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Real Estate Recorded Marked Improvement in H1 —Report

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Housing - Investors King
  • Real Estate Recorded Marked Improvement in H1 —Report

In the first six months of 2018, the Nigerian economy as a whole experienced significant improvements and this was also the fate of the real estate sector, a new report by Northcourt, a real estate investment solutions company, has said.

The various subsectors — residential, retail, office, hospitality and industrial – experienced stabilisation of rents, revival of some suspended projects and the commencement of new ones, in stark contrast to H1 2017, the report noted.

It added that the improvement was evident in the prices of building materials that dipped or remained constant when compared with last year’s.

“This is expected and understandable, seeing that foreign exchange rates have stayed fairly stable for about 12 months now and is readily available,” the report added.

According to the research, the residential market showed improved price stability and levels of activity in comparison to H1 2017, even though it is fairly high while vacancies still exist in the high to mid income locations.

It explained that as land prices and other construction costs soared, developers continued to stay competitive by intensifying land use, reducing plot sizes, car parks and built-up areas in a bid to supplement the decline in profitability caused by weakened prices since 2016/17.

The creativity by developers, the report noted, brought about general improvement in design and finishing features provided in recent developments, adding that the quality of materials and workmanship could be improved as it remained a major differentiator.

The office market in Lagos, Abuja and Port Harcourt continued to struggle in the review period, the report stated, noting that rents either stayed or declined to remain competitive, while the security risks and environmental hazards in Port Harcourt sent office rents to its lowest in over five years.

It added that Grade-A office vacancies in particular remained high, “and it appears the economy would need to strengthen much more to reverse this trend. The wait for the global brands looking to open up shop in Grade-A signature addresses worthy of their presence may be taking too long.”

As it has been the case for some time now, the report found that retail continued to struggle with the shrinking middle class and the dwindling purchasing power of consumers.

“However, with the exchange rate stabilisation, planning around operational costs and profit projections is much more feasible for retailers. Local investors, emboldened to make further investments, softly opened the Next Mall in Port Harcourt and The Atlantic in Lagos,” it stated.

It added, “Vacancy rates largely reduced across the Grade-A malls. The Palms and Ikeja City Mall had the lowest vacancies at zero and two per cent, respectively. Novare Mall came in at 28 per cent, down from 47 per cent at the end of 2017. Artee’s Port Harcourt Mall, Big Treat and Genesis Centre had eight per cent, 15 per cent and 25 per cent, respectively.

“Ceddi Plaza and Gateway Mall in Abuja recorded 21 per cent and 38 per cent, respectively. Abuja’s largest mall – Jabi Lake (20,000sqm) recorded the highest vacancy rate in city – 40 per cent due to a number of stores that closed down in Q1 and high rentals.”

According to the report, the good news from the sector is however that while some international investors find business conditions less favourable and are instead pursuing retail interests in Eastern Europe and Eastern Africa, local high networth individuals who are not disturbed by currency risks, amongst others, are moving into the retail space to make large-scale investments.

The Director, Real Estate Research and Advisory, Northcourt Real Estate, Ayo Ibaru, stated that players in the real estate market started the year with plans to maximise the economy’s announced recovery, having been burdened with managing underperforming assets during the five-quarter long recession.

Is the CEO and Founder of Investors King Limited. He is a seasoned foreign exchange research analyst and a published author on Yahoo Finance, Business Insider, Nasdaq, Entrepreneur.com, Investorplace, and other prominent platforms. With over two decades of experience in global financial markets, Olukoya is well-recognized in the industry.

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Nigerian Businesses Face Tougher Times as PMI Drops to 19 Months Low of 46.9

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Nigerian businesses continued to face headwinds as the Purchasing Managers Index published by Stanbic IBTC shows a 19-month low. 

According to the report released on Friday, business conditions took a hit and PMI dipped from 49.8 points in September to 46.9 points, the steepest decline since March 2023.

For context, a PMI reading above 50 points indicates growth in business activity. Conversely, a reading below 50 points indicates contraction, suggesting deterioration consequent to an economic downturn.

According to the report, businesses faced pressures from the local currency weakening, higher fuel prices and increasing cost of transportation.

This has also forced the hands of businesses to increase prices to sustain operations, which the report stated has led to a reduction in new orders and business activity.

Most importantly, confidence in the business sector plummeted to the worst ever since the organisation started documenting PMI in 2014.

“Overall input costs rose at one of the sharpest rates on record, with selling prices increased accordingly. This resulted in marked reductions in new orders and business activity, while business sentiment was the lowest in the survey’s history,” the report read in part.

A positive light in the report was that some companies managed to add a few new hires, extending a six-month trend of job creation. The downside to this was that the companies employed these staff on a short-term basis.

The report also stated that companies are making efforts, now more than ever, to help their staff stay afloat in the current economic situation.

“Meanwhile, efforts to help workers with rising living costs meant that staff pay was increased to the greatest extent in seven months,” the report added.

Metrics like the private sector output, volume of orders, and quantities of purchases made by customers all recorded steeper values than they did in September.

