REAL ESTATE INVESTMENT IN THE CONTEXT OF THE ASSET MANAGEMENT CORPORATION OF NIGERIA ACT AS AMENDED.

Transcription

1 REAL ESTATE INVESTMENT IN THE CONTEXT OF THE ASSET MANAGEMENT CORPORATION OF NIGERIA ACT AS AMENDED. A PRESENTATION MADE BEFORE THE LAGOS BUSINESS SCHOOL ALUMNI SESSION 4 ON THURSDAY, APRIL 27, 2017 BY 10.00AM AT THE LAGOS AIRPORT HOTEL, 111 OBAFEMI AWOLOWO WAY, IKEJA LAGOS STATE. PRESENTER: BENJAMIN O.AZI ESQ, DTZ/CUSHMAN & WAKEFIELD, LAGOS..

2 REAL ESTATE INVESTMENT IN THE CONTEXT OF THE ASSET MANAGEMENT CORPORATION OF NIGERIA ACT AS AMENDED. SUMMARY: 2 A Definition of Real Estate. Real estate is property comprised of land and the buildings on it as well as the natural resources of the land including uncultivated flora and fauna, farmed crops and livestock, water and minerals. Forms -Residential, Commercial & Industrial The Nature & Importance of Real Estate Investment The Palestinian Question, Bakassi Peninsular, Faulkland Islands, South China Sea. etc. Real Estate As A Store of Value, As A Collateral, As source of Rental Income, Capital Growth Element and A Source of Premium. Recognition of the right to real estate interest under the 1999 Constitution of the Federal Republic Of Nigeria, The Land Use Act and Land Use Laws of Federating States. Expropriation: Over riding Public Interest, Sequestration, Forfeiture, Insolvency Related Circumstances. When the Real Estate Interest Is Work In Progress. Effective Valuation.

3 REAL ESTATE INVESTMENT IN THE CONTEXT OF THE ASSET MANAGEMENT CORPORATION OF NIGERIA ACT AS AMENDED. The Goals / Objectives of the Amcon Act and reality of its implementation and effects. The 2015 Amendment. a) Goals & objectives of the Act. b) Nature of Amcon Bail Out Compared with the US experience. Intended Lifespan of AMCON & Adopted Strategy c) Implementation of the Act in the context of real estate investments. Test Case: Ahmed Bola Tinubu International Truck Terminal, Iganmu.-Essence, State of Development at Time Of AMCON intervention, Future? 3

4 REAL ESTATE INVESTMENT IN THE CONTEXT OF THE ASSET MANAGEMENT CORPORATION OF NIGERIA ACT AS AMENDED. Table1: Loan acquisition from EFIs Eligible Financial Institutions(EFIs) Percentage of AMCON Portfolio Access 1.63% Diamond 2.13% Ecobank 2.07% Enterprise 3.59% ETB 0.59% FBN 5.21% FCMB 2.94% Fidelity 1.75% Finbank 4.04% GTB 2.25% 4 Intercontinental 14.62%

5 REAL ESTATE INVESTMENT IN THE CONTEXT OF THE ASSET MANAGEMENT CORPORATION OF NIGERIA ACT AS AMENDED. Keystone 9.15% MainStreet 11.40% Oceanic 11.58% SKYE 2.62% Stanbic IBTC 0.13% STERLING 1.22% UBA 5.80% UNION 11.43% Unity 2.28% Wema 1.13% Zenith 2.42% 5 Grand Total %

6 REAL ESTATE INVESTMENT IN THE CONTEXT OF THE ASSET MANAGEMENT CORPORATION OF NIGERIA ACT AS AMENDED. Breakdown of the top five sectors in which the EBAs originated from. They represent 75.35% off all EBAs purchased. Table 2: Top Five Sectors Sector Oil and Gas 27.23% General Commerce 18.49% Capital Market 17.93% Manufacturing 6.24% Percentage of AMCON Portfolio 6 Finance and Insurance 5.47%

7 7 REAL ESTATE INVESTMENT IN THE CONTEXT OF THE ASSET MANAGEMENT CORPORATION OF NIGERIA ACT AS AMENDED.

8 REAL ESTATE INVESTMENT IN THE CONTEXT OF THE ASSET MANAGEMENT CORPORATION OF NIGERIA ACT AS AMENDED. Table 3: Distribution of Loans Loan Distribution Percentage of AMCON Portfolio Number of Loans Over N10b 40% 62 Between N1b and 10b 37% 431 Between N100m and 1b 16% 1, m and Below 7% 10,046 Total 100% 12,537 8

9 9 REAL ESTATE INVESTMENT IN THE CONTEXT OF THE ASSET MANAGEMENT CORPORATION OF NIGERIA ACT AS AMENDED.

10 10 REAL ESTATE INVESTMENT IN THE CONTEXT OF THE ASSET MANAGEMENT CORPORATION OF NIGERIA ACT AS AMENDED.

11 REAL ESTATE INVESTMENT IN THE CONTEXT OF THE ASSET MANAGEMENT CORPORATION OF NIGERIA ACT AS AMENDED. Table 4: Breakdown of Assets Securing EBAs Asset Classification Percentage of AMCON Portfolio Number of Loans 11 Combination of Assets 13% 103 Debenture 15% 295 Mortgage 20% 2,096 Others 6% 795 Shares 22% 4,105 Shares & Mortgage 4% 20 Unsecured 22% 5,123 Total 100% 12,537

12 REAL ESTATE INVESTMENT IN THE CONTEXT OF THE ASSET MANAGEMENT CORPORATION OF NIGERIA ACT AS AMENDED. The Amcon Act and effect on Real Estate Investments. a) Amcon Intervention as third party to financial arrangements b) Amcon intervention as Supervening factor or Force majeure? c) Amcon intervention and project dynamics and timeline. d) Amcon intervention as threat to realisation of investment. 12

13 REAL ESTATE INVESTMENT IN THE CONTEXT OF THE ASSET MANAGEMENT CORPORATION OF NIGERIA ACT AS AMENDED. What is really needed-partnership or Insurance?. Amcon & REITS. Conclusion. Realignment of Objectives More effective & Efficient Implementation through Private Sector Oriented Organisation & Management -Exit Strategies-Capital Market Reits. Merger With The Infrastructure Bank Plc / Development Bank of Nigeria. 13