UPDC seeks reform in real estate laws amid mortgage defaults

Following increasing rate of mortgage defaults, UPDC Plc has called for review of real estate laws, especially reform in the foreclosure laws to create a conducive environment for homeownership.

UPDC Chief Executive Officer, Mr. Odunayo Ojo, who made the submission during its Media Luncheon in Lagos, said there was also need to strengthen advocacy for Nigerians to be able to use their pension contributions as equity for housing.

In his review, he said the economic headwinds across the globe weighed considerably on real estate activity in 2022, the occupiers took more cautious approach to decision-making with reduced requirements in some cases.

“Transaction volumes also weakened as major central banks tightened monetary policy, which significantly pushed up the cost of borrowing. Rising interest rates and worsening economic conditions dampened investor sentiments leading to a drop of global investment volumes by 20 per cent year-on-year from 2021.

“Nevertheless, investor demand continues to tilt towards the residential sector, albeit cautiously due to higher financing costs. The industrial and logistics sector also showed resilience with healthy levels of demand and strong fundamentals.

“The retail market took a cautious approach as most retailers focused on optimising profitability in their existing spaces. The hotel and hospitality sector however showed growth supported by increased travel demand and continued recovery of urban activities pre-pandemic.

“Similarly, the commercial office sector witnessed greater volumes of leases as more employees return to office,” Ojo said.

He said despite a very challenging business environment, the company remained steadfast to its strategic objectives and demonstrated resilience in the continued execution of its ongoing projects, while simultaneously pushing and motivating the sales team to record significant growth in property sales and other revenue lines as compared to the preceding year.

According to him, the Festival Hotel was re-operationalised during the year following the completion of renovations of key facilities with managerial/operational assistance from Premium Swiss Hotels (PSH) – a growing hospitality management company from Switzerland. “In December last year, UPDC acquired a five-hectare land along Monastery Road in Sangotedo, Lekki with the intent of developing a site and service scheme targeted at the middle class,” he said

Ojo stated that the UPDC Group posted a total revenue of N5.9 Billion in 2022 as compared to the N825 million recorded in 2021 with a significant portion of that increase coming from property sales, which accounted for N5.1 billion of total revenues.

After six consecutive years of losses, the group returned to profitability with a profit before tax of N331 million compared to a loss of N1.6billion in the 2021 and a total comprehensive profit of N7million as compared to a loss of over N2 billion recorded in 2021.

He listed the company’s current projects as Pinnock Prime Estate, a 1.47-hectare site and service scheme located in Lekki Pennisula II, which is envisioned to become a sought-after development and estate of choice within the area creating a new benchmark for suburban living.

Others include The Hampshire, a five-hectare mixed-use development into serviced Plots (Site and Service Infrastructure) with residential, commercial and public use zones in Sangotedo, Lagos.