- Says investment in sector has greater chance of appreciation
In view of the continuous slump in Treasury bills yields, occasioned by the stoppage of individuals and non-bank corporates from the Central Bank of Nigeria’s Open Market Operations auctions, a real estate advisory firm, Northcourt has called on investors to invest in real estate, shares and long-term bonds to reduce risk and realise higher returns.
Northcourt is a real estate investment solutions company that adopts a research-based approach to developing and managing property as well as providing real estate advisory services in West Africa.
Speaking at a capacity building forum of the Finance Correspondents Association of Nigeria, on the topic “investment opportunities in 2020,” the Chief Operating Officer/ Director of Advisory, Northcourt Mr. Ayo Ibaro said though there is always a risk of losing money whenever one invests, there is also the need to invest wisely.
Ibaro stressed that the recurrent expenses in the retail sector is still huge, noting for instance that most big malls spend about N30 million on diesel per month.
According to him, the real estate sector provides a better option for investors that are looking for long-term windows to invest in, because real estate has greater chance of appreciation, adding that land for instance, is not static, which explains why it kept appreciating even during recession.
“If you have appetite for just short-term investment, then invest in shares, bonds and explore currencies because,” Ibaro advised.
He wants retail investors who have been having sleepless nights over low T-Bill yields to be careful in 2020 because the CBN and other multilateral organisations might still take certain decisions that could change every market expectations.
Regretting that the real estate sector has a lot of dead capital, Ibaro argued that attention should be paid to un-occupied multi-million naira houses scattered across Nigeria, saying that the owners could pay a token every month to government.
Such amount he said, could be channeled into provision of tangible social infrastructure especially children centers, schools, hospitals, health facilities among others.
In certain cities like Port Harcourt Ibaro said, it is the hotels, governments and churches that are top users of Land, thus crowding out entrepreneurs.
On challenges facing the sector, the real estate expert stated that costs of construction of residential houses, lack of social and affordable amenities are among them.