Property Developers to tread carefully on the real estate frontier in Nigeria

SEEMINGLY buoyed by the growing apathy by commercial banks to fund projects and impact of on going reforms by the government, a brand new report has predicted that developers may well be more cautious in property development as the market remains slow, and prepare for a shifting landscape.

The Lagos Housing Development Market — 2016 Outlook Report by Residential Auctions Company (RAC) disclosed that «the next coming months and beyond will be testing times for programmers as demand is likely to be curtailed with customers cutting back on spending until a clearer picture of the market emerges to restore consumer confidence in the marketplace.

»It is expected that plenty of developers will tread carefully when embarking on new jobs to start and location of pick is a predominant factor. Additionally to hedge risks, programmers will Nigerian Tribune Latest News scale back on the size of jobs they embark upon and can seek to build up small-scale size jobs that will provide not more than three — ten units, that will instantly attract sales even in the off-plan period consequently eliminating the event of baseless units waiting to be sold several months after end that will raise the cost of keeping stock."

Given the present economic atmosphere, the report jobs that just a third of the 14,415 units now under construction will be delivered this year resulting in 4,325 units, «but unless programmers can seek alternative financing asides from the commercial banks then this amount mightn't be delivered.

»Some of these developments date back to over five years and there are several possible reasons for the delay in delivery, among such reasons could be a dearth of funds which will hinder the ability of the programmer to fund the advancement of the development or it may be a litigation case between parties involved. In most cases it's generally unless a source of finance emerges the development will remain in limbo until a solution was found and the former that occurs.

This could potentially present an opportunity for developers to pursue «Bunch financing» that's an alternate type of raising financing from a group of investors through an internet platform and is a somewhat new theory."

The research says that 62 per cent of new housing units in the development will be delivered to the Lagos Island marketplace as demonstrated above. This should not come as a surprise since the Lekki- Epe axis still has a massive part of green field sites (undeveloped property) in Lagos.

«The future of this market appears pretty much complete as supply will continue to grow with demand and infrastructure is enhanced to bring more companies. We can't categorically say that Lagos Island has more green field sites than Lagos Mainland or vice versa as there is no data to show or prove this theory, accordinng to RAC Managing Director, Mr. Omorotimi Akinlose.

He explained, „Notwithstanding the reality that Lagos Island has got the bulk of new units under going development, we cannot fail or overlook that some places on Lagos Mainland such as; Ayobo Ipaja, Badagry and Okokomaiko also have vast amount of units in the development, a significant consequence of a few mass housing schemes launched under Joint Venture (JV) arrangements and are still awaiting completion.

RAC report said: “With the on going rehabilitation and growth of the Lagos-Badagry Expressway along with the building of the Blue Line Lagos Rail Transport (LRT) mass transit transport system from the Lagos State Government (LASG), the Okokomaiko — Badagry axis part of Lagos Mainland has got the possibility to emerge as the next „Lekki“ of Lagos Mainland in the future in relation to the delivery of new housing units in Lagos provided infrastructures continues to improve along this axis.

»This may have a directive favorable impact on commercial activities in the positioning and will behave as a trigger to tempt more residents from other locations on Lagos Mainland to migrate. The Blue Line is a 27km urban railway line which will run from Okokomaiko to Marina. There'll also be a Red Line that will run from Marina.

The report revealed that below the Eko Atlantic City endeavor, a Public-Private-Partnership (PPP) initiative involving the Lagos State Government and also a private company South Energyx Nigeria Limited (a subsidiary company of the Chargoury Group of Companies) under the auspices of the Federal Government of Nigeria, over 1,000 units of flats of various room sizes ranging from one bedroom to four bedroom penthouses are already under construction.

Leading the pack of these developments are Eko Pearl Towers by ESLA International. Eko Pearl Towers are high rise residential buildings to be found in the centre of Eko Atlantic City.

It is going to comprise of five stunning residential towers on the seaport of Eko Atlantic. The towers are; Indigo Pearl Tower, Black Pearl Tower, White Pearl Tower, Champagne Pearl Tower and Aqua Pearl Tower. In total only slightly over 560 flat units will be provided by the towers with one tower totally sold out and the very first pair of units is going to be delivered as early as 2016.

Another high rise development now under construction in Eko Atlantic City is Eko Energy Tower Estate being developed by oil and gas logistics firm Orlean Invest West Africa a Nigerian Tribune Newspaper Advert Rate group with over 25 years of providing corporate and real estate services. Eko Energy Estate is a superior residential area that'll cover www.wbateam.com approximately 450,000 square meters of land and will be found in the Northwestern corner of Eko Atlantic City.

The first phase of Eko Energy Estate will consist of three high rise 20 floors residential towers which will supply about 260 flat units of various amount of bedrooms is expected to be delivered by 2018 and as illustrated above.
It is projected that by the full conclusion of Eko Energy Estate there will be 5,000 flats in 50 — 60 residential towers.

Other prominent residential developments currently in the works in Eko Atlantic City are Azuri Penisula, LeReve Tower and Lagos Sky Tower.