Real estate on the islands of Lagos is relatively more expensive that it is on the mainland but if you spend most of your day on the island then you should add the extra fuel you burn, the extra wear on your vehicles, the hassles and stress, the cost of doctor’s fee and medication.
If you have been seeking to buy a property you should have done it in the heat of the global meltdown. The real estate market crashed along with the Nigerian Capital Market and choice properties were going for peanuts.
There are a lot of good locations on the island to choose from. It is a general consensus among estate surveyors that Lekki corridor remains very appealing since there is hardly any investor coming into real estate that will not want to kick-start his venture in Lekki. Ironically, not many of these potential investors are conversant with the Lekki axis. Some still see Lekki as being synonymous with Lekki Phase 1, which is only a government estate on the axis.
Lekki corridor prides itself with more than 200 housing estates and still counting. The attraction to this location is the avalanche of world-class developments such as the free trade zone, proposed refinery, airport, seaport, holiday resorts and similar multi-national developments, which enhances property value on the axis.
Besides, the on-going road improvement exercise will continue to make Lekki axis to remain the fastest growing real estate location in Africa. These developments will afford a large number of residents the luxury of working within the proximity to their homes as well as enjoy their leisure times in the tranquillity of the sea-view environment.
As the development progresses, the influx would increase and so would the prices, so you would have to speed up on your decision making if you intend to live on the island.
In Lekki Phase1the average price range for a plot of land measuring between 1000 and 1100 square metres costs between N80 million and N120 million while the cost of a 5-bedroom detached house with a boy’s quarter and swimming pool on a 1000-square metres plot of land in Nicon Town is between N165 million and N180 million. The cost of a similar building in Victoria Garden City (VGC) could be as high as N200 million.
However, low-end property locations like Sango-tedo, Lakowe, Ahoyaya, Ajah-Badore, Akodo, Oniyanrin, Epetu, Abijo, will cost you less. For instance, a plot of land measuring 700 square metres in Sangotedo costs only N3.5 million while another plot of land of the same size in Badore costs N5 million.
If you are putting your money into a high-end location like Ikoyi, then you have to study the guidelines and building regulations first. Out investigations revealed that once your plots are registered with the Lagos Registry you would not need to pay the regularisation fees of N20, 000 per square metre, when acquiring your building permit.
Also some parts of the estate are favoured by town planning regulations. For instance a 4,405 square metre plot on Alexander Road on which the owner can build up to 15 floors attracts an asking price of N1.1billion (N250, 000 per square metre) while a 3,800 square metre plot on McDonald Road with which you would only get an approval to build 6 floors on it, is offered at N800m (N210, 000 per square metre). A 3,210 square metre plot on Glover Road Ikoyi which already has an approved design for a 15 storey building is on the market for N850m (N265, 000 per square metre).
However, return on investment in Ikoyi properties is quite enormous both in rental value and capital appreciation, more so, most property owners demand rent in dollars, so can let out the other flats and recoup the cost of the building within the next few years.
If you purchased a 2-apartment building then you can let out the second apartment. If it is a five-bedroom semi-detached house with a 3-bedroom boy’s quarter in Ikoyi, you could get about N7.5 million annually, but if you bought a block of flats the other three-bedroom or two-bedroom flats and earn N1- N2million less than that.
Other than the island you might considers other strategic locations on the mainland. Yaba for instance has a central location and the availability of a lot of infrastructure. Yaba will also enjoy an unprecedented increase in demand this year which will push rent prices up. With its characteristic old structures, Yaba is strategically located and has a direct access to the Lagos Central Business Distrct, and if you are purchase a building there you can recoup the cost price when you let out the ‘extras’ over the next few years as the rents rise.
According to Bola Olaiya, the principal partner of Bola Olaiya & Co, a firm of estate surveyors and valuers, the concerted efforts of the state government to improve infrastructure is a driving force for properties in Yaba, He told the magazine that the development has led some property developers to embark on massive residential developments in the area, among which are Tajudeen Olanrewaju estate, Grace Estate, Haliconia estate and New Court estate, Lava Oakwood estate, and Royal estate.
The old structures in Yaba are also being purchased by individuals.
These old structures are either renovated to suit the buyers taste or simply pulled down and replaced with new structures. “For a very long time from now, Yaba will continue to be a centre of attraction for the property market. More old structures are being put-up for sale on daily basis and demand keeps increasing. Rent is also on the increase because there is more demand for accommodation, especially by those that work on the Island. Also people want to live and do business where they will not be disturbed by incessant flooding and inadequate facilities,” Olaiya said.
Depending on the size of the land, the structure on it and its location, the cost of property in Yaba is in the range of N45 million and N125 million. Rent per annum is between N900,000 and N1.2 million for tastefully finished three-bedroom flat and could be as high as N2 million for four-bedroom terrace house.
As the saying goes; ‘If wishes were horses, beggars would ride.’ A lot of people would like to have a home in Ikoyi, but the average size of a plot of land above 1000 square metres and the price can be as high as N250, 000 per square metres, so it is really for the big boys. On the other hand if you can get a loan for it then you can break it into smaller pieces, take out what you need and sell off the rest for a profit. The fact that smaller plots are scarce means that your bits of land would be hot cakes.
Another location on the mainland that will experience a boost in its property market this year is Magodo GRA, Phase 1 and 2, which appears to have suddenly woken-up from a downward note since the end of 2010. The estate now record a flurry of construction activities following a revocation order slammed on some undeveloped plots in Magodo Phase 2 sometime in 2009. Those who got their land back immediately mobilised to site.
Now, blocks of flats appear to be the vogue within the estate. A property developer who craves anonymity attributed the development to the increase in the commercial value of properties in the estate and the high return on rentals. He maintained that the estate which was renowned for duplexes and semi-detached houses is reverting to blocks of flats as a result of high demand. “More people who want to live within the estate cannot afford to pay for duplexes, so you discover that you have lots of empty building for a very long period of time. So, there is the need to start building smaller apartments like two-bedroom and three-bedroom flats that are in high demand,” he said.
Property owners are capitalising on demand to increase rent within the estates. The annual rent for a 3-bedroom flat with exotic interior and all en-suite rooms ranges between N1.2 million and N1.5 million and the rent for a 4-bedroom duplex is between N1.4 million N2.5 million. The average price for a Semi-detached house in Magodo is between N45 million and N75 million while a plot of land is sold between N18 million and N30 million.
Mowe/Ofada axis is expected to continue to thrive for low-end property market ahead of other places like Badagry and Ikorodu. Investors can take advantage of vast physical development on the axis and the proposed expansion of the Lagos-Ibadan Expressway to commit their money now and see it grow in the years ahead.
As more estates spring up in Mowe, Ibafo and Ofada, all small towns in Ogun State, on the border of the Lagos-Ibadan Expressway, property value has appreciated on the axis by over 200 per cent in the last couple of years. Quite a number of estates are springing-up on daily basis and selling a plot of land between N300, 000 and N850, 000. Some of them give buyers instalment payment options spread over 12 or 24 months and could be as low as N30, 000 per month. In Mowe for example, a 3 bedroom flat goes for between N200, 000 and N300,000 per annum. While it is as high as N400,000 for the same type of apartment in Arepo, another suburb along the Lagos Ibadan expressway, but much closer to Lagos.
The property market in other locations like Gbagada, Banana Island, Oniru Estate and 1004 flats are expected to become more attractive this year. By the projections of Demola Adetola, one time publicity secretary of the Nigerian Institution of Estate Surveyor and Valuers, NIRSV, the real estate market look promising this year, irrespective of the location. He added that investors will be properly guided as the economic factors play out before the first quarter of the year.