Rating Release
Agusto & Co. assigns an “A-” rating to Wemabod Limited with a stable outlook.
This rating expires on 30 June 2023.
Agusto & Co. hereby assigns an “A-” rating to Wemabod Limited (“Wemabod” or “the Company”). The rating reflects Wemabod’s good operating cash flows supported by the relative stability in its earnings and strong average occupancy rate of nearly 90% across its portfolio of commercial, industrial and residential properties. The rating further considers the Company’s diversified income stream that has continued to support revenue growth, and its unique project financing strategy that has helped to keep its leverage low. These rating positives are however constrained by Wemabod’s concentrated ownership structure as well as concerns over the continuous decline in its profit margin amid intensifying cost pressures in building projects and facility management services that have characterised the business climate. Furthermore, we consider the country’s uncertain political landscape and the worsening macroeconomic problems as potential downside risks to Wemabod’s future growth and expansion plans.
Wemabod Limited is a real estate and property development company with a diversified portfolio of commercial, industrial and residential properties across major cities in Nigeria. The Company is the real estate arm of Odu’a Investment Company Limited (“the Odu’a Group”) – a conglomerate owned and controlled by the former Western States of Nigeria (now Oyo, Ogun, Ondo, Osun and Ekiti States). Wemabod owns some of the iconic commercial properties in Lagos including Western House, Investment House, Unity House, Lapal House and Awolowo House. The Company’s primary focus has been on property development and acquisition with the view to generating rental income. However, there has been a shift in Wemabod’s strategy with increased investments in new properties as well as renovation of existing commercial buildings in a bid to improve their attractiveness and occupancy rate.
The opinions expressed in this rating release do not represent investment or other advice and should therefore not be construed as such.