Lagos is often identified amongst cities with the most expensive real estate markets in the world, as a result of the high costs of property. However, as Jones Lang LaSalle demonstrate in a study on The World’s most expensive office areas, Lagos is generally excluded from such studies as chronic levels of undersupply create exceptionally high rents.
The Lekki region in Lagos has seen outstanding growth in the past decade. According to the Nigerian Institution of Civil Engineers the axis is the fastest growing real estate corridor in West Africa. Reporting strong growth in the number of people residing and working along the corridor. Fine and Country pointed out in an interview with CNBC Africa that Lekki is in growth mode and foresee the region to be the core growth area within the years to come. The Lekki Peninsula, which is approximately 70-80km long, stretching from Victoria Island to the west Refuge Island in the east represents a blank canvas of endless potential. Its no surprise then that areas within the region have been allocated for a Free Trade Zone, an airport and a sea port surely with a lot more to come in the next few years.
It is believed that in the future Lekki Peninsula will be a large commercial centre in Lagos state and also a city with impressive social amenities and infrastructure. Much of the reason for the robust expectations and forecasts for the region more recently are due to infrastructural projects such a the Lekki-Ikoyi link bridge and the redevelopment of the Lekki-Epe Express way. Business day reported that property analysts believe the axis could play a major role as the new investment hub for real estate investors as Lagos gradually evolves into a mega city.
The Lekki-Ikoyi link bridge, which was commissioned by the Governor in 2013, noted that it has had a significant impact on travel time in a manner that is enhancing business. The bridge has changed the dynamics of the real estate market in Ikoyi and Lekki. As a result ample properties that were previously vacant are quickly filling up, causing small price increases within the region.
Moreover, the Lagos State Government report that the master plan for Lekki will provide a built area that can accommodate a residential population of about 3.4m people and non-residential population of about 1.9m people. The government hopes that unique characteristics of the Atlantic Coast, Lagos Lagoon and the inland natural areas will be protected and enhance to give ‘Lekki New City’ the special natural ambience character. This is an impressive improvement from previous development schemes as sustainability is being considered. It is important especially in Lagos to ensure that practices in development are carried out sustainably considering the current population and expectations for growth.
One question being asked is the extent at which Lekki can hold Luxury properties now and in the future. There certainly is a market, and it is growing. However, the capacity can only hold a certain amount at the moment as development in the region is still largely underway. However, the future for Lekki is very promising and there is strong optimism.
Eko Atlantic, a multibillion-dollar investment provided solely by private investors is a new city that has been created in a bid to make it the financial centre of Nigeria and possibly West Africa. Like Lekki, this scheme is one that is getting a lot of traction. Many are excited about the very well planned scheme and believe that if completed and executed properly will steal the shine from Ikoyi and V/I in the high end residential and commercial real estate markets respectively.
Local agents explain that the plans that have been set for development are unlike anything that have ever been seen before and they have enough power to throw Ikoyi off its throne. For real estate investors with large asset holdings in Ikoyi, the best advice for them is to begin to diversify. As a shift in the dynamics high-end residential market is imminent.