The Potential of Real Estate
Investment in Nigeria
Investment
in real estate has been a timeless and rewarding global enterprise. Nigeria, a
landing home for most investors has experienced an explosion in real estate
investment in recent time.
Report
by Business Day on June 6, 2014 reveals a growing investor’s confidence in the
Nigerian economy. This confidence has been the major catch for foreign direct
investment (FDI) in the real estate sector.
Enabling
factors such as Nigeria’s demographics, emerging middle class with strong
spending power and, of course the recent re based of Gross Domestic Product
(GDP) which shows a GDP size of $510 billion has made Nigeria a hot spot for
both local and foreign investors.
Current State of Real Estate
Investment in Nigeria
In
Nigeria presently, investment in industrial, office, infrastructure and retail
real estate is gaining more attention and investment pull compared to
residential. This trend has created a big space and opportunity for daring
investors.
For
instance, Actis LLP, a London-based private-equity firm with around US$1.7
billion (N272 billion) investments in Africa has initiated many projects in
Nigeria, including, the 307,000 square feet Ikeja City Mall in Lagos. Reports
say that the cost of Actis investment is approximately US$100 million (N16
billion), and is presently occupied by renowned retailers like Shoprite
Holdings and Samsung Electronics. It has also invested another US$100 million
(N16 billion) for developing a 19,40,000 square-feet Heritage Place in Lagos
slated to open in 2015.
Actis
as well as other notable real estate investors such as 3Investonline, UPDC,
James Cubitt Architecture and a host of others leans heavily on industrial,
office, infrastructure, and retail investment. This trend has no doubt created a huge opportunity for investment in residential real estate.
The Need to Invest in Residential Real
Estate in Nigeria
BGL
research says that Nigeria needs around 16 million housing units to accommodate
its population of approximately 168 million, with over 50 per cent of the
Nigerian population being homeless or without adequate shelter. Nigeria has
room to create approximately 1 million housing units, per year, for the next 20
years to cater to the housing needs of its people.
Like
never before, residential accommodation is in much demand in Nigeria. Nigeria
is one of such places where property gets sold even before construction is
completed. Nigeria’s urban population increased to 50 per cent of the
population in 2012 from 10 per cent of the population in 1960. It is predicted
that population of urban center, Lagos, will reach a staggering 20 million by
the year 2020, making it one of the biggest cities in the world.
The
need to redirect focus from industrial to residential real estate is expedient.
Despite the unrest and insurgency Nigeria is grappling today, people from
neighboring countries keep migrating into Nigeria increasing the already large
population. There is a also a mass drift from rural to urban cities.
The
recent re basing of the Gross Domestic Product (GDP) by the Federal Government
which has placed Nigeria as the largest economy in Africa with a GDP of $510
billion ahead of South Africa (having a GDP of $370 billion) shimmers a gleam
of the potential of investing in Nigeria real estate industry.
It
has exposed much more opportunities in real estate and infrastructure,
especially residential investment and development than had been previously
imagined by both investors and analysts
Recent investment in Residential Real
Estate
Mustapha
Njie, a real estate developer from The Gambia has recently invested a whopping
N24 billion into for the development of a 750-unit high-end housing estate
called RivTaf Golf Estate in Port Harcourt, Rivers State, which will deliver
luxury villas or duplexes, town houses and luxury two- and three-bedroom
apartments.
Mustapha
in a statement says “My confidence in the Nigerian market is simply because
there is demand, and if we could build 600 housing units at Brufut Garden for a
population of 1.5 million people in The Gambia, 750 housing units for Nigeria’s
over 160 million people is just a scratch on the surface,”.
Foreign
investors are seeing the potential of residential real estate investment in
Nigeria and dipping into it.
For
more details on how to invest in residential real estate in Nigeria, visit www.padronconsulting.com or send all inquiries to austin@padronconsulting.com
or +2348181702919.
PadronConsulting
assists foreign investors and Nigerians in the Diaspora to develop, acquire and
manage properties even without having an established presence in Nigeria.
Ryta Moemeke
