For investors with patient capital and a long-term view of the property market, Alaro City is the next destination as land value in the emerging city will be rising 61.9 percent to $272 per square metre by 2025, a new report shows.
Experts have described this as a compelling opportunity for investors not easily seen in other assets class under the present economic condition in the country where inflation has eaten up values across board.
According to the report which gives an estimation of property prices in the city, land value in the city, at the moment, is $168 per metre, projecting that the value will also go up to $186 per square metre and $229 per square metre in 2023 and 2024 respectively.
These prices are for the plot types at the high-density area of the city. Plots in the city are categorised by density as low, medium and high. They are also categorized by use as commercial, industrial and residential. Plot sizes range from 500 to 1,000sqm for low-density plots, while medium-density and high-density plots are typical of larger sizes.
The report, compiled by Northcourt Real Estate, projects further that within the same three-year period, land values at the residential segment of the city will be rising from the current $136 per square metre to $188 per square metre at the lower limit of the segment’s low-density area.
At the upper limit of the same low-density area of the city, the value is expected to go up from the current $141 per square metre to $215 per square metre.
Read also: How real estate remains the hedge against inflation
Investors who will prefer to invest at the lower limit of the high density in the residential area will see value of their land rise from today’s price of $162 per square metre to $254 per square metre while those that will choose to invest in the upper limit at today’s price of $174 per square metre will, by 2025, see the value go up to $290 per square metre.
Alaro City is a joint venture project between the Lagos State government and masterplan developers called Rendeavour. The city is a 2,000-hectare phased mixed-use development located in the northwest quadrant of the Lekki Free Zone and has key amenities which contribute to its growing value.
As a masterplan developer, Rendeavour is reputed to have a portfolio that includes more than 30,000 acres (12,000 hectares) of land in the urban growth areas in major cities in Kenya, Ghana, Zambia, and the Democratic Republic of Congo.
Tayo Odunsi, Northcourt’s CEO, notes that “key indicators in the Alaro City area clearly suggest an increase in demand for land and related property uses; population growth and infrastructure investment by the Lagos State government are key drivers.”
He notes further that the Epe axis, in which Alaro City Free Zone is located, is fast taking on the name ‘New Lagos’ as individuals, families and companies move into the area, drawn by opportunities to start businesses, live in moderately priced gated communities, healthcare facilities and send their wards to good schools.
Odunsi listed some of the city’s growth drivers as increasing demand for land within gated communities; increase in production activity in the Lekki – Epe corridor; improving infrastructure along the Lekki-Epe corridor; demand for Free Trade Zones, and rise in demand for industrial and logistics space.
He pointed out, however, that this growth could be slowed by such factors as currency depreciation and fluctuations; rising country and global inflation; impending global recession; political uncertainties and land tenure and ownership disputes.
“As a free zone, Alaro City has areas for offices, logistics and warehousing, regulatory administrative services, healthcare facilities, hotels, entertainment, and 150 hectares of parks and open spaces,” Odunsi said, adding that the city also boasts critical infrastructure and facilities such as power supply, advanced security systems, high-speed internet, shuttle-bus transportation system, and disposal of liquid, solid waste by the public waste management authority.
In line with its mixed-use status, the upcoming Lagos International Airport will be located adjacent to the city, which is also in close proximity to the region’s largest deep-sea port as well as significant Nigerian and international industries.
The land on which Alaro City sits has a Certificate of Occupancy. Over 50 enterprises are either relocating to the city or growing their operations there. BUA Group, HMD Africa, Kenol, Caterpillar, Ariel Foods, and ASB Valiant are some of the companies that fall within this category.
Universal Homes is responsible for the development of the first residential phase, which consists of 576 apartments.
Odunsi disclosed that TK Tech Africa is looking to acquire 9.85 hectares/98,514sqm (5.06 hectares for industrial and logistics use, priced at $185 per square metre and 4.78 hectares for commercial use, priced at $200 per square metre) and hold for 3 years.
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