Vacancy Factor up to 172

Quality Properties Mostly Vacant

VFIX up 4.2% from 165 in March to 172 in June 2016

A lagging indicator – yet to respond to policy changes

Lekki has the highest vacancy rate at 65%

The Ikoyi bridge a major catalyst

Leading to excess development

Residential index rose by 6.8% q-o-q, commercial index remained flat at 148

Reflects a slowed but continued deterioration in the real estate market

VFIX up to 172 in Q2 2016

VFIX up to 172 in Q2 2016

0

20

40

60

80

100

120

140

160

180

200

Jan

'15

Feb

'15

Mar

'15

Ap

r'1

5

May

'15

Jun

'15

July

'15

Au

g'1

5

Sep

'15

Oct

'15

No

v'1

5

Dec

'15

Jan

'16

Feb

'16

Mar

'16

Ap

r'1

6

May

'16

Jun

e'1

6

Source: FDC Think

• Gradually rising in Q2’16

VFIX up to 172 in Q2 2016

Month/Year VFIX Residential

Index

Commercial

Index

Jan 2015 100 100 100

Jan 2016 160.2 169.2 148

Mar 2016 165.3 176.9 148

Apr 2016 165.9 180.8 143

May 2016 170.5 188.5 143

June 2016 172.2 188.5 148

Macro-economic Challenges Drive Increased Vacancy

• Nigeria in recession means high vacancy rates

• Carrying cost of properties is excruciating

• Headline inflation at 16.5% is negative for real estate

• After devaluation, property values appreciate

• Replacement cost far in excess of market value

Macro-economic Challenges drive Increased Vacancy

• Cement price up 10% from N1500 to N1650

• Building material prices sharply higher

• Rents will spike after wage review

• Real estate a perfect hedge against inflation

Outlook

• Declining purchasing power to dampen housing demand

• Expect a move from prime areas to the suburbs

• Expect an increase in new developments

• Market recovery expected in 2017