Is Lagos The Real Estate Hub In Nigeria?

Real estate as a sector has become more popular in Nigeria in the last few years. The industry has risen rapidly and has seen exponential growth in no time. A CBO capital report from January 2015 valued the sector at 6.4trn naira ($39bn), with a 10% yearly growth rate. According to AfricaRanking.com, the Nigerian economy grew by 89% from 1990 to 2010, making it Africa’s largest economy.

This economic growth has influenced the rise of the country’s real estate sector. Nigeria’s fast-growing economy has boosted urbanization in so many regions. There is a high demand for housing now, and more investors from all walks of life are trooping in to invest in the sector. Although real estate development is getting more attention in Nigeria, it is not a positive note, as it has become a primary concern in Nigeria. The current housing market development is not enough to eradicate homelessness, a country with about 170 million citizens with a yearly demand of up to 700,000 additional housing units. 

Top Real Estate Investment Regions Or States In Nigeria

Africa’s most populous country, Nigeria, has 52% of urban areas settlement with more people seeking life in the cities (the urban areas). Nigerians are constantly migrating to the cities in large numbers in search of jobs and healthcare. Citizens are settling into these hubs for the improved standard of living offered by the urban areas compared to rural areas that mostly lack even basic amenities. This influx of Nigerians to the cities translates to an increased demand for housing units in the city, ultimately leading to the real estate surge in said locations. Therefore, availability of social amenities, the standard of living, and industrialization/development are the three metrics we used in making our selections of the top real estate investment regions or states in Nigeria.

(Photo Credit: Wikipedia)

Generally, Lagos, Abuja, and River State (Port Harcourt) hold the most profitable real estate opportunities in Nigeria, with Lagos and River State being two of the most industrialized Nigerian states. This translates to a higher standard of living in these states than most other Nigerian states.  These states are enjoying the most migration in Nigeria as people are moving there to take advantage of the industrialization, job opportunities, healthcare, and so on. On the other hand, Abuja is the capital of Nigeria, and it has great wealth. Even though the state does not have as many industries as the other two states, Abuja is still one of the fastest developing Nigerian states.

Three of the Best States for Real Estate Investment in Nigeria

1. Lagos

Lagos is one of Africa’s largest cities and Nigeria’s most populated state. The city, known as Nigeria’s economic and financial hub, is also projected to be Africa’s 5th largest economy. The thriving economy of Lagos, availability of infrastructure, and the state’s commercial strength make it a prime location for real estate investment and development in Nigeria. One of the booming areas for real estate investment in the last few years is Ibeju Lekki.

Here’s why;

Ibeju Lekki holds some of the best real estate opportunities in Nigeria for both government and private corporations, and this is partly because of the easy access to the seaport. The area has also been earmarked by the government for several infrastructural developments; such as the Lekki deep-sea port, Lekki international airport, and the Lekki free trade zone. Also, Dangote refinery, Kelloggs, Dano Milk, and Power oil are some of the popular brands that will be operating in the region soon. The state will also be creating different tourist attractions, with plans for LUFASI nature park, Lekki conservation center, and Lekki International Golf Course. These factors are why Ibeju Lekki is one of the primary real estate investment areas in Lagos, and it also contributes to why Lagos might be Nigeria’s major real estate hub.

2. Abuja

The federal capital territory of Nigeria, Abuja, might be lagging in terms of industrialization and population especially when compared to Lagos. The state can boast of a wealthy population to match even Lagos because it is the nation’s capital. Plus, the high influx of small and medium-scale enterprises in the region is why the state is on this list. The state receives massive investments in its real estate sector since top government officials and those in private organizations can invest large funds into the sector. All of these have been/are still contributing to the growth of real estate in the state.

3. Rivers State

Rivers State also has one of the primary real estate markets in Nigeria. The capital city, Port Harcourt, is one of Nigeria’s biggest cities. The city boasts of several great infrastructures like seaports, refineries, oil servicing firms, airports, etc. The state has a vibrant economy, especially in port Harcourt. This is due to industrialization, urbanization, and foreign investments. The state’s wealth and commercialization have attracted a large population over the years, which is one of the main reasons for real estate growth.

However, Lagos state population is expected to grow consistently and eventually double by 2050 to make it the third-largest city in the world. The large population means a higher demand for housing or accommodation. This means that the real estate sector of Lagos will further increase, especially considering the 3.2% yearly population growth and a 16% yearly urbanization growth rate. So many factors have contributed to the real estate surge of Lagos, from government support, local investors to foreign investors.

To answer the question, is Lagos the real estate hub in Nigeria? We can simply say yes! We see where real estate stands in the state and where it’s going in the next few years.