• Thursday, March 28, 2024
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What Total staff move from Banana Island means to property market

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The Banana Island property market was badly bruised recently when the staff of Total Nigeria left the highbrow settlement for their newly completed residential building, Kuramo Beach Residences also called Total Residences in Victoria Island.

Total, a subsidiary of the Total Group, is an industry leader in petroleum marketing and services in Nigeria. The exit of its staff has thrown back 70 luxury flats into Banana Island’s narrow but very expensive market, raising concerns on the likely impact on both landlords and the market.

An upper class settlement in Lagos, Banana Island with curved shape of a real banana, is adjudged the most  exclusive and expensive location in Nigeria today where property value is  not only stupendously high, but also denominated in dollars, though could be paid in naira equivalent.

“This island has the best security, facilities and services;  it has become a brand on its own. Everybody who has got some money wants to live on the island. Nobody is now thinking of living in old Ikoyi. People are now ready to pay extra to live on this island”, Chudi Ubosi, an estate surveyor and valuer, told BusinessDay.

Here is an island where a standard plot of land measuring 1,000 square metres sells for between N300 million and N400 million;  a three-bedroom apartment typically sells for  between N150 million and N250 million and about N500 million  for a five-bedroom stand-alone house, depending however on location, build-quality and  finishing.

Renting  does not come cheap either in Banana Island. BusinessDay checks revealed that rent for a three bedroom apartment here ranges from N20 to N30 million per annum which is way ahead of N5 million to N15 million for same size apartment in Victoria Island.

However, for commercial real estate, one  square metre space goes for between N200,000  and N300,000 while in Victoria Island and Ikoyi, it goes for between N270,000 and N400,000 per square metre. This is because Banana Island is mostly residential. Again, its exclusivity and high level security does not support high volume commercial activities.

It is against this backdrop that concerns are mounting over the 70 flats that are now vacant on this island plus others that may not have been reported. “This is a hard hit on the real estate market in Banana Island, but a plus for the Victoria Island market”, noted Yemi Stephen, a partner at Estate Links, a firm of estate surveyors and valuers in Lagos.

“How many companies in Nigeria today can take up flats accommodation in excess of 10? And here we are talking about 70 flats where rents are paid in dollars; it will take a while to fill,” Stephen observed.

Though  Godwin Asuelimen, Head, Core Product, at Propertypro.ng shares Stephen’s views, he pointed out in an interview that the exit of the Total staff might not have a major effect on the real estate market as it is not a macro factor.

 “It will only have effect on the two companies that are involved in the transaction, but it would shake the market,” he insisted,  hinting that  “the agent(s) handling the Banana Island property will probably target corporate clients”, but  they should be ready to do reasonable pricing, not the price they want.”

 Stephen argued that “if the Banana Island agents are looking for corporate clients like that of Total, then it may take them eternity to get the flats filled up;  if they are creative and lease per unit, they may be able to fill it up in the next  four months or there-about.”

 What happened in Banana Island is not totally new in the property market. It had happened before when Mobil vacated its former office for  Black Diamond just opposite the Mobil Building along Lekki-Epe Expressway.  But that was not of the same magnitude as that of Banana Island. It was a block of 49 apartments and it took two years to fill it up.

Despite the negative impact of the exit of Total staff on Banana Island market, there are also some positive sides to that movement. It is a huge plus for commercial activities in Victoria Island and its environs, particularly The Palms Mall which is not far away from the new residence.

“The shops around the Adetokunbo Ademola and  environs will,  in the nearest future, expand. Those shops were servicing Eko Hotel and a few others, but  now a building of over 100 apartments is being filled up; it will have a huge influence on the retail and other commercial outlets”, Stephen assured.

Kuramo Beach or Total Residences is an iconic residential development located strategically at the intersection of Ahmedu Bello Way and Adetokunbo Ademola streets in Victoria Island Lagos. It is an imposing  edifice standing 89 metres high and over-looking the Atlantic Ocean just a few metres away.

“This  is a twin tower building, sitting on a total land area of 40,000 square metres, offering  140 residential apartments, a clubhouse, two podium-parking levels, a mini football pitch, multi-functional hall and recreational sport facilities”,  Ramzi Chidiac, managing director, ITB Nigeria Limited, explained to BusinessDay in a telephone interview.

ITB Nigeria, a subsidiary of the Chagoury Group, is the designer and contractor on this project which was awarded to it in August 2015. The construction company has built an enduring reputation as an innovative  company providing full and advanced integrated engineering and construction solutions to both private and public sectors.

“With up to 1000 employees, world-class projects like the Azuri Peninsula, Eko Tower 1&2, The Heritage Place, Kingsway Towers, Eko Signature Hotel, the Trinity Towers  and The National Assembly Complex, ITB has become the growing face of African development”, Chidiac enthused.

He disclosed  that Kuramo Beach was constructed from carefully chosen materials and with strict adherence to quality and safety standards. The building  comes with power efficient HVAC system, highly controlled sewage plant for effective environmental management, standard compliant fire integrity system, efficient and standard water supply and distribution facilities and state of the art architectural design guided by a world class quality management system.

Abbas Haidar, Kuramo’s  project manager , assures prospective buyers,  “we have committed a lot of time, resources, expertise, digitalized equipment and utmost competence to ensure the successful completion of this project”.

Continuing, he said, “this is, no doubt, one of the best high-rise residential buildings in Lagos state. Not only will this futuristic building provide utmost comfort for its owners, it will also successfully answer the demand for more accommodation for Lagos amid the growing population” .

An island state with the smallest land mass in Nigeria, Lagos has over 20 million population. The state has a housing deficit estimated at 3million units, requiring close to 200,000 housing units built every years for the next 10 years to bridge the gap.

A report on the State of the  Lagos Housing Market published by the  Pison Housing Company estimates that 60 percent of Lagos residents live in rent accommodation and spending about 50 percent of their income on paying house rents. This makes the completion of Kuramo Beach Residences a welcome development,  especially for those who can afford its luxury apartments.