Nigeria: 'Why Investing in Lagos Property Market Is an Imperative'

24 November 2020

Promoter of PERIWINKLE Residences Limited, a Lagos luxury real estate development,

Barr. Chiedu Nweke has advised prospective real estate investors to see the opportunity in investing in the Lagos property market, insisting that "the rental returns on premium real estate investments in Lagos are at least three times higher than having cash in the bank."

Quoting from an advisory report by a leading advisory company, Nweke asserted that the average rate of interest on a six-month fixed term deposit at a financial institution is between 2.5% - 3%, compared to rental yields in Lagos of between 7-12%.

According to him, "Rental yields are extraordinarily high in Lagos, compared to most other countries around the world. Now that prices have stabilised in premium locations, the high yields make investing in the Lagos property market an attractive proposition for any global investor".

While acknowledging that since the beginning of the year, PERIWINKLE Residences Limited has seen a marked increase in sales and enquiries from various investors, most especially foreign investors, he further stated that "Over the past couple of years, the market has been dominated by end-users, but we are now seeing a return of the investors. However, unlike before, they are not chasing capital growth; they are focusing on rental yields. It is a very different market dynamic".

Nweke pointed out that the positive sentiment is shared by a real estate advisory firm, which predicts good quality; well-established developments will continue to do well at the expense of newer residential areas. The firm also anticipates the residential market will continue to gain from increasingly available mortgage finance options at competitive rates.

"Investors are coming back to the market, not because they think the price of their property will double in a matter of months, but because they are comfortable with consistent, sustained and globally competitive rental returns," he stressed.

On buyers' sentiments, he stated that PERIWINKLE Residences Limited is experiencing the strongest demand in three years across its range of premium developments at Lekki Phase 1 and Ikoyi; adding that there is a strong flight to quality in both locations, as existing residents seek to upgrade and new buyers aim to take advantage of market conditions which currently offer extraordinary value for money.

"The Lagos, real estate market, has become increasingly fragmented which means there is little benefit in reviewing the market as a whole. We are now seeing demand and prices rising convincingly in premium locations within Lagos, but these price gains are to some extent, being offset by price declines in some of Lagos less sought after locations", he said.

PERIWINKLE Residences Limited is an internationally recognised, luxury-focused, high-end developer. With a proven track record for delivering some of the most luxurious residential properties across Nigeria, the developer is well capitalised and has the vision and momentum to provide solid investment opportunities for customers across all the markets in which it operates.

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