Firms float N20b trust fund to boost real estate
Poised to boost the retail sector of Nigeria’s real estate industry, a consortium of firms has floated N20 billion Real Estate Investment Trust (REIT).
The newly berth REIT, promoted by Top Services Limited, a close-ended Real Estate Investment Trust company would be managed by a firm, Messrs First Ally Asset Management.
Speaking during the signing of the Memorandum of Understanding (MOU), in Ikoyi, Chairman, Top Services Limited, Chief Tokunbo Omisore, said his company spearheaded the flouting of the REIT because of the need to grow the retail sector of real estate industry.
Omisore, an architect, said the growing urbanization in Nigeria is driving the opportunities for organized retailers (Shoprite, SPAR) to enter the market.
“This is a high turnover, low margin business and sensitive to rental pricing. Their business model depends on lower margins, higher turnover of everyday goods and services. Thus they are sensitive to pricing and location”, he said.
Omisore added that the model has made developers to move away from malls catering for international brands towards malls focusing on retailers selling groceries, dry goods and other everyday items.
He also hinted that the offer price of the REIT is N1,000 per unit. Wooing investors, he said, the REIT has a stable and regular income distribution from diversified portfolio of real estate and real estate related assets; long term leases with tenants and diverse corporate tenant profile with staggered rental renewal periods, which prevent mass vacancy at any one period and provides stable and resilient portfolio performance.
“Others are attractive valuation metrics with a portfolio that delivers stable and consistent returns to investors; deposit of pre-executed agreements (Deed of Assignments, Deed of Declaration of Trust-DOT) with the custodian by the sponsor, prior to the offer; immediate refund of already received income on the properties”, he said.
Omisore assured would be investors of safety, saying, the new REIT, will invest in retail related real estate and has identified four malls that will constitute the initial investments including Adeniran Ogunsanya Mall, Surulere and Apapa Mall, Lagos State.
“The TSL REIT will focus on retail related real estate assets that have established occupancy levels.
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