Chairman’s Statement

Wole Oshin


Review of Global Operating Environment

The pandemic remains a recurring theme in our world today. So far, half of the global population has received at least a dose of the COVID-19 vaccine. The narrative has evolved from the pandemic itself to its offshoots; supply chain disruptions, rising commodity prices, and surging inflation rates. Replete in the news are reports of chip shortages, resulting from the inability of supply to keep up with the increased demand for consumer electronics post-lockdown. The global economy currently faces an imminent threat of inflation in the aftermath of fiscal and monetary stimulus employed to reduce the effect of business disruptions caused by the pandemic.

Vaccine inequity has resulted in diverging economic outcomes. As expected, the vaccine rollout in Sub-Saharan Africa (SSA) has been the slowest globally, leaving the region vulnerable to repeated waves of Covid-19. Only c.9% of the African population was fully vaccinated as of 31-Dec-2021, compared to the c.49% global figure. Additionally, the discovery of the Omicron variant in South Africa, and the reaction of developed countries in banning travel from some African countries, highlight the perennial threat of the pandemic. Prolonged foreign travel restrictions still pose downside risks to investment and the business continuity.

The IMF expects regional growth at 3.8% in 2022. However, the recovery remains modest by global standards, expanding the income disparity with developed economies.

2021 has been a year unlike any other, the pandemic continued to impact the property market, with real estate having to react and adapt once again. The race for space continued and flexible working conditions have increasingly influenced the choices made by buyers with the Industrial and logistics sectors thriving in an e-commerce environment with heavy demands.

The capital markets continue to recover globally from their pandemic troughs, with several markets posting record investment activity at the close of the year.

Capital markets activity in the Americas and the largest economies in EMEA drove quarterly growth, as several of the markets that exhibited resilience in the early stages of the pandemic, such as Japan and South Korea, have experienced moderated capital markets activity in recent months. Robust competition for high-quality core and core-plus assets has resulted in the elevated prevalence of frustrated capital, and investors continue to move further out on the risk spectrum. Investor focus on portfolio diversification remains pronounced in the markets, and the residential real estate sector is now the most active globally, ahead of offices, and is driving 29% of transactional activity in 2021.


The Nigerian economic recovery gained momentum in the third quarter of 2021, as the low base in the non-oil sector supported output and secured a growth level of 4.0%. Positive momentum was particularly seen in heavyweight sectors like trade and real estate (21.0% of the economy), both of which are on the path to their first yearly growth in 6 years. The latter may have fed off prolonged periods of low-interest rates, while the former likely benefited from improved cross-country business activities upon border re-opening and less stringent COVID restrictions. However, Nigeria still lagged behind its SSA peers from a growth perspective with the oil sector shaving off c.1.0% of real GDP growth due to low crude oil production linked to terminal shut-ins and weaker investment.

Overall, a couple of factors are expected to shape the Nigerian economy’s direction in 2022. To mention a few, we expect the potential removal of fuel subsidy (as mandated by the Petroleum Industry Act) and electioneering activities to be key drivers of implementing economic policies, coupled with economic fortunes regarding inflation and monetary policy. With due consideration to the waning impact of the high base effect and international inflationary pressures, we expect a cautionary stance from the CBN and Monetary Policy Committee (MPC) in dictating its policy stance.

The IMF projects that Nigeria’s economy will grow by 2.7% in 2022 and remain at this level over the medium term, allowing GDP per capita to stabilize at current levels, notwithstanding long-standing structural problems and elevated uncertainties.


The real estate sector contributed 5.7% in Q4 of 2021, compared with 6.4% in Q4 of 2020. The key challenges of the real estate sector have remained the same, such as limited liquidity, insufficient supply of mortgages and pressure on purchasing power.

