_PNG.png)
The opportunities created amid the COVID-19 pandemic has raised optimism that the residential, construction, and industrial segments of real estate market are to drive the sector’s growth, while yielding good returns for developers, investors and landlords, according to Nigeria Real Estate Report 2021.
The report by Ubosi Eleh and Company, said the demand for residential real estate is expected to increase, as work from home becomes a more permanent influence in space demand.
The increase in demand for warehousing amid a surge in e-commerce transaction in Nigeria is expected to fuel the growth of industrial subsector. Also, the execution of projects that were put on hold amid COVID-19 lockdown and the rebuilding of recently vandalised properties during the ENDSARS protest is expected to boost expansion of construction sector and thus, drive the growth of the overall real estate market in 2021.
Though, the housing sector growth potential would only be fully realised if significant, concerted changes are made to Nigeria’s housing strategy, the country’s residential property market is expected to witness a boom this year as increasing demand for housing; either for purchase or rental, fuelled by a growing population, which is moving close to the 2030 estimate of 263million, persists.
The report revealed that investment in products that meet market demand like one and two bedrooms in strategic locations in economic cities like Lagos, Port Harcourt and Abuja will continue to be in high demand-sale or lease- and also yield good returns.
“By and large, the outlook for residential real estate looks very good in 2021. This is across all zones of the nation. Again, this will hold either for sale or lease. The market will see a boom, as investors seek alternative investment outlets for investible funds with the collapse of money market instruments. Residential property values; residential and sale, will defy expectation this year as it is projected to easily attain 10-20 per cent increase in value across board.
“Short stay and apartments with flexible rent payment plan are projected to see growth as tenants’ purchasing power continue to slide. Hotels and other housing service providers that are yet to evolve with market realities will lose some market shares to the new ventures.”
Following increasing security awareness, the demand for more secure estates and gated communities will influence the choice of tenants/homebuyers in choosing a location. This will become more important in residential property development and could shore up values of such properties in the estates by as much as 5-8 per cent.
While inadequate and decaying infrastructure and increasing densification may have impacted the value of properties in Lagos Island (except Banana Island), properties in locations like Chevron, Agungi and Osapa, which reported an average rental value of 6 per cent in 2020 are expected to give investors good return this year.
The report noted that the impact of COVID-19 lockdown and consequently, the shift from brick and mortar stores to online shopping brought more emphasis on the importance of warehouse and logistics in Nigeria.
As online sales are expected to grow even after the pandemic has eased, so is the demand for logistics and warehousing. With the increase in the number of online retailers, which is expected to grow in the nearest future, availability and delivery times would be vital to retaining customers amid the expected industry competition.
Source: The Guardian 7/6/2021