The real estate industry of Papua New Guinea has experienced significant growth parallel with the infrastructure boom from the LNG project. Top-end and medium range housing segments have undergone some contraction after the project completion. Low-end housing demand continues to rise due to increased urbanisation and while the government and businesses in the industry are working to address the issue of affordable housing, demand continues to outstrip supply.
The requirement for commercial properties are projected to sustain particularly in Port Moresby and Lae. However, a critical issue that needs to be addressed to faciliate development is the shortage of land. 97% of the land area in the country is under customary tenure, where much of this is undocumented. On the other hand, urban land, where available, is locked up in government leases.
Despite these challenges, the real estate landscape is changing. Urbanisation, demographic shifts, land ownership, sustainability, and the shifting financial ecosystem will all have major implications for real estate investment and development. They’re likely to increase the size of the real estate asset pool, yet alter the nature of investment opportunities and risks. Real estate players need to make sure they’re fit for the future and success will depend on having global networks, specialist expertise and innovation, cost management and scale, as well as people that suit your strategic objectives.
How can PwC help?
PwC are market leaders in the real estate sector. We serve as auditors, tax and legal advisers, and financial and tax due diligence experts for the industry's key players. We have extensive experience in advising on transactions, fund IPOs, restructures and capital transactions. PwC works with a significant number of foreign investors, including pension funds, which invest in Papua New Guinea real estate.
Creating value for your business
PwC is the only professional services firm that offers a total service approach covering all disciplines. We can provide services on structuring, vehicle establishment, asset acquisitions, tax and legal services, and ongoing services. Additionally, our integrated real estate team can deliver a range of other services including debt and capital advisory services and valuation services.
- Tax
- Assurance
- Due diligence
- Deals modelling
- Real estate advisory
Tax
- Development of an appropriate tax structure
- Assessment of tax exposures relating to income tax, GST, stamp duty, withholding tax and other taxes
- Liaison with the Internal Revenue Commission (IRC)
- Ongoing tax consulting and compliance services
- Setting up of entities to own assets
- Advice regarding fund establishment, mergers, real estate acquisitions, developments and commercial leases and implementation of transactions
Assurance
- Audit of listed and unlisted funds
- Accounting advice in relation to on-going real estate matters
- Review of compliance with policies, controls and standards
- Transaction accounting support
Due diligence
- Buy side and sell side financial, commercial and operational due diligence
- Investigating Accountant Report for IPOs and other public transactions
- Advice on accounting structuring and guidance on complex accounting treatment
- Routine review of vendor and bidder valuation models to ensure application of an appropriate accounting treatment
Deals modelling
- Development of a flexible financial model to support assessment of the acquisition, including calculation of implied returns, financial ratios, comparison of scenario outputs and sensitivity analysis
- Performance of a model review ('audit') once the acquisition model has been developed and the forecasts have been agreed, linking in with the outputs from due diligence
Real estate advisory
- Lead Advisory services and strategic advice
- Acquisition and divestment support
- Design and approval management
- Construction and delivery management
- Project realisation
