Why investors avoid parking lots development despite huge opportunities

In spite of the huge op¬portunities in the ve¬hicle parking space business in Lagos, Nige¬ria’s commercial nerve centre, investors still find that segment of economic activity unattractive and unprofitable for investment.
As a commercial and large industrial city, Lagos does not have standard and well developed parking lots where car owners could leave their cars and collect same for a fee, at the end of the day’s business.
The situation is such that even Lagos Island, which is the city’s central business district (CBD), is lacking in a standard parking space, and according to authorities of the state, plans by the gov¬ernment to develop malls, leisure parks and other rec¬reational facilities as part of the Lagos Island redevelopment master plan, presents immense opportunities for private sector investment in that part of the city.
An investment analyst with a private equity in¬vestment firm, however, explained to BusinessDay that investment in parking space in Lagos is not viable for a number of reasons.
He listed the reasons as land scarcity, exorbitant land charges and low in¬vestment yield from such a venture.
According to the ana¬lyst, who did not want to be named, land is scarce, and any investor taking up that venture must look for central locations at the city centre.
He added that such loca¬tions are hard to find and also very expensive.
“When eventually you find one and calculate all the land charges you have to pay to the state govern¬ment the investment won’t make sense any longer”, he said, adding, “return on investment is another story altogether because it is not worth the hassle”.
Francisco Bolaji Abosede, former Lagos commissioner for physical planning and urban development, had at a forum in Lagos disclosed that as part of its model city planning scheme aimed at realising the mega city dream, the state government has a grand design for the development of the Marina corridor into a city of its own, adding that the aim is to develop the corridor into an attractive city with shop¬ping malls, parking lots and leisure centres.
The Marina corridor which encompasses the long and expansive stretch of land from the UTC Trad¬ing Stores to the Governor’s Lodge on Lagos Island, has been a source of concern to redevelop¬city development watchers.
The corridor, which lies centrally between Marina Street and the Eko Bridge, is a prime location on the Island and has all these years served mainly as parking lots for bank workers and sundry businesses within the Central Business District (CBD).
Abosede affirmed that land is scarce in the state, hence government’s efforts at maximising land use for the benefit of the people.
“With a total land area of 3,577 square kilometers, a growing population of over 18 million people, a popula¬tion density of 4,193 persons per kilometre, a growth rate of 6-8 percent and an¬nual population growth of 600,000, Lagos has 20 com¬munities and 37 local council development authorities and remains a destination for all ethnic nationalities”, he said. ¬