Recent research on the Nigerian Real Estate Market predicts that land prices in the country’s leading and second-tier cities are likely to spike over the next few years.
The report adds that this price increase is likely to occur mainly in significant construction projects and transportation infrastructure areas.
This new report by Northcourt Real Estate explains that the price increase is due to several factors, including private sector development activities and state and federal policies and programs on housing and infrastructure development.
Infrastructure Company (InfraCo), a public-private partnership company established to deal with infrastructure deficit starting from the third quarter of 2021 (Q3′ 2021), is one such program coming from the government.
“An N15-trillion pocketbook backs this partnership. The Federal Government’s plan to construct 400 houses in each of the 774 Local Government Areas in Nigeria will increase the demand for land. However, the overall impact will vary from one state to another,” Ayo Ibaru, COO/director of research at Northcourt, explains.
Securities and Exchange Commission (SEC) has issued new rules for industrial warehousing. As a result of these changes, the industrial submarket has become more regulated, which is expected to reinforce the demand-supply dynamic for land for this purpose.
The rules emphasize the need to provide enough parking and loading/unloading spots for large vehicles. The management of Flour Mills Nigeria, working with improved financial performance numbers (profit was up 126% y-o-y), has purchased 5,200 hectares of land as part of its expansion program, according to Ibaru.
According to the report, 24 states have pledged 2,000 hectares for the Federal Government’s social housing programme. Also, 17 states have indicated an interest in the Solar Power programme, part of the Economic Sustainability Plan (ESP). Both programs are expected to affect land demand and price positively.
Numerous players are expanding their frontiers and making more developments in the private sector. Oak Homes, for instance, claims it is entering a new era of smart and luxury living.
“We need to redefine the game. So, our team has a major overhaul, which includes a new management staff with an ex-pat chief operations officer (COO). He worked with the big names, and his major task was to make the Oak Homes brand even bigger. Our products in the coming months would redefine the tag ‘affordable’,” notes Olukayode Olusanya, the company’s CEO.
Currently, Eko Atlantic City, a world-class city rising from land reclaimed from the Atlantic Ocean adjacent to Victoria Island in Lagos, is seeing increased investor interest from local real estate investors and developers.
“We moved into Eko Atlantic and started our first project, the A&A Tower. It is a tower of over 22 floors; we are doing it to showcase what is possible with the Nigerian spirit and what anyone can achieve when determined,” Evelyn Edumoh, the Arkland properties Limited chief operations officer, states.
Continuing, Edumoh reveals, “We are the first purely indigenous company doing development in Eko Atlantic City. When we started that project, many people thought we were crazy because it was such an audacious project. I can tell you that the project has opened doors for us.
“The project has led us to start our second one, and even more Nigerian developers are now coming into the city. They are beginning to see that there is an opportunity for everyone there, and we have shown that there is growth in that city.”
According to another developer, who would not like to be named, interest in Eko Atlantic was increasing. By the first quarter of 2022, his company would be mobilizing to the site to build two luxury towers of 30 stories each in the new city.
The city’s land price is a closely guarded secret, as the promoters, South Energyx Nigeria, say it can be made available only to genuine buyers. Its price remains the highest in Lagos even after being sold a few years ago; the Eko Atlantic City land was sold for $1,250 per square metre.
Banana Island and Old Ikoyi follow closely behind. Old Ikoyi was selling for N514,889 per square metre in the first half of this year, showing an 18 per cent increase from the corresponding period in 2020, when it was sold for N514,889 per square metre.
Lekki, on the other hand, has been strong. In the first half of 2021, the price of land in that market node was N246,785, representing a 29 per cent increase from the first half of 2020, when the price was N191,857 per square metre.
Victoria Island is not as strong as land prices in that axis have declined from N315,775 per square metre in 2020 to N273,000 per square metre in the first half of 2021. This represents a decrease of 14 per cent
