How investors can tap opportunities in Lagos Island property market | Prestige Real Estate News
The Lagos Island property market represents the core of the high-end real estate market nodes, not only in Lagos as home to luxury real estate, but also in Nigeria as a whole.
Investment in this market, comprising Lekki Phase 1, Ikoyi, Victoria Island, Gracefield Island, Orange Island, Banana Island, and Eko Atlantic City, requires huge capital, which is compensated for by good returns on investment (RoI) over a shorter period.
An investment analysis of these market nodes, focusing on their strengths, weaknesses, opportunities, and threats (risks) (SWOT), shows that investors have more opportunities and strengths to enjoy than weaknesses and threats to fear.
To enjoy these opportunities as an individual investor is generally not easy, where capital is not enough to get a piece of the pie alone, hence the need to pool resources or crowd-fund, buy what is possible, allow the investment to mature, develop, or sell off.
“We are encouraging syndicate structures where groups pool capital to access 1000–5000 square metre blocks, reducing individual exposure while enabling more ambitious projects in Lagos’ growing waterfront corridor,” Udo Okonjo, CEO, Fine & Country West Africa International, explained to BusinessDay at the weekend.
Fine & Country is Africa’s premier real estate advisory firm with over $200 million in luxury and investment sales. It serves clients ranging from institutional partners like Zenith and Access Banks to high-net-worth individuals, and is an exclusive broker for top-tier developments across Nigeria.
At a recent Webinar on the Lagos Island Property Market hosted by the company, Okonjo cited Eko Atlantic City and Orange Island as two exclusive developments where land prices have seen quite encouraging appreciation, but very few investors look their way.
A poll conducted during the Webinar, which sought to know where attendees had viewed, researched, or invested, produced an intriguing result, showing Lekki Phase 1 with 38.46 percent of the polls; Ikoyi, 34.62 percent; Victoria Island, 15.38 percent; Orange Island, 5.77 percent; Eko Atlantic, 3.85 percent; and Banana Island, 1.92 percent.
Chuka Okonjo, the Webinar anchor, explained that this distribution reveals both where money is already flowing and where gaps in awareness exist, which can be key indicators of future growth areas.
He outlined Banana Island, Ikoyi, Eko Atlantic, and Orange Island as the ‘four pillars’ of the Lagos Island property market, describing them as the anchors of value and future growth in Lagos’ luxury real estate ecosystem.
Zeroing in on Orange Island, the CEO described it as Lagos’ newest reclaimed island, measuring 150+ hectares, positioned as the “future of Lekki,” with order, planning, and premium infrastructure. “Being adjacent to Lekki/Ikoyi corridors makes the island a future-proof enclave,” she said.
The development of this island is already in its 4th phase. A square metre of land in this new development sells for N450,000. A plot of land there measures 1,000 sqm, meaning that a plot of land sells for N450 million.
For many investors, the island is largely unaffordable or too expensive, but to tap the opportunities that it offers, Okonjo encourages investors to buy as a group, more so as the developer allows a flexible payment plan.
The total sale price for the plot is N495 million, inclusive of 10 percent agency fee or what Okonjo calls ‘Reservation Fee.’ The buyer pays an initial deposit of 30 percent, which gives N135 million, and pays 60 percent of the cost every quarter for 24 months, giving N33.75 million, and then the remaining 10 percent, which gives N45 million.
Buying as a group of five people, the payment becomes much less for each group member. Individual’s share of the total price (495 million) is N99 million; 10 percent agency fee is N9 million; 30 percent initial deposit is N27 million; 60 percent quarterly payment for 24 months is N6.75 million, while the remaining 10 percent is N9 million.
Prospective investors are, however, advised to note that survey costs will apply at the point of allocation, starting from approximately ₦1.3 million per plot. This is subject to Lagos State directive. They should also know that plot allocations have not yet commenced and will only take place in the final phase of the master plan and survey delivery.
Culled from BusinessDay
