Afriland Properties said it plans to get its business back on track with investments in lock-up shops targeted at low-end housing consumers.
At a recent Investors’ Call at the headquarters of the NASD OTC Securities Exchange in Lagos, the company said revenue rose 1 percent in the 2019 financial year, while total assets declined by 2.4 percent as a result of the decline in cash.
Uzo Oshogwe, managing director and CEO of Afriland Properties, during the Investors’ Call, said a difficult operating environment was largely responsible for the not-so-impressive growth the company recorded.
Apart from a marginal rise in ease of doing business Nigeria recorded in 2018, the operating environment had several challenges in 2018 including the high-interest rate on borrowing, deficient infrastructure, energy issues, insecurity in some parts of the country, which impacted negatively on housing demand in the country.
Currently, Nigeria has 22 million units of housing deficit. The modern retail office market has an average vacancy rate of 61 percent as of the first half of 2019 compared to 57 percent at the end of 2018.
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“We do have a substantial loan liability which we intend to clear up in 2020,” Oshogwe said. The company had lost ground from the Falomo Shopping Mall it signed with the Lagos State government which was later canceled by a new government.
Oshogwe said Afriland plans to approach the government again to continue the project. In the meantime, the company has completed the development and renovation work of the Raymond House building, which commenced in 2016, and now known as Afriland Towers, and will be opening it soon.
Nevertheless, rising demand in lock-up shops, Oshogwe says, remains a focus for Afriland which already has a project that is near completion at Egbeda Lagos.
As part of efforts to save money, Oshogwe said, “We kept our staff cost at a minimum. We didn’t do a lot of construction work but we sweated our engineering team. We also did a lot of negotiations.”
In 2020, Afriland plans to deepen its engagement with the government and seal joint venture partnerships.
Meanwhile, NASD disclosed that it is talking with the Pension Commission of Nigeria to invest money in the alternative market.
