hi nairalan financial gurus. i just stumbled across the sky shelter fund offer and i'm pretty interested. Its asking price is #100 per unit and the min investment is #100,000. I'm new to this stuff so i need some advice from you guys who are more experienced. should i invest in this offer? how do i invest in this offer? i neesd ur answers soon cause the offer closes on August 29th. Thanks

Made up my mind to also be a part of it but no one wants to comment on it

I am also interested.

I posted a Topic asking people what mutual funds are the best but no one has answered till now.

It seems like we need more people with information about Mutual funds to comment!!

Ha! at last, a thread on Skye - i was thinking of starting one up

for starters, the prospectus can be found at:
http://www.skyebankng.com/uploaded_files/Prospectus.pdf

looking at the forecast offer statistics (pp 21), it seems that they are looking at paying out massive dividends of N19.72, 23.79, 28.28 per unit of N100 in 2007 (yes, this financial year!!), 2008 and 2009 !! This looks very attractive to me - it means that if i invest N100k and buy 1000 units, i'll get a dividend of N19k by the end of this financial year - Dec 2007!! And in 18months, after year end of dec 2008, i should get a total dividend of over N43k (19.72k + 23.79k) i.e. i get back almost half of the funds i invested, while still havine the same number (1000) of units!!  

Is this realistic or too optimistic? when is the offer money going to get to Skye; will it do so much work for a N19.72 dividend to be paid THIS financial year? or is there something i'm missing?

over to you gurus - frankiriri, easimoni, windywendy et al - help us out here

i was trying to download the prospectus for better analysis and comment. while it is downloading, i may choose to say one or 2 things concerning the fund.

the bank is offering the opportunity to the public to be LAND and HOUSE owners even when the do not possess land. i mean the bank is investing the fund in real estate- a movement from the usual STOCK INVESTMENT MENTALITY. real estate is a lucrative business venture where price KEEPS GOING UP. in accounting land appreciates while other assets depreciates- therefore your investment is bound to grow in value over time. JIM SLATTER in his book "How to become a millionaire" posited that a wise combination of stocks and real estate investment will take you to your promise land.

Also, LASG has substantial interest in the bank, hence land will be made available to the bank to develop, therefore your investment is over 85% safeguarded.

IN MY OPINION
It will be a good buy for those that are interested.

If you are thinking of diversifying as a means of preserving your already earned wealth, this is actually a brillant idea.
Maybe not so brillant if you are thinking of building wealth.
If building is your priority, there a better alternatives

thanks for all your very enlightening replies. i still dont know how to actually subscribe to the fund. please tell me more. i'd also like more detailed inhouse info from someone who works with skye bank

@all,

I am at some cross roads here. I am really thinking to sell an equivalent value of my FBN for the minimum stake in the shelter Fund. I happen to be in the construction industry and i sure know that real estate is HOT. Skye bank is the leader in real estate finance while oceanic is trailing.

From the prospectus, I think its gonna be guud maybe thats y the minimum is 100K. Lets have your take on this.

Skye BANK intends to invest the money in choice real estate in PH, Abuja and Lagos. Think about it, the cost of real estate in Nigeria only goes upwards, especially in these 3 cities.

Because of the tax concessions that Skye will get from the govt, 80% of profits must go back to investors, by way of dividends, provided you hang in there for a year.

They are selling N2 bn in this first instance and the remaining N3 bn at a later date. I reckon that when the second tranche comes up for sale, people who didn't buy the first time would be dieing for a piece of the action considering the bumper dividends and (hopefully) share appreciation. In a nutshell, its my humble opinion that this stock is must buy.

I've already signed on the dotted line for 7,500 units.

aksance:

Ha! at last, a thread on Skye - i was thinking of starting one up

for starters, the prospectus can be found at:
http://www.skyebankng.com/uploaded_files/Prospectus.pdf

looking at the forecast offer statistics (pp 21), it seems that they are looking at paying out massive dividends of N19.72, 23.79, 28.28 per unit of N100 in 2007 (yes, this financial year!!), 2008 and 2009 !! This looks very attractive to me - it means that if i invest N100k and buy 1000 units, i'll get a dividend of N19k by the end of this financial year - Dec 2007!! And in 18months, after year end of dec 2008, i should get a total dividend of over N43k (19.72k + 23.79k) i.e. i get back almost half of the funds i invested, while still havine the same number (1000) of units!!

