Real Estate investors and developers who have been relatively quiet in the last 24 months are showing confidence in the economy by kicking off several new projects across major city centres in the country.
The investors who play in the residential and commercial segment of the property market look set to validate Analyst prediction of a positive outlook for the sector this 2018.
Nigeria’s Real Estate sector has in the last 24 months grappled with sharp supply demand imbalance, widening vacancy rates and falling rents, high cost of building materials, rent arrears and reduced take-up of new office and retail spaces.
However, a shift from this trend looks imminent as developers and investors express confidence in the economy by commencing a handful of residential projects.
A recent report by the African Property Investment (API) Events predicted that given the macroeconomic indicators released recently by the International Monetary Fund (IMF) pointing to a surge in real Gross Domestic Product (GDP) growth of five percent across 18 economies in sub-Saharan Africa, the demands for investment opportunities especially in the real estate sector will increase in the continent.
Damola Akindolire, Executive Director, Real Estate, Alpha Mead Group agrees to this, explaining that in Nigeria the demand for land in developing areas such as Lekki is gradually scaling up. He noted that this has led to an upward swing of about 10 percent-15 percent in land prices in some choice locations.
Akindolire further added that activity in the hospitality sector is also gaining momentum with investors showing positive signs towards investing in hotel apartments especially with the recent opening of Golden Tulip in Oniru and Radisson Blu in Ikeja.
“We will continue to see a strong run in this space with delivery of additional 1000 rooms in 2018”, he said.
A close look at the Lagos Office space market reveals that the trio of Alliance Place, Madina Tower and the Desiderata could all swing their doors open to tenants in the first quarter of 2018.
BusinessDay recently reported that the Ogun State Investment Corporation (OPIC) is making vigorous effort to create a housing hub along the Lagos – Ibadan Expressway. The new housing hub is aimed at assisting the Ogun state government create a mega city footprint by providing housing units in the expansive New Makun City housing project at the Shagamu interchange and the MTR Garden Estates at Isheri end of the expressway.
In a similar scenario, the Rivers state government in partnership with Private Real Estate developers have sealed a deal to deliver about 3,000 housing units in the next few years under the Port Harcourt mega city initiative.
In Lagos, the state government has commenced negotiation with relevant stakeholders for the redevelopment of Adeniji Adele Phase I – V in the city’s central business district. The project which is expected to kick off in March will see the transformation of the current estate into high-rise buildings of different house types.
The Guardian recently reported that an Abuja based Real Estate developer prominent for developing 3500 housing units in Life Camp, Abuja has shown interest in veering into the Lagos Real Estate market. Sources say the firm is partnering with the Lagos State government to develop 618 housing units at the Jubilee estate in Iganmu.
Real Estate analysts say the increasing number of projects echoes Real Estate investors’ confidence on the economy and more importantly could serve as the ‘kick’ as activities gradually peak in West Africa’s most vibrant property market.