Like any other major development in an area or economy, the Lagos Blue Rail Line which has been under construction since 2009 is expected to have its impact on real estate along its captive areas.
The impact of the estimated $1.2 billion project, the first phase of which was commissioned by President Muhammadu Buhari in the run up to the general election in February this year, is said to be short-, medium- and long-term.
It is expected that the operation of the Blue Line and its adoption by a large proportion of the public will improve demand for real estate assets along the its corridor. This is because white-collar workers would likely benefit much from this transformation.
They will be able to get to work much more efficiently due to the accessibility of public transit. Traders and business owners will be able to access more customers and clients with enhanced connectivity. The Blue Line would generate new growth prospects for businesses, allowing them to increase their geographic reach.
It is also expected that the implementation of the Blue Line will have a favorable effect on the local economy by introducing new economic opportunities and improving the standard of living by alleviating traffic congestion.
The first phase of the project, measuring 13 kilometers, will run through Mile 2, Suru-Alaba, Orile Igannu, National Theatre to Marina in the heart of Lagos Island while the second phase is planned to run from Mile 2 to Okokomaiko in Ojo area of the state.
According to a new report assessing the impact of the rail project which is still being test-run two months after its inauguration, the development of new rail lines can have a positive effect on the property values of regions surrounding rail stations in the short-term.
The report, compiled by Northcourt Real Estate, notes further that the development of new train lines generates economic activity and job growth, adding that these can increase the value of local real estate, just as it can improve occupier’s access to jobs and services, thus enhancing the captive area’s desirability and value for residence and business.
The report points out, however, that in the medium term, the potential effects of rail transit on property values in Nigeria are less certain, explaining that, on one hand, the enhanced accessibility and connectivity afforded by rail transportation can increase property prices in the neighborhoods surrounding rail stations.
On the other hand, the report says, the possibility for greater noise and air pollution, as well as the potential for increased traffic congestion, may reduce the desirability of certain neighborhoods and consequently, their property prices.
Expectation is high that the Blue Rail line, which is a partnership between Lagos Metropolitan Area Transport Authority (LAMATA) and The China Civil Engineering Construction Company (CCECC), will improve the frustrating traffic situation in Lagos which is apparently bursting at its seams with over-population weighing on a small land area, estimated at 3.577 square kilometers.
“The Marina Station has an estimated capacity to process over 450 passengers each minute or approximately 27,000 passengers per hour,” Ayo Ibaru, COO, Northcourt, told BusinessDay.
Ibaru underscored the need for investment in infrastructure and urban planning to ensure coordinated and sustainable growth. He noted that, along the rail lines, the central authorities would need to improve residential, infrastructural, educational and healthcare real estate.
“The effects of rail transportation on property prices in Lagos and, by extension, Nigeria will vary depending on the locales and unique characteristics. A light rail line in a heavily populated metropolitan area like Lagos may influence property prices differently more than a high-speed rail line in a rural location,” he said.