Security continues to be a priority in the residential real estate market. This has fuelled demand for gated communities. Major cities such as Abuja and Lagos have seen increased demand for residential assets in gated communities with a few going for over a 50% to 2020 prices and beyond driven by concerns around future lockdowns and the added protection from vandalizations. Analysts report a 25 – 30% YoY price growth in gated communities with a few going as high as 70 – 80% driven by concerns around future lockdowns and security concerns. This may worsen the current challenges in the high-end markets where landlords struggle to fill up space, retrofitting assets to better accommodate short stay occupiers.

Growth in the value of real estate stock in both absolute and relative terms is an important consideration for global real estate investors. Analysts estimate that at the end of 2021, the global value of real estate investable stock was over $34 trillion and expect this to grow to $85.1trillion over the next 20 years. Core cities are set to grow and will remain dominant features of the investment landscape – most notably, Lagos where growth is expected in most submarkets except for the Grade A market.


Bond Redemption: UPDC exercised the call option on its bond in April 2021. This was financed with the aid of an intercompany loan from its majority shareholders: Custodian Investment Plc (CIP) and UAC of Nigeria Plc (UAC). This enabled UPDC to significantly reduce finance cost on its long-term debt obligation.

Launch of UPDC’s flagship real estate project: UPDC launched the development of Pinnock Prime Estate. Pinnock Prime Estate is a site and service scheme located in Ojomu Area, Lekki right beside our existing Pinnock Beach Estate. This marked our first development in many years and marked the resurgence of UPDC on the real estate development scene. The project is expected to be completed by Q3 2022.


The Company’s borrowing costs reduced from N1.51 billion in 2020 to N764 million in 2021. The intercompany loan from Custodian and UAC was utilized to call up the bond in April 2021. This resulted in the significant reduction in Finance Cost.

The hospitality sub-sector was still recovering from the impact of the pandemic, most events and conferences in 2021 were still held virtually. The hotel business remains challenged as evidenced by the weak performance of the business.

The Facility Management business – UPDC Facilities Management Limited, maintained a steadied improved performance for the most part of 2021.


UPDC posted total revenue of N825 million in 2021 as against 2020 revenue of N1.66 billion (for company: N541 million in 2021 as against 2020 revenue of N1.60 billion). Loss before taxation (LBT) for the Group was N1.6 million as against N263 million in 2020. The Total Comprehensive Loss for the year was N2.02 billion, compared with N439 million loss recorded in 2020.

The Company’s interest-bearing debt was N5.51 billion as at December 2021 compared to N5.42 billion as at December 2020.


UPDC Plc has entered 2022 stronger for the following reasons:

Strategic Partnerships: The Board of Directors and Management of UPDC have highlighted the following key strategic partnerships as key to improving its operations in 2022:

Partnerships with Independent Power Producers (IPPs): UPDC will be entering into partnerships with IPPs. This is expected to provide an additional boost to the competitiveness of our real estate offerings.

JV Partnerships: UPDC intends to leverage its extensive relationship network within the real estate industry to enter into development partnerships with land owners. This is expected to provide support to the Company’s performance in 2022.

Going Concern Status: The Board of Directors and Management of UPDC have achieved significant progress in ensuring that the business continues as a going concern. Our focus for 2022 is on growth and revenue generation. The Company’s strategy for 2022 includes the following key items among others:

New Developments: UPDC will be riding on the successful launch of Pinnock Prime Estate to bring up a few additional developments, targeted at the middle-income class 2022.

Grow Operating Income: The management team will continue to drive sales to generate more revenue and grow the Company. Growth in Development and Asset Management revenue lines will also be pursued by the management.

Cost Optimization: This will continue to be a key part of our strategy as revenue starts to grow.


I would like to inform you that since the last Annual General Meeting, there have been changes to the Board of Directors of the Company. Mrs Deborah Nicol-Omeruah (Deputy Chief Executive Officer) and Mrs Folakemi Fadahunsi (Chief Financial Officer) resigned as directors of the Company. Please join me in thanking them for their invaluable contributions and services to the Company. I wish them well in their endeavors.

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