In the 1970s – 1980s, the Lagos Bar Beach, situated on Victoria Island, was the most popular in Nigeria, especially during the military regime when Lagos was the capital. One of the major drivers for its popularity was that it served as an execution spot for many convicted armed robbers and coup plotters of the era. It was always a public spectacle, with thousands of spectators, including television cameras and print journalists, available to cover the event. Notorious robber celebrities like Lawrence Anini and Dr Oyenusi were executed on that spot.
Still, on an ominous trend, Bar Beach also has a reputation for overflowing its banks, often leading to the loss of lives and properties.
Thirty-five years later, this site metamorphosed into one of the grandest real estate projects in Africa, with a square metre of land now selling for almost $2,000. In 2003, the idea to site a modern city on the Atlantic coast in Lagos was raised. Now standing on 10 million square metres of land reclaimed from the ocean and protected by an 8.5-kilometre-long sea wall is the Eko Atlantic City – dubbed the new economic capital of Africa.
Shelter is one of the bare necessities of man’s survival, so, unsurprisingly, housing in Nigeria’s most populous city is in high demand. With a galloping population of over 20 million people, Lagos has a huge housing deficit and has not been able to meet up to 50% of her formal housing demand to date. By 2050, Lagos’ population would hit 32.6 million, making it the sixth-largest city in the world. It is apparent the housing problems could be explosive if necessary measures are neglected. The need to tame the present housing deficit tide and prevent the looming chronic shortage of real estate in the world’s fastest-growing megacity has given rise to real estate projects in several corridors of the state and even in the most seemingly unlikely areas, as we have seen in the case of the $6 billion Eko Atlantic City.
From the studio apartment in the old money environs of Ikoyi to the budding housing estate along the Lekki-Epe expressway, one thing that can be agreed upon despite geographical and financial variation is that the real estate market in Lagos has grown in leaps and bounds.
“Land is scarce and limited, so the lower the supply, the higher the value, which is applicable in Lagos. Lagos’ real estate market undoubtedly has experienced exponential growth in the last few years. Research shows that in Nigeria’s Economic recovery, there was an upward trajectory with Estate Intel stating that the real estate services and construction sector grew by 5% to 10% in 2022,” explained Mojisola Afolayan, the principal partner of Mojisola Afolayan Estates, a real estate consulting and advisory firm in Lagos state.
Lagos State has the highest property values and the most vibrant real estate market in Nigeria, appreciating speedily at a minimum of 15% per annum. As of 2016, the Central Bank of Nigeria (CBN) valued the real estate sector in Lagos at $45.6 billion.
Ibeju-Lekki: the sought-after real estate development site
Although capital-intensive, real estate is one of the fastest-moving businesses in Lagos chiefly because of the high return on investment in the space. For example, one of the most popular and most luxurious neighbourhoods in Lagos, the Lekki Peninsula Scheme 1 – used to be known as Maroko in the 90s, was not filled with pricey real estate properties at the end of that millennium.
In fact, during its transformation to the present-day Lekki, the land purchase in the area was not desirable, and due to less demand, it was cheap. However, so much has happened in the space of 25 years, and the land, offered for sale for around N7 million in the early 2000s, is now selling today for about N500 million. An analysis conducted on the average land price in the area indicates that there was a 63 % increase between 2019 and 2021. Also, the average price per sqm was around N322,000 or N193m per plot.
A similar fate is imminent for a region of Lagos state – Ibeju Lekki, a name derived from two autonomous communities, Ibeju and Lekki. Interestingly, its growth is driven by more than just population growth but the emergence of a cluster of mega projects on the axis.
Afolayan noted that the presence of infrastructure such as factories, transport links (roads, rails, ports, and pipelines matters), and the introduction and advancement of technology facilitate international trade, improve labour productivity, and increase economic output which brings about an appreciation of landed assets and real estate.
Over time the Ibeju-Lekki region has been described as the new Lagos, majorly because, by an educated guess, about 80% of the mega development projects coming into Lagos are sited in that axis. “The once remote local government area in the state came to the limelight after it was chosen to be the site for the planned Lekki Free Trade Zones (LFTZ) by the Lagos government. This came as good news to foreign and domestic investors as they can bypass several of the bottlenecks in a free zone where there is minimal intervention from the government and tons of tax and operation incentives” she explained.
In addition to the LFTZ, the $20 billion Dangote refinery, and the $450 million embryonic Lekki-Epe International Airport, all slated to contribute massively to Lagos and Nigeria’s economy, are located on this axis. Recently, President Muhammadu Buhari commissioned the $1.5 billion Lekki Deep Seaport. In a few years, the proposed $2.5 billion 4th mainland bridge will pass through the route serving as a vehicle of economic opportunities for the people.
Aside from the proximity of Ibeju-Lekki to these mega projects, the area is already a vibrant major business district in Lagos. Companies like Indomie Industry, Eleganza Industries, Power oil production plant, Coscharis Group, and Shoprite are already operational in the area. The area is also known for its beautiful nature reserves. The Lekki Conservation Centre, golf course, Lekki tourist centre, private beaches and resorts that litter the axis make Ibeju Lekki a great site for tourism.
Considering the cluster of amenities and attractions that Ibeju-Lekki has to offer, owning a property in the region is advisable as its value has been on an upward trend in recent years. “ At present, within the Ibeju Lekki LGA, a plot of land with a clean title (good ownership certification) goes for as high as N30 million, unlike 5 years ago when it was an average of N5 -N7 million,” Afolayan stated. It is safe to say the bush you are buying today will become developed in the twinkle of an eye with a significant appreciation in value. Hence it is a goldmine for early investors.
All these offerings open up a wide range of real estate opportunities in the region. It is expected to create massive opportunities covering residential, office, retail and industrial properties. So beyond buying a plot of land and leaving it to appreciate for a period, you could let the property out for a developer, with an agreement on the profit sharing mode.
Another opportunity this area offers with its thriving real estate market is the potential for rental income. Already, this is a thriving phase in the real estate market, because homeownership in Lagos is less than 5%, meaning almost everybody pays rent. As more people move to this area for work or even tourism, the demand for rental properties becomes sky-bound. The cluster of projects aforementioned may provide nothing short of 400,000 jobs on completion, thereby opening opportunities for residential and rental properties. This creates an avenue for investors to have a residual income.
Afolayan said while individuals, real estate developers, and foreign and local investors are already acquiring massive amounts of real estate in the area, many people are still oblivious to the massive investment opportunity Ibeju-Lekki harbours. “Recent trends indicate that Ibeju-Lekki will generate more than 70% of Lagos’s wealth. When you invest right with professionals, your real estate investment has guaranteed returns. Unlike other volatile businesses like importation or trading, property investment can continue to improve your portfolio, build wealth, and grow your portfolio for years when done properly and correctly from the beginning,” she stated.
Although signs of massive growth are already evident in Ibeju Lekki, it is difficult to state how big real estate would be in the area. What is definite is an upward trajectory from where it is currently.