A major disruption is happening in the Nigerian mid-income property market with the development of Blue Water Lagos by a private equity investment firm, Africa Capital Alliance, and a construction giant, Elalan, offering what market analysts have described as exceptional value propositions.
At a time when most investors are holding back investment and adopting a watch-and-see attitude as the economy totters and politics upstages economic activities, Capital Alliance and Elalan are making ambitious entry into the property market with $165 million investment that promises to deliver over 600 residential apartments and penthouses to mid-income home buyers.
“As investors and developers, our confidence in the market derives from our belief that there is demand and we can always identify products where there is demand even in a recession like this. The fact that there is a cycle does not mean that is how the market is going to be forever. There is going to be changes and forceful improvements which will improve project attractiveness.
“We are not really concerned about where we are right now. We believe that we are investing at the right time; when people are not investing is the right time to invest because that is when you get a better deal for your development”, Obi Nwogugu, Head of Real Estate at Capital Alliance, explained as part of reasons for their confidence in a recessing market.
Blue Water Lagos is coming as a redefinition of what, conventionally, could be called ‘affordable housing’. It offers opportunity for live, work and play experience in luxury apartments and shopping/ entertainment mall that will compare favourably with The Palms and Ikeja City Mall in Lagos.
Described as the largest modern residential and best-in-class development in Nigeria, Blue Water Lagos sits on four hectares, about 37,000 square metres, of land. Nwogugu told journalists at the topping out event of phase 1 of the project—The Saphire Residences—that the entire development was estimated to cost $165 million.
The estimated cost of The Saphire Residences is $25 million and, according to Kenneth Leech of Elalan, this first phase which will be delivering 124 apartments, comprising 1,2 and 3-bedroom apartments, would be ready for occupation in January 2020.
“This is a unique scheme; it is in a great location for Lagos people; it is a unique live, work and play lifestyle community. There are apartments, retail and entertainment facilities. The entire scheme promises 6,000 luxury apartments and penthouses”, Leech said of the development which is located a few hundreds of metres away from the Second Roundabout on Lekki-Epe Expressway.
In real estate, it is said that location is everything and this works well for Blue Water Lagos. Leech said the development “is a secure environment in which the residents will have no cause to go anywhere else at the weekend. Everybody’s needs will be provided. It is best-in-class and no-one else is doing this kind of scheme in Nigeria”.
Nwogugu takes it further, saying, “our product speaks for itself; it is a luxury product, it is not what you would call affordable housing. It is a mid-market product in an exceptional location; people say we are competing, but we don’t see any competitor at all.
“Anybody who is doing similar development in Oniru, for instance, does not have the kind of amenities that we have, nor the quality of our product. This is being built by a tier-1 builder who has expertise in mechanical, electrical engineering and plumbing. What you get is a quality product”, he assured.
He emphasized that there was no other scheme like theirs going on in Lagos because they were offering opportunity for waterfront living in Lagos for anybody who wants it. He noted that this is the first time anybody is putting up condominiums in a waterfront location. “You hear about waterfront developments around the world in places like New York, Miami, London, etc. But it is now available in Lagos”, he entrhused.
In spite of the persisting lull in the property market, buyer-interest in Blue Water Lagos has been quite encouraging. According to Nwogugu, the scheme has recorded 35 percent commitment from buyers and 15 percent under discussion, meaning that negotiation is going on. Buyers are offered flexible payment plan which requires them to make 20 percent down payment and spread the balance over the year payable on quarterly basis.
CHUKA UROKO