Is this realistic or too optimistic? when is the offer money going to get to Skye; will it do so much work for a N19.72 dividend to be paid THIS financial year? or is there something i'm missing?

over to you gurus - frankiriri, easimoni, windywendy et al - help us out here

seems like a good deal if you are not too concerned about growing your portfolio. It's great for those looking for income. You certainly won't get 19% didvidend from any major company on the stock exchange.

author=Crownvilla link=topic=71236.msg1380097#msg1380097 date=1186793312]
Because of the tax concessions that Skye will get from the govt, 80% of profits must go back to investors, by way of dividends, provided you hang in there for a year.
[quote][/quote]

@crownvilla - Please how did you get this information

@all correct- s.s.f might be a good deal but i would not advice you to sell your FBN for this. isnt there anyother way you can raise the money because that is also a worthwhile investment.

@all - i think im going to invest in this on monday. so far ive been recieving positive information and nothing negative.

@ Attila, please see the following from pg 8 of the abridged version of the prospectus for Skye Shelter Fund.


Net Asset Value per Unit = summation of 1 plus (2-5) divided by number of Units outstanding.
3.11 INCOME DISTRIBUTION
A minimum of 80% of the income will be distributed to unit holders at the end of every financial year subject to the minimum guaranteed return as under “summary of Offer” (item 15).
3.12 TAX CONSIDERATION
Income from the Fund shall not be subject to income tax. Withholding tax paid at source on dividends and interest income shall be treated as final tax. Foreign investors should contact their respective tax authorities for the tax treatment of capital gains income earned in Nigeria.

I've also done some private research on this type of investment which is called a Real Estate Investment Trust (REIT). In America where they originated from, the govt gives the company tax concessions, as a result, 95% of income goes back to investors if they hold on to their stock for a year.

Even in my hometown, Oshogbo of all places, the prices of property is going northwards. I don't need to tell you about Lagos, PH and Abuja!

@ crownvilla thanks for the reply.

Fingers crosed im doing it today

@all

people so those of us who dont have 100000 cant invest in the sky fund? na wo o!

@temmie1
what are the other alternatives to building wealth? can you enlighten me?

thanks people

@lokia -- I just thank God that money came at this time.


One of my friends told me that they allow for joint accoutns so maybe you can contact Skye bank to ask them and if you have other people that you can combine with, you can still do it. Try and find more information, im sorry thats all i know for now

Again, sorry for being naive, how do i get more info abt Sky Shelter Fund. How do i go about investing in it? Temmie, can u enlighten me more on this kind of funds.

Thanks

BabyGaddy

i've got a little question. i just started this stock tin, got a stockbroker last week, and they say my account will take 2weeks to open. they also say i wont be able to get a cscs no. until a months time. so i'm thinkin; can i go ahead and buy the shelter form offer on my own i.e without filling my new brokers name into the form? cause i dont know if it will be a problem when i want to add the stocks to my cscs account when i get the no., and i dont want to loose out of this offer because of an inept stockbroking firm, pls advise.
p.s, what is the e.dividend section at the bottom of the form for? pls explain how i should go about fillin that

If you are interested in  the Sky Shelter Fund, please you can buy through me.

Please contact me and I can get the Application forms across to you. I work in a stock broking house acting as a receiving agent to the offer.

@pinokio

go to any skye bank, fill the form and make payment. Chikena

all this niger delta boys, una blood too dey hot sef. person go just jump witout looking abi? naim make una dey run anyhow for portharcourt when notin dey pursue
anyway thanks for the advice. i'll do just dat

@all

Pls read this piece culled from the Punch, Monday 13th August 2007:


Nigeria real estate sector is up for bumper investment’
By Akinpelu Dada
Published: Monday, 13 Aug 2007
Before banks shied away from investing in real estate because of the long gestation period and the fear that those who borrowed money might not be able to recoup their investment sufficiently. Is this still so?

