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Real Estate and Property Development in Nigeria (Lagos as a Case Study) (Reviewed, 10th May 2001) Tell your friends about this page! Email it to them.

The newly-completed Nicon Building, AbujaAll links below are on this page

Focus
Market Players
Land Developers/Financiers
Marketers of Ready-Built Properties

There can be no meaningful growth or development either vertically or horizontally in the real estate sector without Land availability. Land is a factor of production [major though passive] which without a lot of actions regarding production cannot take place.

Land which earns rent therefore is a very necessary and an important tool in real estate and property development and therefore must be well managed.

Apart from the establishment and development of Abuja, the creation of states, the other significant measure which the military undertook in their long administration of Nigeria was the control of land through promulgation of the Land Use Decree which was passed in an emotional manner and therefore cannot be regarded as a true and realistic land reform measure.

Most Land owners with the exception of those who live in urban areas still see themselves as the owners of their land and their neighbour see them in the same way. It is only the government that has persuaded itself that it is the owner of the land in the country. The idea of holding in trust for people would appear to be opportunistic. The dilemma today therefore is that land as a percentage of total development cost is far higher than it was prior to 1978 i.e. before the promulgation of Land Use Act. The main reason being that there is a deliberate policy of restriction of supply of urban Land which has increased cost.

Focus:

However, as high as the cost of development in urban areas due to the reasons given above are, so also are the reforms. Simply said. The higher the risk the greater the returns. This is obvious in many ways and is further enhanced the fact that Housing Stock in most urban areas of Nigeria especially are far short of required needs.

Whole supply periodically is in shorter burst than expected or in other words demand far exceeds supply in the real estate sector which in simple economics means prices would go higher because of stiff competition for the available few of the stock.

Therefore it is conclusive that a very bright opportunity existing in the real estate/properties sector of this economy though it is highly capital intensive and needs professional guidance to profit from such investments. This is even more interesting now that the democratic government is in place and the country’s economy is being opened up by the privatization scheme of the present administration which is supposed to usher us into more effective management of resources and reduce redundancy in public utilities management and maintenance. It would also break monopolies like the National Electric Power Authority, NEPA. All of this will inevitably improve general efficiency, production and quality of life.

MARKET PLAYERS:

In the Nigerian real estate/properties sector, we can divide the industry players broadly into the following categories: 

  1. Developer/Financiers 
  2. Construction/Builders 
  3. Marketers of finished products 
  4. Managers/Maintenance specialists.

Developers/Financiers

Because of the particularly heavy burden of finance involved in real estate developments not everybody could afford or even effectively be involved in the business but among the major players in this line are:

HFP Engineering: They have to their credit developments like the VGC: Victoria Garden City is a paradise by the Lagoon according to their adverts. This development along the Peninsula of Lagos known as Lekki. It is an expansive mixed use development comprising of various sizes and categories of houses, shopping mall and residential facilities like pools, Tennis/squash court, Gardens e.t.c. They have also have invested heavily in solid infrastructure like power generation and communication facilities. Another of their development is a private cemetery also long the Lekki-Epe Expressway. They also built Dolphin Estate and Adekunle Estate both for L.S.D.P.C. i.e. Lagos State Property Development Corporation. Jura shopping complex is also one of their major works.

G. Cappa: Another Developer Financier. They are more involved in building multi-storey high-rise office spaces. They have quite a few dotting the skyline of the commercial city of Lagos. However their presence is not limited to Lagos only.

L.S.D.P.C.: Lagos State Development and Property Corporation is a subsidiary/parastatal of the Lagos State government responsible for mass housing provision and they could be said to have so far performed creditably.

Cornerstone Construction Company: This is a private initiative aimed at providing affordable accommodation targeted at the middle class Nigerians with the aim of making profit. They have also performed creditably well.

Marketers of Finished Products

This are the companies and organizations involved in sales and letting of the properties so far constructed. Most of them often times are estate firms while others are properties company and agents.

Among the top players here are:

1. Knight, Frank & Rutley Nigeria       www.knightfrank.co.uk/countries/nigeria

2. Jide Taiwo & Co                            www.jidetaiwo.com (under construction)

3. Diya Fatimilehin& Co                     www.diya-fatimilehin.com

4. Osita Okoli & Co

5. Bode Adedeji & Co

6. Gas Properties Limited

7. Bancorp Properties Limited             +2341 260 0705-9;  Fax: +2341 263 1283

8. Wole Ogungbola & Co

All these companies adopt an aggressive marketing strategy to appeal to their targeted customers and clientele. Also most of them, especially the estate firms are further employed as Managers/Maintenance Managers for such development so that the value inherent in such development can be optimally obtained.

Picture: NICON Building, Abuja, Nigeria.

Editor's Note: NEPA is now called Power Holding Company of Nigeria, PHCN from 2005.

© NigeriaBusinessInfo.com

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