First Ally Asset Management offers N20bn REIT on NSE

First Ally Asset Management said the company, a fund manager and Top Services Limited (TSL) are floating a N20 billion Real Estate Investment Trust (REIT) on The Nigerian Stock Exchange (NSE)

The close-ended REIT offer, consisting of 20 million units for subscription at N1, 000 per unit opened from February 1, 2017 and to close on March 10, 2017, and has   First Ally Capital as its lead issuing house and First Ally Asset Management as its fund manager.

Speaking at the company’s “Facts behind the Offer” on the Nigerian Stock Exchange (NSE) on Thursday, the Managing Director of First Ally Asset, Mr. Winston Osuchukwu, said that TSL REIT is a close ended Real Estate Investment Trust (REIT) registered and regulated by the Securities and Exchange Commission (SEC) and to be listed on the NSE.

He noted that the initial investments by the REIT will focus on retail-related real estate, identifying Adeniran Ogunsanya Mall Surulere, Lagos, Apapa Mall, Cocoa Mall, Ibadan, Akure Mall, Ondo state to constitute the initial investment of the fund.

He stated, “We are promising stable and regular income distribution to investors in the REIT and one of the strengths of the TSL REIT includes predictable cash flow.

“The REIT will have rental payment agreements that are indexed to the naira and dollar rate, zero leverage of assets at inception, while investors will not take on development, construction or financing risk.”

Osuchukwu added that the TSL REIT will also focus on retail related real estate that have established occupancy levels, saying that the fund dose not intend to take on projects at the development or construction stage.

He stated that the growing urbanisation in Nigeria is driving the opportunities for organised retailers, Shoprite, Spar among others to enter the market, saying “This is a high turnover, low margin business and sensitive to rental pricing and their business model depends on lower margin, leading to their sensitive to pricing and location.”

He urged investors to invest in the fund as it is a stable and regular income from diversified portfolio of real estate and related assets, gives PFA’s access to retail related real estate in a tradeable vehicle, the REIT is transparently structured and backed by reputable organisations, among others.

The Chief Executive Officer, NSE, Mr. Oscar Onyema at the N20 billion offering said, “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 has on our platform as a mechanism to bring issuers and investors together I wish to encourage 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 urged other fund managers to continually make available educational materials on REIT that will help investors make informed decisions.