Net income of SFS REIT Fund hits 12-year high

SFS Real Estate Investment Trust Fund (SFS REIT Fund), a close-ended real estate investment trust scheme, reported its highest net income value in at least twelve years, according to an analysis by BusinessDay.

Data from the company’s unaudited financial statement revealed that SFS REIT Fund’s net income increased by 51.2 percent to N480.3 million in 2024 from N317.5 million reported in 2023.

The SFS REIT Fund is the first real estate investment trust fund in Nigeria, and it is listed on the Nigeria Stock Exchange (NSE).

The fund started through an Initial Public Offer (IPO) of 20 million units of N100.00 each on July 23, 2007, and was officially listed on the Nigerian Stock Exchange on February 28, 2008 at a price of N100.00.

The fund was in January 2024 with a share price of N101.38. It closed the financial year with N179.45, recording 77 percent capital appreciation on the floor of the Nigeria Stock Exchange.

The SFS REIT Fund’s target investors are pension fund administrators, investment managers, endowment funds, insurance companies, international investors, and savvy individual investors interested in the stability and returns associated with real estate investing.

The fund is dedicated to utilising a pragmatic research-driven approach to acquiring, holding, renting, renovating, and trading income-generating real estate, such as residential homes, shopping malls, shops, hotels, offices, and warehouses while taking advantage of the fund’s tax-exempt status.

During the surveyed period, total income increased to N554.9 million from N395.4 million, obtained by rental income, fixed interest income, and profit on investment property disposal.

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Rental income increased to N205 million from N190 million, fixed interest income grew to N176.5 million from N147.7 million while profit on investment property disposal rose to N172.4 million from N57.6 million.

It is worth noting that the assets held by the REIT are located in prime areas. This advantageous positioning enables the REIT to increase rental charges or lease rentals with minimal resistance.

Victory Park Estate, located in Igbokushu, Lekki-Lagos with 12 units has a current yield of 6.50 percent. The tenants are individuals with 11 years property age.

Milverton Court Estate, located in Osapa, Lekki-Lagos with 17 units has a current yield of 6.28 percent. The tenants are individuals with 6 years of property age.

Sapphire Gardens Estate located in Awoyaya, Lekki-Lagos with 6 units has a current yield of 5.60 percent. The tenants are corporate entities with 6 years of property age.

Bourdillion Court Estate, located in Chevron dr, Lekki-Lagos with 8 units has a current yield of 6 percent. The tenants are individuals with 4 years of property age.

Harold Shodipo, located in G.R.A Ikeja, Lagos with 6 units has a current yield of 4.30 percent. The tenants are corporate entities with 10 years of property age.

Maccido Royal Gardens Estate, located in Galadinmawa, Abuja with 2 units has no current yield. The estate is currently available for sale with 6 years of property age.

As of FY 2024, the REIT’s total assets stood at N3.47 billion from N3.3 billion in FY 2023. Investment properties accounted for 57 percent of the REIT’s total assets in FY 2024, while investment securities and cash accounted for 42.6 percent and 8.9 percent, respectively.

Further analysis revealed that net cash generated from operating activities fell to N188.9 million in 2024 from N443 million in a similar period of 2023.

Cash and cash equivalents at the end of the period dipped to N29.4 million from N755 million which can be attributable to negative cash flow in investing and financing activities.

Net cash flow used in investing activities stood at a negative cash flow of N624 million from a negative cash flow of N78 million.

Net cash flow used in financing activities stood at a negative of N290 million from a negative of N169 million driven by distribution paid during the period.

Basic earnings per unit increased to N24.02 from N15.88 during the period.