The Prospect of the Real Estate Industry In Nigeria

by Myne Properties & Investment Ltd
(Ikeja, Lagos)

The Prospect Of The Real Estate Industry In Nigeria

The focus of this write up is to call the attention of prospective real estate investors, particularly in Lagos State, to the prospect of the real estate industry in Lagos Nigeria.

All over the world, history has shown that real estate industry has always been the biggest and most sustainable source of individual wealth and also most preferred & important investment option.

After the crash of the stock market, the real estate industry received a lot of attention from savvy investors for obvious reasons.

Although our government is making efforts to provide accommodation and infrastructure, the private investors must complement the efforts of the government.

This partnership is the only way by which the housing deficit of our country Nigeria can be accommodated.

How possible is the government going to provide 30,000 houses for Nigerians in 4 years without the involvement of the private sector? (7,500 houses every year, 625 houses every month, 20 houses every day!!!)

Are you aware that 80% of the population in Nigeria lives in rented apartment and they all look forward to becoming landlords in the nearest future?

This may not be possible without the involvement of the private sector.

Let me encourage you with the following information about the prospect of the industry:

In Lagos Alone over N13 trillion is yet to be tapped in the Lagos State Real Estate Property market alone.

There is an on-going infrastructural transformation of Lagos state to meet its mega city status, one of such is the upgrading of the Lekki-Ajah expressway, and the expansion of Badagry road to 12 lanes to include light passenger rail track.

The expansion of Lagos Ibadan Expressway by Bi-Courtney Highway Services in conjunction with the federal government will be managed for 25 years. What do you expect of properties within the axis? They are certainly going to be gold mines for early smart investors.

There are a lot of ongoing developmental projects embarked upon by the administration of Governor Raji Fashola such as Eko Atlantic City Project, Lekki Free Trade Zone, and LASU-IBA New Town Development. All in the bid to increase the housing stock in the state which will invariably complement the efforts of private investors.

Fourth Mainland Bridge is being proposed by Lagos State government as part of the Lagos Mega City Initiative to link Badore in Lekki/Ajah. The bridge will allow several people who live on the mainland and work on the Island commute without the usual traffic bottle neck. Hence property market will surely boom in Ajah/Badore/Ikorodu axis.

According to United Nations, the housing deficit in Lagos State alone is about 5 Million due to the population size. It means that the market actually exists for more investors in the property market.

The new master plan of Ibeju-Lekki as incorporated into the Mega City Plan has a new International Airport, Lekki Free Trade Zone, The Deep Sea Port. The axis has, Eko Tourist Beach Resort in Akodo Village, Hermitage Gardens Resort, proposed 21 Hole Golf Course, Obafemi Awolowo Museum and Resort and many more.

Foreign Investors are presently perfecting their plans to commence tourism development projects at Badagry.

One of them is Pinnacle Point Group Limited, the largest golf and leisure estate developer on the African continent. Another one is the "Slavery Theme Park’’ being promoted by a group of American Investors called ‘’The Motherland Group’’ led by Marlon Jackson, senior brother of the International Pop superstar, Michael Jackson.

The development will include a replica slave ship and allow tourists ‘’walk the route of shackled slaves’’ in Badagry. It will also include Luxury Hotels, Shopping malls, golf course and lot more.

These and many more are being put in place to open up new locations for real estate business to thrive within the next 5 years at least.

YOU CAN BE AN INVESTOR

Anybody can be an investor and as such anyone with a good business mind set can venture into the real estate business.

Imagine an individual living in a 4 bedroom bungalow on an acre of land (about 4,000sqm) in Ikeja, Lagos State.

This same land can accommodate his 4 bedroom bungalow on 1,000sqm of land while the remaining 3,000sqm can accommodate a block of 6 units of 3 bedrooms flat with complementary facilities like administrative office, water treatment space, generator house, good landscape and comfortable parking lots.

If a flat is sold for =N=60 Million, the 6 units will be N360Million. The development cost is about 300 Million, meaning that the land can bring about a profit of N60million just in 12 months of construction period.

The man can undertake the management of the facility and make some cool cash.

You can sell off your mansion, buy a more comfortable accommodation in a developing area and then invest the money to buy land and build self contain apartment (one/two bedroom) for young couples or bachelors/spinsters. Manage the rent for a while and then turn the money around again.

Within 5-7 years, banks will surely be competing for your attention. It is that simple.

You can even renovate your 4 bedroom bungalow and make it into 2 units of two bedrooms each. While you live in one, you can rent out the other.

This helps your cash flow and with time you can buy another land in a developing area to do more of that.

If you start now, you should be on top of the game in the next 5 years. It is that simple.

OTHER WAYS OF INVOLVEMENT

a) Buy existing building, renovate same and sell/rent out at profitable price.

b) Buy raw land or abandoned land with or without building on it and sell it out at a profitable price when the market has appreciated.

c) Buy raw land with or without building on it, develop it and then sell/rent out at profitable market prices.

TYPES OF DEVELOPMENT

a) Residential development – bungalows, self contain, flats, duplex, detached houses

b) Commercial development – lock up shops, let able spaces, halls, malls

c) Industrial development – ware houses, production spaces.

The bane of the real estate industry has always been ‘how do I get the funding for my real estate projects’’?

FUNDING OPTIONS

1. You can make use of your personal savings knowing that the project is profitable.

2. You can partner with friends to pull financial resources together for the project.

3. You can partner with the government to actualize your dream.

4. You can raise funds from the banks or other primary mortgage institutions (PMI).

According to Ken McElroy, a real estate investor and property management expert, real estate business is set to boom whenever you see the movement of infrastructure like roads, electricity/gas and water into new areas or the location of industries in new areas which invariably increases employment.

This is the reason why we would expect a smart investor to watch out for the following locations:

Lagos-Ibadan Expressway

Badagry Axis

Ikorodu

Ajah – Epe Axis

Sango Ota Axis

Mowe-Ofada Axis

. . . and many more.

Depending on the scope of your project, you may not even require any funding from the bank and yet the project will be executed (I guess you may want to know more about this aspect!!!)

About the author

Tolu Bisade-Phillips trained as an Architect and he is the Managing Partner/CEO of MYNE PROPERTIES & INVESTMENT LIMITED (MPI), a fast growing Real Property Development Consulting Firm based in Ikeja Lagos, Nigeria.
E-mail: mpioffice.ng@gmail.com, Tel:08083756688, 08053243608.

The Prospect of the Real Estate Industry In Nigeria

Real Estate Guide Magazine

For Rent

Properties For Sale