UPDC repositions for improved performance – Ettah
The UACN Property Development Company (UPDC) Plc is repositioning the business for improved performance and has put in place adequate strategies to enable it deliver better value to all stakeholders.
The Chairman of the Company, Mr. Larry Ettah, stated this while addressing shareholders at the Company’s Annual General Meeting (AGM) at the Golden Tulip, Festac in Lagos.
He noted that the Nigerian real estate sector is one of the significant drivers in the country’s non-oil economy. The sector accounted for 7.5per cent of total GDP in 2015 and grew by 2.1per cent year-on-year in the same year. However, it recorded negative GDP growth in 2016. Q1 contracted by -4.69 per cent, Q2 by-5.27per cent, Q3 by -7.37 per cent and Q4 by -9.27per cent.
Mr Ettah pointed out that Nigeria’s real estate market still presents substantial opportunities as well as a number of challenges for property investors and developers. Cumbersome and time-consuming processes for land acquisition, insecure land title, infrastructure deficiency are few of the challenges of the sector.
Existing concerns such as underdeveloped mortgage market, paucity of medium to long term infrastructure and financial institutions with reasonable interest rates are areas the Federal Government would need to pay particular attention to in the near future in order to move the sector forward.
According to the Chairman, the Company posted revenue of N4.99b (Group N6.34b) as against 2015 revenue of N3.74b (Group N5.12b).
Loss before taxation (LBT) was (N2.02b), Group N1.78b against loss of N1.8b and Group’s profit of N0.56m in 2015. In view of this performance, the Board, regrettably will not be recommending
the payment of dividend for the year under review. The recommendation was approved by shareholders during the meeting.
Commenting on the operating environment, Mr. Ettah stated that housing demand in residential real estate has consistently exceeded supply. A key constraint in bridging the huge gap in housing delivery on the demand side is affordability.
The reduced purchasing power of Nigerians and the inability of the low-income earners to pay the prevailing exorbitant rents have led to increased demand for affordable houses.
Consequently, developers in recent times have shifted focus to the middle-income segment of the market, where there appears to have been a significant level of income stabilization. The Federal Government and certain State Governments have embarked on initiatives regarding affordable homes and have specific agencies set-up towards that end.
Growth in the retail development slowed down with vacancy rate of between 33%-65% in the big Shopping Malls due to uncomplimentary foreign exchange regime.
