NSE Building

Companies listed on the Nigeria Stock Exchange (NSE) were Wednesday urged by stockbrokers to float more Real Estate Investment Trusts (REITs) and other alternative investments other than equities, saying there were investors, willing to stake their funds in REITs.

The Chairman of Association of Stockbroking Houses (ASHON), Mr. Emeka Madubuike, made the call at the Nigerian Stock Exchange (NSE), just as the stock market snapped back from two day’s sell-off to close 0.37 per cent higher at 33,736.82

Madubuike, who spoke during the UACN Property Development Company (UPDC) Plc’s presentation of ‘Facts Behind the Offer’ in respect of its ongoing N30 billion REIT, noted that the offer was the first Initial Public Offering to hit the market in recent times.

“The REIT will give investors opportunity to diversify their investments outside equities. Since the 2008 downturn, some investors are looking for alternative investments to stake their funds. We therefore, urge companies to come with alternative investments for investors in the market,” he said.

A REIT is a corporation or trust that uses the pooled capital of many investors to purchase and manage income property and it is listed and traded on the stock exchange.

Speaking on the offer, the Managing Director/Chief Executive Officer of UPDC, Mr. Hakeem Ogunniran, said investors stood to reap many benefits because it was a unique REIT.

“What we have done is to put together our premium assets and we have floated this trust and are selling 60 per cent to the public. So, these REITs provide a unique opportunity to the public and other institutional investors to become part owners of this property,” he said.

He explained that investors were investing in the unique asset class that would offer them stable and regular distribution.

“But more importantly, our REITs are unique because these assets already exist. You are therefore, investing in a UPDC REITs that has earnings certainty and has little risks in terms of whether or not you earn the required investment on your returns,” he said.