Patrick Ilodianya; Chairman, Dr. Layi Fatona and Director, Yemi Gbenro during the Fund’s Annual General Meeting.
The Managing Director/Chief Executive Officer, SFS Real Estate Investment Trust (REIT), Patrick Ilodianya has expressed concerns about affordability in the Federal Government’s ambitious plan to develop 550,000 houses over the next decade for N4.4 trillion.
Ilodianya, who spoke during the fund’s 2023 general meeting, in Lagos, acknowledged the challenges in Nigeria’s housing sector, including substandard construction materials and escalating prices.
The chief executive also noted that economic factors such as interest rates and changing work patterns have dampened demand for office spaces, leading to a cautious approach towards new leases.
However, Ilodianya said he remained optimistic about the future, anticipating a boost in investments from both the government and the private sector. This increased investment; he added is expected to drive up demand for residential units, subsequently enhancing rental income for the REIT.
MEANWHILE, SFS REIT has reported a gross revenue increase of N395.42 million in 2023 as against N247.79 million in 2022, witnessing a remarkable growth of 70 per cent.
The growth marks the highest profit in the fund’s 17-year history, culminating in a proposed dividend of N14.50 per share, representing a record distribution that offers a competitive dividend yield of 14.31 per cent.
He stated that concurrently, the fund also observed growth in dividend payouts of 71.60 per cent, nearly doubling the previous figures. Detailing its achievement, Ilodianya explained that the proposed N14.50 per share dividend translates to an 18.83 per cent return, based on a share price of N77.00 as of January 1, 2023.
The performance, he stressed, yields an estimated total return exceeding 50 per cent yearly, thereby underscoring the fund’s robust growth and profitability.
Ilodianya attributed the significant revenue boost to a strong performance in interest and rental income, with rental income contributing 48 per cent of the total earnings.
Additionally, he reported that tenored deposits skyrocketed by 312 per cent year-on-year, driving total assets up by 11.29 per cent to N3.30 billion. Despite a 27.39 per cent increase in operating expenses to N77.91 million, he stated that the net profit margin surged by 80 per cent, reinforcing the fund’s financial health, while the net asset value for 2022 stood at N2.445 billion.
