UPDC Plans Fresh Capital Injection, to Focus on Retail Market

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Goddy Egene

The Chairman of UACN Property Development Company (UPDC) Plc, Mr. Larry Ettah has said that the company plans to inject fresh capital to boost its operations.

In his address to shareholders at the company’s annual general meeting (AGM) in Lagos recently, Ettah said the capital injection would be in form of rights issue, disposal of low performing assets and sell down of surplus stake in the real estate investment trust (REIT) among others.

“Our strategy for 2016 and beyond includes deleveraging the business through equity capital injection by way of rights issue, sell down of surplus stake in the REIT and disposal of low-performing assets, as well as leveraging on partnerships and alliances that are in sync with the company’s long term goals,” he said.

He added that the company is also recalibrating development towards the retail segment and has put in place strategies to enable it take advantage of emerging opportunities in the segment.
According to him, despite the slow-down in the luxury segment, the Nigerian real estate market remained attractive as there were significant untapped potential in the residential category, and numerous opportunities in the retail, commercial and industrial segments of the market in the near term.

He explained that the growth in the commercial segment has been driven by new investments in high growth sectors like retail, hospitality/tourism and telecommunications, while the spike in demand for residential housing is linked to population growth & rising income levels (emergence of middle class).

He disclosed that although real estate development activity is increasing in several states of the federation, demand and supply for commercial and residential properties remain more predominant in Lagos, Abuja and Port Harcourt.

Ettah said that though there are indications of over-supply in the premium market segment evidenced by high vacancy factors and declining rentals in Ikoyi, Victoria Island and Abuja, the retail sector of the market was still on a growth path.

The chairman said company continued its ongoing developments in 2015 and commenced some new ones,
He pointed out that the challenges being faced by the market in terms of issues with titles, high cost of funding, inadequate mortgage financing and poor infrastructure were expected to persist in the medium term and would continue to prevent effective demand in the low/medium residential market segments.