Showing posts with label Control. Show all posts
Showing posts with label Control. Show all posts

Tuesday, March 18, 2014

‘We are bullish in tracking opportunities in the market’

The retail and office space markets are, understandably, flourishing in sub-Saharan Africa, particularly in Nigeria, and as demand in this market continues to come from increasingly sophisticated consumers and international retailers, the need for products of international standards becomes imperative. FUNKE OKUBADEJO, a director in Real Estate at Actis – a private equity manager that prides itself with ‘power of capital’ – speaks with CHUKA UROKO on how her firm is pioneering the development of these products, among other issues. Excerpts:

Actis’ real estate portfolio in sub-Saharan Africa (SSA)
As a matter of introduction, Actis is a private equity manager focused on emerging markets, including sub-Saharan Africa (SSA) and Africa in general. It has about $5 billion funds under management and $1.8 billion of this has been committed to Africa. In real estate, we are primarily focused on SSA. We have investment in Nigeria, Ghana, East Africa, Tanzania, Kenya, Mauritius and Zambia.
We have pioneered the transitioning of the traditional shopping culture to more modern shopping malls with our initial investment in The Palms in Lagos. We have done the same with the Accra Mall in Ghana. We also invested in Ikeja City Mall which is still the largest retail mall in Lagos. We are also looking at office space. We want to pioneer this segment as well. Our office space project in Accra is the first green-certified office building coming to the market in SSA. We followed it up with The Heritage Place in Lagos which is still under construction and is expected to be delivered in the fourth quarter of 2015. It promises to be the first green commercial building in Nigeria. Heritage Place is bringing a total redefinition in office building in terms of what an office will be. It is unique in terms of specification and design; it is a modern eco-friendly product coming to the market.

Investment plan for 2014
Our main focus is on growing consumer asset classes. We will also be investing in infrastructure in the emerging markets where we are present. Looking at Nigeria which is a key market with a projected GDP growth of 6-7 percent, we see significant opportunity for us to make additional investment in the key areas such as commercial developments in retail and office segment. We see what we are doing as a great enabler of the growth of retail because we don’t want to see the retailers bothering about making investment in real estate space.
We are looking at big retail centres where people can do their shopping and also relax. From the real estate point of view, this is an area we have seen significant demand from consumers. We are also looking at opportunities in industrial business where we can provide facilities for big industrialists to warehouse their products. Moving out of Lagos, we also have investment in Abuja which is the Jabi Lake Mall. We are looking at other key cities in the country.

Challenges of investment
The major challenge here is being able to execute the project in time and on budget. We have the benefit of having done projects in other markets in Africa and so, we  leverage on our experience to execute our projects. We develop on an existing execution platform; we have a dedicated team that works on our key markets. This has helped to manage the challenges of execution in this market. We have been able to deliver in time and on budget and this has created a level of credibility for us in the market. In all we do, we don’t get any kind of incentive from government. For us, it is important that businesses are sustainable in their own right and not dependent on anything from the government.

Investment in retail outside the city centres
We are considering this quite alright, but location is very important in real estate investment. Location has to do with visibility and accessibility. To the extent that land is out there where people can see and get there easily, I think we will consider that. Certain projects are not carried out here because of the cost of land. Most times, it is difficult to get a sizeable piece of land that can accommodate a mall in the middle of a city centre or a highbrow area. This is not peculiar to Nigeria; it is all over the world. We don’t have any issue moving out of the city centre as long as there is a good transport link that can connect consumers to the mall.

The next five years of investment
We have done The Palms and Ikeja City Mall; we have The Heritage Place and Abuja Jabi Lake Mall under construction; we have appetite to do more. We are very bullish in tracking the opportunities in the market by continuing to replicate what we have done before in the primary cities of Nigeria. We expect to see more activity; we have developed capacity much more than we had before, giving us a lot more ability to roll out more projects.

Investment in residential projects
This is an area we are considering to look at, but our key focus is on commercial real estate and that is where we have developed capacity to deal with. The residential area is where more people have capacity to address. We involve ourselves in the commercial segment where there is less capacity locally, an area where a significant amount of equity capital is required and where there is ability to raise debt. We basically focus on areas where we see there is a significant capacity gap, and not just anywhere we see opportunity that is compelling.

Heritage Place as a green office building
When we talk about a green building, we are looking at sustainability which has to do with impact on environment. It also has to do with the use of energy and how this relates with the resources in the environment. The key issue about Heritage Place is the design and how much energy it is going to consume. It has been certified by Leadership in Energy and Environmental Design (LEED) that the design would achieve at least 20 percent more energy savings than a comparable building anywhere in the world. When we look at our own environment, we see that that number would be higher up to 30 percent or more.

Sunday, July 21, 2013

FG Loses Control Of Tourism, Hotel Regulation To States

A PANEL of the Supreme Court of Nigeria has unanimously declared that it is only a state house of assembly that can make laws on tourism or exercise control in the licensing or grading of hotels, restaurants and fast food outlets.

   Dismissing a case filed by Attorney General of the Federation and upholding the contention of that of Lagos State, the Court on Friday held that the Constitution empowers only the National Assembly to regulate tourist traffic, a term which does not extend to hotel registration or licensing.
   The Court also ruled in favour of Lagos State in another case filed on the same subject, which was consolidated with the first one for hearing. In the latter case, the Court declared valid both the Hotel Licensing Law of Lagos State and the Hotel Occupancy and Restaurant Consumption Law of Lagos State. The offending sections of the Nigerian Tourism Development Corporation  (NTDC) Act were, however, declared null and void.

   Represented by the Attorney General, Mr. Ade Ipaye, Lagos State Government had argued during the hearing that the only power reserved to the National Assembly on the Exclusive Legislative List in Schedule 2 to the Constitution was the regulation of tourist traffic, which only pertained to immigrations and the issuance of visas, but Mr. Tunde Busari, representing the Attorney General of the Federation, contended that the phrase was enough to cover all tourism subjects and that the NTDC Act had therefore covered the field. On those grounds, Mr. Busari called on the court to invalidate the Hotel Licensing Law and Hotel Consumption Tax Law of Lagos State. This was rejected by Galadima JSC who read the lead judgment and all other justices in both cases.

   It would be recalled that the Lagos Sate Government and the Federal Government had been embroiled in controversy over the question of proper authority to license and grade hospitality establishments. This had resulted in the NTDC and the State Government setting up parallel registration and regulation structures to the annoyance of businessmen in the industry.  By dismissing the case of the Federal Government, the apex court has put paid to this controversy and paved way for State Governments to take full charge of tourism regulation and development within their respective jurisdictions.

Commenting on the judgment, Mr. Disun Holloway who is the Lagos State Commissioner for Tourism and Intergovernmental Relations, declared it as a landmark and commended the Supreme Court for upholding the tenets of Federalism. He also stated his expectation that this judgment will eradicate multiplicity of taxation and regulation, thereby enabling States to take charge and properly plan for the hospitality industry in their respective territories.