For a combination of reasons including state of the economy, response to popular demand, efficient use of capital, among others, affordable housing has become the next investment frontier for big ticket real estate investors and developers.
It is becoming the next frontier in the campaign to reduce the deficit in the housing sector, and investors are embracing the new trend. The trend offers opportunities across all jurisdictions and investors are up- scaling their investment in that area.
Affordable offerings like studio apartments, one bedroom and two bedroom flats near the city centre have continued to enjoy demand and there’s also a shift by some developers in favour of the category.
Largely driven by developers’ response to the millennial market’s demands, blue-chip executives and expatriates are also opting for studio apartments. Investors who buy bigger houses for investment purposes are now being advised to purchase multiple studio apartments to sustain portfolio cash flow.
Factors influencing demand for such affordable offerings like studio apartments amongst millennials are better space management, functionality and cost of managing residential units. With high land costs, weak infrastructure and the absence of modern facilities continuing to hamper the growth of Nigeria’s industrial sector, experts say affordable housing in form of studio apartments and others are the ideal vehicle to build a sustainable and growing business because of the ability to serve more ‘clients’ in one location, along with achieving a higher per-square-foot rent than can be achieved in a single-family residence.
The trend is receiving acceptance in places like Lagos, Abuja and Portharcourt with high cost of land, offering less competition and more economy of scale.
Before now, many investors possessed a limiting belief that it was difficult to buy an apartment complex and they never entered the arena. However, this faulty thinking has been changing in the past few years, but many investors still hesitate to explore the possibilities of jumping into affordable housing.
But with the lull in the sector occasioned by government macro-economic policy, over-supply in commercial and retail sectors as well as inappropriate supply in the residential sector, more investors are embracing it.
Also, international real estate advisor, Savills, puts the 2017 value for global real estate at $280.6trillion with the residential component accounting for $220.6trillion. Sub-Saharan Africa’s residential real estate market is estimated at $6.6trillion, unevenly distributed across its 1.12billion inhabitants.
Promoters of Periwinkle Residences Lekki are already adopting the scheme for its Oxygen Apartments , the newest development in the exclusive and serene water view of Lekki Phase 1, Lagos.
Chief Executive Officer of Periwinkle Lifestyle Estate, Chiedu Nweke said the 10 -floor high-rise is a selection of one, two and three bedroom apartments, each having a generous layout with wide terraces, unrivaled opulence and grandeur in an enchanting contemporary architectural design.
CHUKA UROKO
