Nigerian property values rise as Western economy shrinks

The shrinking economy of the Western world is having a positive impact on African economies, especially sub-Saharan Africa, where property values have gone up and portfolio investors have upped their investment, market watchers say.

Africa, particularly Nigeria, is now the green field and many investors are coming in to get a foothold in its large and growing market.

“Nigeria is a huge market; it is under supplied, and it is growing. In terms of growth, looking at the consumer side, consumer spending in this market is growing at about 9.2 percent annually more than South Africa, which is about 6 percent and even less in some of the other developed markets. So here, there is strong growth and buying power,” Michael Chu’di Ejekam, director of real estate for Actis, told our correspondent in Lagos.

Ejekam said sub-Saharan Africa, in comparison with some other markets, is in a growth period, as Africa dominates the list of fastest-growing economies in the world.

“If you look at the Top 10 world economies, at least six out of the 10 are African countries including Nigeria, Ghana, Mozambique, Zambia, Ethiopia, Tanzania and Congo,” he said, noting that “if you look at Nigeria and Ghana, they have high growth rate. Nigeria’s GDP is growing at an average of 7 percent per annum. Ghana grew a couple of years ago at double digits but now, it should have normalised to about 7 percent.”

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Mustapha Njie, a Gambian property developer, whose company is in partnership with Rivers State government to develop 750 housing units in Port Harcourt, affirmed the surge in demand, and told BusinessDay in Port Harcourt that all the premium units including Villas and Town houses in the N14.1 billion estate were sold out in one month, as the buyers were mainly oil company workers.

Samuel Ukpong, MD/CEO, 1004 Estates Limited, disclosed that his company did an analysis of the property market and discovered that rental values were going up just as sales values were also going up.

Ukpong said they have seen a surge in demand for their apartments mainly from the expatriate community, “and this is because there is a slow growth in the Western economy, making Africa the new green field; a lot of oil companies are coming into Nigeria now to get a foothold.”

He said about 50 percent of their residents were from the expatriate community, saying however, that the location of the estate had also contributed to the rise in the value of their property.

“Real estate is all about location, location, location. In some other locations, rents are either stagnant or declining, but on the contrary, we are selling our three-bedroom apartment for N60 million to N65 million, which is N10 million to N15 million above the price last year,” he disclosed.

He attributed the increase in the value of their property to the road infrastructure on Lekki-Epe expressway on which motorists pay toll for its use.

“This is a special location. What we have here is different from what obtains in Lekki Phase One, for instance, where residents spend N40,000 to 60,000 a month paying toll for their two to three cars. If you live in 1004, that amount of

money which comes to N600, 000 to N700,000 a year is saved,” he noted, adding that many people had found it both convenient and economical to live in their estate.

He therefore advised that Nigerians should begin to re-organise their mindset to be able to leverage on the emerging opportunities as new companies were coming and bringing in their expatriate staff to explore the market.

Actis, Primrose and Laurus who have perfected plans to build a 14-floor green office building in Ikoyi, Lagos, however, said that “the office complex is their response to rising demand for quality office space in the market.”

Eko Pearl Nigeria Limited is also responding to anticipated demand for residential property with their 24-floor Eko Pearl Towers, expected to be the first building in Eko Atlantic City, Lagos.

On the retail side, UPDC is gearing up to develop the Festival Mall in Festac Town, while Odu’a Group in partnership with Top Services is to build the Apapa Mall in addition to the Heritage Mall in Ibadan, Oyo State.