Skip to next paragraph

Akinpelu Dada
Deputy General Manager, Investment Banking Group, Skye Bank, Mr. Moses Oguntayo

Let us take it from the perspective of an individual that has money, if he has enough money, he decides the scale of project he wants to do and he goes in with his money without borrowing from anybody, and once he does it properly within a time frame that is reasonable, he will make his money. Skye Bank, for instance, has been involved in so many projects, we have seen the pitfalls in similar projects, we know what people have done to fail and what they have done to succeed and that is the experience we are bringing into the market. This fund is not borrowing, it is that people are putting together capital and use it to invest.

The beauty of the Skye Shelter Fund is that up to 80 per cent of the returns in a year will be distributed to unit holders. That is, whatever level of profit we make, we are allowed to distribute up to 80 per cent. Because it is also going to be quoted on the floor of the Stock Exchange, if you decide at the end of one or two years that you don’t want to be part of this fund, you can go to the stock exchange and sell it.

You must also know that real estate in an appreciative asset, if you buy an asset for N5m today even in our individual capacities, six months down the line, if you want to sell it, you won’t sell at N5m, it appreciates unlike other assets, if you buy a car today for N5m and you want to sell it in six months, somebody will tell you it is a second-hand thing and you will be struggling to sell it at N3m.

So, apart from the income that is coming from investment in real estate, there is the underlining capital appreciation and you can see what your investment is used to finance. Unit holders will on regular basis have the opportunity to visit projects that are financed with this fund, that is the difference because it will focus essentially on real estate.

We also want to emphasise the advantages, which is that you have cross market , the usual practice for funds of this size and nature is that you only recourse to the fund managers for redemption, but here you are free to go to the market to get your money back, you can sell it like the regular shares. So, it is unique product different from the way other funds operate. It is a full listing that can be freely traded unlike if the other funds, if you are on the memorandum listing, you will have to go to the fund manager’s office and say this is my unit certificate and I don’t want to have it anymore, they will be the one to dictate to you what price you are going to redeem it, but this one is market-driven, you know what you are going to get even before you leave your house.

The building industry has been canvassing for a secondary mortgage market for some time. Does this have any relationship with this particular offer?

There are ongoing efforts at encouraging the secondary mortgage market and Skye Bank among others has been involved in some of the initiatives. For instance, the Lagos State Government has started an initiative whereby your title registration is faster and that is very commendable.

The enforcement and execution are getting better; these are the things blocking the secondary mortgage market. We are also part of an ongoing initiative by the International Finance Corporation to standardise mortgage documents to make sure that the hurdle in the area of mortgage is removed by the government, and there are others like the Federal Capital Territory Administration, which has done a lot in this area by computerising the land titling process and we are aware that some other states have started the computerisation thing so that you can go to a central point and punch some keys and get access to data.

These should encourage transactions in secondary mortgage. Even as at now, from our own experience, we know that these problems don’t hinder good products in the market. Abuja Model City, which we financed with a developer, consists of more than 250 houses and some others like Goshen Beach Estate were completely sold out before completion even with all the hindrances of legislation. We are currently into two projects on the Lekki axis. So, Nigerians understand the peculiarities of legislation in this environment and the government is responding, like the clamour for the repeal of the Land Use Act, but before that happens, we would find a way. The key is understanding how to mitigate those risks.

Nigerians can understand, but what about the foreign investors? How much of a hindrance will these constitute to them?

We are talking to an international organisation based in Kenya- Shelter Afrique. Because of these hindrances, they have understood the peculiarity of the Nigerian environment and legislations, these hindrances are not peculiar to Nigeria. We are still trying to get to the level of best practices, since we can not get there in one day, the best thing is to see how we can manage it.

