Apapa: Property owners still worried amid gains of call-up system
… as vacancy rate remains high, rental income low
Property owners in Apapa are still worried in spite of the gains the port city has seen in the last two months following the full implementation of the electronic call-up system deployed to control truck movement.
It was expected that with the significant improvement in traffic situation and reduction in port congestion, the property market would benefit by way of increased demand for commercial and residential properties, and, by extension, increased rental income and occupancy rate.
But that is not happening and may not happen in the near future, according to landlords and estate agency practitioners in the city. “Yea, we have been enjoying some sanity and easy movement in the past two months, but we are still worried that our houses remain largely empty,” Ayo Vaughan, chairman, Apapa Residents Association, says in a phone interview.
“Though rents have not dropped, they have not increased either and I don’t foresee any increase in rent in the near future. Many of the empty properties will remain so for a while because the owners who left may not because of just two months respite start rushing back to Apapa,” Vaughan states.
Uche Chiejina, an estate agent in Apapa, agrees, adding that it would take quite a while for confidence to return to Apapa property market, saying, “Many businesses or tenants that left must have settled down where they are at the moment and so, may not be considering coming back here.”
Continuing, he notes, “we expected the call-up system to impact the property market; but we are not seeing that. Rents have been static at N2.5 million per annum for a 3-bedroom apartment, down from N4.5 million, within the GRA. No reasonable landlord is talking about rent increases, knowing that no new tenant is out there in search of a house to rent.”
The 12-year-old gridlock in Apapa left the city almost a wasteland. Besides degrading the environment, it devalued its property market which was at par with Ikeja GRA and the rest in that class.
According to Vaughan, retirees who invested their life savings in residential property have been sulking over loss of rental income, estimating that 40 percent of residential buildings in the port city are unoccupied while rental income loss is in the region of N200 million per annum.
A walk through the city’s roads and avenues shows that there are more houses that are empty than those that are occupied. On Liverpool Road, for instance, almost all the residential houses on the road are empty; ditto for the adjoining streets like Azare Close, Child Avenue, etc.
The story is the same on Point Road, Central and North Avenues through to Park Lane, which is a bit different because of the commercial properties like Apapa Mall, Shippers’ Council, and a few banks like Fidelity. All these breed activities in that area.
Wharf Road and Commercial Road used to be the ‘Central Business Districts’ of this port city where high net-worth firms and banks had their offices and branches, respectively. A walk through these ‘districts’ shows that most of the banks have either relocated or have the number of their branches reduced.
On Wharf Road alone, more than 10 banks and two eateries have shut down their branches due to the pain and difficulty in accessing these branches, leading to loss of substantial customers in the area. Unity Bank, for instance, which used to have four branches, now has two, Ecobank with eight branches.
All these account for the growing vacancy rates in both residential and commercial buildings in the port city. Rotimi Steven, a broker at International Estate Partners, says “a significant number of residential properties in Apapa are empty, with vacancy rate well above 50 percent.
“Owners slash rent as much as 60 percent to lure buyers, yet interest is poor; where a property has a price tag of N3 million in Ikeja GRA, the same property struggles to sell for N1 million in Apapa.”
These situations are fallouts of the gridlock that defines Apapa as Nigeria’s premier port city. But with the introduction of the call-up system, it has abated, but not without imperfections here and there.
BusinessDay had reported, however, that the call-up system has had its positive impact, chiefly on easing port congestion, which has helped to drag down haulage cost by 50 percent in the past one month.
Presently, it costs about N700,000 to lift a 40-foot container from Tin-Can Port to warehouses in Lagos compared with late last year and earlier this year, when importers paid as much as N1.4 million to lift the same size of container to anywhere in Lagos.
“The implementation of the electronic call-up systems in Lagos ports, Apapa, and Tin-Can Island ports, has brought in slight ease in cargo evacuation as truckers presently spend fewer days to access the port terminals,” the report says.
The electronic call-up system was fully deployed to terminals in Tin-Can ports including Crown Flour Mills, Josepdam Port, Tin-Can Island Container Terminal, Ports and Cargo, PTML, and Five Star Logistics, on May 31, 2021, three months after its introduction in Apapa Port.