Trends showed that prices, cost of staff maintenance and input prices, on the other hand, recorded very sharp increases, with some metrics posting record hikes since March 2023.

Inflation in the general Nigerian macro environment is telling in every quarter and businesses are not exempt.

Analysts told Investors King that special interventions will help ease the pressure on companies, but warned that risky conditions attached to these measures may scare off firms from accepting them.

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Dangote Refinery Sells Petrol At N990 Per Litre to Trucks

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Dangote Refinery

Dangote refinery has finally announced the price of premium motor spirit (PMS), popularly known as Petrol, following months of back and forth.

The company said it sells to domestic marketers at N971 per litre into ships and N990 into trucks, according to a statement signed by Anthony Chiejina, Group Chief Branding and Communications Officer and released on Sunday evening.

“Post deregulation, NNPC set the pace by selling PMS to domestic marketers at N971 per litre for sale into ships and at N990 for sale into trucks. This set the benchmark for our pricing, and we have even gone lower to sell at N960 per litre for sale into ships while maintaining N990 per litre for sale into trucks”, the company said in the statement released on its X page.

On a series of accusations and counter-accusations from IPMAN, PETROAN, and other associations, Dangote refinery said it is impossible to land petrol at a lower price than Dangote refinery’s current price, except they are importing substandard products.

“Both organisations claim that they can import PMS at lower prices than what is being sold by the Dangote Refinery. We benchmark our prices against international prices, and we believe our prices are competitive relative to the price of imports.

“If anyone claims they can land PMS at a price cheaper than what we are selling, then they are importing substandard products and conniving with international traders to dump low quality products into the country, without concern for the health of Nigerians or the longevity of their vehicles. Unfortunately, the regulator (NMDPRA) does not even have laboratory facilities which can be used to detect substandard products when imported into the country.”

The company claimed it started selling at the stated rates without knowing the exchange rate that would be used to pay for the crude purchased.

Meanwhile, the company has said an international trading company rented a depot facility close to its refinery with plans to start blending substandard products and dump them into the Nigerian market to compete with Dangote refinery’s better quality.

“This is detrimental to the growth of domestic refining in Nigeria. We should point out that it is not unusual for countries to protect their domestic industries in order to provide jobs and grow the economy. For example, the US and Europe have had to impose high tariffs on EVs and microchips in order to protect their domestic industries.”

“While we continue with our determination to provide affordable, good quality, domestically refined petroleum product in Nigeria, we call on the public to disregard the deliberate disinformation being circulated by agents of people who prefer for us to continue to export jobs and import poverty.”

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NAFDAC Uncovers Fake Condoms in Four States, Issues Fresh Directives to Zonal Directors, State Coordinators

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The National Agency for Food and Drug Administration and Control (NAFDAC) has issued fresh directives to its Zonal Directors and State Coordinators after uncovering the unlawful sale and distribution of an unregistered condom brand named Foula Condoms in some states in Nigeria.

The agency made this known via a report from its officials in the Post-Marketing Surveillance directorate.

The officials identified Foula condoms which is packaged in sets of three, in Abakaliki, Ebonyi State, and Zango, Katsina State.

This finding was part of a risk-based post-marketing surveillance study focused on registered condom products in Nigeria.

NAFDAC revealed that these unregistered products are not labelled in English and may have side effects.

The agency further warned Nigerians to desist from the use of unauthorized and unregistered condoms as they pose great health risk for users.

NAFDAC said, “The condom is not registered by NAFDAC for use in Nigeria, and the labelling of the product is not in the English Language.

“Condoms are a proven effective barrier method that can be used as a dual-purpose method for both prevention of unintended pregnancy and protection against HIV and other sexually transmitted infections.
To be most effective, any barrier method used for contraception or preventing infection must be used correctly.”

“The purchase and use of poor-quality condoms will adversely affect every aspect of condom promotion for the prevention of unintended pregnancy and protection against HIV and other Sexually Transmitted Infections. If condoms leak or break, they cannot offer adequate protection.

“All NAFDAC zonal directors and state coordinators have been directed to carry out surveillance and mop up the unregistered products within the zones and states. Importers, distributors, retailers, healthcare professionals, and consumers are hereby advised to exercise caution and vigilance within the supply chain to avoid importing, distributing, selling, and using illegally distributed products. All medical products/ medical devices must be obtained from authorized/licensed suppliers.

The products’ authenticity and physical condition should be carefully checked. Healthcare professionals and consumers are advised to report any suspicion of the sale of substandard and falsified medicines or medical devices to the nearest NAFDAC office, at 0800-162-3322 or via email: sf.alert@nafdac.gov.ng

“Similarly, healthcare professionals and patients are also encouraged to report adverse events or side effects related to the use of medicinal products or devices to the nearest NAFDAC office or through the use of the E-reporting platforms available on the NAFDAC website www.nafdac.gov.ng or via the Med- safety application available for download on android and IOS stores or via e-mail on pharmacovigilance@nafdac.gov.ng,” the agency stated.

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