invest now · key to making sure you choose high-performing investments, especially during an...

NEWSLETTERJUNE 2020

SUSTAINABLE INVESTMENT III

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| June Newsletter

FROM THE HEADLINES

The Interna�onal Monetary Fund has put the economic fallout of the current Covid-19 crisis in the category of a severe recession, worse than the 2008 subprime crisis. The prices of commodi�es have fallen globally. Crude oil prices became so vola�le that at some point, it was trading in nega�ve. The equity markets have also witnessed extreme vola�lity across the world and debt investments have triggered some

panic among investors due to their underlying credit risks. Commercial real estate, which encompasses the hard-hit hotel and retail sectors have also experienced a hard hit, but we s�ll see value in residen�al Real Estate, despite the challenging �mes.

With so much vola�lity in the market, what should an investor do and where should one invest their hard-

| June Newsletter

EMPHASIS ON OUR PERSPECTIVE

In a crisis, it is important to be aware of the dangers – but more importantly, recognizing opportunity.

Tips for inves�ng in Real Estate during and a�er the outbreak:

Real estate opportuni�es and stocks have been long-term rivals for the �tle “Best Investment Strategy.” However, a�er the Coronavirus outbreak, the stock market was quick to take a downward turn, and property prices have remained almost unchanged.

While common investment vehicles might take a hit in returns right now, inves�ng in a recession can actually be the best �me to buy real estate because it's less vola�le than the stock market, and there isn't as much compe��on from other buyers. The smartest real estate inves�ng strategy during these

�mes is finding proper�es that have a great chance for apprecia�on over the long term.

Ÿ Invest in ci�es with a strong workforce, vibrant b u s i n e s s e n v i r o n m e n t a n d m a n y j o b opportuni�es

Ÿ Invest in projects where you are the major investor and the comple�on of the project does not rely on other sales

Ÿ Use a local partner to help you iden�fy asset pricing cycles through the en�re process

At a �me where everyone seems wary of predic�ng the future, investors can pave their own way forward by taking ac�on with confidence and looking ahead rather than looking for short-term prospects. When it comes to property interest, using a local expert is key to making sure you choose high-performing investments, especially during an economic reality with seemingly unsure foo�ng.

Opportunity in Chaos

Investors need to understand how certain investment performance and economic down �mes are related. For example, the stock market is a forward-looking mechanism and economic reports are backward-looking. For this reason, stock prices o�en fall months before a recession begins. It also means that stock prices o�en bounce back up before the recession is officially over.

Ÿ Look into long term investments that will generate ongoing passive income

Ÿ Act now to gain from increased nego�a�on opportuni�es for discounts with less investor traffic, which will lead to greater opportuni�es for inves�ng in high-value assets.

e a r n e d m o n e y ? T h i s s i t u a � o n d e m a n d s unprecedented moves, but without panic. It is cri�cal to align your investments to your risk appe�te, financial goals, and corresponding returns expecta�ons. However, when there i s an unprecedented economic situa�on like the one we are currently faced with, it requires more effort than normal.

SUSTAINABLE INVESTMENT IIIWITH EMPHASIS ON OUR PERSPECTIVE

The first half of the year has been met with unexpected challenges, and the return to normalcy seems worryingly undefined. As we find ourselves in unchartered territory, the level of uncertainty in the economy skyrockets and the recovery trajectory is difficult to forecast.

As the crisis demands the world to come together to explore alternatives, be it through social distancing, remote work access, availability of critical supplies and protective measures for all, and of course, all through effective resource management, it is critical to remain forward-looking as there are opportunities even within tough financial times.

Doing our utmost to provide unmatched guidance on sustainable investment opportunities during the Covid-19 crisis, Bilaad Realty stands ready to live up to our significant social and economic responsibility as society re-opens.

While the pattern is familiar to a standard recession, studies have shown that historically, economic

activities return to normalcy very quickly once epidemics are over. This is why beyond preparing for a harsh economy; a sustainable investment strategy is essential for long term personal financial growth and development. In the same way Nigeria needs to invest more in non-oil revenue sources, individuals need to continue to grow their investment pots despite the economic downturn.

Aliyu Aliyu

Bilaad Realty LtdChief Execu�ve Officer