NSE urges investors on REIT as TCL promises returns

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8 years ago

From left, Haruna Jalo-Waziri, Executive Director, Capital Markets, The Nigerian Stock Exchange (NSE); Sam Willie Ndata, Doyen of Stockbrokers; Oscar Onyema, Chief Executive Officer, NSE; Biodun Arokodare, Chairman, First Ally Asset Management and Winston Osuchukwu, Managing Director, First Ally Asset Management at the Facts Behind the Offer of TSL-REIT in Lagos, recently.

The Nigerian Stock Exchange (NSE) has given its nod to the recent Initial Public Offering (IPO) of Top Services Limited’s Real Estate Investment Trust (REIT) to raise N20 billion, offered for subscription at 20 million units of N1000 each per unit.

Oscar Onyema, Chief Executive Officer (CEO) of the NSE, in his welcome address at the Facts Behind the Offer, congratulated the fund manager, issuing house and other parties to the transaction on receiving the Exchange’s approval for the IPO, while urging participation.

According to him, the Facts Behind the Offer is designed to enable the sponsors to provide information on the offering to the key stakeholders in the market. “It shows the confidence the sponsors and fund managers have on our platform as a mechanism to bring issuers and investors together,” Onyema added.

The NSE CEO said that with a total market capitalisation of N16.18 trillion across all of NSE’s asset classes, it has implemented far-reaching transformational programmes that have improved market access and provided products that are aligned to investors’ requirements. Several transparency initiatives (such as BrokerTrax, X-Compliance, X-Whistle, Compliance Status Indicator symbols, X-Issuer, X- Alert and so on) have brought significant sanity to the marketplace and provided for a fair and orderly market.

He, however, urged other fund managers to take advantage of the opportunities available in the Real Estate Investment Trust (REIT) market through product innovations that meet investors’ needs and appetite.

“I encourage investors to take advantage of the opportunities presented by Real Estate Investment Trust schemes which typically offers stable and regular income distribution from diversified portfolio of real estate and real estate related assets,” he affirmed.

Winston Osuchukwu, Managing Director (MD) of the company, however, promised returns for investing in the REIT, noting that the company would pay dividend at the end of the current financial year.

“We will definitely pay dividend to shareholders of the company at the end of the current financial year, but I don’t know how much that will be paid; but we will definitely pay dividend,” he said.

Osuchukwu explained that the funds raised from this offer would make possible the purchase of various retail commercial properties, located in the South West of Nigeria.

According to him, TSL REIT would invest in retail related real estate and has identified four malls that would constitute the initial investments. These include Adeniran Ogunsanya Mall in Surulere, and Apapa Mall in Apapa, both in Lagos State; Cocoa Mall, Dugbe, Ibadan in Oyo State and Akure Mall, Akure, Ondo State.

“The TSL REIT will focus on retail related real estate assets that have established occupancy levels. The Fund does not intend to take on projects at the development of construction stage,” Osuchukwu added.

REITs are corporations or trusts that use the funds of many investors to purchase and manage income property and/or mortgage loans.

REITs offer tax advantages to investors and provide a liquid way to invest in real estate, which is an otherwise illiquid market.

Currently, there are four listed property companies on the NSE with a combined market capitalisation of over N45 billion. These include Skye Shelter Fund Plc, Union Homes Real Estate Investment Trust, UPDC and UACN Property Development Company.