Appetite for Alaro City, the new mixed-income city being built at the Lekki Free Zone (LFZ), has remained strong as investors and prospective homeowners have continued to turn to a development that has been widely hailed as the next phase of Lagos.
The project, more than twice the size of Victoria Island, is a joint venture between the Lagos State Government and Africa’s largest new city builder, Rendeavour.
Alaro City, launched in January, is planned as a 2,000-hectare integrated mixed-use, city-scale development with industrial and logistics locations, complemented by offices, homes, schools, healthcare facilities, hotels, entertainment and 150 hectares of parks and open spaces.
The phase one of its residential plots has already been sold out; and the phase two sales are on-going, the company announced in a recent statement. Businesses are also taking advantage of the mixed-use characteristics of the new city going by the several facilities under construction at the site. More than ten businesses, spanning across national and multinational firms, are currently investing in the city.
According to Odunayo Ojo, CEO, Alaro City, the new city, located in the north-west quadrant of the LFZ, lies in the growth path of Lagos and aims to serve as a model for what a modern mixed-use city looks like.
“We expected high uptake of the plots, but the rate at which they sold out has been exceptional,” he said.
Strategically located at the LFZ, it is mouth-watering for investors to leverage the benefits that the city brings.
According to Ojo, Alaro City is situated in a prime location in the Lekki Free Zone, making it one of the most exciting development projects to come to Lagos State.
“The location and exclusive benefits have undoubtedly been key selling points for buyers,” he said confidently.
Another key attraction, according to him, is the pedigree of the city’s developers. Rendeavour, seen as the biggest new city builder in Africa, is currently building seven new cities in Nigeria, Kenya, Ghana, Zambia and Democratic Republic of the Congo.
Stephen Jennings, founder/CEO, Rendeavour, said the company was committed to investing huge capital in the project, thereby making it to improve the economy of Nigeria and Africa, and to meet the aspirations of Africa’s burgeoning middle classes, and serve as a catalyst for further urban development.
“As a master developer, Rendeavour invests over $250 million in each project, creating the infrastructure and living and working spaces that will help sustain and accelerate Africa’s economic growth,” he said.
Real estate and tax experts say the city is also attracting investors as a result of the fact that it is in a tax-free zone within an axis that has become one of the highest appreciating real estate areas in the country.
Gbenga Olaniyan, chairman, Estate Links Limited, said the Lekki-axis has been a key driver in residential real estate over recent years.
“Alaro City offers a unique and valued investment proposition that the market clearly recognises,” Olaniyan said, adding that, as with any real estate investment, “the real trick is to key in early.”
Businesses in the LFZ are exempt from all federal, state and local government taxes, levies and rates while operating in the zone. Some of these taxes include: Value Added Tax (VAT), Withholding Tax (WHT), Company Income Tax and Custom/Import Duties. This has also been identified as a magnet for investors in Alaro City.
Bidemi Olumide, partner/CEO, Taxaide, a tax management firm said any company that is operating within the zone has a significant rebate in taxes.
“You have zero to no income taxes; you have no transactions taxes, etc,” he assured.
On the regulatory side, according to Olumide, investors in the zone have been exempted from dealing with multiple regulators; but with only one regulator, which is the Nigeria Export Processing Zones Authority (NEPZA), who then organises all the relevant regulators under one umbrella. With this arrangement, companies have only one port of call for all regulatory matters which significantly reduces compliant costs that were usually associated with multiple regulators.
“These investors are attracted by, among other things, the tax breaks available with operating in a free trade zone,” he said.
The residential plot appetite can also be tied to all these incentives as home builders will benefit from the advantages of building in a free zone; benefits which include cheaper construction costs resulting from tax and duty incentives.
“Residents within the LFZ will also benefit from a single regulatory body that manages levies,” said Olumide, adding that “Businesses producing and selling within free trade zones enjoy significantly less operational costs.”
The LFZ, spanning across 16,500 hectares and widely acclaimed as the most ambitious project in Lagos State, has received remarkable attention this year; partly due to the several milestones celebrated by major investors in the zone in the past few months.
One of the biggest investors in the zone is Dangote Group, which is building a petroleum refinery, a fertilizer processing plant, a gas pipeline project and a petro-chemical plant in the south east quadrant of the zone.
JOSEPH MAURICE OGU