By Peter OBIORA InvestAdvocate
Lagos (INVESTADVOCATE)-Top Services Limited-Real Estate Investment Trust (TSL REIT) has said it must definitely pay dividend to investors of the company at the end of the current financial year, Winston Osuchukwu, managing director (MD) of the company said on Thursday at the “Facts behind the Offer” held at the Nigerian Stock Exchange (NSE).
“We will definitely pay dividend to shareholders of the company at the end of the current financial year, but I don’t know how much that will be paid; but we will definitely pay dividend,” he said.
TSL REIT on February 1, 2017 opened an Initial Public Offering (IPO) to raise N20 billion and offered for subscription 20 million units of N1000 each at par.
Osuchukwu said the funds raised from this offer would make possible the purchase of various retail commercial properties, located in the South West of Nigeria. “The TSL REIT will invest in retail related Real Estate and has identified four (4) malls that will constitute the initial investments, “he said.
According to him, the identified malls are Adeniran Ogunsanya Mall in Surulere, Lagos State, Apapa Mall in Apapa, Lagos State, Cocoa Mall, Dugbe, Ibadan in Oyo State and Akure Mall, Akure, Ondo State. “The TSL REIT will focus on retail related real estate assets that have established occupancy levels. The Fund does not intend to take on projects at the development of construction stage,” Osuchukwu added.
He said the growing urbanization in Nigeria is driving the opportunities for organized retailers (Shoprite, SPAR etc) 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,” the MD of TSL affirmed.
TSL said some of the compelling reasons to invest in REIT include, stable and regular income distribution from diversified portfolio of real Estate and Real Estate related assets, giving PFA’s access to Retail Related Real Estate in a tradeable vehicle (Usually only available via PE Funds) and existing long term leases with tenants.
Other reasons to invest in REIT according to TSL are, REIT allowing for diversification of an investment portfolio thereby reducing risks, deposit of pre-executed agreements (Deed of Assignments, Deed of Declaration of Trust DOT) with the Custodian by the sponsor prior to the offer.
Earlier in his opening remark, Oscar Onyema, chief executive officer (CEO) of the NSE congratulated the Fund manager, Issuing house and other parties to the transaction on receiving the Exchange’s approval for an IPO to raise N20 billion by offering 20 million units at N1,000.00 per unit.
“In their filing to the Exchange they indicated that the funds raised from this offer would make possible the purchase of various retail commercial properties, located in the South West of Nigeria. If successful, the new REIT will join UPDC REIT, Skye Shelter REIT, and Union Homes REIT on the Nigerian Stock Exchange,” he said.
According to him, this facts behind the offer is designed to enable the Sponsors to provide information on the offering to the key stakeholders in the market. “It shows the confidence the Sponsors and fund managers have on our platform as a mechanism to bring issuers and investors together,” Onyema added.
The NSE CEO said with a total market capitalization of N16.18 trillion across all of NSE’s asset classes, it has implemented; far-reaching transformational programmes that have improved market access and provided products that are aligned to investors’ requirements; several transparency initiatives (such as BrokerTrax, X-Compliance, X-Whistle, Compliance Status Indicator symbols, X-Issuer, X- Alert etc.) that have brought significant sanity to the market place and provided for a fair and orderly market.
He encouraged other fund managers to take advantage of the opportunities available in the Real Estate Investment Trust (REIT) market through product innovations that meets investors’ needs and appetite. “I encourage investors to take advantage of the opportunities presented by Real Estate Investment Trust schemes which typically offers stable and regular income distribution from diversified portfolio of real estate and real estate related assets,” he affirmed.
Lead Issuing House to the offer is First Ally Capital Limited; Co-Issuing Houses are Cowry Asset Management, FutureView Financial Services and Greenwich Trust Limited. Application list closes March 10, 2017.
