Lagos, Abuja and Portharcourt, Nigeria’ commercial, administrative and petroleum industry capitals respectively, are the top real estate investment destinations, and account for as high as 65 percent of all activities in this asset class, a report by the National Bureau of Statistics has revealed.
The report indicates that Lagos has the greatest amount of real estate activities at 37 percent, followed by Abuja with 22 percent and Port Harcourt (Rivers State) with 6 percent, all covering 65 percent of real estate activities in the country.
The trio, often regarded as Nigeria’s traditional cities, have seen increased tempo of activity in real estate development and much of the investments that have gone into real estate in the country in the last decade were concentrated in these cities.
Nigeria’s has a burgeoning real estate sector, which by the GDP rebasing exercise in the country in April 2014, was discovered to be the fastest growing and sixth largest sector in the Nigerian economy, explaining the rising level of investment in the sector by both local and foreign investors.
According to the NBS report on Nigeria’s real estate in March this year, PricewaterhouseCoopers (PwC) revealed that the value of investment in the Nigerian real estate sector was expected to rise by 4 percent to USD13.65 billion by the turn of 2016, up from its current value of US$9.19 billion.
“The combination of a growing economy, rapid expansion of the emerging middle classes, continued urbanisation, and a younger generation with high aspirations are accountable for the growth and the increased level of investment we have seen in this sector”, John Strang, Fine and Country’s managing director notes, adding that these factors are exerting dramatic levels of pressure on all sectors of the real estate market.
The sector presents immense opportunities which the World Bank says is worth about $385 billion, and Strang says these opportunities are not for the Big-Boys alone, observing that the demand and supply equation in this sector is out of balance.
“But investment is not just for the Big Boys; opportunities are available in all real estate asset classes and at all levels of entry price” he said, pointing out that real estate has become an investment destination because it is more stable than stocks or bonds; has long term growth and income return and financing is available.
Lola Olaide-Stephen, MD/CEO of Realty Concept, says investment in real estate is a product of inner and personal conviction that one is ready to make the move, explaining that people should be ready to take risks coming from the decisions they have willingly made.
Olaide-Stephen who spoke at an investors forum hosted by Fine and Country at the weekend, advised that potential investors should embrace what she called ‘crowd funding’ for their investment.
“This is an investment strategy in which a number of potential investors come together, pool resources and use same to invest in real estate”, she said, pointing out that there are cases where somebody who has land but not money, meets another who has money but not land, and they strike a balance based on what each contributes to the pool.