As the Lagos-Ibadan railway line nears completion, real estate investment analysts say there are potentials for expansion and investors are already taking position to tap from the opportunities of capital appreciation of existing investments along that corridor and the door of new estate developments to open on back of the project.
Hinging the prospects of an additional market on the rural-urban migration of professionals, job-seekers and entrepreneurs’ attraction from other states to the heavy commerce commanded by Lagos, the industry stakeholders project that the rate of estate developments along the inter-state rail track will double in the next five years, especially in value.
They also bank on the capacity of the infrastructure to give a new lease of life to businesses, entertainments, culture and life that can stimulate high-density development of properties along the line.
The toast of real estate industry on the route would be in locations such as Isherri towards Arepo, Asese, Ogere in Ogun state further down towards the big city of Ibadan.
Therefore, for whoever has the capacity, the time is here to acquire properties in those areas because in the next couple of years, the rental income to be generated on those properties will keep appreciating.
“Considering the congestion in Lagos, it makes more sense that people live outside Lagos, even if they transact businesses in Lagos. The introduction of the rail system is going to ease traffic on the Lagos-Ibadan expressway and aid movement of goods and services from Lagos to Ibadan and vice-versa,” Deji Fasuwon, managing director, Propertymart, told BusinessDay.
“It is going to encourage developers to look outside of the city centre of Lagos and begin to move towards Ogun and Oyo states, precisely Ibadan, and develop projects there, where people can live and commute to and from Lagos easily,” he added.
The helmsman at the burgeoning real estate investment company cited opportunity for developers to begin to build housing estates along the corridor such that people will be able to build their businesses.
Affirming the appreciation in real estate value to be generated from the rail line, Kunle Awobudu, former president at the Nigeria Institute of Building (NIOB) posited that the area was potentially a prime haven for investors anticipating future returns
“Once the rail line is completed, it will attract a lot of interest. I don’t think they will regret it. The only prayer is for Julius Berger construction company to increase pace of construction,” Awobudu told BusinessDay, noting that the rail project would ensure unhindered access to key neighbouring cities such as Ibadan, Ijebu-Ode, Benin, Abeokuta and Lagos.
The construction of rail transit infrastructure usually improves conectivity of communities like those on the Lagos-Ibadan expressway. The route connecting Lagos to both neighbouring southwest states and far-off states in the south-south and south-east of the country is one of the most notorious for fatal accidents and is typically fraught with high congestion of vehicles and loss of productive hours in traffic.
The 132 kilometre rail line is a N458 billion project facilitated by N386 billion Chinese loan and N72 million equity requirement from the federal government. It received real boost in 2017 following the Kemi Adeosun, the former minister of Finance release of Nigeria’s total counterpart payment.
Due to the competition to be part of the economic activities in Lagos, the road infrastructure is overburdened. But experts see the untoward trend lowering with the coming on stream of this major transport infrastructure.
BusinessDay finding shows that rents on some high-profile estates along the Lagos-Ibadan expressway were already hitting well above N1 million per annum, particularly within the OPIC area of Ogun state.
On the average, since Lagos is the centre of attraction, value proposition will also be benchmarked on proximity to Lagos. But with increased accessibility promised by the rail line, property value will enjoy competitive rates based on distance from Lagos.
Estates have been developing along the Lagos-Ibadan corridor long before the rail project was started. The route is a major development corridor in Lagos. Others are Lagos-Badagry expressway, Lekki-Epe, Ikorodu Road and Abule Egba – Abeokuta.
“Of all, Lagos-Ibadan is the fastest growing after the Epe corridor and more promising. Because of that, real estate investments have been growing there”, said Akinola George, a real estate expert.