The UACN Property Development Company (UPDC) Plc led price gainers at the stock market on Tuesday as investors increased demand for the equity on news that the company is being repositioned to deliver better value to all stakeholders.
UPDC appreciated 9.4 per cent to close at N1.86 per share, trailed by Fidson Healthcare with 8.8 per cent. Vitafoam Nigeria Plc, Honeywell Flour Mills Plc and Newrest ASL Plc appreciated by 4.9 per cent apiece to complete the top price gainers.
Market analysts linked the renewed demand for UPDC shares to the efforts by the management to reposition the company. The Chairman of UPDC, Mr. Larry Ettah told shareholders at the annual general meeting (AGM) held in Lagos yesterday that despite the challenging business terrain, the company continued its ongoing project developments in 2016 and commenced new ones.
Providing details on the company’s plan for the future, he said: “A key strategic imperative for 2017 is to deleverage the company. This is being achieved through deployment of an aggressive sales strategy, one for one Rights Issue that is about to be launched, and divestment from low yielding investment properties. The fundamentals of the company are strong and the brand remains positioned to deliver value to all stakeholders.”
According to him, Nigeria’s real estate market still presents substantial opportunities as well as a number of challenges for property investors and developers.
He said: “Cumbersome and time-consuming processes for land acquisition, insecure land title, infrastructuredeficiency 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.”
Ettah said that housing demand in residential real estate has consistently exceeded supply, explaining that a keyconstraint 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 stabilisation. The federal government and certain state governments have embarked on initiatives regarding affordable homes and have specific agencies set-up towards that end,” he said.