Nigeria’s property sector in need of proper policy - CNBC Africa

Nigeria’s property sector in need of proper policy

Western Africa

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“When you look at the real estate sector in Nigeria, you realise that it’s not very deep yet. It’s something that the government is still working at – policies have to be there for these companies to move,” Mohammed, an analyst at Assar Investments, told CNBC Africa on Wednesday.

“Going forward we might begin to see a lit bit of activity in this sector due to the government policy that is about to be rolled out now.”

Investors are in need of large-scale, income-producing retail estate portfolios on the Nigerian Stock Exchange (NSE). This need gave birth to Real Estate Investment Trusts (REIT); however there are two listed trusts – Skye Shelter and Union Homes.

The Skye Shelter Fund, listed on the NSE in February 2008, allows 75 per cent of the fund to be invested in real estate, 25 per cent in real estate related assets and about 10 per cent of the fund could be invested in liquid assets.

Union Homes, a subsidiary company of Union Bank of Nigeria, provides mortgage finance services, builds estates, funds estate developers and estate development, supports investors in housing schemes and purchases houses and estates for resale.

According to the World Bank, Nigeria has a housing deficit of 16 million units estimated at 59.5 trillion naira and 720,000 housing units are expected to be built annually to bridge this deficit.

Despite the outlook for the real estate space at the moment, Mohammed believes that going forward, there will be movement in the sector.

“There’s a lot of potential there but for now we’re still going to see flat trading because there are a lot of opportunities in other areas now that are cheaper.”

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