NAN-HE-3
Investment
Lagos, March 28, 2017 (NAN) The Association of Estate Agents of Nigeria (AEAN) has called for review of Real Estate Investment Trusts (REITs) laws to allow direct investment of pension fund in real estate.
Its Chairman, Chudi Ubosi, made the call in an interview with the News Agency of Nigeria (NAN) on Tuesday in Lagos.
According to him, REITs laws and National Pension Commission (PenCom) guidelines forbid pension funds and assets from being directly invested in real estate.
He said that REITs regulations directed that pension funds could only be invested in mortgage-backed securities.
Ubosi said that contributions to PenCom under the national contributory pension fund had accumulated to more than N5.3 trillion.
“This is enough fund that can be used to grow the building construction industry and the economy as a whole if properly harnessed and managed,” he said.
Ubosi said the stakeholders in the industry should dialogue with PenCom and other financial institutions to create a financial and mortgage platform for developers to access loans.
According to him, the platform should be designed in such a way that developers would be able to access loans at five to six per cent interest rate.
He said that such mortgage loans should be repayable within 25 to 30 years to impact greatly in the real estate industry.
“Operators in the industry need to look for how the pension fund can be used to finance the mortgage industry.
“The guidelines and regulations should be reviewed to allow direct investment of pension fund at the low end of real estate industry where it will have great impact.
“Real estate industry is safer, stable and rewarding, while it remains a viable venture to invest the pension fund,” Ubosi said.
LUC/FLP/TA
Edited by Folorunso Poroye/Tajudeen Atitebi