-By Danlami Nasir Isah
Real estate being a critical sector in any economy has been unstable in recent past due to the instability of the Nigerian economy.
In a real estate market analysis report for the first quarter of 2019, the supply side of the residential real estate market continue to show positive signs, although tenants were yet to recover from the weak economy which slipped into recession for over 16 months.
The report shows that Nigerian middle income earners have been boxed into ‘work, live and play’.
Also, land values appreciated with frontier land investments offering impressive rates of return since real estate sector came out of recession in Q1 2019, growing by 0.93% in
“Green buildings continue to feature in conversations, waiting for a generally traditionalist market to catch up.
“Projects as the Recycle Pay project, which allow school fees payments in plastic bottles join the list of sustainability initiatives.
“Long term profitability through sustainability, when compared with current systems, remains a more complex calculation.
“Land values have continued to appreciate and the Grade A office markets struggle with unhealthy vacancy rates remains the case. Coworking models are also evolving and, for the first time, we will be including properties prices from emerging cities for investment consideration across major cities including Abuja, Port Harcourt, Lagos, and Calabar,” the report said
Accordingly, a 400,000m2 of Grade-A office space is expected to be rushed by Nigerians in 2019, as coworking continues to grow because business owners are unable to meet up to the dollar rents obligations for Grade A office space.
Also, Nigeria’s commercial real estate market seems to be going green.
In the same vein, most ongoing prime office developments – or those that have been delivered in recent years are attributions to the fact that green buildings are here to stay.
For instance, the acquisition of about 50,000m2 land by the United States government in Eko Atlantic City for the Consulate’s new head office as well as A 21-storey smart office tower being constructed in Uyo, Akwa Ibom state at an approximate cost of N19 billion.
Also, the funding of the project expected to be through a Public Private Partnership upon completion is regarded as one of the few leading examples to showcase that Nigeria’s commercial real estate is gradually going green.
The H1 real estate report also revealed that in the area of security, many citizens prefer to go for more secured estates and houses than the less secured.
This was attributed to the insecurity currently being faced by the country which had made citizens to rent or patronize only houses they feel they will be secured as well as their families.
“Security has grown as a critical selector tool in the residential market. Secure gated communities are priced higher than estates perceived to be less secured to.”
Also, the critical strategy in Investment thinking in property is gradually changing and the landscape is gradually changing.
In the same vein, some experts are already advising the Monetary Policy Committee (MPC) of the Central Bank of Nigeria to untighten monetary rates to allow for more investment in the sector.
This singular action they believe will further remove the uncertainty around delaying property purchasing decisions exhibited by some business men and real estate developers as some investors are opting to buy assets out of the country and many are looking to sell local assets in Nigeria due to tight monetary policies.
On the choice of the type of apartment to be rented out, the report says a room self contained, one and two bedroom flats remain the most sought after even as landlords make little or no reductions in fee.
The report also hailed the federal government’s strides in infrastructure and rated it high in infrastructure development.
The report also projects that at H1 2020, real sector growth must have stabilized following robust policies of the government and the signing of a 25,000MW six-year electricity deal with Siemens which will advance the development of the sector.
It added that if banks increase credit lending to the real sector, it will go a long way in promoting the development of the sector rapidly.