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Fund manager extends HMK REIT’s N13.39bn IPO

Fund manager extends HMK REIT’s N13.39bn IPO App logo

The arrangers of Haldane McCall Real Estate Investment Trust have announced the extension of the Initial Public Offering, which opened on December 4, 2014.

According to them, this comes after the Securities and Exchange Commission approved the extension of the offer period.

Initially scheduled to close on January 14, the IPO will now close on January 28.

The fund manager explained in a statement that the move was to give interested investors the opportunity to invest in the REIT, following the time lost to the public holidays that were declared during the festive seasons.

Under the IPO, HMK REIT is offering 2.6 million units at N5.15 per unit valued at N13.39bn with a minimum purchase of 10,000 units and multiples of 2,000 thereafter to the investing public.

According to the fund manager, the proceeds of the offer will be used principally for the acquisition of a diverse portfolio of residential and commercial properties located in GRA Ikeja, Ikeja Central Business district and Ikoyi, respectively.

Specifically, it said, “HMK REIT will invest in a portfolio of high quality residential and commercial real estate properties that are already generating income, other potential high yield real estate assets and money market instruments.

“A minimum of 90 per cent will be invested in Real Estate and Real Estate related assets while a maximum of 10 per cent will be in Liquid Asset Investment.”

The Managing Director, FSDH Asset Management Limited, the fund manager, Mr. Olumayowa Ogunwemimo, was quoted as saying HMT REIT offered an opportunity to discerning investors to balance their investment portfolio and partake in stable and consistent stream of real estate income which a REIT provides as 90 per cent of income is distributed annually.

He added, “The REIT is an alternative for investors at a time where equities are not doing fantastically well. It is a way of preserving value and ensuring that investors do have an opportunity to extract value from the market.

“The major difference of the HMK REIT to other portfolios is in its exposure to the different asset classes. For instance, mutual fund has exposure to equities while a REIT has exposure to real estate. So it gives you that additional benefit of investing in real estate. But the key thing most investors look out for is the dividend pay-out.”

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