumer will not affect the producer. We feel it because it hinders the proper flow of our goods to the end user. What effect is that going to have? It means we will pile stock and when we pile stock, it means cash is trapped. We pay high interest rates and they would not yield good returns and investments go to where returns come regularly.
“This is a very big issue in the economy. If you put all these together, you will agree with me that we are really facing a critical time as manufacturers,” he stated.
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