The foreign investors themselves have understood because their countries at a particular time had gone through what we are experiencing now and once they see conscious efforts on the part of the government and the private sector, they have more confidence especially when these projects are being anchored by private sector organisations unlike if it is being handled by one powerful corporation or housing authority where the Permanent Secretary today may not be there again in two months time.

If you ask foreign investors to invest in a Nigerian bank, they will study the legislations because ours are different from theirs, they will look at the management of the bank and study our system until they are assured that their investment is safe. So, they will look at the management of this fund and whatever we are putting together and once they have confidence in it, they will come along.

We have done a project with Shelter Afrique before we financed some part of it and they financed the rest and because they were impressed, they have given us a multi-million dollar facility to book mortgages for individuals. So, as we are building houses for sale, we can use this money to give people loan for 10-15 years at lower interest rates. This will make sure that instead of waiting for people to accumulate money and then you are selling a project for 12 months the buyer doesn’t have to bring all the money at once, may be he will bring like 10 or 20 per cent, and then you can quickly sell the houses and use the money to start another project.

We also have a PMI which is called Skye Mortgage Bankers Limited. It has recently been recapitalised and it will also be used to access the National Housing Fund loan for individuals.

Can you give more insight about the involvement of the IFC?

They are talking to everybody. They are talking to the financial institutions because they will provide the money to develop the houses. IFC is talking to the Federal Government about the Land Use Act, how to harmonise the application of the rules across the federation, how to remove some of the obnoxious clauses in the Act, how to review registration charges because in some states if you buy a property you will pay between 25 and 30 per cent of the value to register the title in your name. lagos state may ask you to go and bring white paper, other states might ask for pink or red, yellow or blue paper and you are on it for 12 months.

IFC is talking to major states where land is an issue. It is also talking to developers on how to improve construction methods and how to develop new building materials to bring down the cost. They are bringing their experts from other African countries and Europe to come and work with us. IFC is saying let all the banks come together and design common forms so that each bank will not be asking customers for different requirements.

What is Skye Shelter Fund and what does it have in stock for investors?

Skye Bank has played a prominent role in housing development in the country. We have been involved with almost all the reputable real estate developers around, we have financed projects in Lagos, Abuja and Port Harcourt both low and medium-income houses. Most of the projects have been undertaken by high net worth individuals and companies, and then, we know the benefits and the returns they have been able to make on it. So, it is in line with that that we thought there are quite a number of individuals who wish to invest in real estate but because they do not have the financial muscle to do it alone and in a state that will be beneficial that we should pull them together and help them partake in real estate development. It is also in response to the clamour by the regulatory authorities, that is, the Security and Exchange Commission and the Nigerian Stock Exchange that there should be more products in the market for investors to put in money. As at now, it is going to the Stock Exchange. We believe that we should on a continuous basis bring in new products into the market and that is why we are coming with this REIT, Skye Shelter Fund and it is the first of its kind in the Nigerian capital market, it is the first to be quoted on the floor of the stock exchange.

Is it that you will partner with developers to build houses in viable locations where they can easily sell by providing the fund to execute the projects?

There are so many options, the first is to identify properties and buy them off with the fund money and then maybe, we refurbish them and put in some facilities which are absent. For instance, if you have a new estate with no good water system, no swimming pool, there are no such facilities that tenants will like to have in such premises, we will put them in and let out the apartments or you decide that there are 20 units in there, let’s sell 10 and retain 10 for rent, that is the main focus of this. The fund can also decide to take some land in a very developed area and develop what they think the market in that area is looking for.

Now, the alternative is that you can see a developer who has acquired land or who is in the course of developing a project, you can go there and say I want to be your joint development partner and on the basis of how much he has put into the project and how much you are willing to commit into the project, you agree on an income sharing formula. Some of the fund can also be put on the shares of real estate companies that are very well known.

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@crownvilla

Thanks for that piece of information.

@crownvilla,
Thank you for the information. I didn't get to read through the whole hing though. It has always been a definate buy for me.

,mj

Nice investment

Money talks everywhere in Naija.
I'm into money making stuff too...though in calculated gambling.
My signature below is my witness