UPDC Finance Costs Reducing, Coy in Upward Trajectory, Says MD, Ojo

Bennett Oghifo

The Managing Director of UPDC PLC.,  Mr. Odunayo Ojo has said that the company’s finance costs have continually reduced to the point where now they are actually having positive income.

Ojo, who stated this at a recent press briefing, also said UPDC is on an upward trajectory and that this performance would be sustained. 

“We are on an upward trajectory and with all the hard work of our management and staff and also the support of our customers and our stakeholders, we believe that this performance will be sustained.”

Ojo said finance costs, which was one of the issues that UPDC had in the past, “have continually reduced to the point where now we are actually having positive income.

“So that’s also some of the strategies that we have to put in place to restructure our capital base, restructure our cash flow to ensure we are poised for a brighter future.”

According to Ojo, “Property development continues to be a key driver of the business. We have a N9.2 billion contribution to turnover. Advancing services, that is just started but we anticipate that there will be a continuous growth segment overall in the business. “Hospitality is our second largest contributor to revenue at N1.4 billion, almost N1.5 billion and then followed by facility management which is 924 plus other income, was able to cross N1 billion last year to give us our total revenue N11.78billion.”

On expected growth, Ojo said, “Some key insights is to see that the hotel continues to grow in spite of what we saw after COVID-19. After COVID-19, the hospitality industry was almost ground to a halt because of the restrictions. But after that, we reopened this hotel (Festival Hotel) in 2022 after COVID-19 and we’ve continually seen the growth of the business. So that’s an area where we also want to take on investment, improve infrastructure and grow that part of the business.

“Our assets continue to grow as a business. So at the end of last year, the size was about N30.9 billion. Our shareholder funds have also grown, which means that as the company grows and as our capital grows, we will see a very strong response.”

UPDC, he said, intends “To target, beyond just the middle class, we also want to look at young professionals. The young professionals are a group of customers that a lot of developers are not focused on adequately. Because the young shall grow, if you look at what has happened in other parts of the world, people enter the real estate market just shortly after they leave school and they get into the labour market.

“What has hampered us in Nigeria has been the lack of proper mortage facilities that will allow you to pay low interest rates for a long period. But the good news is that we are seeing some initiatives in the market today that could support this product.

“So the first point there is that we are creating new urban centers. We are trying to move away from the usual prospects in terms of Lekki-Epe expressway in terms of Lekki Phase  One, in terms of Ikeja GRA and all those emerging locations. “We want to start looking at creating new urban centers in places that can support this kind of product.”

He said Epe was a other axis of Lagos UPDC is considering investing in, saying, “Because of the infrastructure, we can get to Epe, on a good day, in about 25 minutes. When there is traffic we can spend two hours. But the reality is that infrastructure is improving And over time, a place like Epe will no longer be considered as outskirts: it will be merged into the core of Lagos. “Places like Badagry, Ojodu, and so many other places, and even on the Lagos-Ibadan Expressway axis, there’s a lot going on there already. But they are sporadic and they are not well planned. You see developers just come and do something that cannot be sustained. But we are thinking very seriously of looking at these secondary markets and putting products there to sell in different categories. We want to focus on the workforce. I think the workforce can be a critical driver of growth in our industry.”

According to him, “Anybody that has a job, and has rent to pay, should be able to afford a home, because if you can pay rent, you can afford a home. That’s the truth. Someone has invested in that home that you live in. That could be you. You could be your own investor and pay yourself rent via some kind of financing model.

“So we are looking to crack that. We are working with such initiatives as the MRIF. It was initiated by this current government to bring down the cost of mortgage and to also give young people the opportunity to get mortgages at about 12% for over 25 to 30 years. So with those kinds of interventions, we believe that we want to support it and drive a lot of adoption in the workers segment. We are leaning very heavily on infrastructure.”

On technology and business growth, Ojo said, “If you, as a business today, are not thinking digital, you are just going to die. So, we are driving a lot of digital transformation. We are trying to move into the digital age and use such tools as AI and so many other contemporary tools to reach more customers and to serve our customers better.

“We are looking at doing other things. We just don’t want to be known as a company that builds building and those projects. We want to be known as a holistic real estate solutions provider. But whatever needs you have in real estate, UPDC should be able to serve you. Whether you have a property you want to manage, whether you have land you want to develop, whether you have a need in terms of hospitality, housing, commercial, retail, UPDC is your one-stop real estate shop. And that is also going to be where we are going to be focusing on in the future.”

The Project Development Manager, UPDC, Olatunde Jagun, discussed their exquisite project, the Hampshire, a five-hectare mixed-use development in Sangotedo which is further down the Lekki expressway after VGC.

Jagun said, “We launched that development in 2023 and started construction in 2023. It comprised about 62 plots approximately, comprising of both low-density, high-density, and commercial areas, trying to ensure that we complied with all the requirements of the state in terms of planning.

“It was completed in 2024. All our customers are now preparing all their plans to start building. So as far as we are concerned, that is 100% achieved.”

He said their next development is Brompton City, saying, “this is also targeted at the middle income. Brompton City consists of 300,000 square meters of land.

“We have delivered, it was proposed to do it in four phases, and we have delivered the first phase, which is completely sold out. 100,000 square meters was done last year. That was reflected in our performance last year.

“The next phase, which is ongoing, is for 125,000 square meters. Phase two and three combined. We’re currently at the design stage.

“The plan is to deliver first-class infrastructure, including roads, drainage, water treatment, and sewage treatment.”