In a landmark year, SFS Real Estate Investment Trust (REIT) has reported a phenomenal 70% increase in gross revenue, soaring to N395.42 million in 2023 from N247.79 million in 2022. This impressive growth marks the highest profit in the fund’s 17-year history, culminating in a proposed dividend of N14.50 per share—a record-breaking distribution that offers a competitive dividend yield of 14.31%.
Speaking at the fund’s annual general meeting in Lagos, Managing Director and Chief Executive Officer of SFS REIT, Patrick Ilodianya, highlighted the fund’s extraordinary performance. He emphasized the unprecedented dividend payout, which has surged by 71.60%, nearly doubling the previous figures. Ilodianya noted that this dividend proposal, the highest ever declared by the fund, is projected to sustain its peak value with no foreseeable decline.
Detailing the financial triumph, Ilodianya explained that the proposed N14.50 per share dividend translates to an 18.83% return, based on a share price of N77.00 as of January 1, 2023. This performance yields an estimated total return exceeding 50% annually, 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 alone contributing 48% of the total earnings. Additionally, tenored deposits skyrocketed by 312% year-on-year, driving total assets up by 11.29% to N3.30 billion. Despite a 27.39% increase in operating expenses to N77.91 million, the net profit margin surged by 80%, reinforcing the fund’s financial health. The net asset value for 2022 stood at a solid N2.445 billion.
Discussing the broader market landscape, Ilodianya acknowledged the challenges within Nigeria’s housing sector, including substandard construction materials and escalating prices. He expressed concerns about affordability amidst the Federal Government’s ambitious plan to develop 550,000 houses over the next decade at a cost of N4.4 trillion.
The CEO 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 remains optimistic about the future, anticipating a boost in investments from both the government and the private sector. This increased investment is expected to drive up demand for residential units, subsequently enhancing rental income for the REIT.
As SFS REIT continues to navigate the complexities of the real estate market, its record-breaking achievements and strategic outlook position it for sustained growth and investor confidence in the coming years.
