As the Lagos State government continues the test-running of the Blue Line Rail transport system in preparation for its full operation within this year, experts in real estate foresee, among other impacts, growth in rental and capital values of properties in that corridor.
The growth in property values tops the expected long-term impacts of the rail project and, according to the experts, it will be driven by an increase in demand for real estate assets for both residential and commercial purposes.
It is expected that the operation of the rail system will lead to the growth of businesses, especially ancillary companies that will support the rail system. Similarly, more people will be coming to live around the captive area and will be looking for houses to rent or buy to live, work and do business.
A new report that assesses the short, medium and long-term impacts of the rail system, anticipates an increase in the number of gated communities and property uses. The report notes that gated communities and multi-tenanted developments have been on the rise in response to rising security concerns and inclusive living.
The report compiled by Northcourt Real Estate, a Lagos-based consultancy and marketing firm, assesses the advantages and disadvantages of the increase in gated communities and multi-tenanted complexes despite the impact of the Blue Line project.
“These communities will rise as a response to the increased demand for residential real estate along the rail line. The Blue Rail Line will lead to the development of education, religious, hospitality and retail use in low-density areas,” Ayo Ibaru, chief operating officer at Northcourt, said, adding that areas close to the rail stations were expected to see a surge in retail and hospitality use.
Read also: How short term impact of Lagos Blue Rail Line will drive real estate demand
The Blue Rail Line is a two-phase project. The first phase, measuring about 13 kilometres, runs from Mile 2 to Marina on Lagos Island and it is expected to process about 27,000 passengers per hour while the second phase is expected to run from Mile 2 to Okokomaiko.
Ibaru said that the expansion of the rail line, specifically with the addition of a cargo segment, would drive demand for warehousing real estate and an increase in the supply of retail assets that cater to pseudo-office demand.
The long-term impact of the rail project is also expected to bring about infrastructure development. In recent times, there has been a rise in capital expenditure for infrastructure projects as a result of the Blue Line Rail system.
Expectation is that this will result in the development of key infrastructure such as roads, drainage system and electricity supply. “It is essential to recognise the importance of extracting the most possible value for the Lagos real estate market from the Blue Line, which is contingent on careful preparation and implementation,” Ibaru said.
He advised that road networks should complement the rail network with the integration of public transport support services and the provision of occupier-friendly infrastructure, hoping that the rail project would serve as a benchmark and may serve as a model for other states across the country.
This, he said, would result in accelerated national infrastructure development as some states might plan to connect directly with the Lagos rail network.
Yet another part of the long-term impacts of the rail system will be economic, according to the report, as it will have substantial effects on the state, its residents and the economy.
Yemi Madamidola, an estate manager, had told BusinessDay in an interview that besides its potential to increase economic activity by decreasing the cost and time required for businesses to carry goods, the rail project would also lead to job creation as there will be need for workers who will manage the Blue Line system and maintain the infrastructure.
“The implementation of the Lagos Blue Rail Line is expected to result in the creation of a significant number of jobs both directly, through the operation of the rail line, and indirectly, as a result of the positive impact it will have on the local business environment,” Madamidola said.
He noted that the transport sector had consistently been a major contributor to the revenue of the Lagos State government, adding that the rail line project was poised to further enhance this revenue stream.
