The joy of investors in the Lagos property market -Experts

Jhe multi-trillion naira real estate market in Lagos is extremely profitable in both high-end and low-end niches. It is one of the state’s most lucrative investments.

Many are scrambling to invest in the market due to its profitability and huge potential for massive return on investment (RoI). Moreover, the growth potential is huge and promising.

Despite a challenging macroeconomic environment, particularly rising inflation which has driven up the cost of housing, the economy was forecast to expand by more than 2.5%, translating into growth in the property investment.

The 2022 property market outlook recently released by Northcourt postulated that the Nigerian The economy will grow by 2.7% in 2022 according to projections by the International Monetary Fund (IMF).

“Analysts estimate that at the end of 2021, the global value of investable real estate stock was over $34 trillion, and expects it to grow to $85.1 trillion over the next 20 years. . Central cities are expected to grow and will remain dominant features of the investment landscape, notably Lagos, where growth is expected in most submarkets, with the exception of Grade A offices, which will continue to correct,” says The report.

In terms of value, Lagos remains a paradise for real estate investment despite not being the capital of the country. Yet it is the commercial nerve center of Nigeria.

Experts say the state is naturally positioned to have the most valuable and profitable real estate market thanks to the growing population.

Unofficial data suggests that the state has a population of over 22 million and that number is constantly growing as more and more people migrate to Lagos every hour. The growing middle class segment is also an added incentive.

So, for the high-end and low-end real estate market segments in Lagos, the potential for quick return on investment would be incredibly high.

Talk with Daily Trust on why people would prefer to invest in the Lagos property market, a real estate agent, Mr. Tunde Balogun, said that the demand for home ownership in Lagos is very high with high returns on rents which would attract naturally local and foreign investors.

Balogun, who is the CEO of Rent Small Small, a leading technology-driven real estate company, said the attraction will continue to grow both in the high-end segment in Ikoyi, Lekki, Victoria Island, as well as in the low-end niche in mainland Lagos.

He added, “With rising double inflation rates in Nigeria, real estate investments are seen as hedge investments against inflation. The sector is not exempt from the impact of COVID-19, the rising cost of living and Nigeria’s many fiscal and economic challenges, all of which impact property prices from development to management up to the sale/lease.

“However, with its burgeoning population, increasing urbanization and the government’s drive to make Lagos a megacity, the state continues to attract value-for-money investors, compared to other states in the country.

“The demand for home ownership in Lagos is high and the rental yield of properties is also high due to the strong rental demand; which will continue to be a central point of attraction for investors looking to bridge the gap between supply and demand in the state and be assured of returns.

He also noted that there is a growing demand for property in high-end market segments in Ikoyi, Victoria Island, among others.

Balogun added, “It is known that the luxury real estate market is more visible in the high-end markets of Ikoyi, VI and Lekki Phase 1. There is an increasing demand and preference for properties in these areas in because of economic opportunities, high life status and beauty they offer people.

“This is translating into more property developments in these areas, which means they sell faster due to demand. There will be a growing need for properties in these locations as more and more businesses come are opening in Lagos with offices on the island, and employees wishing to maintain proximity to their workplace are also looking for residential apartments there.

According to him, the mainland also has a future as even the segment’s old property can be remodeled in the future to provide bespoke accommodation commensurate with what is available in the Lagos Island axis.

He added: We cannot ignore the fact that there are areas on the mainland that match the island on the same scale and buyers interested in these high end parts of the mainland such as Ikeja GRA, Ogudu GRA , Maryland, Gbagada, etc. , but in the long term, the continent has a better future because there are many old buildings that can easily be demolished to accommodate new ones.

Sheriff Alaraba, a real estate consultant in an article published on his LinkedIn page, said profitability is a major factor for many passionate investors in real estate today.

He said: “A major driver of the profitability of property investment is a good location and the activities and developments that take place there. Taking Nigeria as a case study, you will agree with me that Lagos remains the largest trading center and the state with the highest Internally Generated Revenue (IGR).

Analysts insist the state will continue to be a major investment destination amid the state’s growing housing deficit and rising population. While in the high-end segment or in the metropolis, real estate developers would continue to smile at the banks, marveling at the magnitude of the return on investment despite the rising costs of building materials.