With the dawn of a new year, a lot of idle and patient capital are looking for where to rest in terms of investment with expectation of good returns. One of such places for investment is real estate which, over time, has been described as a store of value and wealth creator.
Out of so many areas in Lagos that support real estate, at various levels though, four locations come up tops. Even though investment consideration in real estate in this sprawling city always favours island locations, our findings reveal that there are good locations on the mainland too.
Apart from Lekki, which is on the island, the other three locations in this survey are on the mainland. They are Okota, Agboju and Ojo, each offering good and quick returns on investment in rental properties.
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Lekki:
For good reasons, Lekki has become an attractive location for investment in real estate in general and apartment properties in particular. Demand for apartments or flats is higher in this location than any other place on the island areas of Lagos.
Our findings which are supported by available data from Nigeria Property Centre, explain why Lekki is top of the destinations for investors in the new year. A developer, who did not want his name mentioned, offered useful and encouraging insights.
“Over 15 percent of people looking for houses to rent flock to Lekki and about 52.7 percent of them are looking for small size apartments, mostly two-bedroom. This is what the market says and we are already responding to that,” the developer said.
Google Trend searches by Nigeria Property Centre, support this view. The searches show that, in a scale of 100 percent, only 7 percent of those looking for houses to rent go to Ajah; 4.5 percent to Ikeja; 3.1 percent go to Ikoyi, while 2.6 percent favour Victoria Island. The rest favours Lekki.
The searches also show that whereas houses for rent corner 52.7 percent of the housing market, those for sale represent 33.4 percent; short let apartments enjoy only 3.4 percent of the market while joint venture has just 0.3 percent share of the market.
“The reason for this is not far-fetched. This location has a large concentration of middle level managers in oil and gas, banks and tech companies in Ikoyi and Victoria Island where house rents are pricey. To maintain their thirst for island residence and nearness to their places of work, Lekki is their destination,” the developer explained.
Okota:
Worsening economic condition and dwindling income is, on incremental basis, compelling many families to rethink and reimagine their accommodation needs. The Lagos rental market has, in the last couple of years, witnessed cautious movement from the city centre to the suburbs and hinterland.
Okota is a major beneficiary of this movement. On regular basis, it receives ‘immigrants’ from places like Surulere, Ilupeju, Gbagada etc which are classified as middle-class settlements with relatively high accommodation cost.
This area has seen over 40 percent increase in house rent across board. Cornelius Ibeagwu, a real estate consultant, told BusinessDay that rent has jumped so high that a two-bedroom apartment now goes for between N2 million and N2.5 million while 3-bedroom apartment is priced between N3 million and N3.5 million, up from N850,000 and N1.2 million for 2-bedroom, depending on the age of the house.
“Though this is tough for renters, it provides opportunity for investors in rental property and the risk of default is quite minimal as majority of the renters there are business men that are doing well,” Ibeagwu noted, assuring that it makes investment sense to move cash to that community.
Agboju:
This rural community has become a sought-after rental destination because of the massive infrastructure development Lagos State government is putting in place in that axis. The area has seen influx of people, leading to increase in house rent.
“This area will soon explode because it is one of the areas that will benefit from the inter-modal transport system and the transport interchange which the state government is building at Mile 2 which is not far from here. Land costs have already gone up as demand has increased significantly. People are buying land to build for both residential and commercial purposes,” Ezekiel Osho, a resident, said.
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Ojo:
Like Lekki, Ojo is a very active rental market where commercial activities drive demand for rental properties. This rural community is home to two big markets—Trade Fair (ASPAMDA) and Alaba International. There are also tertiary institutions which are largely non-residential
The demand for rental property here has been heightened by the improved road transport infrastructure and on-coming rail system to the area.
Fatoki Jaiyeola, another Lagos resident who lives in Ojo-Igbeda, a sleepy community that drives whatever vibrancy it enjoys from Alaba International Market, shared his experience, saying that the situation in the community has put tenants on edge.
“Almost all the new houses here are constructed in two-bedroom forms because that apartment size is in high demand. Landlords are charging above N1 million for each apartment. Some who are still paying N1 million have been served notice of increase as from 2025,” Jaiyeola told our correspondent.
“In some areas here, two-bedroom apartment goes for between N1.2 million and N1.5 million per annum. There is a place called Akai where most of the residents are ‘big boys’ making efforts to ensure that the place becomes exclusive,” he added.
Jaiyeola said demand for houses is far more than the supply, explaining that a lot of people who cannot pay Festac and Okota rents are now relocating to the area where rent is relatively less. “Many of them are traders in Alaba or Trade Fair. So, it pays to live closer to one’s business area,” he said.
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