Despite the fact that the Nigerian economy entered recession in Q3 2020 as a result of the effect of Covid-19 and several industries, including real estate suffering massively, reports from Lagos indicate that real estate developers continued to construct during the pandemic months of 2020, owing to increased demand for residential housing units.
According to research, the most lucrative areas in Lagos for discerning real estate investors are around Ibeju Lekki, Lekki axis, Banana Island, Ikoyi, Surulere, Ikeja GRA, Magodo, Gbagada, and border towns like Arepo, Magboro, and Sango-Ota in Ogun State.
The research divided Lagos State into 7 zones namely
- Island 1 (Lagos Island, Old Ikoyi, S/West Ikoyi, Banana Island, Victoria Island)
- Island 2 (Lekki Phase 1, Ikate, Osapa, Agungi & Chevron)
- Island 3 (Ajah, Sangotedo, Awoyaya & Lakowe)
- Island 4 (Ogba, Ogudu, Magodo GRA 1 (Isheri) & Magodo GRA 2 (Shangisha)
- Mainland 1 (Surulere, Yaba, Ilupeju & Gbagada)
- Mainland 2 (Amuwo Odofin, Isolo, Festac, Apapa) and
- Mainland 3 (Ikeja GRA, Maryland, Ikeja & Alausa).
The highest land prices were reported in the Island 1 zone, which is expected to be replicated in 2021, followed by the Mainland 3 zone. This reflects the intensification of commercialization in these two zones. On the other side, the Island 3 region had the highest amount of land investment.
Per house types, Island 1 zone had the highest values (rental & sale) for both 3-bedroom and 4-bedroom houses. The same also goes for office space rental values.”
Chevron showed the highest yield of 6.87% on investment and is expected to do more in 2021, next was Agungi (6.31%), while Osapa came in third with 6.06%.
The lowest yield was seen in Ogudu – 3.10%, next being Magodo (Shangisha) – 3.19% and third being Magodo (Isheri) – 3.20%.
The research also projected that land and house prices in Lekki Ikate, Chevron axis, Sangotedo and Lakowe are likely to keep increasing as the area welcomes more developments like Lagos Free Trade Zone, 4th Mainland Bridge and Dangote Refinery, which are all expected to come on stream in a few years. upon completion, will further trigger the rise in property values in the zones.
In conclusion, this is the time to invest in real estate with the number of growth poles in the Ibeju Lekki axis of Lagos.